<SUBMISSION>
<ACCESSION-NUMBER>0001047469-07-002561
<TYPE>S-1
<PUBLIC-DOCUMENT-COUNT>26
<FILING-DATE>20070404
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>PROS Holdings, Inc.
<CIK>0001392972
<IRS-NUMBER>760168604
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>S-1
<ACT>33
<FILE-NUMBER>333-141884
<FILM-NUMBER>07749473
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>3100 MAIN STREET
<STREET2>SUITE 900
<CITY>HOUSTON
<STATE>TX
<ZIP>77002
<PHONE>713-335-5151
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>3100 MAIN STREET
<STREET2>SUITE 900
<CITY>HOUSTON
<STATE>TX
<ZIP>77002
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>S-1
<SEQUENCE>1
<FILENAME>a2176970zs-1.htm
<DESCRIPTION>S-1
<TEXT>
<HTML>
<HEAD>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
<BR>
<P><FONT SIZE=3 >
Use these links to rapidly review the document<BR>
<A HREF="#bg76601_table_of_contents">  Table of contents</A> <BR>
<A HREF="#fa76601_pros_holdings,_inc._index_to_c__pro02412">  PROS Holdings, Inc. Index to consolidated financial statements</A><BR></font>
</P>
<P ALIGN="CENTER"><FONT SIZE=2><B>As filed with the Securities and Exchange Commission on April&nbsp;4, 2007  </B></FONT></P>

<P ALIGN="RIGHT"><FONT SIZE=2><B> Registration No.&nbsp;333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </B></FONT></P>


<P><FONT SIZE=2><B> <hr noshade width=100% align=left size=4>
<hr noshade width=100% align=left size=1>  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=5><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>  </B></FONT><FONT SIZE=2><B>Washington, D.C. 20549  </B></FONT></P>

<HR NOSHADE ALIGN="CENTER" WIDTH="120">
<P ALIGN="CENTER"><FONT SIZE=5><B>Form&nbsp;S-1<BR>  </B></FONT><FONT SIZE=2><B>REGISTRATION STATEMENT<BR>
Under<BR>
THE SECURITIES ACT OF 1933  </B></FONT></P>

<HR NOSHADE ALIGN="CENTER" WIDTH="120">
<P ALIGN="CENTER"><FONT SIZE=5><B>PROS Holdings,&nbsp;Inc.<BR>  </B></FONT><FONT SIZE=2>(Exact name of Registrant as Specified in its Charter) </FONT></P>

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<TD WIDTH="32%" ALIGN="CENTER"><FONT SIZE=2><B>Delaware</B></FONT><FONT SIZE=2><BR>
(State or Other Jurisdiction of<BR>
Incorporation or Organization)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%" ALIGN="CENTER"><FONT SIZE=2><B>7371</B></FONT><FONT SIZE=2><BR>
(Primary Standard Industrial<BR>
Classification Code Number)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%" ALIGN="CENTER"><FONT SIZE=2><B>76-0168604</B></FONT><FONT SIZE=2><BR>
(I.R.S. Employer<BR>
Identification Number)</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=5 ALIGN="CENTER" VALIGN="TOP"><BR><FONT SIZE=2><B>3100 Main Street, Suite 900<BR>
Houston, TX 77002<BR>
Telephone: (713)&nbsp;335-5151<BR> </B></FONT><FONT SIZE=2>(Address, Including Zip Code, and Telephone Number,<BR>
Including Area Code, of Registrant's Principal Executive Offices)</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=5 ALIGN="CENTER" VALIGN="TOP"><BR><FONT SIZE=2><B>Albert E. Winemiller<BR>
Chief Executive Officer and President<BR>
3100 Main Street, Suite 900<BR>
Houston, TX 77002<BR>
Telephone: (713)&nbsp;335-5151<BR> </B></FONT><FONT SIZE=2>(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)</FONT></TD>
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<TD COLSPAN=3 ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=2><BR>
<BR></FONT> <FONT SIZE=2><B><I>Copies to:</I></B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%" ALIGN="CENTER"><FONT SIZE=2><B>John J. Gilluly III, P.C.<BR>
DLA Piper US LLP<BR>
1221 South MoPac Expressway, Suite 400<BR>
Austin, TX 78746<BR>
(512) 457-7000</B></FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%" ALIGN="CENTER"><FONT SIZE=2><B>Martin A. Wellington, Esq.<BR>
Davis Polk &amp; Wardwell<BR>
1600 El Camino Real<BR>
Menlo Park, CA 94025<BR>
(650) 752-2000</B></FONT></TD>
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<P ALIGN="CENTER"><FONT SIZE=2><B>Approximate date of commencement of proposed sale to the public:<BR>
As soon as practicable after the effective date of this Registration Statement.  </B></FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule&nbsp;415 under the Securities Act of
1933, check the following box.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Form is filed to register additional securities for an offering pursuant to Rule&nbsp;462(b) under the Securities Act, please check the following box and
list the Securities Act registration statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Form is a post-effective amendment filed pursuant to Rule&nbsp;462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this form is a post-effective amendment filed pursuant to Rule&nbsp;462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If delivery of the prospectus is expected to be made pursuant to Rule&nbsp;434, please check the following
box.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>CALCULATION OF REGISTRATION FEE  </B></FONT></P>

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<TH WIDTH="59%" ALIGN="CENTER"><FONT SIZE=2><B>Title of Each Class of<BR>
Securities to be Registered</B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="25%" ALIGN="CENTER"><FONT SIZE=2><B>Proposed Maximum Aggregate<BR>
Offering Price(1)</B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="15%" ALIGN="CENTER"><FONT SIZE=2><B>Amount of<BR>
Registration Fee</B></FONT><BR></TH>
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<TD WIDTH="59%"><FONT SIZE=2>Common Stock, $0.001 par value per share</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="25%" ALIGN="CENTER" VALIGN="BOTTOM"><FONT SIZE=2>$90,000,000</FONT></TD>
<TD WIDTH="1%" VALIGN="BOTTOM"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="CENTER" VALIGN="BOTTOM"><FONT SIZE=2>$2,763</FONT></TD>
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<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>Estimated
solely for the purposes of computing the registration fee in accordance with Rule&nbsp;457(o). </FONT></DD></DL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section&nbsp;8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section&nbsp;8(a), may determine.  </B></FONT></P>

<P><FONT SIZE=2><B> <hr noshade width=100% align=left size=1>
<hr noshade width=100% align=left size=4>  </B></FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P><FONT COLOR="#FF4040" SIZE=2><B>Subject to completion, dated April&nbsp;4, 2007  </B></FONT></P>

<P><FONT COLOR="#FF4040" SIZE=2><B>The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and
Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not
permitted. </B></FONT></P>

<P><FONT SIZE=2><B>Prospectus</B></FONT></P>

<P><FONT SIZE=2><B>
<IMG SRC="g950845.jpg" ALT="GRAPHIC" WIDTH="216" HEIGHT="78">
  </B></FONT></P>

<P><FONT SIZE=5><B><I>&nbsp;&nbsp;&nbsp;&nbsp;Shares  </I></B></FONT></P>

<P><FONT SIZE=5><B><I>Common stock  </I></B></FONT></P>

<P><FONT SIZE=2>This is an initial public offering of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of common stock by PROS Holdings,&nbsp;Inc. The selling stockholders included in this prospectus
are selling an additional&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of common stock. We will not receive any proceeds from
the sale of shares of common stock by the selling stockholders. The estimated initial offering
price is between $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share. </FONT></P>

<P><FONT SIZE=2>Prior
to this offering, there has been no public market for our common stock. We have applied to list our common stock for quotation on The Nasdaq Global Market under the symbol PROZ. </FONT></P>

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<TD WIDTH="56%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%"><FONT SIZE=2><B>Per share</B></FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%"><FONT SIZE=2><B>Total</B></FONT></TD>
</TR>
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<TD COLSPAN=7><HR NOSHADE></TD>
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<TD WIDTH="56%"><FONT SIZE=2>Initial public offering price</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="56%"><FONT SIZE=2><BR>
Underwriting discount</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
</TR>
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<TD WIDTH="56%"><FONT SIZE=2><BR>
Proceeds to us before expenses</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="56%"><FONT SIZE=2><BR>
Proceeds to selling stockholders before expenses</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
</TR>
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<TD WIDTH="56%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="15%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
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<P><FONT SIZE=2>The selling stockholders identified in this prospectus have granted the underwriters an option for 30&nbsp;days from the date of this prospectus to purchase
up to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional shares of common stock on the same terms and conditions set forth above to cover over-allotments, if any. </FONT></P>


<P><FONT SIZE=2><B>Investing in our common stock involves a high degree of risk. See "Risk factors" beginning on page&nbsp;6.</B></FONT></P>

<P><FONT SIZE=2><B>Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of
this prospectus. Any representation to the contrary is a criminal offense.</B></FONT></P>

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<TD WIDTH="40%"><FONT SIZE=4><B>JPMorgan</B></FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=4><B>Deutsche Bank Securities</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="40%"><FONT SIZE=4>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="40%"><FONT SIZE=4>&nbsp;</FONT></TD>
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<TD WIDTH="40%"><FONT SIZE=4><B><BR>
Jefferies&nbsp;&amp; Company</B></FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=4><B><BR>
Thomas Weisel Partners LLC</B></FONT></TD>
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<P><FONT SIZE=2>The underwriters expect to deliver the shares of common stock to purchasers on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2007. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2007 </FONT></P>

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<P><FONT SIZE=2><B><I>INSIDE FRONT COVER PAGE  </I></B></FONT></P>

<P><FONT SIZE=2>[Description
to follow] </FONT></P>

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NAME="page_bg76601_1_1"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="bg76601_table_of_contents"> </A>
<BR></FONT><FONT SIZE=4><B>Table of contents  <BR>  </B></FONT></P>

<P><FONT SIZE=2><A
NAME="BG76601_TOC"></A> </FONT></P>

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<TD WIDTH="100%"><A HREF="#ca76601_prospectus_summary"><FONT SIZE=2>Prospectus summary</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%"><A HREF="#da76601_risk_factors"><FONT SIZE=2>Risk factors</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%"><A HREF="#dd76601_special_note_regarding_forward-looking_statements"><FONT SIZE=2>Special note regarding forward-looking statements</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%"><A HREF="#de76601_use_of_proceeds"><FONT SIZE=2>Use of proceeds</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%"><A HREF="#de76601_dividend_policy"><FONT SIZE=2>Dividend policy</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%"><A HREF="#de76601_capitalization"><FONT SIZE=2>Capitalization</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%"><A HREF="#dg76601_dilution"><FONT SIZE=2>Dilution</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%"><A HREF="#dg76601_selected_consolidated_financial_data"><FONT SIZE=2>Selected consolidated financial data</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%"><A HREF="#di76601_management_s_discussion_and_an__man03466"><FONT SIZE=2>Management's discussion and analysis of financial condition and results of operations</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%"><A HREF="#dm76601_business"><FONT SIZE=2>Business</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%"><A HREF="#do76601_management"><FONT SIZE=2>Management</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%"><A HREF="#do76601_executive_compensation"><FONT SIZE=2>Executive compensation</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%"><A HREF="#ds76601_certain_relationships_and_related_party_transactions"><FONT SIZE=2>Certain relationships and related party transactions</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%"><A HREF="#ds76601_principal_and_selling_stockholders"><FONT SIZE=2>Principal and selling stockholders</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%"><A HREF="#du76601_description_of_capital_stock"><FONT SIZE=2>Description of capital stock</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%"><A HREF="#du76601_material_u.s._federal___du702146"><FONT SIZE=2>Material U.S. federal tax consequences to non-U.S. holders</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%"><A HREF="#dw76601_shares_eligible_for_future_sale"><FONT SIZE=2>Shares eligible for future sale</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%"><A HREF="#dw76601_underwriting"><FONT SIZE=2>Underwriting</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%"><A HREF="#dw76601_legal_matters"><FONT SIZE=2>Legal matters</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%"><A HREF="#dw76601_experts"><FONT SIZE=2>Experts</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%"><A HREF="#dw76601_where_you_can_find_additional_information"><FONT SIZE=2>Where you can find additional information</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%"><A HREF="#fa76601_pros_holdings,_inc._index_to_c__pro02412"><FONT SIZE=2>Index to consolidated financial statements</FONT></A></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>You should rely only on the information contained in this prospectus. We and the selling stockholders have not authorized anyone to provide you with information
that is different from that contained in this prospectus. We and the selling stockholders are offering to sell, and seeking offers to buy, shares of common stock only in jurisdictions where offers and
sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common
stock. </FONT></P>

<P><FONT SIZE=2>For
investors outside the United States: neither we, the selling stockholders nor any of the underwriters has done anything that would permit this offering or possession or distribution of this
prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to inform yourselves about and to observe any restrictions relating to this
offering and the distribution of this prospectus. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>i</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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NAME="page_ca76601_1_1"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ca76601_prospectus_summary"> </A>
<A NAME="toc_ca76601_1"> </A>
<BR></FONT><FONT SIZE=4><B>Prospectus summary  <BR>  </B></FONT></P>

<P><FONT SIZE=2><I>This summary highlights selected information more fully described elsewhere in this prospectus. You should read the following summary
together with the entire prospectus, including the more detailed information regarding us and the common stock being sold in this offering and our consolidated financial statements and the related
notes appearing elsewhere in this prospectus. You should carefully consider, among other things, the matters discussed in the section entitled "Risk factors" beginning on page&nbsp;6 before deciding
to invest in our common stock.</I></FONT></P>

<P><FONT SIZE=3><B>Overview  </B></FONT></P>

<P><FONT SIZE=2>We are a leading provider of pricing and revenue optimization software, an emerging category of enterprise applications designed to allow companies to improve
financial performance by enabling better pricing. By using our software products, customers gain insight into their pricing strategies, identify detrimental pricing practices, optimize their pricing
decision-making and improve their business processes and financial performance. Our software products incorporate advanced pricing science, which includes operations research, forecasting and
statistics. Our innovative science-based software products analyze, execute and optimize pricing strategies using data from traditional enterprise applications, often augmenting it with
real-time and historical data. We also provide a range of services that include analyzing a company's current pricing processes and implementing our software products to improve pricing
performance. We provide our software products to enterprises across a range of industries, including manufacturing, distribution, services, hotel and cruise, and airline. As of March&nbsp;31, 2007,
we had 90 customers across five industries in 42&nbsp;countries with over 200 implementations of our software products. We recorded revenue of $35.1&nbsp;million and $46.0&nbsp;million in 2005
and 2006, respectively, and have achieved eight consecutive years of profitability. </FONT></P>

<P><FONT SIZE=3><B>Industry background  </B></FONT></P>

<P><FONT SIZE=2>Pricing is an important component of an enterprise's business processes and financial performance. Companies can face a variety of pricing problems such as
unnecessary discounting and quoting prices below breakeven. We believe that improving pricing is one of the most strategic and powerful ways for companies to improve their business and financial
performance. According to a 2006 Gartner Research report, on average, a 1% improvement in price translated to an 11% increase in profitability. In contrast, according to the same report, a 1%
improvement in fixed costs or variable costs only increases profitability by 3% and 7%, respectively. </FONT></P>

<P><FONT SIZE=2>A
variety of trends are accelerating the need for better pricing. They include increasingly complex markets and business models, greater sophistication of purchasers, proliferation of pricing entities
and competitive alternatives, growing quantities of enterprise data and diminishing returns from traditional enterprise applications. </FONT></P>


<P><FONT SIZE=2>One
element contributing to pricing problems is the limited visibility into effective prices and margins after accounting for discounts, promotions, rebates and allowances. In addition, a lack of
uniform pricing and goals, an unscientific, ad-hoc approach to pricing and a lack of complete, relevant and timely data further add to the pricing problems that we believe most companies
face. We believe most companies have yet to develop or systematically implement pricing technology solutions that can best meet business goals and generate optimal prices. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>1</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_ca76601_1_2"> </A>
<BR>

<P><FONT SIZE=2>We
believe the market for pricing and revenue optimization software is a large and rapidly growing opportunity that spans most major industries. An August 2006 AMR Research report estimated that the
price management applications market will be $348&nbsp;million in 2007 and will grow to approximately $1.1&nbsp;billion in 2010, a compound annual growth rate of 46%. We believe that the overall
pricing and revenue optimization software market includes additional elements not considered in the AMR Research report. </FONT></P>

<P><FONT SIZE=3><B>Our solution  </B></FONT></P>

<P><FONT SIZE=2>The PROS Pricing Solution Suite is our set of integrated software products that enables enterprises to apply pricing science to determine, analyze and execute
optimal pricing strategies. Our software
products support pricing decisions through the aggregation and analysis of extensive enterprise application data, transactional data and market information. Our PROS Pricing Solution Suite addresses
three areas necessary to implement and execute an effective pricing solution: pricing analytics, pricing execution and pricing optimization. Our science-based approach to pricing increases business
insight, enhances planning and decision making as well as improves business and financial performance for our customers. </FONT></P>

<P><FONT SIZE=2>Key
strengths that differentiate us from our competitors include our extensive experience in pricing and revenue optimization, our thought leadership in pricing and revenue optimization science, our
high-performance software architecture with proven scalability, our broad pricing and revenue optimization capabilities and our global diversified customer base. In addition, we are able
to configure our PROS Pricing Solution Suite to meet the needs of our customers across industries. </FONT></P>

<P><FONT SIZE=3><B>Our strategy  </B></FONT></P>

<P><FONT SIZE=2>Our objective is to be the leading global provider of pricing and revenue optimization software products. We plan to: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>continue
to expand across vertical markets;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>continue
to focus on customer satisfaction and retention;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>extend
our pricing thought leadership;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>extend
our technology leadership; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>leverage
third-party consultants and systems integrators. </FONT></DD></DL>
<BR>

<P><FONT SIZE=3><B>Company information  </B></FONT></P>

<P><FONT SIZE=2>We were incorporated in Texas in 1985, reincorporated as a Delaware corporation in 1998 and reorganized as a Delaware holding company in 2002. Our principal
executive offices are located at 3100 Main Street, Suite 900, Houston, Texas 77002. Our telephone number is (713)&nbsp;335-5151. Our website address is www.prospricing.com. The
information on, or that can be accessed through, our website is not part of this prospectus. </FONT></P>

<P><FONT SIZE=2>PROS
Revenue Management&reg;, PROS and PROS Pricing Solution Suite are our trademarks in the United States. All other trademarks, trade names or service marks appearing in this prospectus are
the property of their respective owners. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_ca76601_1_3"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ca76601_the_offering"> </A>
<A NAME="toc_ca76601_2"> </A>
<BR></FONT><FONT SIZE=4><B>The offering  <BR>  </B></FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="40%"><FONT SIZE=2><B>Common stock offered by<BR>
PROS Holdings,&nbsp;Inc.:</B></FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="54%" VALIGN="BOTTOM"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="40%"><FONT SIZE=2><B><BR>
Common stock offered by the<BR>
selling stockholders:</B></FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD WIDTH="54%" VALIGN="BOTTOM"><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="40%"><FONT SIZE=2><B><BR>
Common stock to be outstanding after&nbsp;this offering:</B></FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD WIDTH="54%" VALIGN="BOTTOM"><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="40%"><FONT SIZE=2><B><BR>
Over-allotment option:</B></FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD WIDTH="54%" VALIGN="BOTTOM"><FONT SIZE=2><BR>
The selling stockholders have granted the underwriters an option for a period of 30&nbsp;days to purchase up to an
additional&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of common stock.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="40%"><FONT SIZE=2><B><BR>
Use of proceeds:</B></FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD WIDTH="54%" VALIGN="BOTTOM"><FONT SIZE=2><BR>
Approximately $20.0&nbsp;million will be used to repay outstanding indebtedness. We intend to use the remainder of the proceeds of the offering for working capital and other general corporate purposes, including capital expenditures and research and
development. See "Use of proceeds."</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="40%" VALIGN="TOP"><FONT SIZE=2><B><BR>
Proposed Nasdaq Global Market symbol:</B></FONT></TD>
<TD WIDTH="7%" VALIGN="TOP"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2><BR>
PROZ</FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>The number of shares of common stock to be outstanding after this offering is based on the number of shares outstanding as of April&nbsp;2, 2007. This
information excludes: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>200,000
shares of common stock issuable upon the exercise of warrants to acquire our common stock with an exercise price of $2.05 per share;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>1,575,247
shares of common stock issuable upon the exercise of outstanding options with a weighted average exercise price of $4.72 per share; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>710,000
shares reserved for future issuance under our 2007 equity incentive plan. </FONT></DD></DL>
<BR>

<P><FONT SIZE=2>Unless
otherwise indicated, the information in this prospectus assumes that the underwriters will not exercise the over-allotment option. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

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<A NAME="page_ca76601_1_4"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ca76601_summary_consolidated_financial_data"> </A>
<A NAME="toc_ca76601_3"> </A>
<BR></FONT><FONT SIZE=4><B>Summary consolidated financial data  <BR>  </B></FONT></P>

<P><FONT SIZE=2>The summary consolidated financial data set forth below should be read in conjunction with "Selected consolidated financial data," "Management's discussion and
analysis of financial condition and results of operations" and our consolidated financial statements and the related notes included elsewhere in this prospectus. Our historical results are not
necessarily indicative of results for any future period. </FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=11><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="RIGHT"><FONT SIZE=2><B>Year ended December&nbsp;31<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2><B>(In thousands, except per share amounts)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2004<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2006<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=11><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><B>Statement of income data:</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><BR><FONT SIZE=2><B>Revenue</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2>License and implementation</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>20,015</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>20,190</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>29,604</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2>Maintenance and support</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>12,431</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>14,940</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>16,423</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Total revenue</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>32,446</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>35,130</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>46,027</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><BR>
Total cost of revenue</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
13,389</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
13,381</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
15,605</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Gross profit</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>19,057</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>21,749</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>30,422</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><BR>
Gross margin</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
58.7%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
61.9%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
66.1%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><BR><FONT SIZE=2><B>Operating expenses</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2>Selling, general and administrative</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8,969</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>12,010</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>13,261</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2>Research and development</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>6,262</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>6,399</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>10,332</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Total operating expenses</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>15,231</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>18,409</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>23,593</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><BR>
Income from operations</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
3,826</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
3,340</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
6,829</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><BR>
Interest income, net</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
366</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
1,074</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
1,921</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Income before income taxes</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,192</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,414</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8,750</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Income tax provision</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(536</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(975</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(1,725</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Net income</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,656</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,439</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>7,025</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Accretion of preferred stock</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(1,256</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(852</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(460</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Net earnings attributable to common stockholders</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,400</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,587</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>6,565</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Net earnings attributable to common stockholders per share:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2>Basic</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>0.24</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>0.19</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>0.33</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2>Diluted</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>0.19</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>0.16</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>0.32</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Weighted average number of shares</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2>Basic</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>9,822</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>13,891</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>19,649</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="59%"><FONT SIZE=2>Diluted</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>19,618</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>20,012</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>20,604</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=11><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=9,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=325134,FOLIO='4',FILE='DISK112:[07ZBA1.07ZBA76601]CA76601A.;25',USER='KBLACKW',CD=';4-APR-2007;13:35' -->
<A NAME="page_ca76601_1_5"> </A>

<P><FONT SIZE=2>The "Pro forma" data in the table below reflects our redemption in March&nbsp;2007 of our redeemable preferred stock for an aggregate of $17.4&nbsp;million,
our one-time cash dividend in March&nbsp;2007 of $41.3&nbsp;million to our common stockholders, our borrowings in March&nbsp;2007 of $20.0&nbsp;million to partially finance the
dividend on our common stock and our receipt in March 2007 of $660,000 from the exercise of options to purchase 930,458 shares of our common stock. The "Pro forma as adjusted" column in the table
below further reflects the application of the net proceeds from the sale by us of the shares of common stock in this offering after the deduction of the underwriting discount and estimated offering
expenses. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=10><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="56%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="RIGHT"><FONT SIZE=2><B>December&nbsp;31<BR> </B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="56%" ALIGN="LEFT"><FONT SIZE=2><B>(Dollars in thousands)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2006<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Pro forma<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Pro forma<BR>
as adjusted<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=10><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="56%"><FONT SIZE=2><B>Balance sheet data:</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="56%"><FONT SIZE=2>Cash and cash equivalents</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>42,540</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>4,507</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="56%"><FONT SIZE=2>Working capital</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>27,575</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>(10,459</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="56%"><FONT SIZE=2>Total assets</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>63,046</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>25,013</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="56%"><FONT SIZE=2>Long-term indebtedness</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>20,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="56%"><FONT SIZE=2>Redeemable preferred stock</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>17,283</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="56%"><FONT SIZE=2>Total stockholders' equity (deficit)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>10,677</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>(30,073</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="14%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=10><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>A $1.00 increase (decrease) in the assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share
would increase (decrease) cash and cash
equivalents, working capital, total assets and total stockholders' equity after this offering by approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million, assuming the number of shares offered by us, as
set forth on the cover page of this prospectus, remains the same and after deducting underwriter discounts and estimated offering expenses payable by us. </FONT></P>

<P><FONT SIZE=2>The
above information excludes: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>200,000
shares of common stock issuable upon the exercise of warrants to acquire our common stock with an exercise price of $2.05 per share;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>1,575,247
shares of common stock issuable upon exercise of outstanding options with a weighted average exercise price of $4.72 per share; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>710,000
shares of common stock reserved for future issuance under our 2007 equity incentive plan. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=10,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=698710,FOLIO='5',FILE='DISK112:[07ZBA1.07ZBA76601]CA76601A.;25',USER='KBLACKW',CD=';4-APR-2007;13:35' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_da76601_1_6"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="da76601_risk_factors"> </A>
<A NAME="toc_da76601_1"> </A>
<BR></FONT><FONT SIZE=4><B>Risk factors  <BR>  </B></FONT></P>

<P><FONT SIZE=2><I>This offering and an investment in our common stock involve a high degree of risk. You should consider carefully the risks described
below, together with the financial and other information contained in this prospectus, before you decide to buy our common stock. If any of the following risks materializes, our business, financial
condition and results of operations could suffer. In this case, the trading price of our common stock would likely decline and you might lose all or part of your investment in our common stock. The
risks described below are not the only ones we face. Additional risks that we currently do not know about or that we currently believe to be immaterial may also impair our business
operations.</I></FONT></P>

<P><FONT SIZE=3><B>Risks relating to our business and industry  </B></FONT></P>

<P><FONT SIZE=2><B><I>We focus exclusively on the pricing and revenue optimization software market, and if this market develops more slowly than we expect, our business will
be harmed.  </I></B></FONT></P>

<P><FONT SIZE=2>We derive, and expect to continue to derive, all of our revenue from providing pricing and revenue optimization software products, implementation services and ongoing customer
support. The pricing and revenue optimization software market is relatively new and still evolving, and it is uncertain whether this software will achieve and sustain high levels of demand and market
acceptance. Our success will depend on the willingness of businesses to implement pricing and revenue optimization software. </FONT></P>


<P><FONT SIZE=2>Some
businesses may be reluctant or unwilling to implement pricing and revenue optimization software for a number of reasons, including failure to understand the potential returns of improving their
pricing processes and lack of knowledge about the potential benefits that such software may provide. Even if businesses recognize the need for improved pricing processes, they
may not select our pricing and revenue optimization software products because they previously have made investments in internally developed pricing and revenue optimization solutions. Some businesses
may elect to improve their pricing processes through solutions obtained from their existing enterprise software providers, whose solutions are designed principally to address one or more functional
areas other than pricing. These enterprise solutions may appeal to customers that wish to limit the number of software vendors on which they rely and the number of different types of solutions used to
run their businesses. </FONT></P>

<P><FONT SIZE=2>If
businesses do not perceive the benefits of pricing and revenue optimization software, the pricing and revenue optimization software market may not continue to develop or may develop more slowly
than we expect, either of which would significantly and adversely affect our revenue and operating results. Because the pricing and revenue optimization software market is developing and the manner of
its development is difficult to predict, we may make errors in predicting and reacting to relevant business trends, which could harm our operating results. </FONT></P>

<P><FONT SIZE=2><B><I>Any downturn in our sales to airlines or any failure to increase sales to other industries would adversely affect our operating results.  </I></B></FONT></P>

<P><FONT SIZE=2>Historically, we have derived a significant portion of our revenue from the sale of our solutions to customers in the airline industry. Revenue from customers in the airline
industry accounted for 52% and 44% of our total revenue in 2005 and 2006, respectively, although in 2005 and 2006, airlines contributed 44% and 34%, respectively, of our total license and
implementation revenue. We classify revenue from all cargo customers, including air cargo customers, as part of our services industry revenue. We do not expect the revenue from the sale of our
software products and services </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

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<P><FONT SIZE=2>to
customers in the airline industry to grow as rapidly as our revenue from sales to customers in other industries. As such, our success is highly dependent upon our ability to sell our software
products to customers in industries other than the airline industry. If we are unable to market and sell our software products effectively to customers in other industries, we may not be able to grow
our business. In industries other than the airline industry, it is uncertain whether our software products will achieve and sustain the levels of demand and market acceptance that we anticipate. Such
uncertainty is attributable to, among other factors, the following: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
possibility that it may be more difficult than we currently anticipate to implement our software products in certain industries;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
possibility that it may be more difficult than we currently anticipate to establish a customer base in certain industries;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
possibility that it may take more time to train our personnel in the implementation of our software products in new industries; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>our
limited experience implementing our software products in many industries. </FONT></DD></DL>

<P><FONT SIZE=2>Although
we expect the percentage of our revenue attributable to customers in the airline industry to continue to decline, a large portion of our revenue will continue to be derived from airline
customers. Thus, our revenue is subject in part to the success of our customers in the airline industry. The airline industry is highly dependent on general economic conditions. Weak and uncertain
economic conditions in the airline industry, airline industry consolidation and the reported weak performance of certain airline companies, including those commercial airline companies who have
recently filed for bankruptcy could adversely affect our sales to the airline industry. </FONT></P>

<P><FONT SIZE=2><B><I>Deterioration of general economic conditions could adversely affect our sales and operating results.  </I></B></FONT></P>

<P><FONT SIZE=2>We believe the implementation of our software products, which is often accompanied by hardware purchases and other capital commitments, involves significant capital expenditure
by our customers. As a result, customers are likely to reduce or defer their spending on technology in the event of economic instability or downturn. In addition, weak and uncertain economic
conditions could impair our customers' ability to pay for our products or services. Any of these factors could adversely impact our business, quarterly or annual operating results and financial
condition. </FONT></P>

<P><FONT SIZE=2><B><I>Our software products require implementation projects that are subject to significant risks, the materialization of which could negatively impact the
effectiveness of our solutions, resulting in harm to our reputation, business and financial performance.  </I></B></FONT></P>

<P><FONT SIZE=2>The implementation of our software products can involve complex, large-scale projects that require substantial support operations, significant resources and reliance on certain
factors that may not be under our control. For example, the success of our implementation projects is heavily dependent upon the quality of data used by our software products and the stability,
functionality and scalability of the customer's information technology infrastructure. If weaknesses or problems in infrastructure or data exist, we may not be able to correct or compensate for such
weaknesses. In addition, implementation of our software products can be highly complex and require substantial efforts and cooperation on the part of our customers and us. If we are unable to
successfully manage the implementation of our software products such that those products do not meet customer needs or expectations, our business, reputation and financial performance may be
significantly harmed. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>7</FONT></P>

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<P><FONT SIZE=2>In
2006, approximately 51% of our license and implementation revenue was earned from 10 customers. If an implementation project for a large customer is substantially delayed or cancelled, our ability
to recognize the associated revenue and our operating results would be adversely affected. </FONT></P>

<P><FONT SIZE=2><B><I>Our revenue recognition is primarily based upon our ability to estimate the efforts required to complete our implementation projects, which may be
difficult to estimate.  </I></B></FONT></P>

<P><FONT SIZE=2>We generally recognize revenue from our software licenses and implementation services over the period during which such services are performed using the
percentage-of-completion method. The length of this period depends on the number of licensed software products and the scope and complexity of the customer's deployment
requirements. Under the percentage-of-completion method, the revenue we recognize during a reporting period is based on the percentage of man-days incurred during
the reporting period as compared to the estimated total man-days required to implement our software products. If we are unable to accurately estimate the overall total man-days required to
implement our software products, such inaccuracies could have a material effect on the timing of our revenue. Any change in the timing of revenue recognition as a result of inaccurate estimates could
adversely impact our quarterly or annual operating results. </FONT></P>

<P><FONT SIZE=2><B><I>If our cost estimates for fixed-fee arrangements do not accurately anticipate the cost and complexity of implementing our software products,
our profitability could be reduced and we could experience losses on these arrangements.  </I></B></FONT></P>

<P><FONT SIZE=2>Substantially all of our license and implementation arrangements are priced on a fixed-fee basis. If we underestimate the amount of effort required to implement our software
products, our profitability could be reduced. Moreover, if the actual costs of completing the implementation exceed the agreed upon fixed price, we would incur a loss on the arrangement. </FONT></P>

<P><FONT SIZE=2><B><I>We might not generate increased business from our current customers, which could limit our revenue in the future.  </I></B></FONT></P>

<P><FONT SIZE=2>We sell our software products to both new customers and existing customers. Many of our existing customers initially purchase our software products for a specific business
segment within their organization and later purchase additional software products for the same or other business segments of their organization. These customers might not choose to make additional
purchases of our software products or to expand their existing software products to other business segments. In addition, as we deploy new applications and features for our software products or
introduce new software products, our current customers could choose not to purchase these new offerings. If we fail to generate additional business from our existing customers, our revenue could grow
at a slower rate or even decrease. </FONT></P>


<P><FONT SIZE=2><B><I>If we fail to develop or acquire new pricing and revenue optimization functionality to enhance our existing software products, we will not be able to
achieve our anticipated level of growth.  </I></B></FONT></P>

<P><FONT SIZE=2>The pricing and revenue optimization software market is characterized by: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>rapid
technological developments;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>newly
emerging and changing customer requirements; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>frequent
new product introductions and enhancements. </FONT></DD></DL>

<P><FONT SIZE=2>We
must introduce new pricing and revenue optimization functionality that enhances our existing software products in order to meet our business plan, maintain or improve our competitive position, </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>8</FONT></P>

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<P><FONT SIZE=2>keep
pace with technological developments, satisfy increasing customer requirements and increase awareness of pricing and revenue optimization software generally and of our software products in
particular. Any new functionality we develop may not be introduced in a timely manner and may not achieve market acceptance sufficient to generate material revenue. Furthermore, we believe our
competitors are heavily investing in research and development, and they may develop and market new solutions that will compete with, and may reduce the demand for, our software products. We cannot
assure you that we will be successful in developing or otherwise acquiring, marketing and licensing new functionality, or delivering updates and upgrades that meet changing industry standards and
customer demands. In addition, we may experience difficulties that could delay or prevent the successful development, marketing and licensing of such functionality. If we are unable to develop or
acquire new functionality, enhance our existing software products or adapt to changing industry requirements to meet market demand, we may not be able to achieve our anticipated level of growth and
our revenue and operating results would be adversely affected. </FONT></P>

<P><FONT SIZE=2>In
addition, because our software products are intended to operate on a variety of technology platforms, we must continue to modify and enhance our software products to keep pace with changes in these
platforms. Any inability of our software products to operate effectively with existing or future platforms could reduce the demand for our software products, result in customer dissatisfaction and
limit our revenue. </FONT></P>

<P><FONT SIZE=2><B><I>Competition from vendors of pricing solutions and enterprise applications as well as from companies internally developing their own solutions could
adversely affect our ability to sell our software products and could result in pressure to price our software products in a manner that reduces our margins and harms our operating results.  </I></B></FONT></P>


<P><FONT SIZE=2>The pricing and revenue optimization software market is competitive, fragmented and rapidly evolving. Our software products compete with solutions developed internally by
businesses as well as solutions offered by competitors. Our principal competition consists of: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>pricing
and revenue optimization software vendors, including a number of vendors that provide pricing and revenue optimization software for specific industries; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>large
enterprise application providers that have developed offerings that include pricing and revenue optimization functionality. </FONT></DD></DL>

<P><FONT SIZE=2>We
expect additional competition from other established and emerging companies to the extent the pricing and revenue optimization software market continues to develop and expand. We also expect
competition to increase as a result of the entrance of new competitors in the market and industry consolidation, including through a merger or partnership of two or more of our competitors or the
acquisition of a competitor by a larger company. Many of our current and potential competitors have larger installed bases of users, longer operating histories and greater name recognition than we
have. In addition, many of these companies have significantly greater financial, technical, marketing, service and other resources than we have. As a result, these companies may be able to respond
more quickly to new or emerging technologies and changes in customer demands and to devote greater resources to the development, promotion and sale of their products than we can. </FONT></P>

<P><FONT SIZE=2>Competition
could seriously impede our ability to sell additional software products and related services on terms favorable to us. Businesses may continue to enhance their internally developed
solutions, rather than investing in commercially-available solutions such as ours. Our current and potential competitors may develop and market new technologies that render our existing or future
products obsolete, unmarketable or less competitive. In addition, if these competitors develop products with similar or superior functionality to our products, or if they offer products with similar </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>9</FONT></P>

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<P><FONT SIZE=2>functionality
at a substantially lower price than our products, we may need to decrease the prices for our products in order to remain competitive. If we are unable to maintain our current product,
services and maintenance pricing due to competitive pressures, our margins will be reduced and our operating results will be adversely affected. We cannot assure you that we will be able to compete
successfully against current or future competitors or that competitive pressures will not materially and adversely affect our business, financial condition and operating results. </FONT></P>

<P><FONT SIZE=2><B><I>We are subject to a lengthy sales cycle and delays or failures to complete sales may harm our business and cause our revenue and operating income to
decline in the future.  </I></B></FONT></P>

<P><FONT SIZE=2>Our sales cycle may take several months to over a year. During this sales cycle, we may expend substantial resources with no assurance that a sale will ultimately result. The
length of a customer's sales cycle depends on a number of factors, many of which we may not be able to control. These factors include the customer's product and technical requirements and the level of
competition we face for that customer's business. Any lengthening of the sales cycle could delay our recognition of revenue and could cause us to expend more resources than anticipated. If we are
unsuccessful in closing sales or if we experience delays, it could have an adverse effect on our operating results. </FONT></P>

<P><FONT SIZE=2><B><I>If we fail to retain our key personnel or if we fail to attract additional qualified personnel, we will not be able to achieve our anticipated level of
growth and our operating results could be adversely affected.  </I></B></FONT></P>

<P><FONT SIZE=2>Our future success depends upon the continued service of our executive officers and other key sales, development, science and professional services staff. The loss of the
services of our executive officers and other key personnel would harm our operations. In addition, our future success will depend in large part on our ability to attract a sufficient number of highly
qualified personnel, and there can be no assurance that we will be able to do so. In particular, given the highly sophisticated pricing science included in our products, the pool of scientists and
software developers qualified to work on our products is limited. In addition, the implementation of our software products requires highly-qualified personnel, and hiring and retaining such personnel
to support our growth may be challenging. Competition for such qualified personnel is intense, and we compete for these individuals with other companies that have greater financial, technical,
marketing, service and other resources than we do. If we fail to retain our key personnel and attract new personnel, we will not be able to achieve our anticipated level of growth and our operating
results could be adversely affected. </FONT></P>

<P><FONT SIZE=2><B><I>Our revenue recognition policy may cause any decreases in sales not to be reflected in our revenue immediately.  </I></B></FONT></P>

<P><FONT SIZE=2>The period over which we recognize license and implementation revenue for an implementation depends on the number of licensed software products and the scope and complexity of
the customer's deployment requirements and ranges from six months to several years. As a result, a substantial majority of our revenue is recognized on arrangements that were executed in previous
periods. Any shortfall in new sales of our software products may not be reflected in our revenue for several quarters, and as such the adverse impact on our business may not be readily apparent. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>10</FONT></P>

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<P><FONT SIZE=2><A
NAME="page_dc76601_1_11"> </A> </FONT> <FONT SIZE=2><B><I>Our license and implementation revenue produces lower gross margins than our maintenance and support revenue, and an increase in license and
implementation revenue relative to maintenance and support revenue may harm our overall gross margins.  </I></B></FONT></P>

<P><FONT SIZE=2>Our license and implementation revenue was approximately 57% and 64% of our total revenue in 2005 and 2006, respectively. Our license and implementation revenue has lower gross
margins than our maintenance and support revenue. Continued increases in the percentage of total revenue represented by license and implementation revenue could adversely affect our overall gross
margins even though gross profit may be increasing. </FONT></P>

<P><FONT SIZE=2><B><I>Our international sales subject us to risks that may adversely affect our operating results.  </I></B></FONT></P>

<P><FONT SIZE=2>Over the last several years, we derived a significant portion of our revenue from customers outside the Americas. In 2005 and 2006, approximately 52% and 54% of our total
revenue, respectively, was derived from outside the Americas. We may not be able to maintain or increase international market demand for our products. We are considering adding personnel and
facilities abroad to support and expand our growing global customer base. Managing overseas growth could require significant resources and management attention and may subject us to new or larger
levels of regulatory, economic, tax and political risks. We cannot be sure that developing international operations will be successful. Among the risks we believe are most likely to affect us with
respect to our international sales and operations are: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>economic
conditions in various parts of the world;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>unexpected
changes in regulatory requirements;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>less
protection for intellectual property rights in some countries;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>new
and different sources of competition;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>multiple,
conflicting and changing tax laws and regulations that may affect both our international and domestic tax liabilities and result in increased complexity and costs;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>difficulties
in complying with foreign labor laws, regulations or restrictions;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>if
we were to establish international offices, the difficulty of managing and staffing such international offices and the increased travel, infrastructure and legal
compliance costs associated with multiple international locations;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>difficulties
in enforcing contracts and collecting accounts receivable, especially in developing countries;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>if
contracts become denominated in local currency, fluctuations in exchange rates; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>tariffs
and trade barriers, import/export controls and other regulatory or contractual limitations on our ability to sell or develop our products in certain foreign markets. </FONT></DD></DL>


<P><FONT SIZE=2>As
we continue to expand our business globally, our success will depend, in large part, on our ability to anticipate and effectively manage these and other risks associated with our international
operations. Our failure to manage any of these risks successfully could harm our international operations and reduce our international sales, adversely affecting our business, operating results and
financial condition. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>11</FONT></P>

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<P><FONT SIZE=2><B><I>Our inability to sustain our historical maintenance and support renewal rates and pricing would adversely affect our operating result.  </I></B></FONT></P>


<P><FONT SIZE=2>Maintenance and support agreements are typically for a term of one to two years. Over the past three years, customers have renewed an average of 96% of the maintenance and
support revenue that was up for renewal. Historically, maintenance and support revenue has represented a significant portion of our total revenue, including approximately 36% of our total revenue in
2006. In addition, our maintenance and support revenue has a higher gross margins than our license and implementation revenue. If our customers choose not to renew their maintenance and support
agreements with us on favorable terms or at all, our business, operating results and financial condition could be harmed. </FONT></P>


<P><FONT SIZE=2><B><I>We might not be able to manage our future growth efficiently or profitably.  </I></B></FONT></P>

<P><FONT SIZE=2>We experienced significant growth in 2006 and are planning for this growth trend to continue. In response to such growth, we will likely need to expand the size of our sales
and marketing, research and development and general and administrative staffs, grow our related operations and strengthen our financial and accounting controls. There is no assurance that our
infrastructure will be sufficiently scalable to manage our growth. For example, our anticipated growth may result in a significant increase in demand for our implementation personnel to implement our
solutions. If we are unable to address these additional demands on our resources, our operating results and growth might suffer. Even if we are able to hire additional personnel, there is no guarantee
such personnel will be as highly qualified as our existing personnel. As a result, certain implementations of our solution may not meet our customers' expectations and our reputation could be harmed
and our business and operating results adversely affected. Also, if we continue to expand our operations, management might not be effective in expanding our physical facilities and our systems,
procedures or controls might not be adequate to support such expansion. Further, to the extent we invest in additional resources to support further growth and growth in our revenue does not ensue, our
operating results would be adversely affected. Our inability to manage our growth could harm our business. </FONT></P>

<P><FONT SIZE=2><B><I>Defects or errors in our software products could harm our reputation, impair our ability to sell our products and result in significant costs to us.  </I></B></FONT></P>


<P><FONT SIZE=2>Our pricing and revenue optimization software products are complex and may contain undetected defects or errors. Several of our products have recently been developed and may
therefore be more likely to contain undetected defects or errors. In addition, we frequently develop enhancements to
our software products that may contain defects. We have not suffered significant harm from any defects or errors to date, but we have found defects in our software products from time to time. We may
discover additional defects in the future, and such defects could be material. We may not be able to detect and correct defects or errors before the final implementation of our software products.
Consequently, we or our customers may discover defects or errors after our software products have been implemented. We have in the past issued, and may in the future need to issue, corrective releases
of our products to correct defects or errors. The occurrence of any defects or errors could result in: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>lost
or delayed market acceptance and sales of our software products;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>delays
in payment to us by customers;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>injury
to our reputation;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>diversion
of our resources; </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>12</FONT></P>

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<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>legal
claims, including product liability claims, against us;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>increased
maintenance and support expenses; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>increased
insurance costs. </FONT></DD></DL>
<BR>

<P><FONT SIZE=2>Our
license agreements with our customers typically contain provisions designed to limit our liability for defects and errors in our software products and damages relating to such defects and errors,
but these provisions may not be enforced by a court or otherwise effectively protect us from legal claims. Our liability insurance may not be adequate to cover all of the costs resulting from these
legal claims. Moreover, we cannot assure you that our current liability insurance coverage will continue to be available on acceptable terms. In addition, the insurer may deny coverage on any future
claim. The successful assertion against us of one or more large claims that exceeds available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or
the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business and operating results. Furthermore, even if we prevail in any
litigation, we are likely to incur substantial costs and our management's attention will be diverted from our operations. </FONT></P>

<P><FONT SIZE=2><B><I>New accounting standards or interpretations of existing accounting standards, including those related to revenue recognition, could adversely affect our
operating results.  </I></B></FONT></P>

<P><FONT SIZE=2>Generally accepted accounting principles in the United States are subject to interpretation by the Financial Accounting Standards Board, the American Institute of Certified
Public Accountants, the Securities and Exchange Commission, or SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. A change in principles or interpretations,
in particular those related to revenue recognition, could have an adverse effect on our reported financial results. </FONT></P>

<P><FONT SIZE=2><B><I>If we fail to protect our proprietary rights and intellectual property adequately, our business and prospects may be harmed.  </I></B></FONT></P>

<P><FONT SIZE=2>Our success will depend in part on our ability to protect our proprietary methodologies and intellectual property. We rely upon a combination of trade secrets, confidentiality
policies, nondisclosure and other contractual arrangements, and patent, copyright and trademark laws to protect our intellectual property rights. We cannot, however, be sure that steps we take to
protect our proprietary rights will prevent misappropriation of our intellectual property, or the development and marketing of similar and competing products and services by third parties. </FONT></P>

<P><FONT SIZE=2>We
rely, in some circumstances, on trade secrets to protect our technology. Trade secrets, however, are difficult to protect. In addition, our trade secrets may otherwise become known or be
independently discovered by competitors, and in such cases, we could not assert such trade secret rights against such parties. We seek to protect our proprietary technology and processes, in part, by
confidentiality agreements with our employees, consultants, customers, scientific advisors and other contractors. These agreements may be breached, and we may not have adequate remedies for any
breach. To the extent that our employees, consultants or contractors use intellectual property owned
by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. </FONT></P>

<P><FONT SIZE=2>As
of the date of this filing, we have four pending U.S. patent applications. We have not pursued patent protection in any foreign countries. Our pending patent applications may not result in issued
patents. The patent position of technology-oriented companies, including ours, is generally uncertain and involves complex legal and factual considerations. The standards that the United States Patent
and Trademark Office uses to grant patents are not always applied predictably or </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>13</FONT></P>

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<P><FONT SIZE=2>uniformly
and can change. Accordingly, we do not know the degree of future protection for our proprietary rights or the breadth of claims allowed in any patents that may be issued to us or to others.
If any of our patent applications issue, they may not contain claims sufficiently broad to protect us against third parties with similar technologies or products, or provide us with any competitive
advantage. Moreover, once they have been issued, our patents and any patent for which we have licensed or may license rights may be challenged, narrowed, invalidated or circumvented. If our patents
are invalidated or otherwise limited, other companies will be better able to develop products that compete with ours, which could adversely affect our competitive business position, business prospects
and financial condition. </FONT></P>

<P><FONT SIZE=2>Patent
applications in the U.S. are typically not published until 18&nbsp;months after filing, or in some cases not at all, and publications of discoveries in industry-related literature lag behind
actual discoveries. We cannot be certain that we were the first to make the inventions claimed in our pending patent applications or that we were the first to file for patent protection. Additionally,
the process of obtaining patent protection is expensive and time-consuming, and we may not be able to prosecute all necessary or desirable patent applications at a reasonable cost or in a
timely manner. As a result, we may not be able to obtain adequate patent protection. </FONT></P>

<P><FONT SIZE=2>In
addition, despite our efforts to protect our proprietary rights, unauthorized parties may be able to obtain and use information that we regard as proprietary. The issuance of a patent does not
guarantee that it is valid or enforceable. As such, even if we obtain patents, they may not be valid or enforceable against third parties. In addition, the issuance of a patent does not guarantee that
we have a right to practice the patented invention. Third parties may have blocking patents that could be used to prevent us from marketing or practicing our potentially patented products. As a
result, we may be required to obtain licenses under these third-party patents. If licenses are not available to us on acceptable terms, or at all, we will not be able to make and sell our software
products and competitors would be more easily able to compete with us. </FONT></P>

<P><FONT SIZE=2><B><I>Intellectual property litigation and infringement claims may cause us to incur significant expense or prevent us from selling our software products.  </I></B></FONT></P>


<P><FONT SIZE=2>Our industry is characterized by the existence of a large number of patents, trademarks and copyrights and by frequent litigation based on allegations of infringement or other
violations of intellectual property rights. A third party may assert that our technology violates its intellectual property rights, or we may become the subject of a material intellectual property
dispute. Pricing and revenue optimization solutions may become increasingly subject to infringement claims as the number of commercially available pricing and revenue optimization solutions increases
and the functionality of these solutions overlaps. Future litigation may involve patent holding companies or other adverse patent owners who have no relevant product revenue and against whom our own
potential patents may therefore provide little or no deterrence. Regardless of the merit of any particular claim that our technology violates the intellectual property rights of others, responding to
such claims may require us to: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>incur
substantial expenses and expend significant management efforts to defend such claims;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>pay
damages, potentially including treble damages, if we are found to have willfully infringed such parties' patents or copyrights;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>cease
making, licensing or using products that are alleged to incorporate the intellectual property of others; </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>14</FONT></P>

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<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>distract
management and other key personnel from performing their duties for us;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>enter
into potentially unfavorable royalty or license agreements in order to obtain the right to use necessary technologies; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>expend
additional development resources to redesign our products. </FONT></DD></DL>

<P><FONT SIZE=2>Any
license required as a result of litigation under any patent may not be made available on commercially acceptable terms, if at all. In addition, some licenses may be nonexclusive, and therefore our
competitors may have access to the same technology licensed to us. If we fail to obtain a required license or are unable to design around a patent, we may be unable to effectively develop or market
our products, which could limit our ability to generate revenue or maintain profitability. </FONT></P>

<P><FONT SIZE=2>We
may also be required to indemnify our customers for their use of the intellectual property associated with our current product suite or for other third-party products that are incorporated into our
solutions and that infringe the intellectual property rights of others. If we are unable to resolve our legal obligations by settling or paying an infringement claim or a related indemnification claim
as described above, we may be required to compensate our customers under the contractual arrangement with the customers. Some of our intellectual property indemnification obligations are contractually
capped at a very high amount or not capped at all. </FONT></P>

<P><FONT SIZE=2><B><I>We use open source software in our products that may subject our software products to general release or require us to re-engineer our
products, which may cause harm to our business.  </I></B></FONT></P>

<P><FONT SIZE=2>We use open source software in our products and may use more open source software in the future. From time to time, there have been claims challenging the ownership of open
source software against companies that incorporate open source software into their products. As a result, we could be subject to suits by parties claiming ownership of what we believe to be open
source software. Some open source licenses contain requirements that we make available source code for modifications or derivative works we create based upon the open source software and that we
license such modifications or derivative works under the terms of a particular open source license or other license granting third parties certain rights of further use. If we combine our proprietary
software products with open source software in a certain manner, we could, under certain of the open source licenses, be required to release the source code of our proprietary software products. In
addition to risks related to license requirements, usage of open source software can lead to greater risks than use of third party commercial software, as open source licensors generally do not
provide warranties or controls on origin of the software. In addition, open source license terms may be ambiguous and many of the risks associated with usage of open source cannot be eliminated, and
could, if not properly addressed, negatively affect our business. If we were found to have inappropriately used open source software, we may be required to re-engineer our products, to
discontinue the sale of our products in the event re-engineering cannot be accomplished on a timely basis or take other remedial action that may divert resources away from our development
efforts, any of which could adversely affect our business, operating results and financial condition. </FONT></P>

<P><FONT SIZE=2><B><I>We utilize third-party software that we incorporate into our software products, and impaired relations with these third parties, defects in third-party
software or a third party's inability or failure to enhance their software over time could adversely affect our operating performance and financial condition.  </I></B></FONT></P>


<P><FONT SIZE=2>We incorporate and include third-party software into our software products. If our relations with any of these third parties are impaired, or if we are unable to obtain or
develop a replacement for </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>15</FONT></P>

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<P><FONT SIZE=2>the
software, our business could be harmed. The operation of our products could be impaired if errors occur in the third-party software that we utilize. It may be more difficult for us to correct any
defects in third-party software because the software is not within our control. Accordingly, our business could be adversely affected in the event of any errors in this software. There can be no
assurance that these third parties will continue to invest the appropriate levels of resources in their products and services to maintain and enhance the capabilities of their software. </FONT></P>

<P><FONT SIZE=2><B><I>The elimination or significant reduction in the general business tax credit could adversely affect our results of operations.  </I></B></FONT></P>

<P><FONT SIZE=2>Our results of operations benefit from the tax credit incentives under the U.S. research and experimentation tax credit extended to taxpayers engaged in qualified research and
experimental activities while carrying on a trade or business. This tax credit is designed to stimulate qualifying company research and development over time by reducing after-tax costs.
By qualifying for the tax credit, we have been able to use general business tax credits and may use related general business tax credit carryforwards in future periods to reduce our federal income tax
liability. Our operating activities may disqualify us in the future from the benefits of the tax credit. In addition, the tax credit may not be renewed prior to its expiration on December&nbsp;31,
2007, or if renewed, it may be renewed on terms significantly less favorable than current tax incentives or on terms resulting in our disqualification from the benefits of the tax credit. The
elimination or significant reduction in the tax credit would increase our effective tax rate and would adversely affect our results of operations. </FONT></P>


<P><FONT SIZE=2><B><I>If we do not develop relationships with third-party consultants and systems integrators to implement our solutions, our growth may suffer.  </I></B></FONT></P>

<P><FONT SIZE=2>Our strategy is to develop relationships with third-party consultants and systems integrators to assist with implementation of our solutions. If third-party consultants and
systems integrators are reluctant to assist on terms acceptable to us, if at all, or if we otherwise fail to establish and maintain these relationships, our growth may suffer and our operating results
could be harmed. In addition, if we establish such relationships with third-party consultants and systems integrators, we may only have limited control over the level and quality of service provided
by such parties. </FONT></P>

<P><FONT SIZE=2><B><I>We may enter into acquisitions that may be difficult to integrate, fail to achieve our strategic objectives, disrupt our business, dilute stockholder
value or divert management attention.  </I></B></FONT></P>

<P><FONT SIZE=2>We currently do not have any agreements with respect to any acquisitions, but in the future we may pursue acquisitions of businesses, technologies and products that we intend
to complement our existing business, products and technologies. We cannot assure you that any acquisition we make in the future will provide us with the benefits we anticipated in entering into the
transaction. Acquisitions are typically accompanied by a number of risks, including: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>difficulties
in integrating the operations and personnel of the acquired companies;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>difficulties
in maintaining acceptable standards, controls, procedures and policies;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>potential
disruption of ongoing business and distraction of management;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>inability
to maintain relationships with customers of the acquired business;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>impairment
of relationships with employees and customers as a result of any integration of new management and other personnel;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>difficulties
in incorporating acquired technology and rights into our products and services; </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>16</FONT></P>

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<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>unexpected
expenses resulting from the acquisition; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>potential
unknown liabilities associated with acquired businesses. </FONT></DD></DL>

<P><FONT SIZE=2>In
addition, acquisitions may result in the incurrence of debt, restructuring charges and write-offs, such as write-offs of acquired in-process research and
development. Acquisitions may also result in goodwill and other intangible assets that are subject to impairment tests, which could result in future impairment charges. Furthermore, if we finance
acquisitions by issuing convertible debt or equity securities, our existing stockholders may be
diluted and earnings per share may decrease. To the extent we finance future acquisitions with debt, such debt could include financial or operational covenants that restrict our business operations. </FONT></P>

<P><FONT SIZE=2>We
may enter into negotiations for acquisitions that are not ultimately consummated. Those negotiations could result in diversion of management time and significant
out-of-pocket costs. If we fail to evaluate and execute acquisitions successfully, we may not be able to achieve our anticipated level of growth and our business and operating
results could be adversely affected. </FONT></P>

<P><FONT SIZE=2><B><I>Our operations might be affected by the occurrence of a natural disaster or other catastrophic event in Houston, Texas.  </I></B></FONT></P>


<P><FONT SIZE=2>Our headquarters are located in Houston, Texas, from which we base our operations. Although we have contingency plans in effect for natural disasters or other catastrophic
events, these events, including terrorist attacks and natural disasters such as hurricanes, could disrupt our operations. Even though we carry business interruption insurance and typically have
provisions in our contracts that protect us in certain events, we might suffer losses as a result of business interruptions that exceed the coverage available under our insurance policies or for which
we do not have coverage. For example, even a temporary disruption to our business operations may create a negative perception in the marketplace. Any natural disaster or catastrophic event affecting
us could have a significant negative impact on our operations. </FONT></P>

<P><FONT SIZE=2><B><I>We will incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time
to new compliance initiatives.  </I></B></FONT></P>

<P><FONT SIZE=2>As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. SEC and Nasdaq rules and regulations impose
heightened requirements on public companies, including requiring changes in corporate governance practices. Our management and other personnel will need to devote a substantial amount of time to these
new compliance initiatives. We may also need to hire additional finance and administrative personnel to support our compliance requirements. Moreover, these rules and regulations will increase our
legal and financial costs and will make some activities more time-consuming. </FONT></P>

<P><FONT SIZE=2>In
addition, we are required to maintain effective internal controls for financial reporting and disclosure controls and procedures. In particular, we will be required to perform system and process
evaluation and testing of our internal controls over financial reporting to allow management to report on, and our independent registered public accounting firm to report on, the effectiveness of our
internal controls over financial reporting, as required by Section&nbsp;404 of the Sarbanes-Oxley Act. Our testing, or the subsequent testing by our independent registered public accounting firm,
may reveal deficiencies or material weaknesses in our internal controls over financial reporting. Our compliance with Section&nbsp;404 will require that we incur substantial accounting expense and
expend significant management efforts. We currently do not have an internal audit group, and we may need to hire additional accounting and financial staff with appropriate public company experience
and technical accounting knowledge. Moreover, if we are not able to comply with the requirements </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>17</FONT></P>

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<P><FONT SIZE=2>of
Section&nbsp;404 in a timely manner, or if we or our independent registered public accounting firm identifies deficiencies or material weaknesses in our internal controls over financial
reporting, the market price of our stock could decline and we could be subject to sanctions or investigations by the Nasdaq, SEC or other regulatory authorities, which would require additional
financial and management resources. </FONT></P>

<P><FONT SIZE=2><B><I>Our ability to raise capital in the future may be limited, and our failure to raise capital when needed could prevent us from executing our growth
strategy.  </I></B></FONT></P>

<P><FONT SIZE=2>We believe that our existing cash and cash equivalents and our cash flow from future operating activities, together with the net proceeds of this offering, will be sufficient
to meet our anticipated cash needs for the foreseeable future. The timing and amount of our working capital and capital expenditure requirements may vary significantly depending on numerous factors,
including the other risk factors described in this prospectus. In addition, we may require additional financing to fund the purchase price of future acquisitions. Additional financing may not be
available on terms favorable to us, or at all. Any additional capital raised through the sale of equity or convertible debt securities may dilute your percentage ownership of our common stock.
Furthermore, any new debt or equity securities we issue could have rights, preferences and privileges superior to our common stock. Capital raised through debt financings could require us to make
periodic interest payments and could impose potentially restrictive covenants on the conduct of our business. </FONT></P>


<P><FONT SIZE=3><B>Risks relating to this offering and ownership of our common stock  </B></FONT></P>

<P><FONT SIZE=2><B><I>Because there has not been a public market for our common stock and our stock price may be volatile, you may not be able to resell your shares at or
above the initial offering price.  </I></B></FONT></P>

<P><FONT SIZE=2>Prior to this offering, you could not buy or sell our common stock publicly. We cannot predict the extent to which an active trading market for our common stock will develop or
whether the market price of our common stock will be volatile following this offering. The market for technology stocks has been volatile. The following factors, most of which are outside of our
control, could cause the market price of our common stock to decrease significantly from the price you pay in this offering: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>variations
in our quarterly or annual operating results;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>decreases
in market valuations of comparable companies;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>fluctuations
in stock market prices and volumes;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>decreases
in financial estimates by equity research analysts;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>announcements
by our competitors of significant contracts, new products or product enhancements, acquisitions, distribution partnerships, joint ventures or capital
commitments;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>departure
of key personnel;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>changes
in governmental regulations and standards affecting the software industry and our products;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>sales
of common stock or other securities by us in the future;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>damages,
settlements, legal fees and other costs related to litigation, claims and other contingencies; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>other
risks described elsewhere in this section. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>18</FONT></P>

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<P><FONT SIZE=2>In
the past, securities class action litigation often has been initiated against a company following a period of volatility in the market price of the company's securities. If class action litigation
is initiated against us, we will incur substantial costs and our management's attention will be diverted from our operations. All of these factors could cause the market price of our stock to decline,
and you may lose some or all of your investment. </FONT></P>

<P><FONT SIZE=2><B><I>If equity research analysts do not publish research or reports about us or if they issue unfavorable commentary or downgrade our common stock, the price
of our common stock could decline.  </I></B></FONT></P>

<P><FONT SIZE=2>The trading market for our common stock will rely in part on the research and reports that equity research analysts publish about us and our business. The price of our stock
could decline if one or more equity research analysts downgrade our stock or if those analysts issue other unfavorable commentary or cease publishing reports about our business. </FONT></P>

<P><FONT SIZE=2><B><I>Future sales of our common stock by existing stockholders could cause our stock price to decline.  </I></B></FONT></P>

<P><FONT SIZE=2>After this offering, we will have&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of common stock outstanding. The&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
sold in this offering, or&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares if the
underwriters' over-allotment option is exercised in full, will be freely tradable without restriction or further registration under federal securities laws unless purchased by our
affiliates. The remaining&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of common stock outstanding after this offering will be available for sale in the public market as follows: </FONT></P>

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</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="49%" ALIGN="LEFT"><FONT SIZE=2><B>Number of shares<BR> </B></FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="49%" ALIGN="LEFT"><FONT SIZE=2><B>Date of availability for sale<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>On the date of this prospectus</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>90 days after the date of this prospectus</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>180 days after the date of this prospectus</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>180 days after the date of this prospectus, upon the exercise of vested options</FONT></TD>
</TR>
<TR VALIGN="TOP">
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</TR>
</TABLE>
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<P><FONT SIZE=2>The remaining&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares held by existing stockholders will become eligible for sale at various times on or
before&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;. </FONT></P>

<P><FONT SIZE=2>The
above table assumes the effectiveness of the lock-up agreements under which holders of substantially all of our common stock have agreed not to sell or otherwise dispose of their
shares of common stock. J.P. Morgan Securities Inc. and Deutsche Bank Securities&nbsp;Inc. may, at their discretion and at any time without notice, release all or any portion of the securities
subject to lock-up agreements. </FONT></P>

<P><FONT SIZE=2>If
our common stockholders sell substantial amounts of common stock in the public market, or if the market perceives that these sales may occur, the market price of our common stock may decline. In
addition, as soon as practicable after the completion of this offering, we intend to file&nbsp;a registration statement under the Securities Act of 1933, as amended, or the Securities Act, covering
2,285,247 shares of common stock consisting of shares subject to options outstanding or reserved for issuance under our stock option plans and shares of our common stock issued upon exercise of
options under such plans. Accordingly, shares registered under that registration statement will be available for sale in the open market, subject to the contractual lock-up agreements
described above that prohibit the sale or other disposition of the shares of common stock underlying the options for a period of 180&nbsp;days after the date of this prospectus. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>19</FONT></P>

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<BR>

<P><FONT SIZE=2><B><I>We have broad discretion in the use of the proceeds of this offering.  </I></B></FONT></P>

<P><FONT SIZE=2>Approximately $20.0&nbsp;million of the net proceeds to us from this offering will be used to repay certain indebtedness incurred in connection with the payment of a
one-time cash dividend to our stockholders in March&nbsp;2007. The remainder of the net proceeds will be used, as determined by management in its sole discretion, for working capital and
general corporate purposes. We have not, however, determined the allocation of those remaining net proceeds among such uses. Our management will have broad discretion over the use and investment of
these net proceeds, and, accordingly, you will need to rely upon the judgment of our management with respect to our use of these net proceeds, with only limited information concerning management's
specific intentions. You will not have the opportunity, as part of your investment decision, to assess whether our proceeds are being used appropriately. </FONT></P>


<P><FONT SIZE=2><B><I>Our directors and executive officers will continue to have substantial control over us after this offering and could limit the ability of stockholders
to influence the outcome of key transactions, including changes of control.  </I></B></FONT></P>

<P><FONT SIZE=2>We anticipate that our executive officers and directors and entities affiliated with them will, in the aggregate, beneficially own&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of our outstanding common
stock following the completion of this offering, assuming the underwriters do not exercise their over-allotment option. Our executive officers, directors and affiliated entities, if acting
together, would be able to control or influence significantly all matters requiring approval by our stockholders, including the election of directors and the approval of mergers or other significant
corporate transactions. These stockholders may have interests that differ from yours, and they may vote in a way with which you disagree and that may be adverse to your interests. The concentration of
ownership of our common stock may have the effect of delaying, preventing or deterring a change of control of our company, could
deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company and may affect the market price of our common stock. </FONT></P>

<P><FONT SIZE=2><B><I>Anti-takeover provisions in our Certificate of Incorporation and Bylaws, which will be effective on the closing of this offering, and under
Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.  </I></B></FONT></P>


<P><FONT SIZE=2>Our Certificate of Incorporation and by-laws and Section&nbsp;203 of the Delaware General Corporation Law contain provisions that might enable our management to
resist a takeover of our company. These provisions include the following: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
division of our board of directors into three classes to be elected on a staggered basis, one class each year;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>a
prohibition on actions by written consent of our stockholders;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
elimination of the right of stockholders to call a special meeting of stockholders;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>a
requirement that stockholders provide advance notice of any stockholder nominations of directors or any proposal of new business to be considered at any meeting of
stockholders;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>a
requirement that a supermajority vote be obtained to amend or repeal certain provisions of our certificate of incorporation; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
ability of our board of directors to issue preferred stock without stockholder approval. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>20</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_dd76601_1_21"> </A>

<P><FONT SIZE=2>In
addition, because we are incorporated in Delaware, we are governed by the provisions of Section&nbsp;203 of the Delaware General Corporation Law, which limits the ability of stockholders owning
in excess of 15% of our outstanding voting stock to merge or combine with us. Although we believe these provisions collectively provide for an opportunity to obtain higher bids by requiring potential
acquirors to negotiate with our board of directors, they would apply even if an offer were considered beneficial by some stockholders. In addition, these provisions may frustrate or prevent any
attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing
the members of our management. </FONT></P>

<P><FONT SIZE=2><B><I>Investors in this offering will experience immediate and substantial dilution in the net tangible book value of the common stock they purchase in this
offering.  </I></B></FONT></P>

<P><FONT SIZE=2>Investors in this offering will experience immediate dilution of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, because the price that they pay will be substantially greater than the net tangible
book value per share of common stock that they acquire. This dilution is due in large part to the fact that our earlier investors paid substantially less than the price of the shares being sold in
this offering when they purchased their shares of our capital stock. If outstanding options to purchase our common stock are exercised, investors in this offering will experience additional dilution. </FONT></P>

<P><FONT SIZE=2><B><I>We do not intend to pay dividends on our common stock in the foreseeable future.  </I></B></FONT></P>

<P><FONT SIZE=2>We do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently anticipate that we will retain all of our available cash, if any, for
use as working capital and for other general corporate purposes. Any payment of future dividends will be at the discretion of our board of directors and will depend upon, among other things, our
earnings, financial condition, capital requirements, level of indebtedness, statutory and contractual restrictions applying to the payment of dividends and other considerations that the board of
directors deems relevant. In particular, the provisions of our existing indebtedness prohibit us from paying dividends without the consent of the lenders. Investors seeking cash dividends should not
purchase our common stock. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>21</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_dd76601_1_22"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dd76601_special_note_regarding_forward-looking_statements"> </A>
<A NAME="toc_dd76601_1"> </A>
<BR></FONT><FONT SIZE=4><B>Special note regarding forward-looking statements  <BR>  </B></FONT></P>

<P><FONT SIZE=2>We have made statements under the captions "Prospectus summary," "Risk factors," "Management's discussion and analysis of financial condition and results of
operations" and "Business" and in other sections of this prospectus that are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as "may,"
"might," "will," "could," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative or plural of these words and other comparable
terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, include, among other things, our anticipated strategies and anticipated trends in our
business and the markets in which we operate. These statements are only predictions based on our current expectations and projections about future events. Although we believe the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Because these forward-looking statements involve risks
and uncertainties, there are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from those expressed or implied by the forward-
looking statements. You should specifically consider the numerous risks outlined under "Risk factors." </FONT></P>

<P><FONT SIZE=2>You
should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement on Form&nbsp;S-1, of which this prospectus
is a part, that we have filed with the Securities and Exchange Commission, completely and with the understanding that our actual future results, levels of activity, performance and achievements may be
materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>22</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=8,SEQ=27,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=935008,FOLIO='22',FILE='DISK112:[07ZBA1.07ZBA76601]DD76601A.;18',USER='KBLACKW',CD=';4-APR-2007;13:36' -->
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_de76601_1_23"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="de76601_use_of_proceeds"> </A>
<A NAME="toc_de76601_1"> </A>
<BR></FONT><FONT SIZE=4><B>Use of proceeds  <BR>  </B></FONT></P>

<P><FONT SIZE=2>We estimate that the net proceeds we will receive from this offering will be approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million, after deducting underwriting
discounts and commissions and estimated offering costs. We will not receive any proceeds from the sale of shares of common stock by the selling stockholders. </FONT></P>

<P><FONT SIZE=2>Our
principal purposes for this offering are to obtain working capital for general corporate purposes, repay indebtedness, establish a public market for our common stock and facilitate our future
access to public capital markets. We will have broad discretion in the way we use the net proceeds to us; however, we intend to use the net proceeds to us from this offering as summarized in the
following table: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=4><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="87%" ALIGN="LEFT"><FONT SIZE=2><B>Use of net proceeds*<BR> </B></FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="87%"><FONT SIZE=2>Retirement of indebtedness(1)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="87%"><FONT SIZE=2>Available cash</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="87%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="87%"><FONT SIZE=2>Total uses</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<DL compact>
<DT style='margin-bottom:-9pt;'><FONT SIZE=1>(*)</FONT></DT><DD><FONT SIZE=1>The
amounts set forth in this table are approximate.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD><FONT SIZE=1>To
partially finance the payment of a one-time cash dividend of $41.3&nbsp;million to our stockholders, we incurred $20.0&nbsp;million of indebtedness in
March&nbsp;2007. By its terms, this indebtedness becomes due in full upon the closing of this offering and would otherwise be due and payable in March&nbsp;2012. The indebtedness bears interest at
a base rate or Eurodollar rate, at our option, plus a margin of 1.50% for base rate borrowings and 2.75% for Eurodollar rate borrowings. </FONT></DD></DL>


<P><FONT SIZE=2>A $1.00 increase (decrease) in the assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share would increase (decrease) the net proceeds to us from this
offering by approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after
deducting
underwriter discounts and estimated offering expenses payable by us. </FONT></P>

<P><FONT SIZE=2>The
amount and timing of what we actually spend may vary significantly and will depend on a number of factors, including our future revenue and cash generated by operations and the other factors
described in the "Risk factors" section. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>23</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_de76601_1_24"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="de76601_dividend_policy"> </A>
<A NAME="toc_de76601_2"> </A>
<BR></FONT><FONT SIZE=4><B>Dividend policy  <BR>  </B></FONT></P>

<P><FONT SIZE=2>Subject to preferences that may apply to shares of preferred stock outstanding at the time, the holders of outstanding shares of our common stock may receive
dividends out of assets legally available and in the amounts that our board of directors may determine from time to time. </FONT></P>


<P><FONT SIZE=2>In
August&nbsp;2006, we redeemed 1,294,030 shares of our redeemable preferred stock for $8.4&nbsp;million, including accrued dividends of $2.7&nbsp;million on such shares. In March&nbsp;2007,
we redeemed the remaining 2,627,282 outstanding shares of our redeemable preferred stock for $17.4&nbsp;million, including accrued dividends of $5.6&nbsp;million on such shares. In
March&nbsp;2007, we also paid a one-time cash dividend of $41.3&nbsp;million to the holders of our outstanding common stock. </FONT></P>

<P><FONT SIZE=2>Upon
the closing of this offering, we expect to retain all remaining available funds and any future earnings for use in the operation and development of our business. Accordingly, we do not anticipate
declaring or paying cash dividends on our common stock in the foreseeable future. In addition, our credit agreement prohibits us from declaring or paying future dividends without the consent of the
lender. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>24</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_de76601_1_25"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="de76601_capitalization"> </A>
<A NAME="toc_de76601_3"> </A>
<BR></FONT><FONT SIZE=4><B>Capitalization  <BR>  </B></FONT></P>

<P><FONT SIZE=2>The following table sets forth our capitalization as of December&nbsp;31, 2006 on: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>an
actual basis;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>a
pro forma basis to give effect to:
<BR><BR></FONT>
<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD><FONT SIZE=2>our
incurrence of $20.0&nbsp;million of indebtedness in March&nbsp;2007;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD><FONT SIZE=2>our
redemption of 2,627,282 shares of our redeemable preferred stock for $17.4&nbsp;million in March&nbsp;2007;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(c)</FONT></DT><DD><FONT SIZE=2>our
one-time cash dividend of $41.3&nbsp;million to our holders of common stock in March&nbsp;2007; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(d)</FONT></DT><DD><FONT SIZE=2>our
receipt of $660,000 upon the exercise of options to purchase 930,458 shares of our common stock in March 2007.
<BR><BR></FONT></DD></DL>
</UL>
</DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>On
a pro forma as adjusted basis to give effect additionally to our sale of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of common
stock in this offering, after deducting the estimated
underwriting discount and commission and estimated offering expenses payable by us, and the application of the net proceeds of this offering as described under "Use of proceeds." </FONT></DD></DL>


<P><FONT SIZE=2>You
should read the following table in conjunction with the section of this prospectus captioned "Management's discussion and analysis of financial condition and results of operations" and our
consolidated financial statements and related notes. </FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=12><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="RIGHT"><FONT SIZE=2><B>December 31, 2006<BR> </B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT"><FONT SIZE=2><B>(unaudited)<BR>
(In thousands, except share and per share data)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Actual<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Pro forma<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=2><B>Pro forma<BR>
as adjusted(1)</B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=12><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2>Long-term obligations, including current portion</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>20,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><BR>
Redeemable preferred stock, $0.001 par value; 3,921,312 designated, 2,627,282 issued and outstanding, actual; no shares designated, issued or outstanding, pro forma and pro forma as adjusted</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
17,283</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><BR>
Stockholders' equity (deficit):</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="17%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Preferred stock, $0.001 par value, no shares authorized, actual and pro forma; 5,000,000 authorized, pro forma as adjusted; no shares designated, issued or outstanding, actual, pro forma and pro forma as
adjusted</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Common stock, $0.001 par value; 28,000,000 authorized, 23,580,729 issued and 19,733,689 outstanding, actual; 24,511,187 issued and 20,664,147 outstanding, pro forma; 50,000,000 authorized
and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;issued and outstanding pro forma as adjusted</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>24</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>25</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Additional paid-in-capital</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>7,813</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>8,472</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Common stock warrants</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>226</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>226</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Treasury stock</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(8,938</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>(8,938</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Retained earnings</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>11,552</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>(29,858</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=5 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>Total stockholders' equity (deficit)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>10,677</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>(30,073</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><BR>
Total capitalization</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
27,960</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><BR>
(10,073</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=12><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<DL compact>
<DT style='margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD><FONT SIZE=1>A
$1.00 increase (decrease) in the assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share would increase (decrease) cash and cash
equivalents, additional
paid-in capital, total stockholders' equity and total capitalization by approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million, assuming the number of shares offered by us, as set forth on the cover page
of this prospectus, remains the same and after deducting underwriter discounts and estimated offering expenses payable by us. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>25</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_dg76601_1_26"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dg76601_dilution"> </A>
<A NAME="toc_dg76601_1"> </A>
<BR></FONT><FONT SIZE=4><B>Dilution  <BR>  </B></FONT></P>

<P><FONT SIZE=2>Our net tangible book value as of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;was approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million, or
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share of our common stock. Our net tangible
book value per share represents our total tangible assets less total liabilities, divided by the number of shares of our common stock outstanding
on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;. </FONT></P>

<P><FONT SIZE=2>Without
taking into account any changes in net tangible book value after&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, other than to give
effect to the sale of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of our common stock in this offering, after
deducting underwriting discounts and estimated offering costs payable by us, our as adjusted net tangible book value as of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2007 would have
been approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million, or $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share of our common stock. This amount represents an immediate increase in net tangible book
value of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share to our existing
stockholders and an immediate dilution in net tangible book value of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share to new investors purchasing shares in this offering. The following table illustrates the dilution in net
tangible book value per share to new investors. </FONT></P>

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<TABLE WIDTH="76%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=7><HR NOSHADE SIZE=4></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP"><FONT SIZE=2>Assumed initial public offering price per share</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="71%" VALIGN="TOP"><FONT SIZE=2>Net tangible book value per share as of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2007</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="71%" VALIGN="TOP"><FONT SIZE=2>Increase in per share attributable to new investors</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=4 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP"><FONT SIZE=2>As adjusted net tangible book value per share after the offering</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=4 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP"><FONT SIZE=2>Dilution in net tangible book value per share to new investors</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=7><HR NOSHADE></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>If all of the outstanding options and warrants were exercised, the net tangible book value as of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;would have been
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million and the as adjusted net
tangible book value after this offering would have been $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, causing dilution to new investors of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share. </FONT></P>

<P><FONT SIZE=2>A
$1.00 increase (decrease) in the assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share would increase (decrease) our as adjusted net tangible book value as
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2007 by
approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million, the as adjusted net tangible book value per share after this offering by $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share and
the dilution in as adjusted net tangible book
value per share to new investors in this offering by $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and
after deducting underwriter discounts and estimated offering expenses payable by us. </FONT></P>

<P><FONT SIZE=2>The
following table summarizes, as of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2007 on the as adjusted basis described above, the
number of shares of our common stock purchased from us, the total consideration paid to us,
and the average price per share paid to us by existing stockholders and to be paid by new investors purchasing shares of our common stock in this offering, before deducting underwriting discounts and
commissions and estimated offering costs payable by us. </FONT></P>

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<TABLE WIDTH="93%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=14><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="CENTER"><FONT SIZE=2><B>Shares purchased</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=4 ALIGN="CENTER"><FONT SIZE=2><B>Total consideration</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Average<BR>
price per<BR>
share<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Number<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><B>Percent<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Amount<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><B>Percent<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=14><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Existing stockholders</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>New investors(1)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2>Total</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>100%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>100%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=14><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<DL compact>
<DT style='margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD><FONT SIZE=1>A
$1.00 increase (decrease) in the assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share would increase (decrease) total consideration paid to us by investors
participating in this offering by approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the
same and
after deducting underwriter discounts and estimated offering expenses payable by us. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>26</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_dg76601_1_27"> </A>

<P><FONT SIZE=2>The sale of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of common stock to be sold by the selling stockholders in this offering will reduce the number of shares held by existing
shareholders to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares, or&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the total shares outstanding, and will increase the number of shares held by investors participating
in this offering to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
shares, or&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the total shares outstanding. In addition, if the underwriters exercise their over-allotment option in full, the number of shares held by existing
shareholders will be further reduced to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares, or&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the total shares outstanding, and the number of shares held by investors
participating in this offering will be
further increased to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares, or&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the total shares outstanding. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>27</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=32,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=122057,FOLIO='27',FILE='DISK112:[07ZBA1.07ZBA76601]DG76601A.;28',USER='KBLACKW',CD=';4-APR-2007;13:39' -->
<A NAME="page_dg76601_1_28"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dg76601_selected_consolidated_financial_data"> </A>
<A NAME="toc_dg76601_2"> </A>
<BR></FONT><FONT SIZE=4><B>Selected consolidated financial data  <BR>  </B></FONT></P>

<P><FONT SIZE=2>The selected consolidated financial data set forth below should be read in conjunction with the consolidated financial statements and related notes and
"Management's discussion and analysis of financial condition and results of operations" and other financial information appearing elsewhere in this prospectus. The consolidated statements of income
data for the years ended December&nbsp;31, 2004, 2005 and 2006 and the consolidated balance sheet data as of December&nbsp;31, 2005 and 2006 are derived from our audited consolidated financial
statements included elsewhere in this prospectus. The consolidated statements of income data for the years ended December&nbsp;31, 2002 and 2003 and the consolidated balance sheet data as of
December&nbsp;31, 2002, 2003 and 2004 are derived from our
audited consolidated financial statements not included in this prospectus. Historical results are not necessarily indicative of results in the future. </FONT></P>

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<TABLE WIDTH="94%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=17><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER"><FONT SIZE=2><B>Year ended December 31</B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2><B>(In thousands, except per share amounts)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2002<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2003<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2004<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2006<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=17><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><B>Consolidated statements of income data:</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><BR><FONT SIZE=2><B>Revenue</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2>License and implementation</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>25,563</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>19,758</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>20,015</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>20,190</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>29,604</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2>Maintenance and support</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>8,479</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>10,700</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>12,431</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>14,940</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>16,423</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=14 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Total revenue</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>34,042</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>30,458</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>32,446</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>35,130</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>46,027</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Cost of revenue</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>15,680</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>13,722</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>13,389</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>13,381</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>15,605</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=14 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Gross profit</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>18,362</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>16,736</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>19,057</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>21,749</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>30,422</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Gross margin</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>53.9%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>54.9%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>58.7%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>61.9%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>66.1%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><BR><FONT SIZE=2><B>Operating expenses</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2>Selling, general and administrative</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>8,668</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>7,672</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>8,969</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>12,010</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>13,261</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2>Research and development</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>7,847</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>7,181</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>6,262</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>6,399</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>10,332</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=14 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Total operating expenses</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>16,515</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>14,853</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>15,231</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>18,409</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>23,593</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Income from operations</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>1,847</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>1,883</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>3,826</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>3,340</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>6,829</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><BR>
Interest income, net</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2><BR>
622</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2><BR>
227</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2><BR>
366</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2><BR>
1,074</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2><BR>
1,921</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Income before income taxes</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>2,469</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>2,110</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>4,192</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>4,414</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>8,750</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Income tax provision</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>287</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>430</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>536</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>975</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>1,725</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=14 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Net income</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>2,182</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>1,680</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>3,656</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>3,439</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>7,025</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=14 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Accretion of preferred stock</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(1,301</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(1,278</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(1,256</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(852</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>(460</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=14 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Net earnings attributable to common stockholders</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>881</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>402</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>2,400</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>2,587</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>6,565</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=14 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Net earnings attributable to common stockholders per share:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2>Basic</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>0.10</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>0.05</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>0.24</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>0.19</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>0.33</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2>Diluted</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>0.10</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>0.05</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>0.19</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>0.16</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>0.32</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=14 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Weighted average number of shares</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2>Basic</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>9,159</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>8,165</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>9,822</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>13,891</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>19,649</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2>Diluted</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>19,052</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>17,979</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>19,618</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>20,012</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>20,604</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2>28</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=33,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=1041728,FOLIO='28',FILE='DISK112:[07ZBA1.07ZBA76601]DG76601A.;28',USER='KBLACKW',CD=';4-APR-2007;13:39' -->
<A NAME="page_dg76601_1_29"> </A>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="93%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=16><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="41%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER"><FONT SIZE=2><B>December 31</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="41%" ALIGN="LEFT"><FONT SIZE=2><B>(Dollars in thousands)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2002<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2003<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2004<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2006<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=16><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="41%"><FONT SIZE=2><B>Consolidated balance sheet data:</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="41%"><FONT SIZE=2>Cash and cash equivalents</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>19,035</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>26,846</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>32,314</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>38,490</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>42,540</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="41%"><FONT SIZE=2>Working capital</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>15,991</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>18,465</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>22,218</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>27,079</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>27,575</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="41%"><FONT SIZE=2>Total assets</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>31,009</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>34,112</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>45,373</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>50,290</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>63,046</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="41%"><FONT SIZE=2>Redeemable preferred stock</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>25,269</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>17,283</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="41%"><FONT SIZE=2>Series&nbsp;A convertible redeemable preferred stock</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>29,379</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>30,656</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>31,913</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="41%"><FONT SIZE=2>Total stockholders' equity (deficit)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(9,097</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(8,462</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>(6,057</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,044</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>10,677</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=16><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2>29</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=34,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=879156,FOLIO='29',FILE='DISK112:[07ZBA1.07ZBA76601]DG76601A.;28',USER='KBLACKW',CD=';4-APR-2007;13:39' -->
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_di76601_1_30"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="di76601_management_s_discussion_and_an__man03466"> </A>
<A NAME="toc_di76601_1"> </A>
<BR></FONT><FONT SIZE=4><B>Management's discussion and analysis of<BR>  financial condition and results of operations  <BR>  </B></FONT></P>


<P><FONT SIZE=2><I>The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes and the other financial information appearing
elsewhere in this prospectus. This discussion and analysis contains forward-looking statements that involve risk, uncertainties and assumptions. Our actual results could differ materially from those
anticipated in the forward-looking statements as a result of many factors, including those discussed in "Risk factors" and elsewhere in this prospectus.</I></FONT></P>

<P><FONT SIZE=3><B>Overview  </B></FONT></P>

<P><FONT SIZE=2>We are a leading provider of pricing and revenue optimization software, an emerging category of enterprise applications designed to allow companies to improve
financial performance by enabling better pricing. By using our software products, customers gain insight into their pricing strategies, identify detrimental pricing practices, optimize their pricing
decision-making and improve their business processes and financial performance. Our software products incorporate advanced pricing science, which includes operations research, forecasting and
statistics. Our innovative science-based software products analyze, execute and optimize pricing strategies using data from traditional enterprise applications, often augmenting it with
real-time and historical data. We also provide a range of services that include analyzing a company's current pricing processes and implementing our software products to improve pricing
performance. </FONT></P>

<P><FONT SIZE=2>Historically,
a substantial portion of our revenue has come from the global airline industry. More recently, we have seen our revenue growth driven by increases in sales to customers in the
manufacturing, distribution, services, and hotel and cruise industries. We expect the percentage of our revenue from the airline industry to continue to decrease over time although revenue from the
airline industry may remain flat or grow in absolute dollars. </FONT></P>

<P><FONT SIZE=2>We
recognize the substantial majority of our license and implementation revenue on a percentage-of-completion basis because we consider implementation services to be essential
to our customers' usability of our licensed software. Under this recognition policy, the revenue we recognize during a reporting period is based on the total man-days expended on an
implementation of our software products during the reporting period as a percentage of the total man-days estimated to be necessary to complete the implementation of our software products.
As a result of our revenue recognition policy, revenue from license arrangements are recognized over the implementation period, which typically ranges from six months to several years. </FONT></P>

<P><FONT SIZE=2>Our
revenue recognition policy provides visibility into a significant portion of our revenue several quarters in advance. We do not recognize a material portion of our license revenue, if any, upon
our signing a new license agreement with a customer. Our revenue recognition only begins when efforts are expended toward implementation, which alleviates pressure to enter into license agreements by
the end of any particular quarter because we would not be able to recognize the corresponding revenue during the period in which the agreement is signed except to the extent we provide implementation
services during the period. </FONT></P>

<P><FONT SIZE=2>We
maintain our corporate headquarters in Houston, Texas. As of March&nbsp;31, 2007, we had 311 employees. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>30</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=35,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=380256,FOLIO='30',FILE='DISK112:[07ZBA1.07ZBA76601]DI76601A.;36',USER='KBLACKW',CD=';4-APR-2007;15:27' -->
<A NAME="page_di76601_1_31"> </A>
<BR>

<P><FONT SIZE=3><B>Background  </B></FONT></P>

<P><FONT SIZE=2>We were founded in 1985 and initially focused our efforts on providing complex, science-based revenue management solutions to the global airline industry. In
1998, we raised $25.0&nbsp;million by issuing convertible preferred stock to individual investors and to funds affiliated with TA Associates and JMI Equity. Mr.&nbsp;Albert E. Winemiller, our
President and Chief Executive Officer, joined us in 1999, and Mr.&nbsp;Charles H. Murphy, our Executive Vice President and Chief Financial Officer, joined us in 1998. </FONT></P>

<P><FONT SIZE=2>In
1999, we began to consider ways to diversify our product offering to include a broader suite of pricing and revenue optimization functionality. We expanded our focus beyond the airline industry to
include other industries that we believed to have a need for advanced pricing solutions. Our efforts toward diversification of products and customers intensified following September&nbsp;11, 2001 as
a result of the ensuing challenges faced by many airlines following those events. Despite the events
of September&nbsp;11, 2001 and the resulting decline in our revenue, we remained profitable as we sought additional ways to grow our business, and we have had eight consecutive years of
profitability. </FONT></P>

<P><FONT SIZE=2>In
2005, we began to experience increased demand for our pricing and revenue optimization software products. In December&nbsp;2005, Yankee Group published the results of a survey conducted in
July&nbsp;2005 of 389 respondents in the distribution industry and the high-technology, industrial and chemical manufacturing industries, 98% of which had annual revenue over
$500&nbsp;million. Of the respondents, 77% stated that they did not have a price management or profit optimization software solution but planned to purchase one and had developed a business case to
do so. </FONT></P>

<P><FONT SIZE=2>As
of March&nbsp;31, 2007, we had 90 customers across five industries in 42 countries with over 200 implementations of our software products. Our total revenue was $35.1&nbsp;million and
$46.0&nbsp;million in 2005 and 2006, respectively. Our net income was $3.4&nbsp;million and $7.0&nbsp;million in 2005 and 2006, respectively. </FONT></P>

<P><FONT SIZE=2>Our
future revenue growth and profitability will depend on the continued acceptance of our pricing and revenue optimization software products, further penetration of our target industries and the
increased adoption of pricing and revenue optimization software generally. </FONT></P>

<P><FONT SIZE=3><B>Discussion of consolidated financial information  </B></FONT></P>

<P><FONT SIZE=2><B><I>Revenue  </I></B></FONT></P>

<P><FONT SIZE=2>We derive our revenue from license fees, implementation services and maintenance and support services. Our arrangements with customers typically include: (a)&nbsp;license
fees paid for the use of our products either in perpetuity or over a specified term and implementation fees for configuration, implementation and training services and (b)&nbsp;maintenance and
support fees related to technical support and software updates. We consider our implementation services essential to the usability of our licensed software products, and therefore we recognize revenue
from perpetual software license and implementation services together as the services are performed. For certain of our arrangements, we engage an independent contractor to assist in the
implementation. We recognize revenue from these engagements net of the fees owed to the independent contractor. </FONT></P>

<P><FONT SIZE=2><I>License and implementation.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We derive the substantial majority of our license and implementation revenue from the sale of perpetual
licenses for our software products and related implementation services. Revenue from our perpetual licenses and implementation services are generally recognized as implementation services are
performed on a percentage-of-completion basis. </FONT></P>

<P><FONT SIZE=2>We
also recognize revenue from the sale of a limited number of fixed-term licenses, which have terms ranging from three months to five years, and related implementation services. In 2006, license </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>31</FONT></P>

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<P><FONT SIZE=2>and
implementation revenue from fixed-term licenses represented 11.2% of our total license and implementation revenue. Revenue from fixed-term licenses, which generally includes maintenance and
support during the license period, are recognized ratably over the license term. </FONT></P>

<P><FONT SIZE=2>Prior
to 2002, we sold the substantial majority of our solutions on a time-and-materials basis. Beginning in 2002, we began selling our solutions on a fixed-fee basis to induce customers in different
industries to purchase our solutions. Beginning in 2006, we began marketing our solutions on a time-and-materials basis again as we believe we have established a track record of successful
implementations across multiple industries. We do not expect that our transition back to time-and-materials arrangements from fixed-fee arrangements will affect our revenue recognition. </FONT></P>


<P><FONT SIZE=2><I>Maintenance and support revenue.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We generate maintenance and support revenue from the sale of maintenance and support services for our
software products. Our maintenance and support arrangements are sold with terms generally ranging from one to two years. Maintenance and support fees are invoiced to our customers either monthly,
quarterly or on an annual basis. Maintenance and support revenue includes post-contract customer support and the right to unspecified software updates and enhancements on a when and if
available basis. Over the past three years, customers have renewed an average of 96% of the maintenance and support revenue that was up for renewal. </FONT></P>

<P><FONT SIZE=2><B><I>Geographic revenue distribution  </I></B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>
<IMG SRC="g244640.jpg" ALT="CHART" WIDTH="678" HEIGHT="204">
  </B></FONT></P>

<P><FONT SIZE=2>Our
revenue is geographically dispersed because we sell our solutions to a global customer base. We do not believe there are significant trends or uncertainties among our customers based on geography,
and the percentages of revenue among geographic areas fluctuate from year to year. The substantial majority of our customer arrangements are denominated in U.S. dollars. </FONT></P>


<P><FONT SIZE=2><B><I>Cost of revenue  </I></B></FONT></P>

<P><FONT SIZE=2>Cost of revenue consists of (a)&nbsp;compensation and benefits related to professional services and customer support personnel; (b)&nbsp;billable and
non-billable travel, lodging and other out-of-pocket expenses and (c)&nbsp;facilities and other overhead and costs related to revenue. Cost of revenue for license
and implementation revenue consists of those costs related to the implementation of our solutions. The cost of revenue for our maintenance and support revenue consists of those costs related to
post-contract customer support on our deployed solutions. As a percentage of related revenue, cost of license and implementation revenue is higher than cost of maintenance and support
revenue. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>32</FONT></P>

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<P><FONT SIZE=2><B><I>Operating expenses  </I></B></FONT></P>

<P><FONT SIZE=2><I>Selling, general and administrative.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Selling, general and administrative expense consists of (a)&nbsp;compensation and benefits related
to selling, general and administrative activities; (b)&nbsp;travel, lodging and other out-of-pocket expenses; (c)&nbsp;marketing programs such as our conferences and
participating in industry trade shows; (d)&nbsp;accounting, legal and other professional fees and (e)&nbsp;facilities and other related overhead. We expect absolute dollar increases in selling,
general and administrative expenses as we incur additional expenses related to being a publicly-traded company, increase our general marketing activities, increase the number of our sales and
marketing professionals and invest in infrastructure to support continued growth. </FONT></P>

<P><FONT SIZE=2><I>Research and development.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Research and development expense consists of (a)&nbsp;compensation and benefits of software developers,
scientists and product managers working on the development of our new products, enhancements of existing products, scientific research, quality assurance and testing and (b)&nbsp;facilities and
other related overhead. We expense all of our research and development costs as incurred, and we expect to continue to do so in the foreseeable future. We
expect research and development expense to increase in absolute dollars for the foreseeable future as we continue to invest in the development of our software products. </FONT></P>

<P><FONT SIZE=2><B><I>Income taxes  </I></B></FONT></P>

<P><FONT SIZE=2>We are subject to income taxes in the United States and abroad, and we use estimates in determining our provision for income taxes. We estimate separately our deferred tax
assets, related valuation allowances, current tax liabilities and deferred tax liabilities. At December&nbsp;31, 2006, our deferred tax assets consisted primarily of federal general business tax
credit carryforwards of $675,000 remaining from historical research and development activities and temporary differences in the timing of deductions for federal income tax and financial reporting
purposes. We assess the likelihood that deferred tax assets will be realized and we recognize a valuation allowance if it is more likely than not that some portion of the deferred tax assets will not
be realized. This assessment requires judgment as to the likelihood and amounts of future taxable income. Although we believe that our tax estimates are reasonable, the ultimate tax determination
involves significant judgment that is subject to audit by tax authorities in the ordinary course of business. As a result of this assessment, we have recorded a full valuation allowance for the
$675,000 general business tax credit carryforward at December&nbsp;31, 2006. </FONT></P>

<P><FONT SIZE=2>Our
effective tax rates in 2004, 2005 and 2006 were 13%, 22% and 20%, respectively. Our effective tax rate has been lower than the statutory rate of 34% largely due to the application of general
business tax credits, including credits carried forward from prior years. Our general business tax credits may be carried forward for a period of 20&nbsp;years and are available as an offset against
future tax liabilities. Our general business tax credit carryforwards begin to expire in 2022. If our taxable income continues to increase, future general business tax credits may not be available at
levels that will allow us to maintain effective tax rates lower than the statutory rate. As such, increases in our taxable income may be partially offset by increases in our effective tax rate. </FONT></P>

<P><FONT SIZE=2><B><I>Deferred revenue and unbilled receivables  </I></B></FONT></P>

<P><FONT SIZE=2>For our license fees and implementation services, we invoice and are paid based upon negotiated milestones in each customer arrangement with an initial payment due upon
execution and remaining payments due throughout the implementation period. We record as deferred revenue any invoices that have been issued before implementation services have been performed and
before the corresponding license and implementation revenue is recognized. We record as unbilled receivables any recognized license and implementation revenue in excess of the amount invoiced to the
customer. We generally invoice for our maintenance and support services on a monthly or quarterly basis through the maintenance and support period. Deferred revenue does not reflect the </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>33</FONT></P>

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<P><FONT SIZE=2>total
contract value of our customer arrangements at any point in time because we only record deferred revenue as amounts are invoiced ahead of the performance of implementation services. As a result,
there is little correlation between the timing of our revenue recognition, the timing of our invoicing and the amount of deferred revenue. </FONT></P>


<P><FONT SIZE=2><B><I>Conversion and redemption of preferred stock  </I></B></FONT></P>

<P><FONT SIZE=2>In June 1998, we raised $25.0&nbsp;million by issuing convertible preferred stock. In August&nbsp;2005, the holders of our convertible preferred stock elected to convert
the convertible preferred stock into 9,750,000 shares of common stock and 3,921,312 shares of redeemable preferred stock. In August&nbsp;2006, we redeemed 1,294,030 shares of our redeemable
preferred stock for $8.4&nbsp;million. In March&nbsp;2007, we redeemed the remaining 2,627,282 shares of redeemable preferred stock for $17.4&nbsp;million. </FONT></P>

<P><FONT SIZE=3><B>Application of critical accounting policies and use of estimates  </B></FONT></P>

<P><FONT SIZE=2>We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, or GAAP. We make
estimates and assumptions in the preparation of our consolidated financial statements, and our estimates and assumptions may affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from
those estimates. The complexity and judgment of our estimation process and issues related to the assumptions, risks and uncertainties inherent in the application of the
percentage-of-completion method of accounting affect the amounts of revenue, expenses, unbilled receivables and deferred
revenue. Estimates are also used for, but not limited to, receivables, allowance for doubtful accounts, useful lives of assets, depreciation, income taxes and deferred tax asset valuation, valuation
of stock options and accrued liabilities. Numerous internal and external factors can affect estimates. Our management has reviewed these critical accounting policies, our use of estimates and the
related disclosures with our audit committee. </FONT></P>

<P><FONT SIZE=2>Our
accounting policies are more fully described in note&nbsp;1 to the consolidated financial statements. We believe that the following discussion addresses our most critical accounting estimates,
which are those that are most important to the portrayal of our financial condition and results of operations and require management's most difficult, subjective and complex judgments. </FONT></P>


<P><FONT SIZE=2><B><I>Revenue recognition  </I></B></FONT></P>

<P><FONT SIZE=2><I>License and implementation.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We consider our implementation services essential to our licensed software products, and therefore, we
recognize revenue from perpetual software licenses and implementation services together as the services are performed. We do so using the percentage-of-completion method in
accordance with the provisions contained within SOP 81-1, </FONT><FONT SIZE=2><I>Accounting for Performance of Construction-Type and Certain Production-Type
Contracts</I></FONT><FONT SIZE=2>. The percentage-of-completion is measured as the total number of man-days expended on an implementation of our software products
during a reporting period as a percentage of the total man-days estimated to be necessary to complete the implementation. The period over which we recognize license and implementation
revenue depends on the number of licensed software products and the scope and complexity of the implementation requirements. Our revenue recognition period for an arrangement generally ranges from six
months to several years. </FONT></P>

<P><FONT SIZE=2><I>Maintenance and support.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Maintenance and support revenue includes post-contract customer support and the right to unspecified
software updates and enhancements on a when and if available basis. Once an implementation is completed, maintenance and support revenue is recognized ratably over the term of the maintenance and
support arrangement. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>34</FONT></P>

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<P><FONT SIZE=2><B><I>Allowance for doubtful accounts  </I></B></FONT></P>

<P><FONT SIZE=2>In addition to our initial credit evaluations at the inception of arrangements, we regularly assess our ability to collect outstanding customer invoices. To do so, we must make
estimates of the collectibility of accounts receivable. We provide an allowance for doubtful accounts when we determine that the collection of an outstanding customer receivable is not probable. We
also analyze accounts receivable and historical bad debt experience, customer creditworthiness and changes in our customer payment history on an aggregate basis when evaluating the adequacy of the
allowance for doubtful accounts. If any of these factors change, our estimates may also change, which could affect the level of our future provision for doubtful accounts. </FONT></P>

<P><FONT SIZE=2><B><I>Stock-based compensation  </I></B></FONT></P>

<P><FONT SIZE=2>Prior to January&nbsp;1, 2006, we accounted for employee stock options using the intrinsic value method in accordance with Accounting Principles Board Opinion No.&nbsp;25, </FONT> <FONT SIZE=2><I>Accounting for Stock Issued to
Employees,</I></FONT><FONT SIZE=2>or APB No.&nbsp;25, and Financial Accounting Standards Board, or FASB, Interpretation No.&nbsp;44, </FONT> <FONT SIZE=2><I>Accounting for Certain Transactions Involving Stock Compensation, an Interpretation of APB
No.&nbsp;25</I></FONT><FONT SIZE=2>. The intrinsic value represents the difference
between the per share market price of the stock on the date of grant and the per share exercise price of the respective stock option. We generally grant stock options to employees for a fixed number
of shares with an exercise price equal to the fair value of the shares at the date of grant. Under APB No.&nbsp;25, no compensation expense is recorded for employee stock options granted at an
exercise price equal to the market price of the underlying stock on the date of grant. We used the minimum value method to estimate the fair value of our share-based payment awards for disclosure
purposes under SFAS&nbsp;123. </FONT></P>

<P><FONT SIZE=2>On
January&nbsp;1, 2006, we adopted the provisions of the FASB </FONT><FONT SIZE=2><I>Statement of Financial Accounting Standards</I></FONT><FONT SIZE=2> No.&nbsp;123(R), </FONT> <FONT SIZE=2><I>Share-Based Payment</I></FONT><FONT SIZE=2>, or
SFAS&nbsp;123(R). Under this standard, the fair value of each share-based payment award is estimated on the date of grant
using an option pricing model that meets certain requirements. We currently use the Black-Scholes option pricing model to estimate the fair value of our share-based payment awards. The determination
of the fair value of share-based payment awards utilizing the Black-Scholes model is affected by our stock price and a number of assumptions, including expected volatility, expected life,
risk-free interest rate and expected dividends. We do not have a history of market prices of our common stock as we are not a public company, and as such we estimate volatility in
accordance with Staff Accounting Bulletin No.&nbsp;107, </FONT><FONT SIZE=2><I>Share-Based Payment</I></FONT><FONT SIZE=2>, using historical volatilities of similar public entities. The expected
life of the awards is based on a simplified method which defines the life as the average of the contractual term of the options and the weighted average vesting period for all open tranches. The
risk-free interest rate assumption is based on observed interest rates appropriate for the terms of our awards. The dividend yield assumption is based on our expectation of paying no
dividends. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Stock-based compensation expense recorded
in our financial statements under SFAS&nbsp;123(R) is based on awards that are ultimately expected to vest. </FONT></P>

<P><FONT SIZE=2>We
evaluate the assumptions used to value our awards as we issue options. If factors change and we employ different assumptions, stock-based compensation expense may differ significantly from what we
have recorded in the past. If there are any modifications or cancellations of the underlying unvested securities, we may be required to accelerate, increase or cancel any remaining unearned
stock-based compensation expense. Future stock-based compensation expense and unearned stock-based compensation will increase to the extent that we grant additional equity awards to employees. </FONT></P>

<P><FONT SIZE=2>During
2006, we did not grant any stock options. We adopted SFAS&nbsp;123(R) using the prospective method, and as a result we did not have any stock-based compensation expense in 2006 related to
stock-based awards granted prior to January&nbsp;1, 2006. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>35</FONT></P>

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<P><FONT SIZE=2>In
March and April&nbsp;2007, we granted stock options with exercise prices as follows: </FONT></P>

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<TABLE WIDTH="86%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=7><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="58%" ALIGN="LEFT"><FONT SIZE=2><B>(Dollars in thousands, except share data)<BR>
Option grant date<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2><B>Shares<BR>
subject to<BR>
option<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2><B>Per share<BR>
exercise<BR>
price<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2><B>Estimated fair value<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=7><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="58%"><FONT SIZE=2>March 26, 2007</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>860,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>$6.00</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>$2,658</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="58%"><FONT SIZE=2>April 2, 2007</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>300,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>6.00</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>927</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="58%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="58%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>1,160,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>$3,585</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=7><HR NOSHADE></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>The
fair value of each option grant is estimated on the date of grant using the following weighted-average assumptions used for grants in 2007: </FONT></P>

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<TD COLSPAN=3><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="88%" ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><B>2007<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="88%"><FONT SIZE=2>Fair value of underlying shares</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>$6.00</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="88%"><FONT SIZE=2>Dividend yield</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>0%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="88%"><FONT SIZE=2>Volatility</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>54.74%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="88%"><FONT SIZE=2>Risk free interest rate</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>4.48%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="88%"><FONT SIZE=2>Weighted average expected life (in years)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>4.9</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><HR NOSHADE></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>We
account for stock options granted to non-employees in accordance with Emerging Issues Task Force No.&nbsp;96-18, </FONT><FONT SIZE=2><I>Accounting for Equity Instruments
That Are Issued to Other Than Employees for Acquiring, or in Conjunction With Selling, Goods or Services</I></FONT><FONT SIZE=2>, or EITF No.&nbsp;96-18, and related interpretations. We
grant stock options to certain consultants and advisory board members for a fixed number of shares with an exercise price equal to the fair value of our common stock at the date of grant. Under EITF
No.&nbsp;96-18, compensation expense on non-employee stock options is calculated using the Black-Scholes option-pricing model and is recorded using the
straight-line method over the vesting period, which approximates the service period. </FONT></P>

<P><FONT SIZE=3><B>Year ended December&nbsp;31, 2005 compared to year ended December&nbsp;31, 2006  </B></FONT></P>

<P><FONT SIZE=2><B><I>Revenue  </I></B></FONT></P>

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<TD COLSPAN=16><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="28%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=9 ALIGN="CENTER"><FONT SIZE=2><B>Year ended December 31</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="28%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=4 ALIGN="CENTER"><FONT SIZE=2><B>2005</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=4 ALIGN="CENTER"><FONT SIZE=2><B>2006</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="28%" ALIGN="LEFT"><FONT SIZE=2><B>(Dollars in thousands)<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Amount<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2><B>As a<BR>
percentage<BR>
of revenue<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Amount<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2><B>As a<BR>
percentage<BR>
of revenue<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Variance $<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><B>Variance %<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=16><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="28%"><FONT SIZE=2>License and implementation</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>20,190</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>57</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>29,604</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>64</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>9,414</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>47</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="28%"><FONT SIZE=2>Maintenance and support</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>14,940</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>43</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>16,423</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>36</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>1,483</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>10</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="28%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=14 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="28%"><FONT SIZE=2>Total</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>35,130</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>100</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>46,027</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>100</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>10,897</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>31</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=16><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2><I>License and implementation.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;License and implementation revenue increased $9.4&nbsp;million from $20.2&nbsp;million in 2005 to
$29.6&nbsp;million in 2006, representing a 47% increase. Beginning in 2005 and continuing in 2006, we began to experience significantly increased sales of our software products. As we began
implementing those software products in late 2005 and 2006, we began recognizing the related revenue. During 2006, license and implementation revenue from the airline industry decreased as a
percentage of total license and implementation revenue. </FONT></P>

<P><FONT SIZE=2><I>Maintenance and support.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Maintenance and support revenue increased $1.5&nbsp;million from $14.9&nbsp;million in 2005 to
$16.4&nbsp;million in 2006, representing a 10% increase. The increase was the result of our completion of implementations of our software products in 2006 following which we were able to begin
recognizing maintenance and support revenue for those implementations. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>36</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=7,SEQ=41,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=193056,FOLIO='36',FILE='DISK112:[07ZBA1.07ZBA76601]DI76601A.;36',USER='KBLACKW',CD=';4-APR-2007;15:27' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->

<P><FONT SIZE=2><A
NAME="page_dk76601_1_37"> </A> </FONT> <FONT SIZE=2><B><I>Cost of revenue and gross profit  </I></B></FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="30%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=7 ALIGN="RIGHT"><FONT SIZE=2><B>Year ended December&nbsp;31<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="30%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="RIGHT"><FONT SIZE=2><B>2006<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="30%" ALIGN="LEFT"><FONT SIZE=2><B>(Dollars in thousands)<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Amount<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2><B>As a<BR>
percentage<BR>
of revenue<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Amount<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2><B>As a<BR>
percentage<BR>
of revenue<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Variance $<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Variance %<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="30%"><FONT SIZE=2>Cost of revenue</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$13,381</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>38%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$15,605</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>34%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$2,224</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>17%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="30%"><FONT SIZE=2>Gross profit</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$21,749</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>62%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$30,422</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>66%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$8,673</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>40%</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2><I>Cost of revenue.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Cost of revenue increased $2.2&nbsp;million from $13.4&nbsp;million in 2005 to $15.6&nbsp;million in 2006,
representing a 17% increase. The increase is attributable to an overall increase in average headcount in 2006 in order to service the increase in our implementations and to provide increased levels of
support to our larger installed customer base. </FONT></P>

<P><FONT SIZE=2><I>Gross profit.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Gross profit increased $8.7&nbsp;million from $21.7&nbsp;million in 2005 to $30.4&nbsp;million in 2006, representing a
40% increase. The increase in our gross margin was primarily the result of improvements in our implementation processes and the standardization of our software products. In addition, the increase in
maintenance and support revenue also contributed to the increase in our overall margins, as maintenance and support revenue has a higher gross margin than license and implementation revenue. </FONT></P>

<P><FONT SIZE=2><B><I>Operating expenses  </I></B></FONT></P>

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<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="30%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=7 ALIGN="RIGHT"><FONT SIZE=2><B>Year ended December&nbsp;31<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="30%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="RIGHT"><FONT SIZE=2><B>2006<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="30%" ALIGN="LEFT"><FONT SIZE=2><B>(Dollars in thousands)<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Amount<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2><B>As a<BR>
percentage<BR>
of revenue<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Amount<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2><B>As a<BR>
percentage<BR>
of revenue<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Variance $<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Variance %<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="30%"><FONT SIZE=2>Selling, general and administrative</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$12,010</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>34%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$13,261</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>29%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$1,251</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>10%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="30%"><FONT SIZE=2>Research and development</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>6,399</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>18%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>10,332</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>22%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>3,933</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>61%</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="30%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=11 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="30%"><FONT SIZE=2>Total operating expenses</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$18,409</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>52%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$23,593</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>51%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$5,184</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>28%</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2><I>Selling, general and administrative.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Selling, general and administrative expenses increased $1.3&nbsp;million from $12.0&nbsp;million
in 2005 to $13.3&nbsp;million in 2006, representing a 10% increase. The increase is attributable to a $1.2&nbsp;million increase in incentives and personnel involved in sales activities. </FONT></P>

<P><FONT SIZE=2><I>Research and development.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Research and development expenses increased $3.9&nbsp;million from $6.4&nbsp;million in 2005 to
$10.3&nbsp;million in 2006, representing a 61% increase. The increase in research and development expenses is primarily attributable to a $3.3&nbsp;million increase in compensation and benefits
resulting from an increase in our product development and product management activities primarily related to our pricing analytics and pricing execution software products. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>37</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=42,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=527210,FOLIO='37',FILE='DISK112:[07ZBA1.07ZBA76601]DK76601A.;52',USER='KBLACKW',CD=';4-APR-2007;15:45' -->
<A NAME="page_dk76601_1_38"> </A>
<BR>

<P><FONT SIZE=2><B><I>Interest income  </I></B></FONT></P>

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<TD COLSPAN=9><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="50%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="RIGHT"><FONT SIZE=2><B>Year ended December&nbsp;31<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="50%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ROWSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ROWSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2006<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="50%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ROWSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Variance %<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="50%" ALIGN="LEFT"><FONT SIZE=2><B>(Dollars in thousands)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><B>Amount<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><B>Amount<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><B>Variance $<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=9><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="50%"><FONT SIZE=2>Interest income</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>$1,074</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>$1,921</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>$847</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>79%</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=9><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>Interest
income increased $847,000 from $1.1&nbsp;million in 2005 to $1.9&nbsp;million in 2006, representing a 79% increase. The increase was the result of additional interest earned on our
increased average cash and cash equivalent balances in 2006. </FONT></P>

<P><FONT SIZE=2><B><I>Income tax provision  </I></B></FONT></P>

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<TR VALIGN="TOP">
<TD COLSPAN=5><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="79%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="RIGHT"><FONT SIZE=2><B>Year ended December&nbsp;31<BR> </B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="79%" ALIGN="LEFT"><FONT SIZE=2><B>(Dollars in thousands)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>2006<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="79%"><FONT SIZE=2>Effective tax rate</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>22%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>20%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="79%"><FONT SIZE=2>Income tax provision</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>$975</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$1,725</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>Our
income tax provision increased $750,000 from $975,000 in 2005 to $1.7&nbsp;million in 2006, representing a 77% increase. The increase in our income tax provision primarily resulted from the
$4.3&nbsp;million increase in our taxable income. Our effective tax rate decreased from 22% of taxable income in 2005 to 20% of taxable income in 2006. The decrease in our effective tax rate was
primarily attributable to an increase in our deductions related to developing our software products. </FONT></P>

<P><FONT SIZE=3><B>Year Ended December&nbsp;31, 2004 Compared to Year Ended December&nbsp;31, 2005  </B></FONT></P>

<P><FONT SIZE=2><B><I>Revenue  </I></B></FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="30%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=7 ALIGN="RIGHT"><FONT SIZE=2><B>Year ended December&nbsp;31<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="30%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="RIGHT"><FONT SIZE=2><B>2004<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="30%" ALIGN="LEFT"><FONT SIZE=2><B>(Dollars in thousands)<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Amount<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2><B>As a<BR>
percentage<BR>
of revenue<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Amount<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2><B>As a<BR>
percentage<BR>
of revenue<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Variance $<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Variance %<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="30%"><FONT SIZE=2>License and implementation</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$20,015</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>62%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$20,190</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>57%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$175</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>1%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="30%"><FONT SIZE=2>Maintenance and support</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>12,431</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>38%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>14,940</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>43%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>2,509</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>20%</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="30%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=11 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="30%"><FONT SIZE=2>Total</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$32,446</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>100%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$35,130</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>100%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$2,684</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>8%</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2><I>License and implementation.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;License and implementation revenue increased $175,000 from $20.0&nbsp;million in 2004 to $20.2&nbsp;million
in 2006, representing less than a 1% increase. Although we sold additional software products in 2005, we did not begin recognizing significant revenue from those sales until implementation began in
late 2005 and during 2006. </FONT></P>

<P><FONT SIZE=2><I>Maintenance and support.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Maintenance and support revenue increased $2.5&nbsp;million from $12.4&nbsp;million in 2004 to
$14.9&nbsp;million in 2005, representing a 20% increase. The increase was the result of the completed implementations of software products in 2005 following which we were able to commence
recognizing maintenance and support revenue related to those implementations. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>38</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_dk76601_1_39"> </A>
<BR>

<P><FONT SIZE=2><B><I>Cost of revenue and gross profit  </I></B></FONT></P>

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<TD COLSPAN=13><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="30%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=7 ALIGN="RIGHT"><FONT SIZE=2><B>Year ended December&nbsp;31<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="30%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="RIGHT"><FONT SIZE=2><B>2004<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="30%" ALIGN="LEFT"><FONT SIZE=2><B>(Dollars in thousands)<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Amount<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2><B>As a<BR>
percentage<BR>
of revenue<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Amount<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2><B>As a<BR>
percentage<BR>
of revenue<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Variance $<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Variance %<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="30%"><FONT SIZE=2>Cost of revenue</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$13,389</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>41%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$13,381</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>38%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$8</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>0%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="30%"><FONT SIZE=2>Gross profit</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$19,057</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>59%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$21,749</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>62%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$2,692</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>14%</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2><I>Cost of revenue.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Cost of revenue remained relatively unchanged from 2004 to 2005 due to the lack of growth in our license and
implementation revenue in 2005. </FONT></P>

<P><FONT SIZE=2><I>Gross profit.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Gross profit increased $2.7&nbsp;million from $19.1&nbsp;million in 2004 to $21.7&nbsp;million in 2005, representing a
14% increase. The increase in gross profit and gross margin was attributable to the higher maintenance and support revenue in 2005 compared to 2004. </FONT></P>

<P><FONT SIZE=2><B><I>Operating expenses  </I></B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="30%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=7 ALIGN="RIGHT"><FONT SIZE=2><B>Year ended December&nbsp;31<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="30%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="RIGHT"><FONT SIZE=2><B>2004<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="30%" ALIGN="LEFT"><FONT SIZE=2><B>(Dollars in thousands)<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Amount<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2><B>As a<BR>
percentage<BR>
of revenue<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Amount<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2><B>As a<BR>
percentage<BR>
of revenue<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Variance $<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Variance %<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="30%"><FONT SIZE=2>Selling, general and administrative</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$8,969</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>28%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$12,010</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>34%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$3,041</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>34%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="30%"><FONT SIZE=2>Research and development</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>6,262</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>19%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>6,399</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>18%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>137</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>2%</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="30%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=11 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="30%"><FONT SIZE=2>Total operating expenses</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$15,231</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>47%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$18,409</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>52%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$3,178</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>21%</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2><I>Selling, general and administrative.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Selling, general and administrative expense increased $3.0&nbsp;million from $9.0&nbsp;million in
2004 to $12.0&nbsp;million in 2005, representing a 34% increase. The increase was primarily attributable to a $1.8&nbsp;million increase in compensation and benefits related to the increased
number of personnel involved in sales activities, an increase of $497,000 in additional marketing expenses and an increase of $251,000 in travel expenses. In addition, the increase was attributable to
an increase in general and administrative expenses of $193,000 related to additional professional fees, including accounting and legal fees. </FONT></P>


<P><FONT SIZE=2><I>Research and development.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Research and development expense remained relatively constant in 2005 as compared to 2004, but grew on a
quarterly basis during 2005 as we began increasing our spending to enhance our software product offerings. </FONT></P>

<P><FONT SIZE=2><B><I>Interest income  </I></B></FONT></P>

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<TR VALIGN="TOP">
<TD COLSPAN=9><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="50%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="RIGHT"><FONT SIZE=2><B>Year ended December&nbsp;31<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="50%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ROWSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2004<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ROWSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="50%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ROWSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Variance %<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="50%" ALIGN="LEFT"><FONT SIZE=2><B>(Dollars in thousands)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><B>Amount<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><B>Amount<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><B>Variance $<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=9><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="50%"><FONT SIZE=2>Interest Income</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>$371</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>$1,074</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>$703</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>190%</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=9><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2>39</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=44,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=57870,FOLIO='39',FILE='DISK112:[07ZBA1.07ZBA76601]DK76601A.;52',USER='KBLACKW',CD=';4-APR-2007;15:45' -->
<A NAME="page_dk76601_1_40"> </A>

<P><FONT SIZE=2>Interest
income increased $703,000 from $371,000 in 2004 to $1.1&nbsp;million in 2005, representing a 190% increase. The increase was attributable to an increase in overall market interest rates and
in our average cash and cash equivalent balances in 2005. </FONT></P>

<P><FONT SIZE=2><B><I>Income tax provision  </I></B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=5><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="80%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=3 ALIGN="RIGHT"><FONT SIZE=2><B>Years ended December&nbsp;31<BR> </B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="80%" ALIGN="LEFT"><FONT SIZE=2><B>(Dollars in thousands)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2><B>2004<BR> </B></FONT><BR></TH>
<TH WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="80%"><FONT SIZE=2>Effective tax rate</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>13%</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>22%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="80%"><FONT SIZE=2>Income tax provision</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>$536</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=2>$975</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>Our
income tax provision increased from $536,000 in 2004 to $975,000 in 2005 representing a 82% increase. The $438,000 increase in 2005 was attributable to a tax benefit of $212,000 in 2004 resulting
from a reduction in our valuation allowance and an increase in our taxable income of $222,000 in 2005. During 2004, we determined that it was more likely than not that future taxable income would be
sufficient to realize the portion of the deferred tax asset related to our temporary differences and as a result reversed a portion of the valuation allowance and recorded an income tax benefit of
approximately $212,000. </FONT></P>

<P><FONT SIZE=3><B>Selected quarterly data  </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=18><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=7 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=7 ALIGN="RIGHT"><FONT SIZE=2><B>2006<BR> </B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2><B>(Dollars in thousands)<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><B>March 31<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><B>June 30<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><B>Sept. 30<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><B>Dec. 31<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><B>March 31<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><B>June 30<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><B>Sept. 30<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><B><BR>
Dec. 31<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=18><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><B>Revenue</B></FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="25%"><FONT SIZE=2>License and implementation</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>$4,745</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>$4,533</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>$5,045</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>$5,867</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>$5,707</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>$6,657</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>$8,275</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>$8,965</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="25%"><FONT SIZE=2>Maintenance and support</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,635</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,703</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,684</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,918</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,911</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,078</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,190</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,244</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=15 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Total revenue</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8,380</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8,236</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8,729</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>9,785</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>9,618</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>10,735</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>12,465</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>13,209</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><BR>
Cost of revenue</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
3,788</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
3,304</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
2,819</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
3,470</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
3,272</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
3,814</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
4,175</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
4,344</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=15 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Gross profit</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,592</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,932</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>5,910</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>6,315</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>6,346</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>6,921</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8,290</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8,865</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><BR>
Gross margin</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
54.8%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
59.9%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
67.7%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
64.5%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
66.0%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
64.5%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
66.5%</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
67.1%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><BR><FONT SIZE=2><B>Operating expenses</B></FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="25%"><FONT SIZE=2>Selling, general and administrative</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,032</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,004</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,830</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,144</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,363</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,207</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,477</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,214</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="25%"><FONT SIZE=2>Research and development</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,126</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,517</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,858</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,898</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,147</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,257</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,671</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>3,257</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=15 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Total operating expenses</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,158</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,521</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4,688</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>5,042</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>5,510</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>5,464</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>6,148</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>6,471</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><BR>
Income from operations</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
434</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
411</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
1,222</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
1,273</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
836</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
1,457</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
2,142</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
2,394</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><BR>
Interest income</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
187</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
244</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
286</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
357</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
430</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
477</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
498</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
516</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=15 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Income before income taxes</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>621</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>655</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,508</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,630</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,266</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1,934</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,640</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2,910</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Income tax provision</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>137</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>145</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>333</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>360</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>250</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>381</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>520</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>574</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=15 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Net income</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>$484</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>$510</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>$1,175</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>$1,270</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>$1,016</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>$1,553</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>$2,120</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>$2,336</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=18><HR NOSHADE></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>40</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P><FONT SIZE=2>License
and implementation revenue increased on a quarterly basis as sales increased in 2005 and 2006 over the previous year's levels. Maintenance and support revenue increased on a quarterly basis as
implementations were completed and the related maintenance period began. </FONT></P>

<P><FONT SIZE=2>Gross
margins increased on a quarterly basis principally due to the increasing standardization of our products and implementation efficiencies. The increase in gross margins in the quarter ended
September&nbsp;30, 2005 was partially attributed to a reduction in cost of revenue associated with a $304,000 settlement with a third party vendor. Selling, general and administrative expenses
fluctuate from quarter to quarter based on timing of sales and marketing activities. Research and development expenses increased on a quarterly basis principally due to an overall increase in average
product development and product management personnel related to our increased investment in the development of our products. </FONT></P>

<P><FONT SIZE=3><B>Liquidity and capital resources  </B></FONT></P>

<P><FONT SIZE=2>In June&nbsp;1998, we raised $25.0&nbsp;million from certain individuals and funds associated with TA Associates and JMI Equity through the issuance of
convertible preferred stock. In August&nbsp;2005, those investors converted the convertible preferred stock into 9,750,000 shares of our common stock and 3,921,312 shares of redeemable preferred
stock. In August&nbsp;2006, we redeemed 1,294,030 shares of our redeemable preferred stock for approximately $8.4&nbsp;million. In March&nbsp;2007, we redeemed the remaining 2,627,282 shares of
redeemable preferred stock for $17.4&nbsp;million. In March&nbsp;2007, we also paid a one-time cash dividend of $41.3&nbsp;million to our common stockholders. In March&nbsp;2007,
we incurred $20.0&nbsp;million in long-term debt to help finance the payment of this cash dividend. </FONT></P>

<P><FONT SIZE=2>As
of December&nbsp;31, 2006, we had $42.5&nbsp;million of cash and cash equivalents and $27.6&nbsp;million in working capital. Our cash and cash equivalents, combined with our positive cash
flow from operating activities and available borrowings under the revolving credit facility we entered into in March&nbsp;2007, are our principal sources of liquidity. Historically, we have financed
our operations through cash flow from operations. We believe that our existing cash and cash equivalents and our cash flow from future operating activities, together with the net proceeds of this
offering, will be sufficient to meet our anticipated cash needs for the next twelve months. </FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=7><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="62%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="RIGHT"><FONT SIZE=2><B>Year ended December&nbsp;31<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="62%" ALIGN="LEFT"><FONT SIZE=2><B>(Dollars in thousands)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><B>2004<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><B>2006<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=7><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="62%"><FONT SIZE=2>Cash provided by (used in) operating activities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>$(21,087</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>$34,949</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>$13,519</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="62%"><FONT SIZE=2>Cash used in investing activities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(1,293</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(766</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(1,090</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="62%"><FONT SIZE=2>Cash provided by (used in) financing activities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(176</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>17</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(8,378</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="62%"><FONT SIZE=2>Cash and cash equivalents (end of period)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>4,290</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>38,490</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>42,540</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=7><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>Cash
used by operating activities in 2004 includes the purchase of marketable securities of $28.0&nbsp;million and cash provided by operating activities in 2005 includes the maturities of these
marketable securities. Excluding the purchase and the maturities of these marketable securities, cash provided by operations in 2004 was $6.9&nbsp;million and in 2005 was $6.9&nbsp;million. </FONT></P>

<P><FONT SIZE=2>The
increase in cash and cash equivalents from December&nbsp;31, 2005 to December&nbsp;31, 2006 of $4.1&nbsp;million is primarily attributable to net cash provided by operating activities of
$13.5&nbsp;million. Sources of cash provided by operating activities in 2006 consisted primarily of (a)&nbsp;a $12.3&nbsp;million increase in deferred revenue due to an increase in invoiced
amounts on contracts in progress; (b)&nbsp;$7.0&nbsp;million of net income, which included $1.3&nbsp;million of non-cash expenses comprised principally of depreciation and
amortization and (c)&nbsp;a $1.9&nbsp;million increase in accrued expenses and </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>41</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<BR>

<P><FONT SIZE=2>accounts
payable. Uses of cash in operating activities in the same period consisted principally of (a)&nbsp;a $5.3&nbsp;million increase in accounts receivable due to an increase in invoiced
amounts on contracts in progress, net of cash collected; (b)&nbsp;a $1.4&nbsp;million increase in prepaid and other assets; (c)&nbsp;a $1.2&nbsp;million increase in deferred taxes and
(d)&nbsp;a $1.1&nbsp;million increase in unbilled accounts receivable. In 2006, net cash used in investing activities was $1.1&nbsp;million as a result of the purchase of property and equipment,
and net cash used in financing activities was $8.4&nbsp;million primarily due to the partial redemption of our redeemable preferred stock in August&nbsp;2006. </FONT></P>

<P><FONT SIZE=2>The
increase in cash and cash equivalents from December&nbsp;31, 2004 to December&nbsp;31, 2005 of $34.2&nbsp;million was primarily attributable to net cash provided by operating activities of
$34.9&nbsp;million. Sources of cash from operating activities in 2005 consisted primarily of (a)&nbsp;$28.0&nbsp;million of maturities of marketable securities purchased in 2004 that were
classified as trading securities; (b)&nbsp;$3.4&nbsp;million of net income, which included $1.5&nbsp;million of non-cash expenses comprised principally of
depreciation and amortization and (c)&nbsp;a $1.4&nbsp;million decrease in accounts receivable. Uses of cash in operating activities in the same period consisted primarily of (a)&nbsp;a $478,000
increase in unbilled receivables and (b)&nbsp;a $336,000 increase in prepaid and other assets. In 2005, net cash used in investing activities was $766,000 as a result of the purchase of property and
equipment, and net cash provided by financing activities was $17,000 due to the exercise of the stock options. </FONT></P>

<P><FONT SIZE=3><B>Credit facilities  </B></FONT></P>

<P><FONT SIZE=2>In March&nbsp;2007, our indirect wholly-owned subsidiary, PROS Revenue Management, L.P., entered into a $28.0&nbsp;million credit facility, consisting of an
$8.0&nbsp;million revolving credit facility and a $20.0&nbsp;million term loan, each maturing in five years. The revolving credit facility includes borrowing capacity for up to $1.0&nbsp;million
letters of credit and up to $500,000 of same-day swing line loans. All obligations under the credit facility are guaranteed by us and by our other subsidiaries and are secured by
substantially all of our assets and the assets of our subsidiaries. We may prepay loans under the credit facility at any time without premium or penalty. The term loan will become due and payable in
full upon completion of this offering. </FONT></P>

<P><FONT SIZE=2>Borrowings
under our credit facility bear interest at a rate equal to an applicable margin plus, at our option, either a base rate or a Eurodollar rate. The applicable margin for borrowings under the
credit facility is 1.5% for base rate borrowings and 2.75% for Eurodollar rate borrowings. In addition to paying interest on outstanding principal under the credit facility, we are required to pay
(a)&nbsp;a quarterly fee equal to 0.5% per annum on unused commitments under the revolving credit facility; (b)&nbsp;an annual administration fee of $20,000 and (c)&nbsp;customary letter of
credit fees. We also paid a one-time closing fee to the lenders of $210,000. </FONT></P>

<P><FONT SIZE=2>The
credit facility contains a number of covenants that, among other things, restrict our ability to sell assets; incur additional indebtedness; prepay other indebtedness; pay dividends and
distributions; repurchase capital stock from our stockholders; create liens on our assets; make investments; make certain acquisitions; engage in mergers, acquisitions and other fundamental changes;
engage in certain transactions with affiliates; change our accounting policies; amend our charter documents if the amendment affects the interests of our lenders; waive or modify the terms of any
subordinated debt; change our business; or enter into agreements that restrict dividends from subsidiaries. In addition, we must maintain a maximum consolidated leverage ratio, minimum consolidated
fixed charge coverage ratio, minimum consolidated earnings before interest, taxes, depreciation and amortization and maximum capital expenditure amount for so as long as the loans remain outstanding. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>42</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<BR>

<P><FONT SIZE=3><B>Contractual obligations  </B></FONT></P>

<P><FONT SIZE=2>The following table sets forth our contractual obligations as of December&nbsp;31, 2006: </FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=9><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="48%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=7 ALIGN="RIGHT"><FONT SIZE=2><B>Payments due by period<BR> </B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="48%" ALIGN="LEFT"><FONT SIZE=2><B>(Dollars in thousands)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Total<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2><B>Less than<BR>
1 year<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><B>1 to 3 years<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><B>3 to 5 years<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=9><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="48%"><FONT SIZE=2><B>Contractual Obligations</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="48%"><FONT SIZE=2>Operating leases</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$5,227</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>$1,004</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>$3,519</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>$704</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="48%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=7 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="48%"><FONT SIZE=2>Total</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>$5,227</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>$1,004</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>$3,519</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>$704</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=9><HR NOSHADE></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>Our
only significant operating lease obligation relates to our corporate headquarters in Houston, Texas which we lease under a single non-cancelable operating lease agreement. In
March&nbsp;2006, we executed an amendment to the lease that extended the lease term until July&nbsp;31, 2011. </FONT></P>

<P><FONT SIZE=3><B>Off-balance sheet arrangements  </B></FONT></P>

<P><FONT SIZE=2>We do not have any relationships with unconsolidated entities or financial partnerships, such as variable interest entities, which would have been established
for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. </FONT></P>

<P><FONT SIZE=3><B>Quantitative and qualitative disclosures about market risk  </B></FONT></P>

<P><FONT SIZE=2><B><I>Foreign currency risk  </I></B></FONT></P>

<P><FONT SIZE=2>A small percentage of our contracts are denominated in foreign currencies and therefore a portion of our revenue is subject to foreign currency risks. Our cash flows are
subject to minor fluctuations due to changes in foreign currency exchange rates. The effect of an immediate 10% adverse change in exchange rates on foreign denominated receivables as of
December&nbsp;31, 2006 would result in a loss of approximately $29,000. To date, we have not entered into any hedging contracts although we may do so in the future. Fluctuations in currency exchange
rates could harm our business in the future. </FONT></P>

<P><FONT SIZE=2><B><I>Interest rate sensitivity  </I></B></FONT></P>

<P><FONT SIZE=2>We had cash and cash equivalents totaling $42.5&nbsp;million at December&nbsp;31, 2006. These amounts were invested primarily in A-1 and P-1
commercial paper with original maturities less than 90&nbsp;days and money market funds. Unrestricted cash and cash equivalents are held for working capital purposes. We do not enter into
investments for trading or speculative purposes. We believe that we do not have any material exposure to changes in the fair value as a result of changes in interest rates. Declines in interest rates,
however, will reduce future investment
income. If overall interest rates fell by 10% in 2006, our interest income would have declined by approximately $192,000, assuming consistent investment levels. </FONT></P>

<P><FONT SIZE=2>At
December&nbsp;31, 2006, we had no debt outstanding. In March&nbsp;2007, we entered into a borrowing arrangement which provides for a term loan of $20.0&nbsp;million and a revolving line of
credit for $8.0&nbsp;million. We currently have principal outstanding of $20.0&nbsp;million under our term loan. We have not made any borrowings under our line of credit. The term loan will become
due and payable in full upon the closing of this offering. Borrowings under our credit facility bear interest at a rate equal to an applicable margin plus, at our option, either a base rate or a
Eurodollar rate. The applicable margin for borrowings under the credit facility is 1.5% for base rate borrowings and 2.75% for Eurodollar rate borrowings. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>43</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=3><B>Recent Accounting Pronouncements  </B></FONT></P>

<P><FONT SIZE=2>In June&nbsp;2006, the FASB issued FASB Interpretation No.&nbsp;48, </FONT><FONT SIZE=2><I>Accounting for Uncertainty in Income Taxes, an interpretation of
FASB Statement No.&nbsp;109,</I></FONT><FONT SIZE=2> or FIN 48. FIN 48 clarifies the accounting for uncertainties in income taxes recognized in an enterprise's financial statements. FIN 48 requires
that we determine whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authority. If a tax position meets the "more likely than not"
recognition criteria, FIN 48 requires the tax position be measured at the largest amount of benefit greater than 50% likely of being realized upon ultimate settlement. This accounting standard is
effective for our fiscal year beginning January&nbsp;1, 2007. We do not believe the adoption of FIN 48 will have a material effect on our consolidated financial position, results of operations or
cash flows. </FONT></P>

<P><FONT SIZE=2>In
September&nbsp;2006, the Securities and Exchange Commission issued Staff Accounting Bulletin No.&nbsp;108, </FONT><FONT SIZE=2><I>Considering the Effects of Prior Year Misstatements when
Quantifying Current Year Misstatements</I></FONT><FONT SIZE=2>, or SAB 108. SAB 108 provides guidance on the approach that companies must follow in quantifying misstatements of their financial
statements. SAB 108 requires analysis of misstatements using both an income statement (rollover) approach and a balance sheet (iron curtain) approach in assessing materiality and provides for a
one-time cumulative effect transition adjustment. The adoption of SAB 108 did not have a material effect on our consolidated financial position, results of operations or cash flows. </FONT></P>

<P><FONT SIZE=2>In
September&nbsp;2006, the FASB issued SFAS No.&nbsp;157, </FONT><FONT SIZE=2><I>Fair Value Measurement,</I></FONT><FONT SIZE=2> which defines fair value, establishes a framework for measuring
fair value in GAAP and expands disclosures about fair value measurements. SFAS No.&nbsp;157 does not require any new fair value measurements, but provides
guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. SFAS No.&nbsp;157 is effective for our fiscal year beginning
January&nbsp;1, 2008. We are currently evaluating the impact of adopting SFAS No.&nbsp;157. </FONT></P>

<P><FONT SIZE=2>In
February&nbsp;2007, the FASB issued SFAS No.&nbsp;159, </FONT><FONT SIZE=2><I>The Fair Value Option for Financial Assets and Financial Liabilities&#151;Including an Amendment of FASB
Statement No.&nbsp;115</I></FONT><FONT SIZE=2>. This pronouncement permits entities to use the fair value method to measure certain financial assets and liabilities by electing an irrevocable option
to use the fair value method at specified election dates. After election of the option, subsequent changes in fair value would result in the recognition of unrealized gains or losses as period costs
during the period the change occurred. SFAS No.&nbsp;159 becomes effective as of the beginning of the first fiscal year that begins after November&nbsp;15, 2007, with early adoption permitted.
However, entities may not retroactively apply the provisions of SFAS No.&nbsp;159 to fiscal years preceding the date of adoption. We are currently evaluating the effect that SFAS No.&nbsp;159 may
have on our financial position, results of operations and cash flows. </FONT></P>

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<BR></FONT><FONT SIZE=4><B>Business  <BR>  </B></FONT></P>

<P><FONT SIZE=3><B>Overview  </B></FONT></P>

<P><FONT SIZE=2>We are a leading provider of pricing and revenue optimization software, an emerging category of enterprise applications designed to allow companies to improve
financial performance by enabling better pricing. By using our software products, customers gain insight into their pricing strategies, identify detrimental pricing practices, optimize their pricing
decision-making and improve their business processes and financial performance. Our software products incorporate advanced pricing science, which includes operations research, forecasting and
statistics. Our innovative science-based software products analyze, execute and optimize pricing strategies using data from traditional enterprise applications, often augmenting it with
real-time and historical data. We also provide a range of services that include analyzing a company's current pricing processes and implementing our software products to improve pricing
performance. </FONT></P>

<P><FONT SIZE=2>We
provide our software products to enterprises across a range of industries, including manufacturing, distribution, services, hotel and cruise, and airline. As of March&nbsp;31, 2007, we had 90
customers across five industries in 42 countries with over 200 implementations of our software products. We recorded revenue of $35.1&nbsp;million and $46.0&nbsp;million in 2005 and 2006,
respectively, and have achieved eight consecutive years of profitability. </FONT></P>

<P><FONT SIZE=3><B>Industry background  </B></FONT></P>

<P><FONT SIZE=2>Pricing is an important component of an enterprise's business processes and financial performance. Companies can face a variety of pricing problems such as
unnecessary discounting and quoting prices below breakeven. We believe that improving pricing is one of the most strategic and powerful ways for companies to improve their business and financial
performance. According to a
2006 Gartner Research report, on average, a 1% improvement in price translated to an 11% increase in profitability. By contrast, according to the same report, a 1% improvement in fixed costs or in
variable costs only increases profitability by 3% and 7%, respectively. </FONT></P>

<P><FONT SIZE=2><B><I>The need for better pricing  </I></B></FONT></P>

<P><FONT SIZE=2>A variety of trends are accelerating the need for better pricing, including: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Increasingly complex markets and business models.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Globalization of business organizations and proliferation of
product SKUs, lines, distribution channels and customer segments have led to complexity in achieving optimal pricing.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Increased sophistication of purchasers.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Purchasers have increased access to pricing-related market information
and to greater technology resources to process this data. Thus, purchasers have a high level of pricing transparency, which gives them advantages relative to vendors in purchasing processes.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Proliferation of pricing entities and competitive alternatives.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Technological advances, in particular the
Internet, have driven an increase in the number of potential vendors, distribution channels and product alternatives. This proliferation has exponentially increased the amount of price information
that companies must track in order to ensure their offerings are competitively and optimally priced.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Increase in the quantity of enterprise data.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Widespread adoption of enterprise applications, such as enterprise
resource planning, or ERP, customer relationship </FONT></DD></DL>
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<P><FONT SIZE=2>management,
or CRM, and supply chain management, or SCM, systems has produced a substantial amount of enterprise data, including information about individual sale transactions. Companies need ways to
aggregate and use this raw data to improve pricing strategies. </FONT></P>

</UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Diminishing return from traditional enterprise applications.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Companies use ERP, CRM and SCM software products to
improve efficiency and drive increased profitability through lower costs. However, as these software products become more widely adopted, companies are experiencing diminishing returns from additional
investments in these technologies. Therefore, we believe companies are looking for new ways to improve their financial results. Pricing and its impact on revenue have received comparatively little
attention, and we believe companies have the potential to generate a high return on investment by improving price. </FONT></DD></DL>

<P><FONT SIZE=2><B><I>The pricing problem  </I></B></FONT></P>

<P><FONT SIZE=2>We believe most companies have yet to develop and implement pricing technology solutions that improve financial performance. We believe this failure creates a pricing problem,
the key components of which include: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Limited visibility into the pocket price and pocket margin.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The pocket price is a measure of the effective price
paid by the customer in a particular transaction after accounting for all relevant discounts, promotions, rebates and allowances. The pocket margin is a measure of the profitability of a particular
transaction determined after subtracting direct product costs and other costs attributed to a customer from the pocket price. Companies can face challenges in determining the pocket price and pocket
margin of their products due in part to the lack of timely access to relevant data. Without an accurate view of the pocket price and pocket margin, it is difficult for companies to determine the
profit contributions of products, customers or individual transactions. Additionally, many companies are often unaware of trends in pocket prices and pocket margins. As a result, they have difficulty
in determining the economic impact of changing prices, optimizing current prices or forecasting future prices.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Lack of uniform pricing and goals.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We believe most companies do not have a centralized process for managing
overall pricing or communicating and enforcing pricing policies consistently across sales channels and business segments. As a result, sales representatives often negotiate and quote prices that do
not support corporate business goals or financial targets. The absence of uniform pricing policies and goals across an organization leads to conflicting practices among various internal functions,
such as sales, marketing and finance.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Unscientific, ad-hoc approach to pricing.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Most companies rely on a combination of manual processes,
external consultants, spreadsheets or internally developed software tools to conduct pricing activities. We believe current pricing decision support tools often
are unable to efficiently process large volumes of data, lack sophisticated mathematical tools or generate inaccurate pricing information. Because of the difficulty in analyzing data in a scientific
manner and setting optimal prices, we believe many companies often set prices in an ad-hoc manner. As a result, they are also unable to track prices and analyze pricing performance, such
as the response in demand due to price changes.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Lack of complete, relevant and timely data.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Companies have access to large quantities of data generated by
traditional enterprise applications spread across complex global information technology environments. This dispersed data is difficult to aggregate, analyze </FONT></DD></DL>
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<P><FONT SIZE=2>or
make available in a timely fashion. Additionally, internal systems often lack market data and the capability for real-time processing over numerous complex transactions. As a result,
most companies today do not have the necessary and relevant information to make data-driven pricing decisions at the time of sale. </FONT></P>

</UL>

<P><FONT SIZE=2><B><I>Market opportunity  </I></B></FONT></P>

<P><FONT SIZE=2>The potential for business and financial improvement from pricing software solutions has generated increasing focus on addressing the pricing problem through pricing and
revenue optimization software products. We believe companies have only begun to realize the benefits from these solutions. </FONT></P>

<P><FONT SIZE=2>We
believe a comprehensive pricing software solution should provide: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Pricing analytics.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The ability to analyze enterprise and market data to gain insights into pricing strategies
and practices.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Pricing execution.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The ability to disseminate pricing decisions to either users or to other enterprise
applications, such as ERP, CRM or SCM applications, in order to offer a sales force easy-to-use guidelines that help select a profitable price.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Pricing optimization.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The ability to determine and forecast the price sensitivity of a product or a market
segment and to generate optimal pricing strategies to achieve corporate business goals or financial targets. </FONT></DD></DL>


<P><FONT SIZE=2>A
leading provider of pricing and revenue optimization solutions must also be able to implement and support these systems on a global basis across multiple industries and in complex and changing IT
and business environments. </FONT></P>

<P><FONT SIZE=2>We
believe the market for pricing and revenue optimization solutions is a large and rapidly growing opportunity that spans most major industries. An August 2006 AMR Research report estimated that the
price management applications market will be $348&nbsp;million in 2007 and will grow to approximately $1.1&nbsp;billion in 2010, a compound annual growth rate of 46%. We believe that the overall
pricing and revenue optimization software market includes additional elements not considered in this AMR Research report. </FONT></P>


<P><FONT SIZE=3><B>Our solution  </B></FONT></P>

<P><FONT SIZE=2>The PROS Pricing Solution Suite is our set of integrated software products that enables enterprises to apply pricing science to determine, analyze and execute
optimal pricing strategies. Our software products support pricing decisions through the aggregation and analysis of extensive enterprise application data, transactional data and market information.
Our PROS Pricing Solution Suite addresses three areas necessary to implement and execute an effective pricing solution: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Pricing analytics.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our pricing analytics software product provides dynamic visibility into pricing data and
performance across the different segments of a business. These analytics help companies understand the pocket margin and its components and locate detrimental pricing trends and underperforming
segments of their businesses.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Pricing execution.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our pricing execution software products help companies set and implement pricing policies
throughout an enterprise and improve execution through pricing decision and negotiation support. Our execution software products allow our customers to </FONT></DD></DL>
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<P><FONT SIZE=2>strategically
manage a large number of prices, which helps to institutionalize pricing best practices and enforce compliance with pricing policies. </FONT></P>

</UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Pricing optimization.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our pricing optimization software products provide companies with pricing-related
predictive analytics in order to optimize their pricing decision-making. Using market and company data, our optimization software products enable our customers to forecast and determine an optimal
price within a given set of objectives, such as maximizing market share, revenue or profit. </FONT></DD></DL>

<P><FONT SIZE=3><B>Key benefits  </B></FONT></P>

<P><FONT SIZE=2>Our software products help our customers improve their business and financial performance through several key benefits, which include: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Science-based approach to pricing.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our software products enable our customers to apply advanced pricing science
to identify and address their unique and complex pricing challenges. Our software products include a variety of advanced pricing analytics and forecasting and optimization engines that incorporate our
pricing expertise and support real-time, high volume transactions with accurate pricing information.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Improved business insight.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our software products enable our customers to gain insight into their business
strategy, segment and product profitability and pricing challenges. As a result, our customers can identify and characterize the relative attractiveness of products, customers, geographies and even
individual transactions based on sales volume and overall profitability.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Enhanced planning and decision making.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our software products enhance our customers' ability to process and
implement pricing policies in a systematic manner. As a result, they are able to pursue more sophisticated and effective pricing strategies and make more informed pricing decisions. Additionally, our
software products help companies implement best practices uniformly throughout an enterprise, from sales to marketing to finance. </FONT></DD></DL>

<P><FONT SIZE=3><B>Our strengths  </B></FONT></P>

<P><FONT SIZE=2>We believe the following key strengths differentiate us: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Extensive experience in pricing and revenue optimization.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We have a 20-year track record of
providing pricing and revenue optimization software products to numerous customers in a variety of industries. Our software products are integrated into our customers' systems and processes, allowing
us to gain significant insight into the most complex and demanding pricing problems. We believe that our experience in delivering pricing software products that are strategically important to our
customers has enabled us to build a strong reputation within the pricing and revenue optimization market.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Thought leadership in pricing and revenue optimization science.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We focus exclusively on the pricing and revenue
optimization market. We employ a team of 30 scientists who actively participate in the pricing research community and work closely with our customers to improve pricing methodologies. As a result, we
have developed extensive expertise in pricing, and we believe our thought leadership in pricing science enables us to develop and deliver leading pricing and revenue optimization software products. </FONT></DD></DL>
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<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>High-performance software architecture with proven scalability.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our software products currently
operate in some of the largest, most complex and demanding information technology environments. In high volume transaction applications, PROS software products can handle hundreds of simultaneous
users and transactions per second. We continue to invest in improving the scalability, reliability and performance of our software products for large global customers.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Broad pricing and revenue optimization capabilities.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our PROS Pricing Solution Suite addresses analytics,
execution and optimization in an integrated platform. Our software products offer a broad feature set and are designed to be configurable to the unique needs of our customers across industries. We
also provide a range of services to our customers that include analyzing a company's current pricing processes, identifying detrimental pricing practices and implementing our software products to
improve pricing strategies.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Global diversified customer base across industries.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our software is used by customers around the world across a
number of industries, including manufacturing, distribution, services, hotel and cruise, and airline. As of March&nbsp;31, 2007, we had 90 customers across five industries in 42 countries with over
200 implementations of our software products. Our software accommodates global requirements such as currency conversion, units of measure and unique country-specific pricing processes. </FONT></DD></DL>


<P><FONT SIZE=3><B>Our strategy  </B></FONT></P>

<P><FONT SIZE=2>Our objective is to be the leading global provider of pricing and revenue optimization software. To achieve this goal, we are pursuing the following strategies: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Continue to expand across vertical markets.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We believe the strategic importance of our pricing and revenue
optimization solutions will help us attract new customers in our existing markets and in new markets. We intend to expand our customer base by growing our sales force to acquire customers in new
markets and to increase penetration in the manufacturing, distribution, services, hotel and cruise, and airline industries.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Continue to focus on customer satisfaction and retention.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We develop close relationships with our customers by
identifying and addressing their high value pricing needs during the implementation of our software products and by enabling pricing best practices within their organizations. Over the past three
years, customers have renewed an average of 96% of the maintenance and support revenue that was up for renewal. Our focus on customer service creates opportunities to cross-sell additional
pricing solutions and increase penetration within an organization.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Extend our pricing thought leadership.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We plan to extend our thought leadership in pricing science by working on
our customers' demanding pricing problems and increasing our investment in advanced scientific pricing research. We also plan to promote the use of pricing software products through our research
publications and pricing conferences.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Extend our technology leadership.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We intend to extend our technology leadership by increasing our investment in
research and development to deliver more advanced pricing software solutions to our customers. We also intend to make further investments to enhance the scalability of our pricing software products,
which we believe is a key differentiator of our solutions. In addition, we will continue to include new functionality in our software products based on our knowledge of our customers' pricing
problems. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>49</FONT></P>

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<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2><I>Leverage third-party consultants and systems integrators.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We plan to develop relationships with third-party
consultants and systems integrators that will enable them to promote and implement our pricing software products for customers. </FONT></DD></DL>


<P><FONT SIZE=3><B>Products  </B></FONT></P>

<P><FONT SIZE=2>Our PROS Pricing Solution Suite consists of our pricing analytics, pricing execution and pricing optimization software products. The design of our PROS Pricing
Solution Suite allows our customers to deploy all of the products at once or to implement our products incrementally. Our pricing analytics software product is the base product that is present in all
implementations. Our pricing execution products, pricing manager and deal manager, extend the usability of the base analytics product and provide real-time transaction level optimized
prices by customer and product. Our pricing optimization products help companies arrive at an optimal price by analyzing the relationships among demand, price and profit margin. By deploying multiple
products, our customers can analyze their pricing trends, execute consistent pricing policies, effectively negotiate prices and optimize their prices to support organizational goals. </FONT></P>

<P><FONT SIZE=2>Our
PROS Pricing Solution Suite uses our PROS Database that aggregates data from a wide variety of data sources, including our customers' enterprise applications and external market data sources.
Our PROS Database uses our internally-developed data loaders to import data from these data sources for access by our PROS Pricing Solution Suite. </FONT></P>


<P><FONT SIZE=2>The
users of our PROS Pricing Solution Suite include executives, sales and marketing personnel, pricing managers and finance personnel. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>
<IMG SRC="g734082.jpg" ALT="GRAPHIC" WIDTH="657" HEIGHT="277">
  </B></FONT></P>

<P><FONT SIZE=2><B><I>Pricing analytics  </I></B></FONT></P>

<P><FONT SIZE=2>Our pricing analytics software product helps companies gain insight into their pricing performance, allowing them to take action to correct poor performance and take advantage
of time-sensitive opportunities. Our pricing analytics software product enables our customers to: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>determine
pocket price and pocket margins by discrete metrics, such as by customer, product, channel, plant, sales territory and country;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>understand
how various price and cost elements contribute to the pocket margin;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>identify
and understand detrimental pricing trends; </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>50</FONT></P>

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<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>understand
the components of margin variance, including price, cost, volume, product mix and exchange rate effects;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>understand
differences in segment purchasing behavior;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>proactively
monitor pricing performance and market conditions; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>determine
how individual customers contribute to overall revenue and profitability. </FONT></DD></DL>

<P><FONT SIZE=2><B><I>Pricing execution  </I></B></FONT></P>

<P><FONT SIZE=2>Our pricing execution software products consist of the pricing manager and deal manager products. </FONT></P>


<P><FONT SIZE=2><I>Pricing manager.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our pricing manager product allows companies to streamline pricing processes and institute control of pricing policies to
support corporate business goals. It allows organizations to create multiple rules-based price lists and quickly modify prices or guidelines in response to changes in business conditions or strategy.
Our pricing manager product enables our customers to: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>create
and manage pricing policies and rules that are aligned with corporate strategies;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>automatically
generate mass price updates when pricing inputs change, including costs, competitor prices, market indices, supply availability or demand metrics;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>set
up and manage field pricing and discounting guidelines based on pricing policies and benchmarks; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>manage
pricing approval and exception thresholds and the pricing approval workflow to ensure consistency in the pricing process and maintain transaction histories. </FONT></DD></DL>

<P><FONT SIZE=2><I>Deal manager.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our deal manager product provides pricing decision-makers with guidelines, additional context and information to negotiate
better prices. Specifically, the deal manager product enables our customers to: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>more
accurately understand transaction economics including the impact of discounts, rebates, allowances, shipping terms, payment terms, replacement costs and other factors
that can influence the profitability of a transaction;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>communicate
price targets, price floors and profitability guidelines to appropriate decision-makers within an organization;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>consider
important transaction context to aid in better price negotiations, including insight into customer price history and willingness-to-pay, current and planned
inventory levels and recent trends in demand, supply, cost or competition; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>evaluate
transaction scenarios and allow comparisons to previous transactions and peer group benchmarks based on relevant metrics. </FONT></DD></DL>
<BR>

<P><FONT SIZE=2><B><I>Pricing optimization  </I></B></FONT></P>

<P><FONT SIZE=2>Our pricing optimization software products help companies arrive at an optimal price by analyzing the relationships among demand, price and profit margin taking into account
operational and financial constraints. Our pricing optimization software products use advanced statistical techniques to determine optimal prices consistent with pricing strategies. These products
utilize optimization </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>51</FONT></P>

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<P><FONT SIZE=2>and
forecasting engines to solve many distinct pricing problems. Our pricing optimization software products enable our customers to: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>analyze
and understand factors that influence demand in conjunction with price;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>understand
customer or segment price elasticities and customer indifferences or cluster customers into segments based on purchasing behavior;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>construct
and execute price testing to systematically manage and evaluate results of price changes;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>forecast
demand and response to demand using a library of forecasting algorithms that support a vast number of business scenarios and that consider relevant variables; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>run
optimization algorithms and apply appropriate methodology to recommend optimized prices or other business controls. </FONT></DD></DL>
<BR>

<P><FONT SIZE=3><B>Technology  </B></FONT></P>

<P><FONT SIZE=2><I>Software architecture.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our software architecture is based on open standards such as Java, XML and HTTP. We have created a component-based
design in a service-oriented architecture to develop a flexible, layered framework. This framework supports evolution and innovation in technologies and product features. </FONT></P>

<P><FONT SIZE=2><I>Optimization.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We have developed robust science-based forecasting and optimization engines, leveraging the deep expertise and research of
our science and research group. These engines are industry-independent and are validated using our internally-developed verification and testing processes. </FONT></P>

<P><FONT SIZE=2><I>Configuration vs. customization.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Rather than developing custom code for each customer, our PROS Pricing Solution Suite can be configured to
meet each customer's business needs. The configuration capabilities include defining user workflows, executive dashboards, analytic views, approval processes, alerts and data, including hierarchical
dimensions and measures. </FONT></P>

<P><FONT SIZE=2><I>Performance and scalability.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our solutions operate in some of the largest and most demanding enterprise environments. The scalability of
our technology has been tested at leading vendor benchmark performance centers, which validated the ability of our software products to scale to large data volumes and high request rates. For example,
in one implementation of our real-time pricing execution product, our software products handled over 300 requests per second with 250 millisecond average response times. Another
implementation of our pricing execution product handles 750 concurrent users. Also, an implementation of our pricing optimization product refreshes and maintains a data set with over one billion
forecast entries and 150&nbsp;million optimization results. </FONT></P>

<P><FONT SIZE=2><I>Data integration.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The data needed to execute pricing and revenue optimization functionality typically resides in a company's ERP, SCM and
CRM systems, industry-specific transaction systems, office productivity tools such as spreadsheets and external market data sources. Rarely can the data needed to formulate and execute optimal pricing
strategies be found in a single data source within a company. Our data integration capabilities utilize web services and file-based data interfacing to bring data from these disparate
sources together into a single cohesive database to support our PROS Pricing Solution Suite. Our data integration capabilities allow us to quickly deploy our solutions to our customers. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>52</FONT></P>

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<P><FONT SIZE=2><I>User interface.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our technology provides a rich, browser-based interface that supports local and remote users. The user interface supports a
wide variety of highly interactive charts and other data views and provides a comprehensive data security model based on user roles and scope of responsibility. </FONT></P>

<P><FONT SIZE=2><I>Platform support.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our software products run on most standard information technology platforms including Microsoft SQL Server and Oracle
databases, 32-bit and 64-bit processors from HP, SUN, Intel, AMD and IBM, and the HP-UX, Solaris, Linux, Windows and AIX operating systems. </FONT></P>


<P><FONT SIZE=3><B>Science and research  </B></FONT></P>

<P><FONT SIZE=2>We believe that our long-term investment in pricing science differentiates us from our competitors. As our customers realize value from our pricing
software products, we believe that they will seek to address more complex pricing problems through the use of our products. </FONT></P>

<P><FONT SIZE=2>We
employ 30 scientists, 17 of whom are PhDs, all of whom are dedicated to the advancement of pricing and revenue optimization technology and its implementation in our software products. These
scientists have specialties including operations research, management science, statistics, econometrics and computational methods. PROS also has a Science Advisory Council, which is comprised of
faculty from major research universities to advise on the development of pricing science in our software products. Our scientists regularly interact with our customers, and our product development,
sales and marketing, and professional services staff, to keep our science efforts relevant to real-world demands. </FONT></P>

<P><FONT SIZE=3><B>Services  </B></FONT></P>

<P><FONT SIZE=2><I>Pricing and implementation professional services.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our pricing services personnel are responsible for planning the implementations of our
software products and our implementation services personnel are responsible for the configuration and the technical deployment of our software products. We have extensive experience implementing our
software products in global enterprises across multiple industries, and we have developed a standardized and tested implementation process. Our pricing professional services include analyzing a
customer's current pricing processes, identifying specific high-value pricing needs and relevant pricing data and configuring our software products to the customer's specific business. Our
implementation professional services include implementing our software products to configuration specifications, assisting customers in loading and validating pricing data and supporting
organizational activities to assist our customers' transition from awareness of their pricing challenges to adoption of pricing excellence best practices. We also provide training services to help use
and maintain our software products. </FONT></P>

<P><FONT SIZE=2><I>Customer support.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;After our software products are installed and training is complete, our customer support personnel provide ongoing
support and maintenance of our software products. We provide customer support on a centralized basis from our headquarters in Houston, Texas. Our customer support personnel are responsible for
providing product support for our customers through our SupportWeb Portal, a web-based interface for submitting and tracking issues, distributing software releases and bug fixes and
hosting our knowledge base. In addition, our customer support personnel respond to customer issues promptly using an escalation process that prioritizes reported issues based on a defined set of
severity levels and assist customers in deploying our standard releases for each software product by providing release webinars and documentation. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>53</FONT></P>

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<P><FONT SIZE=3><B>Customers  </B></FONT></P>

<P><FONT SIZE=2>We provide our software products to customers in the manufacturing, distribution, services, hotel and cruise, and airline industries. Our customers are
generally large global enterprises, although we have customers that are smaller. All of our customers have over $200&nbsp;million in revenue, and over half of our customers have over
$1.0&nbsp;billion in revenue. Our top 10 customers in 2004, 2005 and 2006 represented 58%, 56% and 44% of our revenue, respectively. In 2006, we had no single customer that accounted for 10% or more
of revenue. </FONT></P>

<P><FONT SIZE=3><B>Case studies  </B></FONT></P>

<P><FONT SIZE=2><I>Manufacturing.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;One of our customers is a global integrated manufacturer of petroleum products and operates hundreds of distribution
terminals across the U.S. Our customer experienced difficulty gaining visibility into the price-demand relationships in its business, because doing so required hundreds of different prices to be
calculated and disseminated in a short span of time. While the customer had the necessary raw data, the customer did not have the ability to process this information in a timely manner and therefore
could not evaluate the effectiveness of pricing decisions. Our software products automated pricing recommendations and forecasts of next days' demand at relative price points and competitor price
postings for each distribution terminal. As a result of implementing our software products, our customer experienced a significant decrease in sales volume volatility and realized increased profits in
the distribution terminals business. </FONT></P>

<P><FONT SIZE=2><I>Distribution.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;One of our customers is a building products distributor that employs approximately 750 sales people with full pricing
autonomy quoting tens of thousands of prices everyday. With tens of thousands of products marketed and sold across multiple U.S. regions, our customer found it difficult to aggregate and analyze
timely market data to implement effective pricing. Our software products were implemented to provide key market and cost information, market pricing benchmarks and customer-specific decision support
during real-time negotiations. This allowed costs and profitability to be accessible at the time of quote. As a result of implementing our software products, the customer improved sales
force productivity, reduced variance across regions, increased deal capture percentages and increased profits. </FONT></P>

<P><FONT SIZE=2><I>Services.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;One of our customers is a global car rental company that maintains a fleet of hundreds of thousands of cars across multiple
classes and makes. Our customer faced significant pricing challenges in executing demand forecasting, analyzing the relevant opportunity costs of fleet movements and optimizing profit opportunities at
the local level. Our software products provide demand forecasting, pricing optimization and insight into fleet management terms to deliver integrated recommendations on pricing, distribution and fleet
acquisition. As a result of implementing our software products, our customer improved its return on assets, reduced fleet idle capacity and recaptured its investment in our software products in the
first year after completion of implementation. </FONT></P>

<P><FONT SIZE=2><I>Airlines.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;One of our customers is a global passenger airline that serves diverse, segmented markets in multiple countries and across
multiple currencies. Due to the complex nature of the airline industry, the customer faced a variety of extremely challenging pricing demands, including managing seating inventory and setting millions
of real-time prices everyday. Our software products allowed our customer to perform real-time seat inventory optimization by market segment, monitor and analyze passenger
traffic flows and optimize revenue across its entire network. As a result of implementing our software products, our customer achieved improved seat utilization rates across multiple routes,
optimization of segmented pricing and generated increased profit. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>54</FONT></P>

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<P><FONT SIZE=3><B>Sales and marketing  </B></FONT></P>

<P><FONT SIZE=2>We sell and market our software products primarily through our direct sales force from our headquarters in Houston, Texas. Our sales force is organized by our
target markets of manufacturing, distribution, services, hotel and cruise, and airline and is responsible for the worldwide sale of our products. Our sales force works in concert with our professional
services personnel for selling and product demonstrations. </FONT></P>

<P><FONT SIZE=2>Our
marketing activities consist of a variety of programs designed to generate sales leads and build awareness of PROS and our pricing and revenue optimization software products. We host a conference
for pricing and revenue optimization professionals, and we participate in and sponsor other industry conferences. </FONT></P>


<P><FONT SIZE=3><B>Competition  </B></FONT></P>

<P><FONT SIZE=2>The market for price and revenue optimization solutions is competitive, fragmented and rapidly evolving. We believe the following factors are the principal
basis of competition in the pricing and revenue optimization software market: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>ability
to offer integrated high-value solutions;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>pricing
focus and domain expertise;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>organizational
change management expertise;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>product
architecture, functionality, performance, reliability and scalability;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>breadth
and depth of product offerings;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>time
to value for the customer;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>services
organization and customer support;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>existing
enterprise relationships;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>large
and referenceable customer base;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>vendor
viability; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>price. </FONT></DD></DL>

<P><FONT SIZE=2>We
compete with several privately held pricing and revenue optimization software vendors such as Rapt, Revenue Technologies, Symphony-Metreo, Vendavo and Zilliant. We believe we are able to
compete successfully with these vendors due to our long history of providing pricing and revenue optimization software products, the scope of our offerings and the flexibility and scalability of our
architecture. </FONT></P>

<P><FONT SIZE=2>There
are also several large enterprise application providers, such as JDA Software, Oracle and SAP that have developed offerings that include pricing and revenue optimization functionality. JDA
Software and Oracle entered the market primarily through their acquisitions of Manugistics and Siebel Systems, respectively, and SAP resells Vendavo's products. We believe these vendors do not provide
all of the pricing and revenue optimization functionality needed to support a pricing-focused organization. These vendors may seek to compete on price by bundling their pricing and revenue
optimization applications with other enterprise applications. We distinguish ourselves from these vendors with the breadth and depth of the functionality of our products. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>55</FONT></P>

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<P><FONT SIZE=2>In
addition, there are a number of vendors that provide pricing and revenue optimization software for specific industries. In the hotel industry, we compete with IDeaS and Easy RMS, and in the airline
industry, we compete with Sabre Airline Solutions and Lufthansa Systems. One industry in which we do not compete is retail, where vendors include DemandTec, JDA Software, Oracle and SAP. Oracle and
SAP entered this retail market through their acquisitions of ProfitLogic and Khimetrics, respectively. </FONT></P>

<P><FONT SIZE=2>Our
products also compete with solutions developed internally by businesses. These businesses rely upon a combination of manual processes, external consultants, spreadsheets or internally developed
software tools to conduct pricing activities. </FONT></P>

<P><FONT SIZE=2>Some
of our current and potential competitors have significantly greater financial, technical, marketing, service and other resources than we have. In addition, many of these companies also have a
larger installed base of users, longer operating histories and greater brand recognition than we have. Competitors with greater financial resources may be able to offer lower prices, additional
products or services or other incentives that we cannot match or offer. These competitors may be in a stronger position to respond quickly to new technologies and may be able to undertake more
extensive marketing campaigns. Moreover, if one or more of our competitors were to merge or partner with another of our competitors, the change in the competitive landscape could adversely affect our
ability to compete effectively. </FONT></P>

<P><FONT SIZE=3><B>Intellectual Property  </B></FONT></P>

<P><FONT SIZE=2>Our success and ability to compete is dependent in part on our ability to develop and maintain the proprietary aspects of our technology and operate without
infringing upon the proprietary rights of others. We rely primarily on a combination of copyright, trade secret, confidentiality procedures, contractual provisions and other similar measures to
protect our proprietary information. Due to the rapidly changing nature of applicable technologies, we believe that the improvement of existing products, reliance upon trade secrets and unpatented
proprietary know-how and development of new products are generally more advantageous than patent and trademark protection. </FONT></P>

<P><FONT SIZE=2>As
of the date of this filing, we have four pending U.S. patent applications. We have not pursued patent protection in any foreign countries. We do not know whether any of our pending patent
applications will result in the issuance of patents or whether the examination process will require us to narrow our claims. </FONT></P>

<P><FONT SIZE=2>We
also use contractual provisions to protect our intellectual property rights. We license our software products directly to customers. These license agreements, which address our technology,
documentation and other proprietary information, include restrictions intended to protect and defend our intellectual property. We also require all of our employees, contractors and many of those with
whom we have business relationships to sign non-disclosure and confidentiality agreements. </FONT></P>

<P><FONT SIZE=2>Our
products also include third-party software that we obtain the rights to use through license agreements. While this software comprises important elements of our product offerings, these
applications are commercially available, and we are aware of substitute applications we could integrate with our products that are also commercially available on reasonable terms. In certain cases we
believe we could develop substitute technology to replace these products if these third-party licenses were no longer available on reasonable terms. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>56</FONT></P>

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<P><FONT SIZE=3><B>Research and development expense  </B></FONT></P>

<P><FONT SIZE=2>Our research and development program involves creating new products and modifying existing products to add new functionality and meet other market demands. Our
research and development expense includes costs associated with our product management, product development and science and research groups. Our research and development expense was
$6.3&nbsp;million, $6.4&nbsp;million and $10.3&nbsp;million in 2004, 2005 and 2006, respectively. </FONT></P>

<P><FONT SIZE=3><B>Employees  </B></FONT></P>

<P><FONT SIZE=2>As of March&nbsp;31, 2007, we had 311 employees. None of our employees is represented by a labor union or covered by a collective bargaining agreement. We
have not experienced any work stoppages and consider our employee relations to be good. </FONT></P>

<P><FONT SIZE=3><B>Facilities  </B></FONT></P>

<P><FONT SIZE=2>We lease approximately 73,200 square feet of office space for our headquarters in Houston, Texas. This lease expires in July&nbsp;2011. We may add new
facilities and expand our existing facility as we add employees, and we believe that suitable additional or substitute space will be available as needed to accommodate any such expansion of our
operations. </FONT></P>

<P><FONT SIZE=3><B>Legal proceedings  </B></FONT></P>

<P><FONT SIZE=2>We are not party to any material legal proceeding at this time. From time to time, we may be subject to legal proceedings and claims in the ordinary course of
our business. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>57</FONT></P>

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<BR></FONT><FONT SIZE=4><B>Management  <BR>  </B></FONT></P>

<P><FONT SIZE=3><B>Executive officers, directors and key employees  </B></FONT></P>

<P><FONT SIZE=2>Our executive officers, directors and key employees, and their ages and positions as of March&nbsp;31, 2007 are as follows: </FONT></P>

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</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="36%" ALIGN="LEFT"><FONT SIZE=2><B>Name<BR> </B></FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2><B>Age<BR> </B></FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="53%" ALIGN="LEFT"><FONT SIZE=2><B>Position<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="36%"><FONT SIZE=2>Albert E. Winemiller*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2>64</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="53%"><FONT SIZE=2>Chairman of the Board, President and Chief Executive Officer</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="36%"><FONT SIZE=2><BR>
Charles H. Murphy*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2><BR>
62</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="53%"><FONT SIZE=2><BR>
Executive Vice President and Chief Financial Officer</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="36%"><FONT SIZE=2><BR>
Ronald F. Woestemeyer*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2><BR>
61</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="53%"><FONT SIZE=2><BR>
Executive Vice President and Director</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="36%"><FONT SIZE=2><BR>
Surain R. Adyanthaya**</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2><BR>
42</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="53%"><FONT SIZE=2><BR>
Senior Vice President, Airline Solutions</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="36%"><FONT SIZE=2><BR>
E. Andrew Boyd**</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2><BR>
47</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="53%"><FONT SIZE=2><BR>
Senior Vice President, Science&nbsp;&amp; Research and Chief Scientist</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="36%"><FONT SIZE=2><BR>
Peter P. Kiernan**</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2><BR>
60</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="53%"><FONT SIZE=2><BR>
Senior Vice President, Professional Services</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="36%"><FONT SIZE=2><BR>
Andres D. Reiner**</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2><BR>
36</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="53%"><FONT SIZE=2><BR>
Senior Vice President, Software Development</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="36%"><FONT SIZE=2><BR>
John M. Riddell**</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2><BR>
63</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="53%"><FONT SIZE=2><BR>
Senior Vice President, Pricing Solutions</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="36%"><FONT SIZE=2><BR>
Jeffrey E. Robinson**</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2><BR>
40</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="53%"><FONT SIZE=2><BR>
Senior Vice President, Pricing Solutions</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="36%"><FONT SIZE=2><BR>
Jeffrey L. Wannamaker**</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2><BR>
50</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="53%"><FONT SIZE=2><BR>
Vice President, Technical Services</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="36%"><FONT SIZE=2><BR>
Benson B. Yuen**</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2><BR>
46</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="53%"><FONT SIZE=2><BR>
Senior Vice President, Business Development</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="36%"><FONT SIZE=2><BR>
Harry S. Gruner(1)(2)(3)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2><BR>
47</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="53%"><FONT SIZE=2><BR>
Director</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="36%"><FONT SIZE=2><BR>
Kurt R. Jaggers(1)(2)(3)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2><BR>
48</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="53%"><FONT SIZE=2><BR>
Director</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="36%"><FONT SIZE=2><BR>
Mariette M. Woestemeyer(1)(2)(3)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
55</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="53%" VALIGN="TOP"><FONT SIZE=2><BR>
Director</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=5><HR NOSHADE></TD>
</TR>
</TABLE>
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<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>*</FONT></DT><DD><FONT SIZE=2>Executive
officer
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>**</FONT></DT><DD><FONT SIZE=2>Key
employee
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>Member
of the compensation committee
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD><FONT SIZE=2>Member
of the audit committee
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD><FONT SIZE=2>Member
of the nominating and governance committee </FONT></DD></DL>


<P><FONT SIZE=2><I>Albert E. Winemiller</I></FONT><FONT SIZE=2> joined us in 1999 as our President and Chief Executive Officer and has served as Chairman of our board of directors since
October&nbsp;2000. Mr.&nbsp;Winemiller holds BS and MS degrees from the University of Missouri and an MBA from Harvard Business School. </FONT></P>

<P><FONT SIZE=2><I>Charles H. Murphy</I></FONT><FONT SIZE=2> joined us in 1998 and has served as our Executive Vice President and Chief Financial Officer since March 2001. Prior to joining us,
Mr.&nbsp;Murphy spent 13&nbsp;years in chief financial officer positions with Expert Software, a publicly traded software company, Merchant International, a software company, and Packaging
Machinery Company, a publicly traded manufacturer of packaging machinery. He was Vice President-Treasurer with Coleco Industries, a publicly traded toy and video game company, and began his career
with Coopers&nbsp;&amp; Lybrand as a certified public accountant. He Holds a BS degree from Bentley College. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>58</FONT></P>

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<P><FONT SIZE=2><I>Ronald F. Woestemeyer</I></FONT><FONT SIZE=2> co-founded the Company in 1985 with his wife, Mariette&nbsp;Woestemeyer, and has been a director since our founding
and our Executive Vice President since 1997. From 1985 to 1997, Mr.&nbsp;Woestemeyer served as our Chief Executive Officer. Prior to founding PROS, Mr.&nbsp;Woestemeyer spent 14&nbsp;years at
Continental Airlines and its predecessor, Texas International Airlines, in various management and executive positions with responsibility over sales and marketing. Mr.&nbsp;Woestemeyer holds a BBA
degree from the University of Houston. </FONT></P>

<P><FONT SIZE=2><I>Surain R. Adyanthaya</I></FONT><FONT SIZE=2> joined us in 1993 and has served as our Senior Vice President, Airline Solutions since January&nbsp;2004. Mr.&nbsp;Adyanthaya
was a software developer from 1993 to 1997 and our Vice President, Software Development from 1997 to 1999. He served as our Senior Vice President, Software Development from 1999 to 2004. Prior to
joining us, Mr.&nbsp;Adyanthaya was a consulting engineer at Texaco Oil Company. Mr.&nbsp;Adyanthaya holds an MS degree in operations research from Stanford University and a BS degree in
mechanical engineering from the University of Houston. </FONT></P>

<P><FONT SIZE=2><I>E. Andrew Boyd</I></FONT><FONT SIZE=2> joined us in 1997 and has served as our Senior Vice President, Science&nbsp;&amp; Research and Chief Scientist since 1999. Prior to joining
us, Dr.&nbsp;Boyd was a university professor, most recently as a tenured faculty member in the Department of Industrial Engineering at Texas A&amp;M University. Dr.&nbsp;Boyd has authored and
contributed to numerous publications, including articles in </FONT><FONT SIZE=2><I>Operations Research</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>Management Science</I></FONT><FONT SIZE=2> and </FONT> <FONT SIZE=2><I>Mathematical
Programming</I></FONT><FONT SIZE=2>, and has received research grants from various agencies such as the National Science Foundation and the Federal Aviation
Administration. Dr.&nbsp;Boyd holds a Ph.D. degree in operations research from the Massachusetts Institute of Technology and a AB degree from Oberlin College. </FONT></P>

<P><FONT SIZE=2><I>Peter P. Kiernan</I></FONT><FONT SIZE=2> joined us in 1996 and has served as our Senior Vice President, Professional Services since 2000. From 1997 to 2000, Mr.&nbsp;Kiernan
was our Vice President, Client Services and from 1996 to 1997, he served as our Staff Vice President, Airline. Prior to joining us, Mr.&nbsp;Kiernan held several positions at Pan American World
Airways,&nbsp;Inc., including Staff Vice President, Revenue Management, Director, Pricing Automation and Director, Revenue Accounting. Mr.&nbsp;Kiernan holds a BS degree in business administration
from California Coast University. </FONT></P>

<P><FONT SIZE=2><I>Andres Reiner</I></FONT><FONT SIZE=2> joined us in 1999 and has served as our Senior Vice President, Software Development since March&nbsp;2007. From 2003 to 2007,
Mr.&nbsp;Reiner was our Vice President, Software Development, from 2000 to 2003, he served as our Director, Software Development, and from 1999 to 2000, he served as our Development Manager.
Mr.&nbsp;Reiner held various software engineer roles at Platinum Technology, a database management software company, ADAC Laboratories, a high-technology healthcare product company, and Kinesix, an
interface software for complex data company, before joining us. Mr.&nbsp;Reiner holds a BS degree in computer science from the University of Houston. </FONT></P>

<P><FONT SIZE=2><I>John M. Riddell</I></FONT><FONT SIZE=2> joined us in 1998 as a Senior Scientist and has served as our Senior Vice President, Pricing Solutions since 2004. From 2001 to 2004,
Mr.&nbsp;Riddell was our Vice President, Pricing and from 2000 to 2001, he served as our Director, New Market Development. Prior to 1998, Mr.&nbsp;Riddell was Director of Research and Development
at OPUS 2 Revenue Technologies, a yield management software company. Mr.&nbsp;Riddell holds an MS degree in operations research from the US Naval Postgraduate School and a BS degree in civil
engineering from the University of Mississippi. </FONT></P>

<P><FONT SIZE=2><I>Jeffrey E. Robinson</I></FONT><FONT SIZE=2> joined us in 2000 and has served as our Senior Vice President, Pricing Solutions since 2006. From 2004 to 2006, Mr.&nbsp;Robinson
was our Vice President, Pricing Solutions and from 2000 to 2003, he served as our Director, Business Development. Prior to joining us, Mr.&nbsp;Robinson held several positions with ADAC Healthcare
Information Systems, a subsidiary of ADAC Laboratories. Mr.&nbsp;Robinson holds a BA degree from Brigham Young University and an MBA from Rice University. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>59</FONT></P>

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<BR>

<P><FONT SIZE=2><I>Jeffrey L. Wannamaker</I></FONT><FONT SIZE=2> joined us in 1998 and has served as our Vice President, Technical Services since 2001. Mr.&nbsp;Wannamaker was our Director,
Tech Services from 2000 to 2001 and from 1998 to 2000, he served as our Director, Software Development. Mr.&nbsp;Wannamaker was the Engineering Manager at Dynasty Technologies, a software company.
Prior to joining us, Mr.&nbsp;Wannamaker holds a BSEE degree from the University of Houston. </FONT></P>

<P><FONT SIZE=2><I>Benson B. Yuen</I></FONT><FONT SIZE=2> joined us in 1988 and has served as our Senior Vice President, Business Development since 1999. From 1995 to 1999, Mr.&nbsp;Yuen was
our Senior Vice President, Sales, Marketing and Consulting Services, and from 1988 to 1994, he served as our Vice President, Customer Services and Professional Services. Prior to joining us,
Mr.&nbsp;Yuen held several positions with Florida Express, an air transportation company, including Director&#151;Pricing, Inventory and Director, Market Planning. Mr.&nbsp;Yuen holds a
BSBA from the University of Central Florida. </FONT></P>

<P><FONT SIZE=2><I>Harry S. Gruner</I></FONT><FONT SIZE=2> has served as a director of the Company since 1998. Since 1992, Mr.&nbsp;Gruner has been a founding general partner of JMI Equity, a
private equity investment partnership. Prior to co-founding JMI Equity, Mr.&nbsp;Gruner specialized in advising software companies as a principal in the corporate finance department of Alex.
Brown&nbsp;&amp; Sons Incorporated, an investment bank. Mr.&nbsp;Gruner is also a director of several privately-held companies. Mr.&nbsp;Gruner holds an MBA from Harvard Business School and a BA
degree from Yale University. </FONT></P>

<P><FONT SIZE=2><I>Kurt R. Jaggers</I></FONT><FONT SIZE=2> has served as a director of the Company since 1998. Mr.&nbsp;Jaggers has been a Managing Director of TA Associates,&nbsp;Inc. since
1997, was a Principal of TA Associates from January&nbsp;1993 to December&nbsp;1996 and Vice President of TA Associates from 1990 to 1992. He is currently a director of WebSideStory, a provider of
Internet behavior information and analysis, as well as several privately-held companies. Mr.&nbsp;Jaggers holds BS and MS degrees in electrical engineering and an MBA from Stanford University. </FONT></P>

<P><FONT SIZE=2><I>Mariette M. Woestemeyer</I></FONT><FONT SIZE=2> co-founded the Company in 1985 with her husband, Mr.&nbsp;Woestemeyer, and has served as a director since our
founding. Mrs.&nbsp;Woestemeyer was the Chief Financial Officer of Metro Networks, a broadcasting company, from 1983 to 1985 and held various
financial roles with Continental Airlines and its predecessor, Texas International Airlines, prior to 1983. Mrs.&nbsp;Woestemeyer holds a BBA degree and an MBA from the University of Houston. </FONT></P>


<P><FONT SIZE=3><B>Board of directors  </B></FONT></P>

<P><FONT SIZE=2>Effective upon the closing of this offering, our certificate of incorporation and bylaws will authorize a board of directors of six members consisting of
Mrs.&nbsp;Woestemeyer, Messrs.&nbsp;Gruner, Jaggers, Woestemeyer and Winemiller and one vacancy. All of our directors are elected pursuant to agreements we have entered into with Mr.&nbsp;and
Mrs.&nbsp;Woestemeyer, TA Associates and JMI Equity and agreements between Mr.&nbsp;Winemiller, Mr.&nbsp;Murphy and Mr.&nbsp;and Mrs.&nbsp;Woestemeyer, all of which terminate upon the
closing of this offering. </FONT></P>

<P><FONT SIZE=3><B>Committees of the board of directors  </B></FONT></P>

<P><FONT SIZE=2>Our board of directors has established an audit committee, a compensation committee and a nominating and governance committee. </FONT></P>

<P><FONT SIZE=3><B>Audit committee  </B></FONT></P>

<P><FONT SIZE=2>The members of our audit committee are Mrs.&nbsp;Woestemeyer and Messrs.&nbsp;Gruner and Jaggers. Our board of directors has determined that
Mr.&nbsp;Gruner is independent under the Nasdaq Marketplace </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>60</FONT></P>

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<P><FONT SIZE=2>Rules
and pursuant to Rule&nbsp;10A-3(b) of the Securities and Exchange Act of 1934, as amended, or the Exchange Act, and that Mr.&nbsp;Gruner qualifies as an audit committee financial
expert within the meaning of SEC regulations and the Nasdaq listing standards. In arriving at this determination, the board examined Mr.&nbsp;Gruner's scope of experience and the nature of his
employment in the corporate finance sector. Mr.&nbsp;Jaggers serves as chairperson of the audit committee. </FONT></P>

<P><FONT SIZE=2>The
audit committee oversees our accounting and financial reporting processes and the audits of our financial statements. Specific responsibilities of our audit committee include: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>reviewing
and providing oversight over the qualification, independence and performance of our independent auditor and determining whether to retain or terminate its
services;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>approving
the terms of engagement of our independent auditor and pre-approving the engagement of our independent auditor to perform permissible
non-audit services;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>reviewing
and discussing with management and our independent auditor the results of the annual audit and the independent auditor's review of our annual and quarterly
financial statements and reports;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>reviewing
with management and our independent auditor matters that have a significant impact on our financial statements;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>conferring
with management and our independent auditors regarding the scope, adequacy and effectiveness of our internal control over financial reporting;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>establishing
procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal control or auditing matters and for the
confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>reviewing
and approving all related party transactions. </FONT></DD></DL>
<BR>

<P><FONT SIZE=3><B>Compensation committee  </B></FONT></P>

<P><FONT SIZE=2>The members of our compensation committee are Mrs.&nbsp;Woestemeyer and Messrs.&nbsp;Gruner and Jaggers. Each member of our compensation committee is a
non-employee director, as defined in Rule&nbsp;16b-3 promulgated under the Exchange Act, and an outside director, as defined pursuant to Section&nbsp;162(m) of the Internal
Revenue Code of 1986, as amended, or the Internal Revenue Code. Our board of directors has determined that Mr.&nbsp;Gruner is independent under the Nasdaq Marketplace Rules. Mr.&nbsp;Jaggers
serves as chairperson of the compensation committee. </FONT></P>

<P><FONT SIZE=2>The
compensation committee discharges the responsibilities of our board of directors relating to the compensation and benefits for our executive officers and directors. Specific responsibilities of
our compensation committee include: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>determining
and reviewing all forms of compensation for our executive officers and directors, including, among other things, annual salaries, bonuses, equity awards,
severance arrangements, change in control protections and other compensatory arrangements;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>reviewing
and approving corporate performance goals and objectives relevant to such compensation;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>administering
our equity incentive plans and granting awards of options and other equity-based awards to our executive officers, directors and employees; </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>61</FONT></P>

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<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>reviewing
our compensation discussion and analysis and compensation committee report required by the rules of the SEC; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>evaluating
and recommending to our board of directors the compensation plans and programs advisable for us, and evaluating and recommending the modification or termination
of existing plans and programs. </FONT></DD></DL>

<P><FONT SIZE=2><B><I>Nominating and governance committee  </I></B></FONT></P>

<P><FONT SIZE=2>The members of the nominating and governance committee are Mrs.&nbsp;Woestemeyer and Messrs.&nbsp;Gruner and Jaggers. The board has determined that Mr.&nbsp;Gruner is
independent under the Nasdaq Marketplace Rules. Mr.&nbsp;Gruner serves as chairperson of the nominating and governance committee. Specific responsibilities of our nominating and governance committee
include: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>identifying,
evaluating and recommending to our board of directors candidates to serve as members of our board of directors and considering the nomination of our incumbent
directors for reelection;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>evaluating
stockholder nominations of candidates for election to our board of directors;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>reviewing
our general policy relating to selection of director candidates and members of committees of our board of directors, including an assessment of the performance of
our board of directors; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>reviewing
and making recommendations to our board of directors regarding corporate governance principles and director compensation. </FONT></DD></DL>
<BR>

<P><FONT SIZE=3><B>Compensation committee interlocks and insider participation  </B></FONT></P>


<P><FONT SIZE=2>No member of our compensation committee and none of our executive officers has any relationships that would constitute an interlocking relationship with
executive officers and directors of any another entity. </FONT></P>

<P><FONT SIZE=3><B>Director compensation  </B></FONT></P>

<P><FONT SIZE=2>We currently do not pay our directors any cash or equity compensation for their services as members of our board of directors or any committee of our board of
directors. We have a policy of reimbursing our directors for travel, lodging and other expenses incurred in connection with their attendance at our board or committee meetings. </FONT></P>

<P><FONT SIZE=2>We
have adopted a policy for director compensation beginning on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2007. Under this policy each
non-employee member of our board of directors will be entitled to receive an
annual grant of options to purchase&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of our common stock, an annual retainer of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and an additional retainer of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if such director also
serves on our audit committee, compensation committee or nominating and governance committee. The chair of each such committee will be entitled to an additional annual retainer of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
The retainer fees will be paid on an annual basis as earned. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>62</FONT></P>

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<BR></FONT><FONT SIZE=4><B>Executive compensation  <BR>  </B></FONT></P>

<P><FONT SIZE=3><B>Compensation discussion and analysis for named executive officers  </B></FONT></P>

<P><FONT SIZE=2>Our mission is to help our customers improve business and financial performance by providing them with our pricing and revenue optimization software products.
Implementing our mission relies on delivering these software products successfully and competitively, as well as our ability to help our customers address their pricing and revenue optimization needs.
As a result, it is critical that we are able to attract, motivate and retain highly talented individuals who are committed to us and our mission and are willing to identify and exploit opportunities
to grow our business. Consequently, the goals of our executive compensation program are to align our executive officers' compensation with our mission and the interests of our stockholders, to provide
incentives and rewards to our executive officers for our success and to reflect the teamwork philosophy of our executive management team. </FONT></P>

<P><FONT SIZE=2>As
a private company, we generally relied upon the experience of management and the members of our board of directors to set the compensation of our executive officers. We have recently adopted an
executive compensation program that combines short-term and long-term components, cash and equity, and fixed and contingent payments, in the proportions that we believe are the most
appropriate to motivate, retain and reward our executive officers for achieving our objectives. </FONT></P>

<P><FONT SIZE=2><B><I>The objectives of our executive compensation policy  </I></B></FONT></P>

<P><FONT SIZE=2>Our executive compensation programs are designed to achieve the following objectives: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>attract
and retain talented and experienced executives in the highly competitive and dynamic pricing and revenue software market;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>motivate
and reward executives whose knowledge, skills and performance are critical to our success;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>align
the interests of our executive officers and stockholders by motivating executive officers to increase stockholder value;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>provide
a competitive compensation package which is weighted heavily towards pay for performance, and in which total compensation is primarily determined by company/team and
individual results and the creation of stockholder value;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>ensure
fairness among the executive management team by recognizing the contributions each executive makes to our success;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>foster
a shared commitment among our management team by coordinating their respective teams and individual goals; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>compensate
our executives to manage our business to meet our long-range objectives. </FONT></DD></DL>

<P><FONT SIZE=2><B><I>Role of the compensation committee in setting executive compensation  </I></B></FONT></P>

<P><FONT SIZE=2>The responsibility for establishing, administering and interpreting our policies governing the compensation and benefits for our executive officers lies with our compensation
committee, which consists entirely of non-employee directors. See "Management&#151;Committees of the board of directors&#151;Compensation committee." </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>63</FONT></P>

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<P><FONT SIZE=2>Our
compensation committee has taken the following steps to ensure that our executive compensation and benefit policies are consistent with both our compensation philosophy and our corporate
governance guidelines: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>evaluated
our compensation practices and assisted in developing and implementing the executive compensation policy;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>established
a practice, in accordance with the rules of Nasdaq, of reviewing the performance and determining the compensation earned, paid or awarded to our chief executive
officer independent of input from him; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>established
a policy, in accordance with the rules of Nasdaq, to review on an annual basis the performance of our other executive officers with assistance from our chief
executive officer and determining what we believe to be appropriate total compensation for these executive officers. </FONT></DD></DL>


<P><FONT SIZE=2><B><I>Components of executive compensation  </I></B></FONT></P>

<P><FONT SIZE=2>Based on our goals and the experience of our board and management, we established the following elements of executive compensation: base salary, cash incentive bonuses and
long-term incentive awards, each as further described below. The compensation committee does not have any formal policies for allocating compensation among salary, cash incentive bonus and
long-term incentive awards, and we have not retained a compensation consultant to review our policies and procedures with respect to executive compensation. </FONT></P>

<P><FONT SIZE=2><I>Base salaries  </I></FONT></P>

<P><FONT SIZE=2>Base salaries for our executive officers are reviewed on a yearly basis. For 2006, our executive officers' base salaries were set by reviewing their then current salaries in
light of 2005 company performance and individual performance, scope of their responsibilities, the experience of the members of our compensation committee with similar stage companies and general
economic factors. </FONT></P>

<P><FONT SIZE=2><I>Cash incentive bonus  </I></FONT></P>

<P><FONT SIZE=2>We have an annual cash incentive bonus plan for our executive officers under which bonuses may be paid shortly after the end of each year based on our performance in meeting
our corporate objectives for the year and each individual's performance and contribution in meeting our corporate
objectives. Bonuses are intended to compensate our executive officers for achieving financial and operational goals and for achieving individual and company performance objectives. The bonuses are
paid in cash and will generally be paid in the first quarter following completion of a given year. </FONT></P>

<P><FONT SIZE=2>Bonuses
are determined based on the achievement of certain financial and operational benchmarks. Each component of this bonus is independent of the other components and has minimum and maximum target
levels. The target bonus amounts are payable under this cash bonus plan if we hit our target levels for each component. If we hit the minimum goals, our executive officers would be entitled to half of
the target bonus amount, and if we achieve the maximum target level, they would be entitled to receive twice their target bonus amount for such component. Actual results between the minimum, target
and the maximum goal levels would be pro-rated. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>64</FONT></P>

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<P><FONT SIZE=2><I>Long-term incentive award programs  </I></FONT></P>

<P><FONT SIZE=2>Our base salary and cash incentive bonus plans are intended to compensate and motivate for the short-term. We believe that providing our executive officers with an
ownership stake through participation in our long-term incentive plans will encourage long-term performance and help align their interests with those of our stockholders. </FONT></P>


<P><FONT SIZE=2><I>1997 stock option plan and 1999 equity incentive plan.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our 1997 stock option plan and 1999 equity incentive plan authorized us to grant
options to purchase shares of common stock to our employees, directors and consultants. Our compensation committee was the administrator of these plans. Stock option grants under these plans were
usually made at the commencement of employment and, occasionally, following a significant change in job responsibilities or to meet other special retention or performance objectives. The compensation
committee reviewed and approved stock option awards to executive officers based upon a review of competitive compensation data, its assessment of individual performance, a review of each executive's
existing long-term incentives and retention considerations. Periodic stock option grants were made at the discretion of the compensation committee to eligible employees and, in appropriate
circumstances, the compensation committee considered the recommendations of our CEO and other members of management. No options were awarded in 2006 since the compensation committee had determined
there was sufficient retention value in the outstanding options and common stock subject to restrictions held by our executive officers. Stock options granted by us have an exercise price equal to the
fair market value of our common stock on the day of grant, typically vest 25% on the first anniversary and monthly thereafter, based upon continued employment over a four-year period, and
generally expire ten years after the date of grant. Incentive stock options also include certain other terms necessary to assure compliance with the Internal Revenue Code. Our 1997 stock option plan
was terminated in April, 1999 and our 1999 equity incentive plan
was terminated on March&nbsp;26, 2007 for purposes of granting any future equity awards under those plans. There were issued and outstanding stock options to purchase 415,247&nbsp;shares of our
common stock under these plans on March&nbsp;31, 2007. </FONT></P>

<P><FONT SIZE=2><I>2007 equity incentive plan.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our 2007 equity incentive plan, or 2007 plan, was adopted by our board of directors on March&nbsp;26, 2007
and approved by our stockholders on April&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2007. The purpose of the 2007 plan is to promote our long-term growth and profitability. The 2007 plan is intended to make
available incentives that will help us to attract, retain and reward employees whose contributions are essential to our success. We may provide these incentives through the grant of: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>restricted
stock awards;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>restricted
stock unit awards;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>stock
options;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>stock
appreciation rights;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>phantom
stock; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>performance
awards. </FONT></DD></DL>
<BR>

<P><FONT SIZE=2>A
total of 1,870,000 shares have been reserved for issuance under the 2007 plan with an evergreen provision that allows for an annual increase equal to the lesser of (a)&nbsp;3.5% of our outstanding
shares (b)&nbsp;900,000 shares or (c)&nbsp;any lesser amount determined by our board of directors. As of April&nbsp;2, 2007, 710,000 shares remain available for grant or award under the 2007
plan. The </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>65</FONT></P>

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<P><FONT SIZE=2>compensation
committee of our board has been designated to administer the 2007 plan. Under the 2007 plan, our employees, officers, directors and other individuals providing services to us or any of
our affiliates are eligible to receive awards. The committee has the authority, consistent with the provisions of the 2007 plan, to determine which eligible participants will receive awards, the form
of the awards and the number of shares of our common stock covered by each award. The committee may impose terms, limits, restrictions and conditions upon awards, and may modify, amend, extend or
renew awards, accelerate or change the timing of exercise of awards or waive any restrictions or conditions of an award. As of April&nbsp;2, 2007, we had awarded equity awards to acquire 1,160,000
shares of our common stock under this plan to our employees and consultants under the 2007 plan. </FONT></P>

<P><FONT SIZE=2><I>Stock options.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our 2007 plan permits the granting of options to purchase shares of our common stock intended to qualify as incentive stock
options, under Section&nbsp;422 of the Internal Revenue Code, and nonqualified stock options. The option exercise price and the term of each option are determined by the compensation committee. The
compensation committee also determines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment during which
options may be exercised. In general, options granted under this plan vest at the rate of 25% on the one year anniversary of the vesting commencement date and in equal monthly installments thereafter
over the next three years. </FONT></P>

<P><FONT SIZE=2><I>Stock appreciation rights.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The compensation committee may grant a right to receive a number of shares or, in the discretion of the
compensation committee, an amount in cash or a combination of shares and cash, based on the increase in the fair market value of the shares underlying the right during a stated period specified by the
compensation committee. </FONT></P>

<P><FONT SIZE=2><I>Restricted stock awards and units.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The compensation committee may award shares of our common stock to participants at no cost or for a
purchase price or restricted stock units that are settled in shares of our common stock. These restricted stock and restricted stock unit awards may be subject to restrictions or may be free from any
restrictions under our 2007 plan. The purchase price of the shares, if any, and any applicable restrictions, are determined by the compensation committee. </FONT></P>


<P><FONT SIZE=2><I>Phantom stock.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The compensation committee may grant stock equivalent rights, or phantom stock, which entitles the recipient to receive
credits which are ultimately payable in the form of cash, shares of our common stock or a combination of both. Phantom stock does not entitle the holder to any rights as a stockholder. </FONT></P>

<P><FONT SIZE=2><I>Performance awards.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The compensation committee may grant performance awards to participants entitling the participants to receive cash,
shares of our common stock or a combination of both, upon the achievement of performance goals and other conditions determined by the compensation committee. The performance goals may be based on our
operating income or on one or more other business criteria selected by the compensation committee. </FONT></P>

<P><FONT SIZE=2>In
the event of any stock split, stock dividend or similar transaction, the shares subject to the 2007 plan and any outstanding awards will automatically be adjusted. The 2007 plan will continue in
effect until the tenth anniversary of its approval by our board, unless earlier terminated earlier. The compensation committee may amend, terminate or modify the plan at any time. </FONT></P>

<P><FONT SIZE=2>In
the event of certain significant corporate transactions, including a change in control of the Company, any then-outstanding equity award or option under the 2007 plan may be assumed,
continued or substituted for by any surviving or acquiring entity (or its parent company). If the surviving or acquiring entity (or its parent company) elects to assume, continue or substitute for
such awards or options and the holder of such award or option is terminated without cause or </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>66</FONT></P>

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<P><FONT SIZE=2>resigns
for good reason within 18&nbsp;months of a change of control of the Company, such awards or options shall vest in full. If the surviving or acquiring entity (or its parent company) elects
not to assume, continue or substitute for the equity awards or options under the 2007 plan, all outstanding equity awards and options under the 2007 plan will vest in full and become fully
exercisable. </FONT></P>

<P><FONT SIZE=2>The
compensation committee believes that the use of stock options and equity awards offers the best approach to achieve our compensation goals with respect to long-term compensation and
currently provides tax and other advantages to our employees relative to other forms of equity compensation. We believe that our equity incentive program is an important retention tool for our
employees. </FONT></P>

<P><FONT SIZE=2>In
April 2007, our Chief Executive Officer and Chief Financial Officer were granted immediately exercisable stock options under our 2007 plan to purchase 150,000 shares of our common stock each at
$6.00 per share. These stock options provide for the full acceleration of the vesting upon our change in control, the officer's termination without cause or resignation for good reason and otherwise
vest as to 25% of the shares in April 2008 and monthly thereafter based on continued employment over the following three years. In the absence of a public trading market for our common stock, the
compensation committee determined the fair market value of our common stock in good faith based upon consideration of a number of relevant factors including the status of our
development and commercialization efforts, results of operations, market conditions and a valuation that we obtained of our common stock as of February&nbsp;28, 2007. In April&nbsp;2007, after
considering these factors, our board determined that the fair market value of our common stock was $6.00 per share. These grants were made because our board believes it is an appropriate incentive
mechanism to encourage retention in the long-term. In determining the number of shares subject to stock options granted to the executive officers, the compensation committee took into account each
executive officer's position, scope of responsibility, ability to affect stockholder value and historic and recent performance. </FONT></P>

<P><FONT SIZE=2><I>Benefits.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We provide our executive officers the following benefits, generally on the same terms as we provide our other employees. </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>health,
dental, travel, accident insurance and vision;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>life
insurance;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>employee
assistance plan;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>medical
and dependant care flexible spending account;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>short-and
long-term disability, accidental death and dismemberment;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>a
401(k) plan;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>paid
time off and vacations;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>sick
days; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>tuition
reimbursement. </FONT></DD></DL>

<P><FONT SIZE=2>We
believe these benefits are consistent with companies with which we compete for employees. </FONT></P>

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<P><FONT SIZE=2><A
NAME="page_dq76601_1_68"> </A> </FONT> <FONT SIZE=2><I>401(k) Plan.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In May&nbsp;1996, we adopted a tax-qualified employee savings and retirement plan, or 401(k) plan, which
generally covers our full-time employees. The plan is intended to qualify under Section&nbsp;401(a) of the Internal Revenue Code. Contributions, and income earned thereon, are not
taxable to employees until withdrawn from this plan. Under this plan, employees may elect to reduce their current compensation up to the statutorily prescribed annual limit and have the amount of the
reduction contributed to the plan. This plan also permits us to make matching contributions to the plan on behalf of participants. Since January&nbsp;2000, we have matched up to 50% of an employee's
contribution up to 6% of the employee's eligible income contributed to our 401(k) plan. </FONT></P>

<P><FONT SIZE=2><B><I>Severance and termination provisions  </I></B></FONT></P>

<P><FONT SIZE=2>We provide our executive officers severance packages if they are terminated without "cause" (as defined in their employment or severance agreements) in order to attract and
retain them. The amount of severance benefits is described below. The Compensation committee reviews the potential payouts to ensure their market-competitiveness in order to incentivize our executive
officers to maintain focus on both daily and long-term efforts. </FONT></P>

<P><FONT SIZE=2>We
entered into employment agreements with Mr.&nbsp;Winemiller, our Chief Executive Officer, and Mr.&nbsp;Murphy, our Chief Financial Officer, on September&nbsp;30, 2005. Both of these
agreements were originally for a two year term and automatically renew for one year terms unless the Company decides not to renew them. The base salaries payable to each of Mr.&nbsp;Winemiller and
Mr.&nbsp;Murphy are subject to periodic review by our compensation committee. Both Mr.&nbsp;Winemiller and Mr.&nbsp;Murphy are entitled to 12&nbsp;months of severance, up to 12&nbsp;months
of health benefits and 12&nbsp;months of acceleration of the vesting on their stock options granted prior to April&nbsp;2, 2007 if their employment with the Company is terminated without "cause"
or they resign with "good reason" as defined in those agreements. On April&nbsp;2, 2007, our board amended these employment agreements to also provide for the full acceleration of vesting, or lapse
of all repurchase rights, of any options or other equity awards granted to these executive officers on or after April&nbsp;2, 2007, if any of these officers is terminated without "cause," resigns
for "good reason" or if a change of control of the Company occurs. In addition, the amended employment agreements provide for 18&nbsp;months of severance and 18&nbsp;months of health benefits if
such officer is terminated within six months of a change in control transaction of the Company. Mr.&nbsp;Winemiller and Mr.&nbsp;Murphy are subject to non-competition and
non-solicitation restrictions during the term of their employment and for the 12-month period following the termination of their employment. </FONT></P>


<P><FONT SIZE=2>In
January&nbsp;1999, we entered into an employment agreement with Mr.&nbsp;Woestemeyer, our Executive Vice President. This agreement was originally for a two-year term and automatically renews
for one year terms unless the Company decides not to renew. Under this agreement, Mr.&nbsp;Woestemeyer's salary is subject to periodic review by our compensation committee, and he is entitled to
12&nbsp;months of severance if he is terminated without "cause" as defined in his agreement or we decide not to renew his agreement without giving him notice. If we decide not to renew this
agreement and we provide 60-days notice of non-renewal to Mr.&nbsp;Woestemeyer, he is entitled to 10&nbsp;months of severance. In addition, Mr.&nbsp;Woestemeyer is subject to
non-competition and non-solicitation restrictions during the term of his employment and for the severance period following the termination of his employment. </FONT></P>


<P><FONT SIZE=2>"Cause"
is defined in these employment agreements as a breach by our officer of his duties of confidentiality which causes a material harm to us, his conviction of, or a plea of guilty or no contest
to, a felony or his failure to perform his duties after notice and a cure period. In addition, for Mr.&nbsp;Winemiller and Mr.&nbsp;Murphy, "cause" also includes an intentional wrongdoing by them
that </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>68</FONT></P>

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<P><FONT SIZE=2>adversely
affects us. Mr.&nbsp;Winemiller and Mr.&nbsp;Murphy can resign for "good reason" and be entitled to severance. "Good reason" is defined in their employment agreements as the assignment
of duties to them that are substantially inconsistent with their current roles with us, the relocation of their offices to more than 50 miles from our present location, a material reduction in their
base salaries and our failure to provide them with similar benefits that we provide to our other employees. </FONT></P>

<P><FONT SIZE=2><B><I>Components of executive compensation for 2006 and 2007  </I></B></FONT></P>

<P><FONT SIZE=2>For 2006, the compensation of executives consisted of three primary components&#151;base salary, a cash incentive bonus award and a benefits package as described above.
In addition, each of our executive officers hold options or shares of our common stock. The compensation committee believes that this program balanced the Company's performance and goals for 2006 with
the compensation objectives discussed above. </FONT></P>

<P><FONT SIZE=2>For
2006, the compensation committee set the following cash incentive bonus components for our executive officers: </FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=3><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="84%" ALIGN="LEFT"><FONT SIZE=2><B>Components<BR> </B></FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2><B>Percentage<BR>
of bonus<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="84%"><FONT SIZE=2>Revenue</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>40%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="84%"><FONT SIZE=2>Operating income</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>20%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="84%"><FONT SIZE=2>Backlog</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>40%</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><HR NOSHADE></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>In 2006, we achieved 76.4% over our 2006 targets for the components as group. </FONT></P>

<P><FONT SIZE=2>In
2007, our compensation committee adopted our 2007 cash incentive bonus plan and the components of this plan. Under this plan, revenue, operating income and contract sales, each of which are each
equally weighted at a one-third of the target bonus. By equally weighting each component, and thus emphasizing each factor uniformly, and by replacing backlog with contract sales for this plan, the
compensation committee further aligned the interests of our executive officers with our 2007 annual performance and shareholder value. </FONT></P>


<P><FONT SIZE=2><B><I>Tax considerations  </I></B></FONT></P>

<P><FONT SIZE=2>After the closing of this offering, we will be subject to Internal Revenue Code Section&nbsp;162(m), which limits the amount that we may deduct for compensation paid to our
chief executive officer and to each of our four most highly compensated officers to $1,000,000 per person per year, unless certain exemption requirements are met. Exemptions to this deductibility
limit may be made for various forms of "performance-based" compensation approved by our stockholders. In addition to salary and bonus compensation that is not "performance-based," the exercise of
stock options may cause an officer's total compensation to exceed $1,000,000. However, compensation from options that meet certain requirements will be exempt from the $1,000,000 cap on deductibility.
In the past, annual cash compensation to our executive officers has not exceeded $1,000,000 per person. Although we do not currently anticipate such compensation to exceed the $1,000,000 limit, our
officer compensation could in the future exceed this limit, and we may not be able to deduct the compensation amount in excess of $1,000,000. While the compensation committee cannot predict how the
deductibility limit may impact our compensation program in future years, the compensation committee intends to maintain an approach to executive compensation that strongly links pay to performance. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>69</FONT></P>

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<P><FONT SIZE=3><B>Summary compensation table  </B></FONT></P>

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</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="34%" ALIGN="LEFT"><FONT SIZE=2><B>Name and principal position<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=2><B>Year<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Salary<BR>
($)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2><B>Non-equity<BR>
incentive plan<BR>
compensation<BR>
($)(1)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2><B>All other<BR>
compensation<BR>
($)(2)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Total ($)<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=11><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="34%"><FONT SIZE=2>Albert E. Winemiller<BR></FONT> <FONT SIZE=2><I>President and Chief Executive Officer</I></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>2006</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>275,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>291,060</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>8,250</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>574,310</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="34%"><FONT SIZE=2>Charles H. Murphy<BR></FONT> <FONT SIZE=2><I>Executive Vice President and Chief Financial Officer</I></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>2006</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>245,000</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>194,481</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>7,350</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>446,831</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="34%"><FONT SIZE=2>Ronald F. Woestemeyer<BR></FONT> <FONT SIZE=2><I>Executive Vice President</I></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>2006</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>233,750</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>61,850</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>7,013</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>302,613</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=11><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<DL compact>
<DT style='margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD><FONT SIZE=1>Payment
for 2006 performance made in March&nbsp;2007 under the PROS Bonus Plan. No bonus was earned or paid in 2006 to a named executive officer except as part of a
non-equity incentive plan.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(2)</FONT></DT><DD><FONT SIZE=1>Represents
matching contributions for each individual's 401(k) plan contributions. </FONT></DD></DL>

<P><FONT SIZE=3><B>Grants of plan-based awards  </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=9><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="47%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="RIGHT"><FONT SIZE=2><B>Estimated future payouts<BR>
under non-equity incentive plan awards(1)</B></FONT><HR NOSHADE><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="47%" ALIGN="LEFT"><FONT SIZE=2><B>Name<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Grant date<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2><B>Threshold<BR>
($)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><B>Target<BR>
($)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2><B>Maximum<BR>
($)<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=9><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>Albert E. Winemiller</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>3/8/06</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>82,500</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>165,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>330,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>Charles H. Murphy</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>3/8/06</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>55,125</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>110,250</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>220,500</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>Ronald F. Woestemeyer</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>3/8/06</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>17,531</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>35,063</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>70,125</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=9><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<DL compact>
<DT style='margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD><FONT SIZE=1>The
cash incentive bonus plan for 2006 was based on us achieving a minimum of 90% of our targets for revenue, operating income and backlog and a maximum at 120% of those targets.
Equal weight is given to the revenue and backlog measures (40% of the bonus amount) and the remaining 20% of the bonus is dependent upon the operating income goal. </FONT></DD></DL>

<P><FONT SIZE=3><B>Options exercised and stock vested  </B></FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=6><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="56%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=4 ALIGN="RIGHT"><FONT SIZE=2><B>Option awards</B></FONT><HR NOSHADE><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="56%" ALIGN="LEFT"><FONT SIZE=2><B>Name<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="21%" ALIGN="RIGHT"><FONT SIZE=2><B>Number of shares<BR>
acquired on<BR>
exercise<BR>
(#)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Value realized<BR>
on exercise<BR>
($)<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=6><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="56%"><FONT SIZE=2>Albert E. Winemiller</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="56%"><FONT SIZE=2>Charles H. Murphy(1)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%" ALIGN="RIGHT"><FONT SIZE=2>100,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>271,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="56%"><FONT SIZE=2>Ronald F. Woestemeyer</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="21%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=6><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<DL compact>
<DT style='margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD><FONT SIZE=1>In
September&nbsp;2005, Mr.&nbsp;Murphy was granted an immediately exercisable stock option for 100,000 shares. Mr.&nbsp;Murphy exercised this stock option on May&nbsp;1, 2006
for 33,333 shares and on August&nbsp;11, 2006 for 66,667 shares at an exercise price of $0.43 per share. Of these shares, 50,000 shares of this option grant were vested at December&nbsp;31, 2006.
We would have had the right on December&nbsp;31, 2006 to repurchase 50,000&nbsp;shares if Mr.&nbsp;Murphy had been terminated for cause or resigned without good reason on December&nbsp;31,
2006. Our repurchase right lapses as to 2,083 shares per month until December&nbsp;31, 2008 when these shares vest in full. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>70</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_dq76601_1_71"> </A>

<P><FONT SIZE=2>We had no outstanding equity awards held by executive officers at December&nbsp;31, 2006. All of Mr.&nbsp;Winemiller's stock options granted prior to 2006
were fully vested and exercised prior to 2006. We have not granted Mr.&nbsp;Woestemeyer any stock options. </FONT></P>


<P><FONT SIZE=3><B>Potential payments upon termination or change in control  </B></FONT></P>

<P><FONT SIZE=2>Under the employment agreements with Mr.&nbsp;Murphy, Mr.&nbsp;Winemiller and Mr.&nbsp;Woestemeyer, discussed under "Compensation discussion and analysis
of executive officers" above, our executive officers are entitled to certain payments if they are terminated. Under these agreements, if Mr.&nbsp;Murphy or Mr.&nbsp;Winemiller is terminated
without "cause," or if they resign for good reason, each one will be entitled to receive 12&nbsp;months of severance, up to 12&nbsp;months of health benefits and 12&nbsp;months of acceleration
of the vesting of their stock option awards and equity awards. Under Mr.&nbsp;Woestemeyer's employment agreement, he is entitled to up to 12&nbsp;months of severance if we terminate his employment
without "cause" or do not renew without notice his employment agreement. If Mr.&nbsp;Winemiller and Mr.&nbsp;Murphy had been terminated without cause, resigned for good reason, other than in
connection with a change of control, or their employment agreements were not renewed, and Mr.&nbsp;Woestemeyer had been terminated without cause, in each case, on December&nbsp;31, 2006, they
would have been entitled to the following: </FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="40%" ALIGN="LEFT"><FONT SIZE=2><B>Executive officer<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Severance<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Health<BR>
benefits<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>SFAS&nbsp;123R<BR>
Fair value of<BR>
vesting<BR>
acceleration(1)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Total<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="40%"><FONT SIZE=2>Albert E. Winemiller</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>275,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>10,058</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>463,500</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>748,558</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="40%"><FONT SIZE=2>Charles H. Murphy(2)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>245,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>10,479</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>531,250</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>786,729</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="40%"><FONT SIZE=2>Ronald F. Woestemeyer</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>275,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>275,000</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE></TD>
</TR>
</TABLE>
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<DL compact>
<DT style='margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD><FONT SIZE=1>Includes
the value of the full acceleration of the vesting on stock options to acquire 150,000 shares of our common stock granted to each of Mr.&nbsp;Winemiller and
Mr.&nbsp;Murphy on April&nbsp;2, 2007.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(2)</FONT></DT><DD><FONT SIZE=1>Includes
the value of the acceleration of vesting of 25,000&nbsp;shares of our common stock, which would have otherwise been subject to our repurchase right. </FONT></DD></DL>

<P><FONT SIZE=2>On April&nbsp;2, 2007, our board approved stock options to Mr.&nbsp;Winemiller and Mr.&nbsp;Murphy to purchase 150,000&nbsp;shares of our common stock
each at $6.00 per share. These options provided that if a change in control occurs, if the officer is terminated without "cause" or if he resigns for "good reason," the vesting of these options will
accelerate in full. </FONT></P>

<P><FONT SIZE=2>Furthermore,
on April&nbsp;2, 2007, the board amended Mr.&nbsp;Winemiller's and Mr.&nbsp;Murphy's employment agreements to provide for 18&nbsp;months of severance and health benefits if they
are terminated within 12 months of a change in control transaction. If Mr.&nbsp;Winemiller and Mr.&nbsp;Murphy had been terminated on December&nbsp;31, 2006 in connection with a change in
control transaction, they would have been entitled to the following: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="40%" ALIGN="LEFT"><FONT SIZE=2><B>Executive officer<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Severance<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Health<BR>
benefits<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>SFAS&nbsp;123R<BR>
Fair value of<BR>
vesting<BR>
acceleration(1)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Total<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="40%"><FONT SIZE=2>Albert E. Winemiller</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>412,500</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>15,087</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>463,500</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>891,087</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="40%"><FONT SIZE=2>Charles H. Murphy(2)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>367,500</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>15,719</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>599,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>982,219</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE></TD>
</TR>
</TABLE>
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<DL compact>
<DT style='margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD><FONT SIZE=1>Includes
the value of the full acceleration of the vesting on stock options to acquire 150,000 shares of our common stock granted to each of Mr.&nbsp;Winemiller and
Mr.&nbsp;Murphy on April&nbsp;2, 2007.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(2)</FONT></DT><DD><FONT SIZE=1>Includes
the value of the acceleration of vesting of 50,000&nbsp;shares of our common stock, which would have otherwise been subject to our repurchase right. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>71</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_ds76601_1_72"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ds76601_certain_relationships_and_related_party_transactions"> </A>
<A NAME="toc_ds76601_1"> </A>
<BR></FONT><FONT SIZE=4><B>Certain relationships and related party transactions  <BR>  </B></FONT></P>

<P><FONT SIZE=2>Since March&nbsp;2004, there has not been, nor is there currently proposed, any transaction or series of similar transactions to which we were or are a party
in which the amount involved exceeded or exceeds $120,000 and in which any of our directors, executive officers, holders of more than 5% of any class of our voting securities, or any member of the
immediate family of any of the foregoing persons, had or will have a direct or indirect material interest, other than compensation arrangements with directors and executive officers, which are
described where required under the "Management" section of this prospectus, and the transactions described below. </FONT></P>


<P><FONT SIZE=3><B>Relationship with investors and founder  </B></FONT></P>

<P><FONT SIZE=2>Albert&nbsp;E. Winemiller, our chief executive officer, president and director, and Ronald&nbsp;F. Woestemeyer, our executive vice president, director and
one of our founders, each hold more than 5% of our common stock prior to this offering. Mariette Woestemeyer, who is married to Mr.&nbsp;Woestemeyer, serves on our board of directors along with her
husband. In addition, the funds affiliated with TA Associates and JMI Equity are considered holders of more than 5% of our common stock. Both Kurt Jaggers, who is a general partner of TA Associates,
and Harry Gruner, who is a general partner at JMI Equity, also serve on our board of directors. </FONT></P>

<P><FONT SIZE=2>After
completion of this offering, Messrs.&nbsp;Winemiller and Woestemeyer, TA Associates and its affiliates, and JMI Equity and its affiliates will beneficially own approximately&nbsp;&nbsp;&nbsp;&nbsp;%,
&nbsp;&nbsp;&nbsp;&nbsp;%,&nbsp;&nbsp;&nbsp;&nbsp;%, and&nbsp;&nbsp;&nbsp;&nbsp;%, respectively, of our outstanding common stock, assuming no exercise of the underwriters' over-allotment option. Set forth below is a
brief description of the existing relationships and agreements between us, Messrs.&nbsp;Winemiller and Woestemeyer, TA Associates and JMI Equity. </FONT></P>

<P><FONT SIZE=2><I>Board of directors.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Mr.&nbsp;Jaggers, a general partner of TA Associates, and Mr.&nbsp;Gruner, a general partner at JMI Equity, are two
of our directors and each serves on our audit, compensation and nominating and governance committees. </FONT></P>

<P><FONT SIZE=2><I>Registration rights.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;TA Associates, JMI Equity and Mr.&nbsp;and Mrs.&nbsp;Woestemeyer have piggyback registration rights with respect
to shares of common stock that they hold. In addition, TA Associates and JMI Equity have demand and other registration rights for their shares of our common stock under the Stock Purchase and
Stockholders Agreement described further below. For a description of these registration rights, see "Description of capital stock." </FONT></P>

<P><FONT SIZE=2><I>Stock Purchase and Stockholders Agreement.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In June&nbsp;1998, we entered into a Stock Purchase and Stockholders Agreement with TA
Associates, JMI Equity and other individuals to whom we issued our convertible preferred stock. This agreement provides the investors registration rights and other rights relating to their investment
in us. </FONT></P>

<P><FONT SIZE=2><I>Redemption of preferred stock.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;On August&nbsp;15, 2005, TA Associates and JMI Equity converted the outstanding shares of our convertible
preferred stock into 9,750,000 shares of our common stock and 3,921,312 shares of our redeemable preferred stock. In 2006, TA Associates and JMI Equity as holders of approximately 75% and 24%,
respectively, of our redeemable preferred stock, elected to have us redeem 1,294,030, or 33%, of the outstanding redeemable preferred stock in accordance with the rights of the redeemable preferred
stock. We redeemed those shares for $8.4&nbsp;million. In March&nbsp;2007, we redeemed all 2,627,282 shares of our remaining redeemable preferred stock for a total redemption price of
$17.4&nbsp;million, including $5.6&nbsp;million in accrued and unpaid dividends on our redeemable preferred stock, in accordance with a redemption agreement between us and the holders of our
redeemable preferred stock. In connection with the redemption in 2006, TA </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>72</FONT></P>

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<P><FONT SIZE=2>Associates
and JMI Equity received $6.4&nbsp;million and $2.0&nbsp;million, respectively. In connection with the redemption in 2007, TA Associates and JMI Equity received $13.0&nbsp;million and
$4.0&nbsp;million, respectively. See "Dividend Policy." </FONT></P>

<P><FONT SIZE=2><I>Dividend.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;On March&nbsp;30, 2007, we declared and paid a one-time cash dividend of $2.00 per share on our common stock. As a
result of such dividend, Messrs.&nbsp;Winemiller, Murphy and Woestemeyer (their relatives and trusts for the benefit of their relatives) and entities associated with TA Associates and JMI Equity
received a total of $3.9&nbsp;million, $1.2&nbsp;million, $12.3&nbsp;million, $14.7&nbsp;million and $4.6&nbsp;million, respectively. See "Dividend policy." </FONT></P>

<P><FONT SIZE=2><I>Warrants.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Mr. and Mrs.&nbsp;Woestemeyer each hold a warrant to purchase 100,000 shares of our common stock at a price of $2.05 per share.
In connection with this offering, these warrants will become fully exercisable beginning on the date of the closing of this offering and will remain exercisable through January&nbsp;20, 2010. See
"Description of capital stock." </FONT></P>

<P><FONT SIZE=2><I>Indemnification agreements.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We have entered into indemnification agreements with each of our current directors and executive officers.
These agreements require us to indemnify these individuals to the fullest extent permitted under Delaware law against liabilities that may arise by reason of their service to us, and to advance
expenses incurred as a result of any proceeding against them as to which they could be indemnified. We also intend to enter into indemnification agreements with our future directors and executive
officers. </FONT></P>

<P><FONT SIZE=2><I>Stock options granted to directors and executive officers.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;For more information regarding the grant of stock options to our directors and
executive officers, please see "Management&#151;Director compensation" and "Executive compensation." </FONT></P>

<P><FONT SIZE=2><I>Employment arrangements.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We have entered into an employment agreement with each of Mr.&nbsp;Winemiller, Mr.&nbsp;Murphy and
Mr.&nbsp;Woestemeyer, our executive officers, which address, among other things, the terms of their employment. See "Compensation discussion and analysis for named executive." </FONT></P>


<P><FONT SIZE=3><B>Procedures for related party transactions  </B></FONT></P>

<P><FONT SIZE=2>Under our code of business conduct and ethics, our employees and officers are discouraged from entering into any transaction that may cause a conflict of
interest for us. In addition, they must report any conflict of interest, including related party transactions, to their managers or our compliance officer. Our audit committee must then approve any
related-party transactions, including those transactions involving our directors, after reviewing each transaction for potential conflict of interest and other improprieties in accordance with our
audit committee charter. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>73</FONT></P>

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<BR></FONT><FONT SIZE=4><B>Principal and selling stockholders  <BR>  </B></FONT></P>

<P><FONT SIZE=2>The following table sets forth information regarding the beneficial ownership of our common stock as of April&nbsp;2, 2007 by: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>each
person known by us to beneficially own more than 5% of our outstanding shares of common stock;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>each
of our current directors;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>each
of our current executive officers;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>all
of our current executive officers and directors as a group; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>each
selling stockholder. </FONT></DD></DL>

<P><FONT SIZE=2>The
percentage of beneficial ownership for the following table is based on 20,664,147 shares of our common stock as of April&nbsp;2, 2007. The percentage of beneficial ownership after the offering
is based on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of our common stock outstanding after this offering, assuming no
exercise of the underwriters' over-allotment option. </FONT></P>

<P><FONT SIZE=2>Beneficial
ownership is determined under the rules and regulations of the Securities and Exchange Commission and does not necessarily indicate beneficial ownership for any other purpose. Under these
rules, beneficial ownership includes those shares of common stock over which the stockholder has sole or shared voting or investment power. It also includes shares of common stock that the stockholder
has a right to acquire within 60&nbsp;days of March&nbsp;31, 2007 through the exercise of any option or other right. The percentage ownership of the outstanding common stock, however, is based on
the assumption, expressly required by the rules and regulations of the SEC, that only the person or entity whose ownership is being reported has exercised options or warrants into shares of our common
stock. </FONT></P>

<P><FONT SIZE=2>Unless
otherwise indicated, the principal address of each of the stockholders below is c/o PROS Holdings,&nbsp;Inc., 3100 Main Street, Suite&nbsp;900, Houston, Texas 77002. </FONT></P>

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<TR VALIGN="TOP">
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<TR VALIGN="BOTTOM">
<TH WIDTH="36%" ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=3 ROWSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Shares beneficially<BR>
owned prior to offering<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=3 ROWSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Shares beneficially<BR>
owned after offering<BR> </B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="36%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ROWSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Shares<BR>
being<BR>
offered<BR>
hereby<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="36%" ALIGN="LEFT"><FONT SIZE=2><B>Name of beneficial owner<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2><B>Number<BR> </B></FONT><BR></TH>
<TH WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Percent<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2><B>Number<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><B>Percent<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=11><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="36%"><FONT SIZE=2><B>Executive Officers and Directors</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="36%"><FONT SIZE=2>Albert E. Winemiller(1)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>2,100,000</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>10.1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="36%"><FONT SIZE=2>Charles H. Murphy(2)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>735,000</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>3.5</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="36%"><FONT SIZE=2>Ronald F. Woestemeyer(3)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>6,349,720</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>30.7</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="36%"><FONT SIZE=2>Harry S. Gruner(4)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>2,321,280</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>11.2</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="36%"><FONT SIZE=2>Kurt R. Jaggers(5)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>7,350,720</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>35.6</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="36%"><FONT SIZE=2>Mariette M. Woestemeyer(6)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>6,349,720</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>30.7</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="36%"><BR><FONT SIZE=2><B>5% Stockholders</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="36%"><FONT SIZE=2>Entities affiliated with TA Associates(7)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>7,350,720</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>35.6</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="36%"><FONT SIZE=2>JMI Equity Fund III, L.P.(8)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>2,321,280</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2>11.2</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="36%"><FONT SIZE=2><BR>
All executive officers and directors as a group (6 persons)(9)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2><BR>
18,856,720</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%" ALIGN="RIGHT"><FONT SIZE=2><BR>
89.9</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=11><HR NOSHADE></TD>
</TR>
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<P><FONT SIZE=1>*Represents beneficial ownership of less than 1%. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>74</FONT></P>

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<DL compact>
<DT style='margin-bottom:-9pt;'><FONT SIZE=1>(1)</FONT></DT><DD><FONT SIZE=1>Consists
of (a)&nbsp;400,000 shares held of record by Albert&nbsp;E. Winemiller Limited Partnership; (b)&nbsp;1,500,000 shares held of record by Albert&nbsp;E. Winemiller Jr.
2006 Irrevocable Trust; (c)&nbsp;25,000 shares held of record by Debra Ann Winemiller; (d)&nbsp;25,000 held of record by Debra Ann Winemiller Revocable Family Trust; and (e)&nbsp;stock options
to acquire 150,000 shares of our common stock, which were granted to Mr.&nbsp;Winemiller on April&nbsp;2, 2007, which are immediately exercisable and which vest as to 25% on April&nbsp;2, 2008
and the remainder monthly thereafter based on continued employment through April&nbsp;2, 2011. Mr.&nbsp;Winemiller disclaims beneficial ownership of the shares held of record by Albert&nbsp;E.
Winemiller Limited Partnership, Albert&nbsp;E. Winemiller Jr. 2006 Irrevocable Trust, Debra Ann Winemiller and Debra Ann Winemiller Revocable Family Trust, except to the extent of his pecuniary
interest therein.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(2)</FONT></DT><DD><FONT SIZE=1>Consists
of (a)&nbsp;423,000 shares held of record by Charles&nbsp;H. Murphy; 43,751 of which are subject to a repurchase option we hold as of March&nbsp;31, 2007;
(b)&nbsp;50,000 shares held of record by Emily&nbsp;L. Murphy; (c)&nbsp;40,000 shares held of record by Bryan&nbsp;M. Murphy; (d)&nbsp;40,000 shares held of record by Jessica&nbsp;K.
Murphy; (e)&nbsp;8,000 shares held of record by Mary Ann Burek; (f)&nbsp;8,000 shares held of record by Steven McDonald; (g)&nbsp;8,000 shares held of record by Dorothy Ann McDonough;
(h)&nbsp;8,000 shares held of record by John&nbsp;F. Murphy and (i)&nbsp;stock options to acquire 150,000 shares of our common stock, which were granted on April&nbsp;2, 2007, which are
immediately exercisable and which vest as to 25% on April&nbsp;2, 2008 and the remaining monthly thereafter based on continued employment through April&nbsp;2, 2011. Charles&nbsp;H. Murphy
disclaims beneficial ownership of the shares held of record by Bryan&nbsp;M. Murphy, Jessica&nbsp;K. Murphy, Mary Ann Burek, Steven McDonald, Dorothy Ann McDonough and John&nbsp;F. Murphy.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(3)</FONT></DT><DD><FONT SIZE=1>Consists
of (a)&nbsp;5,149,720 shares held of record by Ronald&nbsp;F. Woestemeyer; (b)&nbsp;1,000,000 shares held of record by Joetta&nbsp;W. Moulden, Trustee of the
Woestemeyer 1999 Gift Trust; (c)&nbsp;100,000 shares subject to a warrant held of record by Ronald&nbsp;F. Woestemeyer, which is exercisable upon the closing of this offering; and
(d)&nbsp;100,000 shares subject to warrant held of record by Mariette&nbsp;M. Woestemeyer, which is exercisable upon the closing of this offering. Mr.&nbsp;Woestemeyer disclaims beneficial
ownership of the shares held of record by Joetta&nbsp;W. Moulden, Trustee of the Woestemeyer 1999 Gift Trust and shares subject to the warrant held of record by Mariette&nbsp;M. Woestemeyer.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(4)</FONT></DT><DD><FONT SIZE=1>Mr.&nbsp;Gruner
is a managing member of the general partner of JMI Equity Fund,&nbsp;III, L.P. which holds 2,321,280 shares of our common stock as disclosed in footnote&nbsp;8
of this table. Mr.&nbsp;Gruner disclaims beneficial ownership of these shares, except to the extent of his pecuniary interest therein.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(5)</FONT></DT><DD><FONT SIZE=1>Mr.&nbsp;Jaggers
is the managing director and a limited partner in the TA Associates funds that hold an aggregate of 7,350,720 of our shares of common stock, as disclosed in
footnote 7 of this table. Mr.&nbsp;Jaggers disclaims beneficial ownership of these shares, except to the extent of his pecuniary interest therein and 25,908 shares.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(6)</FONT></DT><DD><FONT SIZE=1>Consists
of (a)&nbsp;5,149,720 shares held of record by Ronald&nbsp;F. Woestemeyer; (b)&nbsp;1,000,000 shares held of record by Joetta&nbsp;W. Moulden, Trustee of the
Woestemeyer 1999 Gift Trust; (c)&nbsp;100,000 shares subject to a warrant held of record by Ronald&nbsp;F. Woestemeyer, which is exercisable upon the closing of this offering; and
(d)&nbsp;100,000 shares subject to a warrant held of record by Mariette&nbsp;M. Woestemeyer, which is exercisable upon the closing of this offering. Mrs.&nbsp;Woestemeyer disclaims beneficial
ownership of the shares held of record by Joetta&nbsp;W. Moulden, Trustee of the Woestemeyer 1999 Gift Trust and shares subject to the warrant held of record by Ronald&nbsp;F. Woestemeyer.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(7)</FONT></DT><DD><FONT SIZE=1>Consists
of (a)&nbsp;5,995,309 held of record by TA/Advent&nbsp;VIII, L.P.; (b)&nbsp;1,125,248 held of record by Advent Atlantic and Pacific&nbsp;III, L.P.; (c)&nbsp;110,259
held of record by TA Executives Fund LLC; and (d)&nbsp;119,904 held of record by TA Investors LLC. Mr.&nbsp;Jaggers is a director of TA Associates,&nbsp;Inc. TA Associates,&nbsp;Inc. is the
general partner of TA Associates AAP&nbsp;III Partners, which is the general partner of our stockholder, Advent Atlantic and Pacific&nbsp;III, L.P. TA Associates,&nbsp;Inc. is also the manager
of TA Associates VIII LLC, which is the general partner of our stockholders, TA/Advent VIII L.P. and TA Executive Fund LLC. Mr.&nbsp;Jaggers is the attorney-in-fact of our
stockholder, TA Venture Investors L.P. Mr.&nbsp;Jaggers disclaims beneficial ownership held by these funds except to the extent of his pecuniary interest therein and 25,908 shares. The address for
these entities is 70&nbsp;Willow Road, Suite 100, Menlo Park, California 94025.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(8)</FONT></DT><DD><FONT SIZE=1>Consists
of 2,321,280 shares by JMI Equity Fund&nbsp;III, L.P. Mr.&nbsp;Gruner is a managing member of JMI Associates&nbsp;III, LLC, which is the general partner of our
stockholder, JMI Equity Fund&nbsp;III, L.P. Mr.&nbsp;Gruner disclaims beneficial ownership held by this fund except to the extent of his pecuniary interest therein. The address for this fund is
2&nbsp;Hamill Road, Suite 272, Baltimore, Maryland 21210.
<BR><BR></FONT></DD><DT style='margin-bottom:-9pt;'><FONT SIZE=1>(9)</FONT></DT><DD><FONT SIZE=1>Consists
of (a)&nbsp;18,556,720 shares held of record by our current directors and executive officers, 43,751 of which are subject to repurchase rights we hold as of
March&nbsp;31, 2007. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>75</FONT></P>

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<BR></FONT><FONT SIZE=4><B>Description of capital stock  <BR>  </B></FONT></P>

<P><FONT SIZE=3><B>General  </B></FONT></P>

<P><FONT SIZE=2>Following the closing of this offering, our authorized capital stock will consist of 50,000,000&nbsp;shares of common stock, $0.001 par value per share, and
5,000,000&nbsp;shares of undesignated preferred stock, $0.001 par value per share. As of March&nbsp;31, 2007, we had outstanding 20,664,147 shares of our common stock. As of March&nbsp;31, 2007,
we had 151 common stockholders of record. </FONT></P>

<P><FONT SIZE=3><B>Common stock  </B></FONT></P>

<P><FONT SIZE=2><B><I>Dividend rights  </I></B></FONT></P>

<P><FONT SIZE=2>Subject to preferences that may apply to shares of preferred stock outstanding at the time, the holders of outstanding shares of our common stock are entitled to received
dividends out of assets legally available at the times and in the amounts that our board of directors may determine from time to time. </FONT></P>

<P><FONT SIZE=2><B><I>Voting rights  </I></B></FONT></P>

<P><FONT SIZE=2>Each holder of common stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. We have not provided for cumulative
voting for the election of directors in our certificate of incorporation. This means that the holders of a majority of the shares voted can elect all of the directors then standing for election. In
addition, our certificate of incorporation and bylaws provide that certain actions require the approval of two-thirds, rather than a majority, of the shares entitled to vote. </FONT></P>

<P><FONT SIZE=2><B><I>No preemptive, conversion or redemption rights  </I></B></FONT></P>

<P><FONT SIZE=2>Our common stock is not entitled to preemptive rights and is not subject to conversion or redemption. </FONT></P>


<P><FONT SIZE=2><B><I>Right to receive liquidation distributions  </I></B></FONT></P>

<P><FONT SIZE=2>Upon our liquidation, dissolution or winding-up, the holders of our common stock are entitled to share in all assets remaining after payment of all liabilities and
the liquidation preferences of any outstanding preferred stock. Each outstanding share of common stock is, and all shares of common stock to be issued in this offering when they are paid for will be,
fully paid and nonassessable. </FONT></P>

<P><FONT SIZE=3><B>Preferred stock  </B></FONT></P>

<P><FONT SIZE=2>Following the closing of this offering, our board of directors will be authorized, subject to limitations imposed by Delaware law, to issue up to a total of
5,000,000&nbsp;shares of preferred stock in one or more series, without stockholder approval. Our board is authorized to establish from time to time the number of shares to be included in each
series of preferred stock, and to fix the rights, preferences and privileges of the shares of each wholly unissued series of preferred stock and any of its qualifications, limitations or restrictions.
Our board can also increase or decrease the number of shares of any series of preferred stock, but not below the number of shares of that series of preferred stock then outstanding, without any
further vote or action by the stockholders. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>76</FONT></P>

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<P><FONT SIZE=3><B>Common stock warrants  </B></FONT></P>

<P><FONT SIZE=2>We have outstanding warrants to purchase 200,000 shares of our common stock at an exercise price of $2.05 per share. These warrants may be exercised without
cash pursuant to a net exercise provision which allows the holders of the warrants to exercise their respective warrant for 100,000 shares less the number of shares that have a market value, on the
date of exercise, equal to the aggregate cash exercise price of such warrant. These warrants are exercisable beginning upon the closing of our initial public offering and ending on January&nbsp;20,
2010, which is the date on which the warrants expire. </FONT></P>

<P><FONT SIZE=3><B>Registration rights  </B></FONT></P>

<P><FONT SIZE=2>According to the terms of our Stock Purchase and Stockholders Agreement, TA Associates, JMI Equity and certain other stockholders are entitled to demand,
piggyback and Form&nbsp;S-3 registration rights. These rights expire on the earlier of five years after the completion of this offering and the time when such holders can sell all of the
shares of our common stock that they hold in compliance with securities laws without the use of a registration statement. </FONT></P>

<P><FONT SIZE=2>We
have entered into registration rights agreements with Mr.&nbsp;and Mrs.&nbsp;Woestemeyer and two of our former officers which provide for piggyback registration rights for the shares held by
these individuals other than in connection with our initial public offering. These piggyback registration
rights expire when the holders cease to hold a minimum number of shares of our common stock or at the time when such holders can sell all of the shares of our common stock that they hold in compliance
with securities laws without the use of a registration statement. Mr.&nbsp;and Mrs.&nbsp;Woestemeyer are not subject to the minimum holding requirement. </FONT></P>

<P><FONT SIZE=2><B><I>Demand registration rights  </I></B></FONT></P>

<P><FONT SIZE=2>At any time following 12 months after the date of this prospectus, our stockholders with demand registration rights under our Stock Purchase and Stockholders Agreement have the
right to require that we register all or a portion of their shares of common stock. The underwriters of any underwritten offering have the right to limit the number of shares to be included in a
registration statement filed in response to the exercise of these demand registration rights. We must pay all expenses, except for underwriters' discounts and commissions, incurred in connection with
these demand registration rights, except that we are not required to pay for expenses incurred if the holders of these rights subsequently withdraw their request for registration. </FONT></P>

<P><FONT SIZE=2><B><I>Piggyback registration rights  </I></B></FONT></P>

<P><FONT SIZE=2>If we register any securities for public sale, our stockholders with piggyback registration rights under our registration rights agreements and our Stock Purchase and
Stockholders Agreement have the right to include their shares in the registration, subject to specified exceptions. The underwriters of any underwritten offering have the right to limit the number of
shares registered by these holders. We must pay all expenses, except for underwriters' discounts and commissions, incurred in connection with these piggyback registration rights. TA Associates and JMI
Equity, which together hold 99% of those shares with such piggyback registration rights for this offering, have waived their right to exercise their piggy-back registration rights with
respect to this offering. </FONT></P>


<P><FONT SIZE=2><B><I>Form&nbsp;S-3 registration rights  </I></B></FONT></P>

<P><FONT SIZE=2>Our stockholders who are party to our Stock Purchase and Stockholders Agreement can request that we register such holders' shares of common stock on Form&nbsp;S-3 if we are
eligible to file a registration </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>77</FONT></P>

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<P><FONT SIZE=2>statement
on that form. We must pay all expenses, except for underwriters' discounts and commissions, for all registrations on Form&nbsp;S-3. </FONT></P>


<P><FONT SIZE=3><B>Anti-takeover effects of Delaware law and our certificate of incorporation and bylaws  </B></FONT></P>

<P><FONT SIZE=2>The provisions of Delaware law, our amended and restated certificate of incorporation and our bylaws, which will be effective upon the closing of this offering,
described below may have the effect of delaying, deferring or discouraging another party from acquiring control of us. </FONT></P>

<P><FONT SIZE=2><B><I>Delaware law  </I></B></FONT></P>

<P><FONT SIZE=2>We will be subject to the provisions of Section&nbsp;203 of the Delaware General Corporation Law regulating corporate takeovers. In general, those provisions prohibit a
Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years following the date that the stockholder became an interested stockholder,
unless: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
transaction is approved by the board before the date the interested stockholder attained that status;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>upon
consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock
of the corporation outstanding at the time the transaction commenced; or
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
business combination is approved by the board and authorized at a meeting of stockholders by at least two-thirds of the outstanding shares of voting stock
that are not owned by the interested stockholder. </FONT></DD></DL>

<P><FONT SIZE=2>Section&nbsp;203
defines "business combination" to include the following: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>any
merger or consolidation involving the corporation and the interested stockholder;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>any
sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>subject
to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>any
transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned
by the interested stockholder; or
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. </FONT></DD></DL>
<BR>

<P><FONT SIZE=2>In
general, Section&nbsp;203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person
affiliated with or controlling or controlled by any of these entities or persons. The statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may
discourage attempts to acquire us. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>78</FONT></P>

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<P><FONT SIZE=2><B><I>Certificate of incorporation and bylaws  </I></B></FONT></P>

<P><FONT SIZE=2>Following the completion of this offering, our amended and restated certificate of incorporation and bylaws will provide for: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
division of our board of directors into three classes to be elected on a staggered basis, one class each year;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>a
prohibition on actions by written consent of our stockholders;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
elimination of the right of stockholders to call a special meeting of stockholders;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>a
requirement that stockholders provide advance notice of any stockholder nominations of directors or any proposal of business to be considered at any meeting of
stockholders;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>a
requirement that a supermajority vote be obtained to amend or repeal certain provisions of our certificate of incorporation; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
ability of our board of directors to issue preferred stock without stockholder approval. </FONT></DD></DL>


<P><FONT SIZE=3><B>Transfer agent and registrar  </B></FONT></P>

<P><FONT SIZE=2>The transfer agent and registrar for our common stock is Computershare Shareholder Services, Inc. and its address is P.O.&nbsp;Box 43078, Providence, RI
02940-3078. </FONT></P>

<P><FONT SIZE=3><B>Listing  </B></FONT></P>

<P><FONT SIZE=2>We have applied for trading and quotation of our common stock on The Nasdaq Global Market under the trading symbol "PROZ." </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>79</FONT></P>

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<BR></FONT><FONT SIZE=4><B>Material U.S. federal tax consequences to non-U.S. holders  <BR>  </B></FONT></P>

<P><FONT SIZE=2>The following is a summary of material United States federal income and estate tax consequences of the ownership and disposition of our common stock by a
non-United States holder. For purposes of this discussion, a non-United States holder is any beneficial owner that for United States federal income tax purposes is not a United
States person; the term United States person means: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>an
individual citizen or resident of the United States;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>a
corporation or other entity taxable as a corporation created or organized in the United States or under the laws of the United States or any political subdivision thereof;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>an
estate whose income is subject to United States federal income tax regardless of its source; or
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>a
trust (x)&nbsp;whose administration is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority
to control all substantial decisions of the trust or (y)&nbsp;which has made an election to be treated as a United States person. </FONT></DD></DL>


<P><FONT SIZE=2>An
individual may, in certain cases, be treated, for the taxable year of a disposition, as a resident of the United States, rather than as a nonresident, among other ways, by virtue of being present
in the United States on at least 31&nbsp;days in that taxable year and for an aggregate of at least 183&nbsp;days during the three-year period ending in that taxable year (counting for
such purposes all the days present in the current year, one-third of the days present in the immediately preceding year and one-sixth of the days present in the second
preceding year). Residents are subject to United States federal income tax as if they were United States citizens. Such individuals are urged to consult their own tax advisors regarding the United
States federal income tax consequences of the sale, exchange or other disposition of our common stock. </FONT></P>

<P><FONT SIZE=2>If
a partnership or other pass-through entity holds common stock, the tax treatment of a partner or member in the partnership or other entity will generally depend on the status of the
partner or member and upon the activities of the partnership or other entity. Accordingly, we urge partnerships or other pass-through entities which hold our common stock and partners or
members in these partnerships or other entities to consult their tax advisors. </FONT></P>

<P><FONT SIZE=2>This
discussion assumes that non-United States holders will acquire our common stock pursuant to this offering and will hold our common stock as a capital asset (generally, property held
for investment). This discussion does not address all aspects of United States federal income taxation that may be relevant in light of a non-United States holder's special tax status or
special tax situations. United States expatriates, controlled foreign corporations, passive foreign investment companies, corporations that accumulate earnings to avoid federal income tax, life
insurance companies, tax-exempt organizations, dealers in securities or currencies, brokers, banks or other financial institutions, certain trusts, hybrid entities, pension funds and
investors that hold common stock as part of a hedge, straddle or conversion transaction are among those categories of potential investors that are subject to special rules not covered in this
discussion. This discussion does not consider the tax consequences for partnerships, entities classified as a partnership for United States federal income tax purposes, or persons who hold their
interests through a partnership or other entity classified as a partnership for United States federal income tax purposes. This discussion does not address any United States federal gift tax
consequences, or state or local or non-United States tax consequences. Furthermore, the following discussion is based on current provisions of the </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>80</FONT></P>

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<P><FONT SIZE=2>Internal
Revenue Code of 1986, as amended, and Treasury Regulations and administrative and judicial interpretations thereof, all as in effect on the date hereof, and all of which are subject to
change, possibly with retroactive effect. </FONT></P>

<P><FONT SIZE=3><B>Dividends  </B></FONT></P>

<P><FONT SIZE=2>We do not plan to pay any dividends on our common stock for the foreseeable future. However, if we do pay dividends on our common stock, those payments will
constitute dividends to the extent paid from our current or accumulated earnings and profits, as determined under United States federal income tax principles. To the extent those dividends exceed our
current and accumulated earnings and profits, the dividends will constitute a return of capital and will first reduce a holder's basis, but not below zero, and then will be treated as gain from the
sale of stock. </FONT></P>

<P><FONT SIZE=2>The
gross amount of any dividend (out of earnings and profits) paid to a non-United States holder of common stock generally will be subject to United States withholding tax at a rate of
30% unless the holder is entitled to an exemption from or reduced rate of withholding under an applicable income tax treaty. In order to receive a reduced treaty rate, prior to the payment of a
dividend a non-United States holder must provide us with an IRS Form&nbsp;W-8BEN (or successor form) certifying qualification for the reduced rate. </FONT></P>

<P><FONT SIZE=2>Dividends
received by a non-United States holder that are effectively connected with a United States trade or business conducted by the non-United States holder (and
dividends attributable to a non-United States holder's permanent establishment in the United States if an income tax treaty applies) are exempt from this withholding tax. To obtain this
exemption, prior to the payment of a dividend, a non-United States holder must provide us with an IRS Form&nbsp;W-8ECI (or successor form) properly certifying this exemption.
Effectively connected dividends (or dividends attributable to a permanent establishment), although not subject to withholding tax, are taxed at the same graduated rates applicable to United States
persons, net of certain deductions and credits. In addition, dividends received by a corporate non-United States holder that are effectively connected with a United States trade or
business of the corporate non-United States holder (or dividends attributable to a corporate non-United States holder's permanent establishment in the United States if an
income tax treaty applies) may also be subject to a branch profits tax at a rate of 30% (or such lower rate as may be specified in an income tax treaty). </FONT></P>

<P><FONT SIZE=2>A
non-United States holder who provides us with an IRS Form&nbsp;W-8BEN or an IRS Form&nbsp;W-8ECI will be required to periodically update such form. </FONT></P>


<P><FONT SIZE=2>A
non-United States holder of common stock that is eligible for a reduced rate of withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts currently
withheld if an appropriate claim for refund is timely filed with the IRS. </FONT></P>

<P><FONT SIZE=3><B>Gain on disposition of common stock  </B></FONT></P>

<P><FONT SIZE=2>A non-United States holder generally will not be subject to United States federal income tax on gain realized on the sale or other disposition of
our common stock unless: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
gain is effectively connected with a United States trade or business of the non-United States holder (or attributable to a permanent establishment in the
United States if an income tax treaty applies), which gain, in the case of a corporate non-United States holder, must also be taken into account for branch profits tax purposes; </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>81</FONT></P>

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<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
non-United States holder is an individual who is present in the United States for a period or periods aggregating 183&nbsp;days or more during the calendar
year in which the sale or disposition occurs and certain other conditions are met; or
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>our
common stock constitutes a United States real property interest by reason of our status as a "United States real property holding corporation" for United States federal
income tax purposes at any time within the shorter of the five-year period preceding the disposition or the holder's holding period for our common stock. We believe that we are not
currently, and we are not likely to become, a "United States real property holding corporation" for United States federal income tax purposes. </FONT></DD></DL>

<P><FONT SIZE=2>If
we were to become a United States real property holding corporation, so long as our common stock is regularly traded on an established securities market and continues to be so traded, a
non-United States holder would be subject to United States federal income tax on any gain from the sale, exchange or other disposition of shares of our common stock, by reason of such
United States real property holding corporation status, only if such non-United States holder actually or constructively owned, more than 5% of our common stock at any time during the
shorter of the five-year period preceding the disposition or the holder's holding period for our common stock. Any such non-United States holder that owns or has owned, actually or
constructively, more than 5% of our common stock is urged to consult that holder's own tax advisor with respect to the particular tax consequences to such holder for the gain from the sale, exchange
or other disposition of shares of our common stock if we were to be or to become a United States real property holding company. </FONT></P>


<P><FONT SIZE=3><B>Backup withholding and information reporting  </B></FONT></P>

<P><FONT SIZE=2>Generally, we must report annually to the IRS the amount of dividends paid, the name and address of the recipient, and the amount, if any, of tax withheld. A
similar report is sent to the holder. Pursuant to tax treaties or other agreements, the IRS may make its reports available to tax authorities in the non-United States holder's country of
residence. </FONT></P>

<P><FONT SIZE=2>Payments
of dividends or of proceeds on the disposition of stock made to a non-United States holder may be subject to additional information reporting and backup withholding. Backup
withholding will not apply if the non-United States holder establishes an exemption, for example, by properly certifying its non-United States status on an IRS
Form&nbsp;W-8BEN (or successor form). Notwithstanding the foregoing, backup withholding may apply if either we or our paying agent has actual knowledge, or reason to know, that the
holder is a United States person. </FONT></P>

<P><FONT SIZE=2>Backup
withholding is not an additional tax. Rather, the United States income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a credit or refund may be obtained, provided that the required information is furnished to the IRS in a timely manner. </FONT></P>

<P><FONT SIZE=3><B>Federal estate tax  </B></FONT></P>

<P><FONT SIZE=2>An individual non-United States holder who is treated as the owner, or has made certain lifetime transfers, of an interest in our common stock will
be required to include the value thereof in his or her gross estate for United States federal estate tax purposes, and may be subject to United States federal estate tax unless an applicable estate
tax or other treaty provides otherwise. </FONT></P>

<P><FONT SIZE=2><B>This discussion is for general purposes only. Prospective investors are urged to consult their own tax advisors regarding the application of the United States federal income
and estate tax laws to their particular situations and the consequences under United States federal gift tax laws, as well as foreign, state, and local laws and tax treaties.</B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>82</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dw76601_shares_eligible_for_future_sale"> </A>
<A NAME="toc_dw76601_1"> </A>
<BR></FONT><FONT SIZE=4><B>Shares eligible for future sale  <BR>  </B></FONT></P>

<P><FONT SIZE=2>Before this offering, there has not been a public market for our common stock. As described below, only a limited number of shares currently outstanding will be
available for sale immediately after this offering due to contractual and legal restrictions on resale. Nevertheless, future sales of substantial amounts of our common stock, including shares issued
upon exercise of outstanding options and warrants, in the public market after the restrictions lapse, or the possibility of the sales, could cause the prevailing market price of our common stock to
fall or impair our ability to raise equity capital in the future. </FONT></P>

<P><FONT SIZE=2>Upon
completion of this offering, we will have outstanding&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of our common stock,
assuming that there are no exercises of outstanding options after&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2007. Of these
shares, all of the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares sold in this offering will be freely tradable in the public
market without restriction or further registration under the Securities Act, unless these shares
are held by "affiliates," as that term is defined in Rule&nbsp;144 under the Securities Act. Shares purchased by an affiliate may not be resold except pursuant to an effective registration statement
or an exemption from registration, including the exemption under Rule&nbsp;144 of the Securities Act described below. After this offering, and assuming no exercise of the underwriters' over
allotment option,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of our common stock held by existing stockholders will be
"restricted securities," as that term is defined in Rule&nbsp;144 under the Securities Act. These
restricted securities may be sold in the public market only if they are registered or if they qualify for an exemption from registration under Rule&nbsp;144 or 701 under the Securities Act. These
rules are summarized below. Subject to the lock-up agreements described below and the provisions of Rule&nbsp;144 and Rule&nbsp;701, these restricted securities will be available for
sale in the public market as follows: </FONT></P>

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</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="17%" ALIGN="LEFT"><FONT SIZE=2><B>Number of shares<BR> </B></FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="81%" ALIGN="LEFT"><FONT SIZE=2><B>Date of availability for sale<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="17%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%"><FONT SIZE=2>On the date of this prospectus</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="17%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%"><FONT SIZE=2>90 days after the date of this prospectus</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="17%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%"><FONT SIZE=2>180 days after the date of this prospectus</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="17%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="81%"><FONT SIZE=2>180 days after the date of this prospectus, upon the exercise of vested options</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><HR NOSHADE></TD>
</TR>
</TABLE>
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<P><FONT SIZE=3><B>Lock-up agreements  </B></FONT></P>

<P><FONT SIZE=2>In connection with this offering, all of our officers, directors, employees and stockholders have agreed, subject to limited exceptions, not to directly or
indirectly sell or dispose of any shares of common stock or any securities convertible into or exchangeable or exercisable for shares of common stock for a period of 180&nbsp;days after the date of
this prospectus without the prior written consent of J.P. Morgan Securities&nbsp;Inc. and Deutsche Bank Securities&nbsp;Inc. For additional information, see "Underwriting." </FONT></P>


<P><FONT SIZE=3><B>Rule&nbsp;144  </B></FONT></P>

<P><FONT SIZE=2>In general, under Rule&nbsp;144 as currently in effect, beginning 90&nbsp;days after the date of this prospectus, a person who has beneficially owned shares
of our common stock for at least one year from the later of the date those shares of common stock were acquired from us or from an affiliate of ours, </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>83</FONT></P>

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<BR>

<P><FONT SIZE=2>including
the holding period of any prior owner other than an affiliate, would be entitled to sell, within any three-month period, a number of shares that is not more than the greater of: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>1%
of the number of shares of common stock then outstanding, which will equal
approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares immediately after this offering; or
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
average weekly trading volume of our common stock on the Nasdaq Global Market during the four calendar weeks before a notice of the sale on Form&nbsp;144 is filed. </FONT></DD></DL>

<P><FONT SIZE=2>Sales
under Rule&nbsp;144 are also subject to manner of sale provisions, notice requirements and the availability of current public information about us. </FONT></P>


<P><FONT SIZE=3><B>Rule&nbsp;144(k)  </B></FONT></P>

<P><FONT SIZE=2>In addition, under Rule&nbsp;144(k), a person who is not one of our affiliates at any time during the three months preceding a sale, and who has beneficially
owned the shares proposed to be sold for at least two years from the later of the date these shares of our common stock were acquired from us or from an affiliate of ours, including the holding period
of any prior owner other than an affiliate, is entitled to sell those shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule&nbsp;144.
Therefore, unless otherwise restricted pursuant to the lock-up agreements, those shares may be sold immediately upon the completion of this offering. </FONT></P>


<P><FONT SIZE=3><B>Rule&nbsp;701  </B></FONT></P>

<P><FONT SIZE=2>Any employee, officer or director of, or consultant to us who purchased shares under a written compensatory plan or contract may be entitled to sell them in
reliance on Rule&nbsp;701. Rule&nbsp;701 permits affiliates to sell their Rule&nbsp;701 shares under Rule&nbsp;144 without complying with the holding period requirements of Rule&nbsp;144.
Rule&nbsp;701 further provides that non-affiliates may sell these shares in reliance on Rule&nbsp;144 without complying with the holding period, public information, volume limitation
or notice provisions of Rule&nbsp;144. All holders of Rule&nbsp;701 shares are required to wait until 90&nbsp;days after the date of this prospectus before selling those shares. However, all
shares issued under Rule&nbsp;701 are subject to lock-up agreements and will only become eligible for sale when the 180-day lock-up agreements expire. </FONT></P>

<P><FONT SIZE=3><B>Stock plans  </B></FONT></P>

<P><FONT SIZE=2>We plan on filing a registration statement on Form&nbsp;S-8 under the Securities Act covering 2,285,247 shares of common stock issued as of
March&nbsp;26, 2007 under our 1997 stock option plan and 1999 equity incentive plans and 2007 plan, and shares of our common stock issued upon exercise of options by employees. We expect to file
this registration statement as soon as practicable after this offering. However, no resale of these registered shares shall occur until after the 180-day lock up period. </FONT></P>


<P><FONT SIZE=3><B>Registration rights  </B></FONT></P>

<P><FONT SIZE=2>At any time after 12 months following this offering, certain holders of common stock may demand that we register their shares under the Securities Act or, if we
file another registration statement under the Securities Act, may elect to include their shares in such registration. If these shares are registered, they will be freely tradable without restriction
under the Securities Act. For additional information, see "Description of capital stock&#151;Registration rights." </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>84</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
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<A NAME="toc_dw76601_2"> </A>
<BR></FONT><FONT SIZE=4><B>Underwriting  <BR>  </B></FONT></P>

<P><FONT SIZE=2>We and the selling stockholders are offering the shares of common stock described in this prospectus through a number of underwriters. J.P. Morgan
Securities&nbsp;Inc. and Deutsche Bank Securities&nbsp;Inc. are acting as joint book-running managers and as representatives of the underwriters. We and the selling stockholders have
entered into an underwriting agreement with the underwriters. Subject to the terms and conditions of the underwriting agreement, we and the selling stockholders have agreed to sell to the
underwriters, and each underwriter has severally agreed to purchase, at the initial public offering price less the underwriting discounts and commissions set forth on the cover page of this
prospectus, the number of shares of common stock listed next to its name in the following table: </FONT></P>

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<TABLE WIDTH="77%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=4><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2><B>Name<BR> </B></FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2><B>Number of shares<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>J.P. Morgan Securities Inc.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Deutsche Bank Securities Inc.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Jefferies &amp; Company, Inc.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Thomas Weisel Partners LLC</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="78%"><FONT SIZE=2>Total</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><HR NOSHADE></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>The
underwriters are committed to purchase all the shares of common stock offered by us and the selling stockholders if they purchase any shares. The underwriting agreement also provides that if an
underwriter defaults, the purchase commitments of non-defaulting underwriters may also be increased or the offering may be terminated. </FONT></P>

<P><FONT SIZE=2>The
underwriters propose to offer the shares of common stock directly to the public at the initial public offering price set forth on the cover page of this prospectus and to certain dealers at that
price less a concession not in excess of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share.
Any such dealers may resell shares to certain
other brokers or dealers at a discount of up to $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share from the initial public offering price. After the initial public offering of the shares, the offering price
and other selling terms may be changed by the underwriters. Sales of shares made outside of the United States may be made by affiliates of the underwriters. The representatives have advised us that
the underwriters do not intend to confirm discretionary sales in excess of 5% of the shares of common stock offered in this offering. </FONT></P>

<P><FONT SIZE=2>The
underwriters have an option to purchase up to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional shares of common stock from the
selling stockholders to cover sales of shares by the underwriters which exceed the number
of shares specified in the table above. The underwriters have 30&nbsp;days from the date of this prospectus to exercise this over-allotment option. If any shares are purchased with this
over-allotment option, the underwriters will purchase shares in approximately the same proportion as shown in the table above. If any additional shares of common stock are purchased, the
underwriters will offer the additional shares on the same terms as those on which the shares are being offered. </FONT></P>

<P><FONT SIZE=2>The
underwriting fee is equal to the initial public offering price per share of common stock less the amount paid by the underwriters to us and the selling stockholders per share of common stock. The
underwriting fee is $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share. The following table
shows the per share and total underwriting discounts and commissions to be paid to the underwriters assuming both no
exercise and full exercise of the underwriters' option to purchase additional shares. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>85</FONT></P>

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<P><FONT SIZE=3><B>Underwriting discounts and commissions  </B></FONT></P>

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<TD COLSPAN=13><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="26%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="RIGHT"><FONT SIZE=2><B>Paid by the Company<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="RIGHT"><FONT SIZE=2><B>Paid by the Selling Stockholders<BR> </B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="26%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Without<BR>
over-allotment<BR>
exercise<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>With full<BR>
over-allotment<BR>
exercise<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Without<BR>
over-allotment<BR>
exercise<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>With full<BR>
over-allotment<BR>
exercise<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="26%"><FONT SIZE=2>Per Share</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="26%"><FONT SIZE=2>Total</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>We
estimate that the total expenses of this offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding the underwriting discounts and
commissions, will be approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million.
</FONT></P>

<P><FONT SIZE=2>A
prospectus in electronic format may be made available on the websites maintained by one or more underwriters, or selling group members, if any, participating in the offering. The underwriters may
agree to allocate a number of shares to underwriters and selling group members for sale to
their online brokerage account holders. Internet distributions will be allocated by the representatives to underwriters and selling group members that may make Internet distributions on the same basis
as other allocations. </FONT></P>

<P><FONT SIZE=2>We
have agreed that we will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the SEC a registration statement under the Securities Act relating
to, any shares of our common stock or securities convertible into or exchangeable or exercisable for any shares of our common stock, or publicly disclose the intention to make any offer, sale, pledge,
disposition or filing, without the prior written consent of J.P. Morgan Securities&nbsp;Inc. and Deutsche Bank Securities&nbsp;Inc. for a period of 180&nbsp;days after the date of this
prospectus. Notwithstanding the foregoing, if (1)&nbsp;during the last 17&nbsp;days of the 180-day restricted period, we issue an earnings release or material news or a material event
relating to us occurs; or (2)&nbsp;prior to the expiration of the 180-day restricted period, we announce that we will release earnings results during the 16-day period
beginning on the last day of the 180-day period, the restrictions described above shall continue to apply until the expiration of the 18-day period beginning on the issuance of
the earnings release or the occurrence of the material news or material event. </FONT></P>

<P><FONT SIZE=2>Our
directors and executive officers, and substantially all of our stockholders have entered into lock-up agreements with the underwriters prior to the commencement of this offering
pursuant to which each of these persons or entities, with limited exceptions, for a period of 180&nbsp;days after the date of the final prospectus, may not, without the prior written consent of J.P.
Morgan Securities&nbsp;Inc. and Deutsche Bank Securities&nbsp;Inc., (1)&nbsp;offer, pledge, announce the intention to sell, grant any option, right or warrant to purchase, or otherwise transfer
or dispose of, directly or indirectly, any shares of our common stock (including, without limitation, common stock that may be deemed to be beneficially owned by such persons in accordance with the
rules and regulations of the SEC and securities that may be issued upon exercise of a stock option or warrant) or (2)&nbsp;enter into any swap or other agreement that transfers, in whole or in part,
any of the economic consequences of ownership of the common stock, whether any such transaction described in clause&nbsp;(1) or (2)&nbsp;above is to be settled by delivery of common stock or such
other securities, in cash or otherwise. Notwithstanding the foregoing, if (1)&nbsp;during the last 17&nbsp;days of the 180-day restricted period, we issue an earnings release or
material news or a material event relating to our company occurs; or (2)&nbsp;prior to the expiration of the 180-day restricted period, we announce that we will release earnings results
during the 16-day period beginning on the last day of the 180-day period, </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>86</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_dw76601_1_87"> </A>
<BR>

<P><FONT SIZE=2>the
restrictions described above shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news
or material event. </FONT></P>

<P><FONT SIZE=2>We
and the selling stockholders have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act. </FONT></P>

<P><FONT SIZE=2>We
have applied to have our common stock approved for listing on The Nasdaq Global Market under the symbol "PROZ." </FONT></P>

<P><FONT SIZE=2>In
connection with this offering, the underwriters may engage in stabilizing transactions, which involves making bids for, purchasing and selling shares of common stock in the open market for the
purpose of preventing or retarding a decline in the market price of the common stock while this offering is in progress. These stabilizing transactions may include making short sales of the common
stock, which involves the sale by the underwriters of a greater number of shares of common stock than they are required to purchase in this offering, and purchasing shares of common stock on the open
market to cover positions created by short sales. Short sales may be "covered" shorts, which are short positions in an amount not greater than the underwriters' option to purchase additional shares
referred to above, or may be "naked" shorts, which are short positions in excess of that amount. The underwriters may close out any covered short position either by exercising their option to purchase
additional shares, in whole or in part, or by purchasing shares in the open market. In making this determination, the underwriters will consider, among other things, the price of shares available for
purchase in the open market compared to the price at which the underwriters may purchase shares through the option to purchase additional shares. A naked short position is more likely to be created if
the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market that could adversely affect investors who purchase in this offering. To the
extent that the underwriters create a naked short position, they will purchase shares in the open market to cover the position. </FONT></P>

<P><FONT SIZE=2>The
underwriters have advised us that, pursuant to Regulation&nbsp;M of the Securities Act, they may also engage in other activities that stabilize, maintain or otherwise affect the price of the
common stock, including the imposition of penalty bids. This means that if the representative of the underwriters purchase common stock in the open market in stabilizing transactions or to cover short
sales, the representative can require the underwriters that sold those shares as part of this offering to repay the underwriting discount received by them. </FONT></P>


<P><FONT SIZE=2>These
activities may have the effect of raising or maintaining the market price of the common stock or preventing or retarding a decline in the market price of the common stock, and, as a result, the
price of the common stock may be higher than the price that otherwise might exist in the open market. If the underwriters commence these activities, they may discontinue them at any time. The
underwriters may carry out these transactions on The Nasdaq Global Market, in the over-the-counter market or otherwise. </FONT></P>

<P><FONT SIZE=2>Prior
to this offering, there has been no public market for our common stock. The initial public offering price will be determined by negotiations between us and the representatives of the
underwriters. In determining the initial public offering price, we and the representatives of the underwriters expect to consider a number of factors including: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
information set forth in this prospectus;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>our
prospects and the history and prospects for the industry in which we compete; </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>87</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_dw76601_1_88"> </A>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>an
assessment of our management;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
general condition of the securities markets at the time of this offering;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>other
factors deemed relevant by the underwriters and us. </FONT></DD></DL>

<P><FONT SIZE=2>Neither
we nor the underwriters can assure investors that an active trading market will develop for our common stock, or that the shares of common stock will trade in the public market at or above the
initial public offering price. </FONT></P>

<P><FONT SIZE=2>Certain
of the underwriters and their affiliates may provide from time to time in the future certain commercial banking, financial advisory, investment banking and other services for us and such
affiliates in the ordinary course of their business, for which they may receive customary fees and commissions. In addition, from time to time, certain of the underwriters and their affiliates may
effect transactions for their own account or the account of customers, and hold on behalf of themselves or their customers, long or short positions in our debt or equity securities or loans. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>88</FONT></P>

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<P style='page-break-before:always'></p>
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<A NAME="page_dw76601_1_89"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dw76601_legal_matters"> </A>
<A NAME="toc_dw76601_3"> </A>
<BR></FONT><FONT SIZE=4><B>Legal matters  <BR>  </B></FONT></P>

<P><FONT SIZE=2>DLA Piper US LLP, Austin, Texas, will pass upon the validity of the issuance of the shares of common stock offered by this prospectus. Davis Polk&nbsp;&amp;
Wardwell, Menlo Park, California, is representing the underwriters in this offering. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dw76601_experts"> </A>
<A NAME="toc_dw76601_4"> </A>
<BR></FONT><FONT SIZE=4><B>Experts  <BR>  </B></FONT></P>

<P><FONT SIZE=2>The consolidated financial statements as of December&nbsp;31, 2005 and 2006 and for each of the three years in the period ended December&nbsp;31, 2006
included in this prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as
experts in auditing and accounting. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="dw76601_where_you_can_find_additional_information"> </A>
<A NAME="toc_dw76601_5"> </A>
<BR></FONT><FONT SIZE=4><B>Where you can find additional information  <BR>  </B></FONT></P>

<P><FONT SIZE=2>We have filed with the Securities and Exchange Commission a registration statement on Form&nbsp;S-1, including exhibits, under the Securities Act
with respect to the common stock to be sold in this offering. This prospectus, which constitutes a part of the registration statement, does not contain all of the information in the registration
statement or the exhibits. Statements made in this prospectus regarding the contents of any contract, agreement or other document are only summaries. With respect to each contract, agreement or other
document filed as an exhibit to the registration statement, we refer you to the exhibit for a more complete description of the matter involved. </FONT></P>


<P><FONT SIZE=2>We
are not currently subject to the informational requirements of the Securities Exchange Act of 1934. As a result of the offering of the shares of our common stock, we will become subject to the
informational requirements of the Exchange Act and, in accordance therewith, will file reports and other information with the SEC. You may read and copy all or any portion of the registration
statement or any reports, statements or other information in the files at the public reference room of the Securities and Exchange Commission located at 100 F Street, N.E., Washington, D.C. 20549. </FONT></P>

<P><FONT SIZE=2>You
can request copies of these documents upon payment of a duplicating fee by writing to the Securities and Exchange Commission. You may call the Securities and Exchange Commission at
1-800-SEC-0330 for further information on the operation of its public reference room. Our filings, including the registration statement, will also be available to
you on the web site maintained by the Securities and Exchange Commission at http://www.sec.gov. </FONT></P>

<P><FONT SIZE=2>We
intend to furnish our stockholders with annual reports containing consolidated financial statements audited by our independent auditors, and to make available to our stockholders quarterly reports
for the first three quarters of each year containing unaudited interim consolidated financial statements. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>89</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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NAME="page_fa76601_1_1"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="fa76601_pros_holdings,_inc._index_to_c__pro02412"> </A></FONT> <FONT SIZE=4><B>PROS Holdings,&nbsp;Inc.  <BR>    <BR>    Index to consolidated financial statements  <BR>    </B></FONT></P>

<P><FONT SIZE=2>
<A NAME="FA76601_TOC"></A> </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="71%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%" VALIGN="TOP"><A HREF="#fa76601_report_of_independent___fa702282"><FONT SIZE=2>Report of independent registered public accounting firm</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%" VALIGN="TOP"><A HREF="#fc76601_pros_holdings,_inc._consolidated_balance_sheets"><FONT SIZE=2>Consolidated balance sheets</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%" VALIGN="TOP"><A HREF="#fe76601_pros_holdings,_inc._co__fe702092"><FONT SIZE=2>Consolidated statements of income</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%" VALIGN="TOP"><A HREF="#fg76601_consolidated_statements_of_red__con03185"><FONT SIZE=2>Consolidated statements of redeemable preferred stock and stockholders' equity</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%" VALIGN="TOP"><A HREF="#fi76601_pros_holdings,_inc._co__fi702266"><FONT SIZE=2>Consolidated statements of cash flows</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%" VALIGN="TOP"><A HREF="#fk76601_pros_holdings,_inc._notes_to_c__pro02429"><FONT SIZE=2>Notes to consolidated financial statements</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="100%" VALIGN="TOP"><A HREF="#page_fo76601_1_21"><FONT SIZE=2>Schedule II&#151;Valuation and qualifying accounts</FONT></A></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>F-1</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_fa76601_1_2"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="fa76601_report_of_independent___fa702282"> </A>
<BR></FONT><FONT SIZE=4><B>Report of independent registered public accounting firm  <BR>  </B></FONT></P>


<P><FONT SIZE=2>To
the Board of Directors and Stockholders of<BR>
PROS Holdings,&nbsp;Inc.: </FONT></P>

<P><FONT SIZE=2>In
our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of PROS Holdings,&nbsp;Inc., and its
subsidiaries, at December&nbsp;31, 2005 and 2006, and the results of their operations and their cash flows for each of the three years in the period ended December&nbsp;31, 2006 in conformity with
accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all
material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of
these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion. </FONT></P>

<P><FONT SIZE=2>/s/
PricewaterhouseCoopers LLP<BR>
Houston, Texas<BR>
January&nbsp;26, 2007, except for Note 3, as to which the date is April&nbsp;3, 2007 </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>F-2</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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NAME="page_fc76601_1_3"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="fc76601_pros_holdings,_inc._consolidated_balance_sheets"> </A>
<A NAME="toc_fc76601_1"> </A></FONT> <FONT SIZE=4><B>PROS Holdings,&nbsp;Inc.  <BR>    <BR>    Consolidated balance sheets  <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=10><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=4>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=4>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=4>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=4>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=4>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" ROWSPAN=3><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="16%" ROWSPAN=3 ALIGN="RIGHT"><FONT SIZE=2><B>Pro forma<BR>
stockholders' equity<BR>
as of<BR>
December 31, 2006<BR>
(unaudited)<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER"><FONT SIZE=2><B>December 31</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2006<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=10><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><B>Assets</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Current assets</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>Cash and cash equivalents</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>38,489,803</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>42,540,180</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>Accounts and unbilled receivables, net of allowance of $1,020,000 and $1,190,000, respectively</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>7,429,022</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>13,788,989</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>Prepaid expenses and other</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>1,349,355</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>2,199,997</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=5 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Total current assets</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>47,268,180</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>58,529,166</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Property and equipment, net</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>2,553,309</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>2,372,872</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Other assets</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>468,154</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>2,144,371</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=5 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Total assets</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>50,289,643</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>63,046,409</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=5 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><B>Liabilities and stockholders' equity</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Current liabilities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>Accounts payable</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>1,633,321</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>584,372</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>Accrued liabilities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>2,833,776</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>3,965,817</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>Accrued contract labor</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>746,900</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>1,405,287</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>Accrued payroll</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>1,800,812</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>2,918,979</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>Deferred revenue</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>13,174,190</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>22,079,937</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=5 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Total current liabilities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>20,188,999</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>30,954,392</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><BR>
Long-term deferred revenue</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2><BR>
787,500</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2><BR>
4,131,757</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><BR>
Commitments and contingencies</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>Redeemable preferred stock, $0.001 par value, 3,921,312 shares authorized, 3,921,312 and 2,627,282 shares issued, 3,921,312 and 2,627,282 shares outstanding, respectively</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>25,268,841</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>17,283,168</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><BR>
Stockholders' equity</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>Common stock, $0.001 par value; 28,000,000 shares authorized, 23,431,174 and 23,580,729 shares issued, 19,584,134 and 19,733,689 shares outstanding, respectively,
and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares pro forma</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>23,431</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>23,581</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>Additional paid-in capital</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>7,745,357</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>7,812,536</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>Common stock warrants</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>226,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>226,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>Treasury stock, 3,847,040 common shares at cost</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(8,937,500</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(8,937,500</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>Retained earnings</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>4,987,015</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>11,552,475</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=7 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Total stockholders' equity</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>4,044,303</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>10,677,092</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=7 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Total liabilities and stockholders' equity</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>50,289,643</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>63,046,409</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=7 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2><I>The accompanying notes are an integral part of these consolidated financial statements.  </I></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>F-3</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=97,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=4621,FOLIO='F-3',FILE='DISK112:[07ZBA1.07ZBA76601]FC76601A.;24',USER='LDUONG',CD=';4-APR-2007;12:07' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_fe76601_1_4"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="fe76601_pros_holdings,_inc._co__fe702092"> </A>
<A NAME="toc_fe76601_1"> </A></FONT> <FONT SIZE=4><B>PROS Holdings,&nbsp;Inc.  <BR>    <BR>    Consolidated statements of income  <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="90%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=11><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=4>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=4>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="RIGHT"><FONT SIZE=2><B>Year ended December 31<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2004<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2006<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=11><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><B>Revenue</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>License and implementation</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>20,015,056</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>20,189,874</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>29,604,257</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>Maintenance and support</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>12,430,746</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>14,939,887</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>16,423,252</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Total revenue</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>32,445,802</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>35,129,761</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>46,027,509</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Cost of revenue</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>13,388,512</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>13,380,916</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>15,605,404</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Gross profit</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>19,057,290</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>21,748,845</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>30,422,105</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><B>Operating expenses</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>Selling, general and administrative</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>8,968,822</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>12,010,371</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>13,260,623</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>Research and development</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>6,262,014</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>6,399,159</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>10,332,301</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Income from operations</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>3,826,454</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>3,339,315</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>6,829,181</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Other income (expense)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>Interest income</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>370,977</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>1,074,753</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>1,920,576</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>Interest expense</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(5,328</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Income before income taxes</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>4,192,103</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>4,414,068</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>8,749,757</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Income tax provision</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>536,184</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>974,541</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>1,724,498</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Net income</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>3,655,919</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>3,439,527</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>7,025,259</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Accretion of preferred stock</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(1,256,011</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(852,420</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(459,799</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Net earnings attributable to common stockholders</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>2,399,908</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>2,587,107</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>6,565,460</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Net earnings attributable to common stockholders per share:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>Basic</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>0.24</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>0.19</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>0.33</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>Diluted</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>0.19</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>0.16</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>0.32</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Weighted average number of shares</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>Basic</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>9,822,094</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>13,891,415</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>19,649,372</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>Diluted</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>19,617,672</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>20,012,010</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>20,604,202</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Pro forma net earnings attributable to common stockholders per share (unaudited)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>Basic</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>Diluted</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Weighted average number of shares used in computation</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>Basic</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>Diluted</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2><I>The accompanying notes are an integral part of these consolidated financial statements.  </I></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>F-4</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=98,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=579279,FOLIO='F-4',FILE='DISK112:[07ZBA1.07ZBA76601]FE76601A.;10',USER='JBAKER',CD=';4-APR-2007;12:26' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->

<P><FONT SIZE=2><A
NAME="page_fg76601_1_5"> </A> </FONT></P>

<!-- TOC_END -->

<!-- COMMAND=ROTATED_TABLE WIDTH="150%" -->

<A NAME="fg76601_consolidated_statements_of_red__con03185"> </A>
<A NAME="toc_fg76601_1"> </A>
<P ALIGN="CENTER"><FONT SIZE=4><B>PROS Holdings,&nbsp;Inc.<BR>
Consolidated statements of redeemable preferred stock and stockholders' equity<BR>
Years ended December&nbsp;31, 2004, 2005 and 2006  </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=37><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=9 ALIGN="RIGHT"><FONT SIZE=1><B>Preferred Stock<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="6%" ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="5%" ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" ROWSPAN=3><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=4 ROWSPAN=3 ALIGN="RIGHT"><FONT SIZE=1><B>Series A Convertible<BR>
Redeemable<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%" ROWSPAN=3><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=4 ROWSPAN=3 ALIGN="RIGHT"><FONT SIZE=1><B>Redeemable<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%" ROWSPAN=3><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=4 ROWSPAN=3 ALIGN="RIGHT"><FONT SIZE=1><B>Common stock<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" ROWSPAN=3><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=4 ROWSPAN=3 ALIGN="RIGHT"><FONT SIZE=1><B>Treasury stock<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" ROWSPAN=3><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=3 ALIGN="RIGHT"><FONT SIZE=1><B>Additional<BR>
paid-in<BR>
capital<BR> </B></FONT><BR></TH>
<TH WIDTH="1%" ROWSPAN=3><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=3 ALIGN="RIGHT"><FONT SIZE=1><B>Common<BR>
stock<BR>
warrants<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" ROWSPAN=3><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=3 ALIGN="RIGHT"><FONT SIZE=1><B>Total<BR>
<BR>
stockholders'<BR>
equity<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%" ROWSPAN=2><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT"><FONT SIZE=1><B>Deferred<BR>
compensation<BR> </B></FONT><BR></TH>
<TH WIDTH="1%" ROWSPAN=2><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=2 ALIGN="RIGHT"><FONT SIZE=1><B>Retained<BR>
earnings<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1>&nbsp;</FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1><B>Shares<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=1><B>Amount<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1><B>Shares<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=1><B>Amount<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1><B>Shares<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=1><B>Amount<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1><B>Shares<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=1><B>Amount<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=37><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=1>Balances at December&nbsp;31, 2003</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>3,921,312</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>30,656,489</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>9,820,761</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=1>13,668</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>237,389</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>226,000</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>(2,129</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>3,847,040</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>(8,937,500</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=1>(8,462,572</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="1%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=1>Exercise of stock options</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>2,000</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=1>2</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>4,498</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=1>4,500</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="1%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=1>Accretion of Series A convertible redeemable preferred stock</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>1,256,011</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>(1,256,011</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=1>(1,256,011</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="1%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=1>Compensation expense related to options</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>2,129</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=1>2,129</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="1%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=1>Net income</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>3,655,919</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=1>3,655,919</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD COLSPAN=34 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=1>Balances at December&nbsp;31, 2004</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>3,921,312</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>31,912,500</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>9,822,761</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=1>13,670</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>241,887</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>226,000</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>3,847,040</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>(8,937,500</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>2,399,908</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=1>(6,056,035</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="1%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=1>Exercise of stock options</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>11,373</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=1>11</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>17,141</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=1>17,152</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="1%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=1>Accretion of Series A convertible redeemable preferred stock</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>654,839</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>(654,839</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=1>(654,839</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="1%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=1>Conversion of Series&nbsp;A convertible redeemable preferred stock</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>(3,921,312</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>(32,567,339</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>3,921,312</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>25,071,260</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>9,750,000</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=1>9,750</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>7,486,329</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=1>7,496,079</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="1%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=1>Accretion of redeemable preferred stock</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>197,581</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>(197,581</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=1>(197,581</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="1%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=1>Net income</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>3,439,527</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=1>3,439,527</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD COLSPAN=34 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=1>Balances at December&nbsp;31, 2005</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>3,921,312</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>25,268,841</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>19,584,134</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=1>23,431</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>7,745,357</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>226,000</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>3,847,040</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>(8,937,500</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>4,987,015</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=1>4,044,303</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="1%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=1>Exercise of stock options</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>149,555</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=1>150</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>67,179</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=1>67,329</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="1%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=1>Accretion of redeemable preferred stock</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>459,799</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>(459,799</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=1>(459,799</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="1%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=1>Redemption of redeemable preferred stock</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>(1,294,030</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>(8,445,472</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="1%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="6%"><FONT SIZE=1>Net income</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>7,025,259</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=1>7,025,259</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD COLSPAN=34 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=1>Balances at December&nbsp;31, 2006</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>2,627,282</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>17,283,168</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>19,733,689</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=1>23,581</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>7,812,536</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>226,000</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=1>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>3,847,040</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=1>(8,937,500</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>)</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="6%" ALIGN="RIGHT"><FONT SIZE=1>11,552,475</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>$</FONT></TD>
<TD WIDTH="7%" ALIGN="RIGHT"><FONT SIZE=1>10,677,092</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=37><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=1>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2><I>The accompanying notes are an integral part of these consolidated financial statements.  </I></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>F-5</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=99,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=725997,FOLIO='F-5',FILE='DISK112:[07ZBA1.07ZBA76601]FG76601A.;13',USER='KBLACKW',CD=';4-APR-2007;09:41' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_fi76601_1_6"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="fi76601_pros_holdings,_inc._co__fi702266"> </A>
<A NAME="toc_fi76601_1"> </A></FONT> <FONT SIZE=4><B>PROS Holdings,&nbsp;Inc.  <BR>    <BR>    Consolidated statements of cash flows  <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="90%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=12><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="RIGHT"><FONT SIZE=2><B>Year ended December 31<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2004<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2006<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=12><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2><B>Operating activities</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2>Net income</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>3,655,919</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>3,439,527</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>7,025,259</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2>Adjustments to reconcile net income to net cash provided by (used in) operating activities:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Depreciation and amortization</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>1,582,982</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>1,515,303</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>1,270,441</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Deferred taxes, net</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(211,953</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(98,269</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(1,161,450</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Noncash compensation</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>2,129</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Maturities (purchases) of marketable securities classified as trading securities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(28,023,749</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>28,023,749</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2>Changes in operating assets and liabilities:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Accounts receivable, net</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(5,961,301</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>1,420,289</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(5,273,768</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Unbilled receivables</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>812,397</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(477,585</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(1,086,199</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Prepaid expenses and other</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(721,392</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(335,705</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(1,365,409</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Accounts payable, accrued liabilities, accrued contract labor and accrued payroll</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>2,043,620</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>764,354</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>1,859,646</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Deferred revenue</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>5,734,529</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>697,021</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>12,250,004</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2>Net cash provided by (used in) operating activities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(21,086,819</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>34,948,684</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>13,518,524</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><BR><FONT SIZE=2><B>Investing activities</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2>Purchases of property and equipment</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(1,292,655</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(766,359</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(1,090,004</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2>Net cash used in investing activities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(1,292,655</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(766,359</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(1,090,004</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><BR><FONT SIZE=2><B>Financing activities</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2>Payments on obligations under capital lease</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(180,966</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2>Redemption of redeemable preferred stock</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(8,445,472</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2>Exercise of stock options</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>4,500</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>17,152</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>67,329</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2>Net cash provided by (used in) financing activities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(176,466</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>17,152</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(8,378,143</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2>Net increase (decrease) in cash and cash<BR>
equivalents</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(22,555,940</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>34,199,477</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>4,050,377</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><BR><FONT SIZE=2><B>Cash and cash equivalents</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2>Beginning of year</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>26,846,266</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>4,290,326</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>38,489,803</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2>End of year</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>4,290,326</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>38,489,803</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>42,540,180</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><BR><FONT SIZE=2><B>Supplemental disclosures of cash flow information:</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Cash paid during period for:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>Taxes</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>791,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>749,203</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>1,825,500</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>Interest</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>5,328</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=12><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2><I>The accompanying notes are an integral part of these consolidated financial statements.  </I></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>F-6</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=100,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=694148,FOLIO='F-6',FILE='DISK112:[07ZBA1.07ZBA76601]FI76601A.;13',USER='JBAKER',CD=';4-APR-2007;12:26' -->
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_fk76601_1_7"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="fk76601_pros_holdings,_inc._notes_to_c__pro02429"> </A>
<A NAME="toc_fk76601_1"> </A>
<BR></FONT><FONT SIZE=4><B>PROS Holdings,&nbsp;Inc.<BR>  Notes to consolidated financial statements  <BR>  </B></FONT></P>

<P><FONT SIZE=3><B>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Organization and summary of significant accounting policies  </B></FONT></P>

<P><FONT SIZE=2><B>Nature of operations  </B></FONT></P>

<P><FONT SIZE=2>PROS Holdings,&nbsp;Inc., a Delaware corporation and subsidiaries (the "Company"), is a provider of pricing and revenue optimization software products, an emerging category
of enterprise applications designed to allow companies to improve financial performance by enabling better pricing. Customers use the Company's software products to gain insight into their pricing
strategies, identify detrimental pricing activities, optimize their pricing decision-making and improve their business processes and financial performance. The Company's software products incorporate
advanced pricing science, which includes operations research, forecasting and statistics. These innovative science-based software products analyze, execute and optimize pricing strategies using data
from traditional enterprise applications, often augmenting it with real-time and historical data. The Company also provides a range of services that include analyzing a company's current
pricing processes and implementing the Company's software products to improve pricing performance. The Company provides its software products to enterprises across a range of industries, including
manufacturing, distribution, services, hotel and cruise, and airline. </FONT></P>

<P><FONT SIZE=2><B>Principles of consolidation  </B></FONT></P>

<P><FONT SIZE=2>The consolidated financial statements include the accounts of PROS Holdings,&nbsp;Inc., and its wholly-owned subsidiaries. All significant intercompany transactions and
balances have been eliminated in consolidation. </FONT></P>

<P><FONT SIZE=2><B>Earnings per share  </B></FONT></P>

<P><FONT SIZE=2>Basic earnings per share is computed by dividing net earnings attributable to common stockholders by the weighted average number of common shares outstanding for the period.
Diluted earnings per share is computed using the weighted average number of common shares outstanding and, when dilutive, potential common shares from options and warrants (using the treasury-stock
method) and potential common shares from convertible securities (using the if-converted method). </FONT></P>

<P><FONT SIZE=2><B>Unaudited pro forma stockholders' equity and pro forma earnings per share  </B></FONT></P>

<P><FONT SIZE=2>The pro forma effect of the payment of a common stock dividend of $2.00 per share totaling $41.3&nbsp;million (note&nbsp;12) has been reflected as an unaudited pro forma
adjustment in the accompanying financial statements as of December&nbsp;31, 2006. Because the dividend exceeds 2006 net income, the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares expected to be offered in the
anticipated
initial public offering of the Company were added to the outstanding shares to compute the unaudited pro forma basic and diluted earnings per share of common stock. </FONT></P>

<P><FONT SIZE=2><B>Use of estimates  </B></FONT></P>

<P><FONT SIZE=2>The Company's management makes estimates and assumptions in the preparation of its consolidated financial statements in conformity with accounting principles generally accepted
in the United States. These estimates and assumptions may affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. The complexity of the estimation process and
issues related to the assumptions, risks and uncertainties inherent in the application of the percentage-of-completion method of revenue recognition affect the amounts of
revenue, expenses, unbilled receivables and </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>F-7</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=101,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=752737,FOLIO='F-7',FILE='DISK112:[07ZBA1.07ZBA76601]FK76601A.;23',USER='KBLACKW',CD=';4-APR-2007;13:13' -->
<A NAME="page_fk76601_1_8"> </A>
<BR>

<P><FONT SIZE=2>deferred
revenue. Numerous internal and external factors can affect estimates. Estimates are also used for, but not limited to, receivables, allowance for doubtful accounts, useful lives of assets,
depreciation, income taxes and deferred tax asset valuation, valuation of stock options and accrued liabilities. </FONT></P>


<P><FONT SIZE=2><B>Financial instruments  </B></FONT></P>

<P><FONT SIZE=2>The carrying amount of the Company's financial instruments, which include cash equivalents, marketable securities, receivables and accounts payable approximates their fair
values at December&nbsp;31, 2005 and 2006. </FONT></P>

<P><FONT SIZE=2><B>Cash and cash equivalents  </B></FONT></P>

<P><FONT SIZE=2>The Company considers all highly liquid investments with an original or remaining maturity of three months or less at the time of purchase to be cash equivalents. The Company
has a cash management program that provides for the investment of excess cash balances, primarily in short-term money market instruments. </FONT></P>


<P><FONT SIZE=2><B>Marketable securities  </B></FONT></P>

<P><FONT SIZE=2>Management determines the appropriate classification of investments in debt and equity securities at the time of purchase and re-evaluates such designation as of
each subsequent balance sheet date. Securities for which the Company has the ability and intent to hold to maturity are classified as "held to maturity." Securities classified as "trading securities"
are recorded at fair value. Gains and losses on trading securities, realized and unrealized, are included in earnings and are calculated using the specific identification method. Any other securities
are classified as "available for sale." There were no marketable securities as of December&nbsp;31, 2005 and 2006. </FONT></P>


<P><FONT SIZE=2><B>Prepaid expenses and other assets  </B></FONT></P>

<P><FONT SIZE=2>Prepaid expenses and other assets consist primarily of short-term deferred tax assets, deferred project costs and prepaid third-party license fees. </FONT></P>

<P><FONT SIZE=2><B>Property and equipment  </B></FONT></P>

<P><FONT SIZE=2>Property and equipment are recorded at cost, less accumulated depreciation and amortization. Maintenance, repairs and minor replacements are charged to expense as incurred.
Significant renewals and betterments are capitalized. The Company computes depreciation and amortization using the straight-line method over the assets' estimated useful life. When
property is retired or disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gains or losses are reflected in the consolidated statements of
income. </FONT></P>

<P><FONT SIZE=2><B>Impairment of long-lived assets  </B></FONT></P>

<P><FONT SIZE=2>Property and equipment are reviewed for impairment whenever an event or change in circumstances indicates that the carrying amount of an asset or group of assets may not be
recoverable. The impairment review includes comparison of future cash flows expected to be generated by the asset or group of assets with the associated assets' carrying value. If the carrying value
of the asset or group of assets exceeds its expected future cash flows (undiscounted and without interest charges), an impairment loss is recognized to the extent that the carrying amount of the asset
exceeds its fair value. The Company has not recorded any impairment charges in any of the years ended December&nbsp;31, 2004, 2005 and 2006. </FONT></P>

<P><FONT SIZE=2><B>Revenue recognition  </B></FONT></P>

<P><FONT SIZE=2>The Company's revenue is recognized in accordance with the provisions of the American Institute of Certified Public Accountants Statement of Position&nbsp;97-2, </FONT> <FONT SIZE=2><I>Software Revenue Recognition</I></FONT><FONT
SIZE=2> and related </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>F-8</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=102,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=287485,FOLIO='F-8',FILE='DISK112:[07ZBA1.07ZBA76601]FK76601A.;23',USER='KBLACKW',CD=';4-APR-2007;13:13' -->
<A NAME="page_fk76601_1_9"> </A>
<BR>

<P><FONT SIZE=2>interpretations.
The Company generates revenue from the licensing of the right to use its software products directly to end-users, implementation, training services, sales of
post-contract support and maintenance and support. </FONT></P>

<P><FONT SIZE=2>Revenue
from software licenses and implementation services is recognized as the services are performed using the percentage-of-completion method in accordance with the
provisions contained within SOP&nbsp;81-1, </FONT><FONT SIZE=2><I>Accounting for Performance of Construction-Type and Certain Production-Type
Contracts</I></FONT><FONT SIZE=2>. Our software license arrangements typically include implementation services that are considered essential to the customers' usability of the licensed software
products and therefore new software license revenue is generally recognized together with the implementation services based on the percentage-of-completion method. The
percentage-of-completion computation is measured by the percentage of man-days incurred during the reporting period as compared to the estimated total
man-days for each contract estimated necessary for implementation of the software products. If at the commencement of a contract, the contract fee is not fixed and determinable, revenue is
deferred until the contract fee becomes fixed and determinable. If there is significant uncertainty about contract completion or receipt of payment, revenue is deferred until the uncertainty is
sufficiently resolved. Under fixed-fee contracts, should a loss be anticipated on a contract, the full amount thereof is recorded when the loss is determined. </FONT></P>


<P><FONT SIZE=2>The
Company also licenses software products for fixed terms. Revenue for fixed-term licenses, which generally include maintenance during the license period, is recognized ratably over the license
term. </FONT></P>

<P><FONT SIZE=2>Maintenance
and support revenue includes post-contract customer support and the right to unspecified software updates and enhancements on a when and if available basis. Maintenance and
support revenue is generally attributed to those contracts based on specific renewal pricing contained therein and is recognized ratably over the period in which the services are provided. </FONT></P>

<P><FONT SIZE=2>Reimbursable
travel and expense billings to customers are recognized as revenue as the expenses are incurred. </FONT></P>

<P><FONT SIZE=2>Software
license and implementation services that have been performed, but for which the Company has not invoiced the customer, are recorded as unbilled receivables, and invoices that have been issued
before the software license and implementation services have been performed are recorded as deferred revenue in the accompanying consolidated balance sheets. The Company generally invoices for
maintenance and support services on a monthly or quarterly basis through the maintenance and support period. </FONT></P>

<P><FONT SIZE=2><B>Software development costs  </B></FONT></P>

<P><FONT SIZE=2>Software development costs associated with new products and enhancements to existing software products are expensed as incurred until technological feasibility, in the form of
a working model, has been established. To date, the time period between the establishment of technological feasibility and the completion of software development has been short, and no significant
development costs have been incurred during this period. Accordingly, the Company has not capitalized any software development costs to date. </FONT></P>

<P><FONT SIZE=2><B>Stock options  </B></FONT></P>

<P><FONT SIZE=2>In December&nbsp;2004, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Account Standard 123(R), </FONT><FONT SIZE=2><I>Share-Based
Payment</I></FONT><FONT SIZE=2>, or SFAS&nbsp;123(R). Under this standard, the fair value of each employee stock option is estimated on the date of grant using an options pricing model. The Company
adopted FAS&nbsp;123(R) effective January&nbsp;1, 2006 using the prospective transition method. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>F-9</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=103,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=520286,FOLIO='F-9',FILE='DISK112:[07ZBA1.07ZBA76601]FK76601A.;23',USER='KBLACKW',CD=';4-APR-2007;13:13' -->
<A NAME="page_fk76601_1_10"> </A>
<BR>

<P><FONT SIZE=2>Under
this transition method, no compensation expense is recorded for employee stock options issued prior to the adoption of FAS&nbsp;123(R). </FONT></P>

<P><FONT SIZE=2>The
Company currently uses the Black-Scholes valuation model to estimate the fair value of its share-based payments. Share-based compensation expense recognized in the Company's financial statements
starting on January&nbsp;1, 2006 and thereafter is based on awards that are expected to vest. These amounts are reduced using an estimated forfeiture rate. Forfeitures are required to be
estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. </FONT></P>

<P><FONT SIZE=2>Prior
to the adoption of SFAS&nbsp;123(R), and as permitted by SFAS&nbsp;123, </FONT><FONT SIZE=2><I>Accounting for Stock-Based Compensation</I></FONT><FONT SIZE=2> and SFAS&nbsp;148, </FONT> <FONT SIZE=2><I>Accounting for Stock-Based Compensation
Transition and Disclosure,</I></FONT><FONT SIZE=2> the Company elected to follow Accounting Principles Board Opinion No.&nbsp;25, </FONT> <FONT SIZE=2><I>Accounting for Stock Issued to Employee</I></FONT><FONT SIZE=2>, or APB&nbsp;25, in accounting
for employee stock options and implemented the disclosure-only
provisions of SFAS&nbsp;123 and SFAS&nbsp;148. Under APB&nbsp;25, stock compensation expense was recorded when the exercise price of employee stock options was less than the fair value of the
underlying stock on the date of grant. </FONT></P>

<P><FONT SIZE=2>The
Company granted options to purchase 747,954, 442,500 and zero shares of the Company's common stock to employees during the years ended December&nbsp;31, 2004, 2005 and 2006, respectively. The
fair value of options granted during the years ended December&nbsp;31, 2004 and 2005 was estimated using the minimum value method with the following assumptions: a risk-free interest
rate of 4.35%; no expected dividend yield; and an expected life of five years. No volatility was used for the calculation of fair value of options pursuant to the minimum value method. </FONT></P>


<P><FONT SIZE=2>Upon
exercise of stock options, shares of common stock will be issued from previously unissued shares but could be issued from treasury shares. </FONT></P>

<P><FONT SIZE=2>The
following table presents the pro forma effect of net income and earnings per share as if we had applied the fair-value recognition to stock-based compensation prior to the adoption of SFAS No.
123(R): </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="83%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=8><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="RIGHT"><FONT SIZE=2><B>Year ended December&nbsp;31<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2004<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=8><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Net earnings attributable to common stockholders</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>2,399,908</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>2,587,107</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Less: Total stock-based employee compensation expense determined under the fair value method for all awards net of related tax effects</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(82,515</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(28,076</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=5 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Pro forma net earnings attributable to common stock holders (basic)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>2,317,393</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>2,559,031</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><BR>
Add: accretion of preferred stock</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2><BR>
1,256,011</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2><BR>
654,839</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=5 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Pro forma net income (diluted)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>3,573,404</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>3,213,870</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><BR>
Basic earnings per share:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="63%"><FONT SIZE=2>As reported</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>0.24</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>0.19</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="63%"><FONT SIZE=2>Pro forma</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>0.24</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>0.18</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2><BR>
Diluted earnings per share:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="63%"><FONT SIZE=2>As reported</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>0.19</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>0.16</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="63%"><FONT SIZE=2>Pro forma</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>0.18</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>0.16</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=8><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2>F-10</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=104,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=796077,FOLIO='F-10',FILE='DISK112:[07ZBA1.07ZBA76601]FK76601A.;23',USER='KBLACKW',CD=';4-APR-2007;13:13' -->
<A NAME="page_fk76601_1_11"> </A>

<P><FONT SIZE=2>The
Company accounts for equity instruments issued to nonemployees in accordance with provisions of Emerging Issues Task Force No. 96-18, </FONT><FONT SIZE=2><I>Accounting for Equity Instruments that
are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services</I></FONT><FONT SIZE=2> ("EITF 96-18"). Under EITF 98-18, stock option awards issued to
non-employees are accounted for at the fair value using the Black-Scholes option-pricing model and are recorded using the straight-line method over the vesting period, which approximates the service
period. </FONT></P>

<P><FONT SIZE=2>For
further discussion of the Company's stock-based employee compensation plan, see Note&nbsp;5 to the consolidated financial statements. </FONT></P>

<P><FONT SIZE=2><B>Product warranties  </B></FONT></P>

<P><FONT SIZE=2>The Company generally issues warranties for 90 days from the completion of implementation, depending on the contract, for software licenses and implementation services. In the
Company's experience, warranty costs have been insignificant. </FONT></P>

<P><FONT SIZE=2><B>Income taxes  </B></FONT></P>

<P><FONT SIZE=2>The Company uses the asset and liability method to account for income taxes, including recognition of deferred tax assets and liabilities for the anticipated future tax
consequences attributable to differences between financial statement amounts and their respective tax basis. The Company reviews its deferred tax assets for recovery. A valuation allowance is
established when the Company believes that it is more likely than not that some portion of its deferred tax assets will not be realized. Changes in the valuation allowance from period to period are
included in the Company's tax provision in the period of change. </FONT></P>

<P><FONT SIZE=2><B>Reclassifications  </B></FONT></P>

<P><FONT SIZE=2>Certain reclassifications have been made to the consolidated balance sheet as of December&nbsp;31, 2005 to conform with the 2006 presentation, which had no effect on total
assets, total liabilities, stockholders' equity, net income or cash flows. </FONT></P>


<P><FONT SIZE=2><B>Recent accounting pronouncements  </B></FONT></P>

<P><FONT SIZE=2>In June&nbsp;2006, the FASB issued FASB Interpretation No.&nbsp;48, </FONT><FONT SIZE=2><I>Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement
No.&nbsp;109</I></FONT><FONT SIZE=2>, or FIN&nbsp;48. FIN&nbsp;48 clarifies the accounting for uncertainties in income taxes recognized in an enterprise's financial statements. FIN&nbsp;48
requires that the Company determine whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authority. If a tax position meets the "more
likely than not" recognition criteria, FIN&nbsp;48 requires the tax position be measured at the largest amount of
benefit greater than 50% likely of being realized upon ultimate settlement. This accounting standard is effective for fiscal years beginning January&nbsp;1, 2007. The Company does not believe the
effect, if any, of adoption of FIN&nbsp;48 will have a material effect on its financial position and results of operations. </FONT></P>

<P><FONT SIZE=2>In
September&nbsp;2006, the Securities and Exchange Commission issued Staff Accounting Bulletin No.&nbsp;108, </FONT><FONT SIZE=2><I>Considering the Effects of Prior Year Misstatements when
Quantifying Current Year Misstatements</I></FONT><FONT SIZE=2>, or SAB&nbsp;108. SAB&nbsp;108 provides guidance on the approach that companies must follow in quantifying misstatements of their
financial statements. SAB&nbsp;108 requires analysis of misstatements using both an income statement (rollover) approach and a balance sheet (iron curtain) approach in assessing materiality and
provides for a one-time cumulative effect transition adjustment. SAB&nbsp;108 did not have a material effect on the Company's consolidated financial position, results of operations or
cash flows. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>F-11</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=105,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=752463,FOLIO='F-11',FILE='DISK112:[07ZBA1.07ZBA76601]FK76601A.;23',USER='KBLACKW',CD=';4-APR-2007;13:13' -->
<A NAME="page_fk76601_1_12"> </A>
<BR>

<P><FONT SIZE=2>In
September&nbsp;2006, the FASB issued SFAS No.&nbsp;157, </FONT><FONT SIZE=2><I>Fair Value Measurements,</I></FONT><FONT SIZE=2>which defines fair value, establishes a framework for measuring
fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No.&nbsp;157 does not require any new fair value measurements, but provides
guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. SFAS No.&nbsp;157 is effective for the Company fiscal year beginning
January&nbsp;1, 2008. The Company is currently evaluating the impact of adopting SFAS No.&nbsp;157. </FONT></P>

<P><FONT SIZE=2>In
February&nbsp;2007, the FASB issued SFAS No.&nbsp;159, </FONT><FONT SIZE=2><I>The Fair Value Option for Financial Assets and Financial Liabilities&#151;Including an Amendment of FASB
Statement No.&nbsp;115</I></FONT><FONT SIZE=2>. This pronouncement permits entities to use the fair value method to measure certain financial assets and liabilities by electing an irrevocable option
to use the fair value method at specified election dates. After election of the option, subsequent changes in fair value would result in the recognition of unrealized gains or losses as period costs
during the period the change occurred. SFAS No.&nbsp;159 becomes effective as of the beginning of the first fiscal year that begins after November&nbsp;15, 2007, with early adoption permitted.
However, entities may not retroactively apply the provisions of SFAS No.&nbsp;159 to fiscal years preceding the date of adoption. The Company is currently evaluating the effect that SFAS
No.&nbsp;159 may have on its financial position, results of operations and cash flows. </FONT></P>

<P><FONT SIZE=3><B>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable and contracts in progress  </B></FONT></P>

<P><FONT SIZE=2>Accounts receivable at December&nbsp;31, 2005 and 2006, consist of the following: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="86%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=8><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="RIGHT"><FONT SIZE=2><B>December 31<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2006<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=8><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Accounts receivable</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>7,728,005</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>13,171,773</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Unbilled receivables</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>721,017</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>1,807,216</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=5 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>8,449,022</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>14,978,989</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Less: Allowance for doubtful accounts</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(1,020,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(1,190,000</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=5 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2>Accounts receivable, net</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>7,429,022</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>13,788,989</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=8><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>The
bad debt expense reflected in selling, general and administrative expenses in the accompanying consolidated statements of income for the years ended December&nbsp;31, 2004, 2005 and 2006,
totaled approximately $182,000, $0 and $27,000, respectively. </FONT></P>

<P><FONT SIZE=2>Activity
related to contracts in progress at December&nbsp;31, 2005 and 2006, is summarized as follows: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="86%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=7><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="62%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="RIGHT"><FONT SIZE=2><B>Year ended December 31<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="62%" ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2006<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=7><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="62%"><FONT SIZE=2>Costs&nbsp;&amp; estimated earnings recognized to date</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>26,791,096</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>49,072,064</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="62%"><FONT SIZE=2>Progress billings to date</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(40,031,769</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(73,476,542</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="62%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=5 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="62%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(13,240,673</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(24,404,478</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=7><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>The
foregoing table reflects the aggregate invoiced amount of all contracts in progress as of the respective dates, including amounts that have already been collected. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>F-12</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=106,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=93104,FOLIO='F-12',FILE='DISK112:[07ZBA1.07ZBA76601]FK76601A.;23',USER='KBLACKW',CD=';4-APR-2007;13:13' -->
<A NAME="page_fk76601_1_13"> </A>
<BR>

<P><FONT SIZE=2>These
amounts are included in the accompanying consolidated balance sheets at December&nbsp;31, 2005 and 2006, as follows: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="86%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=7><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="62%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="RIGHT"><FONT SIZE=2><B>December 31<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="62%" ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2006<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=7><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="62%"><FONT SIZE=2>Unbilled receivables</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>721,017</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>1,807,216</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="62%"><FONT SIZE=2>Deferred revenue</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(13,961,690</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(26,211,694</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="62%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=5 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="62%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(13,240,673</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>(24,404,478</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=7><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>During
the years ended December&nbsp;31, 2005 and 2006, the Company had approximately $1,139,000 and $1,780,000, respectively, in deferred maintenance and support revenue, which is reflected within
the above table. </FONT></P>

<P><FONT SIZE=3><B>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Earnings per share  </B></FONT></P>

<P><FONT SIZE=2>The following table sets forth the computation of basic and diluted earnings per share: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="89%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=10><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="49%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER"><FONT SIZE=2><B>Year ended December&nbsp;31</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="49%" ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2004<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2006<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=10><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="49%"><FONT SIZE=2>Numerator:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="49%"><FONT SIZE=2>Net earnings attributable to common stockholders (basic)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>2,399,908</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>2,587,107</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>6,565,460</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="49%"><FONT SIZE=2>Add: accretion of Series&nbsp;A convertible redeemable preferred stock</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>1,256,011</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>654,839</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="49%"><FONT SIZE=2>Net income (diluted)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>3,655,919</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>3,241,946</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>6,565,460</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="49%"><FONT SIZE=2><BR>
Denominator:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="49%"><FONT SIZE=2>Weighted average shares (basic)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>9,822,094</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>13,891,415</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>19,649,372</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="49%"><FONT SIZE=2>Dilutive effect of stock options and warrants</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>45,578</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>433,095</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>954,830</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="49%"><FONT SIZE=2>Dilutive effect of Series&nbsp;A convertible redeemable preferred stock</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>9,750,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>5,687,500</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="49%"><FONT SIZE=2>Weighted average shares with assumed conversion of Series&nbsp;A convertible redeemable preferred stock (diluted)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>19,617,672</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>20,012,010</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>20,604,202</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="49%"><FONT SIZE=2><BR>
Basic earnings per share</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2><BR>
0.24</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2><BR>
0.19</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2><BR>
0.33</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="49%"><FONT SIZE=2>Diluted earnings per share</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>0.19</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>0.16</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>0.32</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=10><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>The
Company has excluded 1,179,194, 654,400 and 108,150 potential common shares from the computation of 2004, 2005 and 2006 dilutive earnings per share, respectively, because the effect would have
been antidilutive. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>F-13</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=7,SEQ=107,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=127485,FOLIO='F-13',FILE='DISK112:[07ZBA1.07ZBA76601]FK76601A.;23',USER='KBLACKW',CD=';4-APR-2007;13:13' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->

<P><FONT SIZE=2><A
NAME="page_fm76601_1_14"> </A> </FONT> <FONT SIZE=3><B>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property and equipment  </B></FONT></P>

<P><FONT SIZE=2>Property and equipment as of December&nbsp;31, 2005 and 2006, consist of the following: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="86%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=9><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="32%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="31%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ROWSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>December 31<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="32%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="31%" ROWSPAN=2 ALIGN="CENTER"><FONT SIZE=2><B>Estimated<BR>
useful life<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="32%" ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2006<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=9><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="32%"><FONT SIZE=2>Furniture and fixtures</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="31%" ALIGN="CENTER"><FONT SIZE=2>7-10 years</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>2,002,102</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>2,015,900</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="32%"><FONT SIZE=2>Computers and equipment</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="31%" ALIGN="CENTER"><FONT SIZE=2>3-10 years</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>5,004,448</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>5,758,681</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="32%"><FONT SIZE=2>Software</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="31%" ALIGN="CENTER"><FONT SIZE=2>2-5 years</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>1,333,134</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>1,235,617</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="32%"><FONT SIZE=2>Leasehold improvements</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="31%" ALIGN="CENTER"><FONT SIZE=2>Shorter of lease term or useful life</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>847,052</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>855,359</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="32%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="31%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=5 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="32%"><FONT SIZE=2>Property and equipment, gross</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="31%" ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>9,186,736</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>9,865,557</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="32%"><FONT SIZE=2>Less: Accumulated depreciation and amortization</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="31%" ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(6,633,427</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(7,492,685</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="32%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="31%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=5 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="32%"><FONT SIZE=2>Property and equipment, net</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="31%" ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>2,553,309</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>2,372,872</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=9><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>Depreciation
and leasehold amortization expense was $1,582,982, $1,515,303 and $1,270,441 for the years ended December&nbsp;31, 2004, 2005 and 2006, respectively. During the years ended
December&nbsp;31, 2005 and 2006, the Company disposed of approximately $1,918,000 and $411,000, respectively, of fully depreciated assets. As of December&nbsp;31, 2005 and 2006, the Company had
approximately $2,473,000 and $4,815,000, respectively, of fully depreciated assets in use. </FONT></P>

<P><FONT SIZE=3><B>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stockholders' equity  </B></FONT></P>


<P><FONT SIZE=2><B>Preferred stock financing  </B></FONT></P>

<P><FONT SIZE=2>On June&nbsp;8, 1998 the Company entered into a stock purchase and stockholders agreement (the "Purchase Agreement") with certain investment partnerships and individuals. The
Company sold 3,921,312 shares of its authorized Series&nbsp;A convertible redeemable preferred stock, par value $0.001 per share ("Series&nbsp;A Preferred Stock") for $25,000,000. The Company
incurred approximately $1,500,000 in transaction fees connection with the financing. The Company also designated another 3,921,312 shares of its preferred stock to be issued as redeemable preferred
stock ("Redeemable Preferred Stock") with a par value of $0.001 per share, upon the conversion of the Series&nbsp;A Preferred Stock. </FONT></P>


<P><FONT SIZE=2><B>Series&nbsp;A preferred stock  </B></FONT></P>

<P><FONT SIZE=2>On August&nbsp;15, 2005 ("Conversion Date"), the holders of the Series&nbsp;A Preferred Stock elected to convert the Series&nbsp;A Preferred Stock into 9,750,000 shares
of common stock at a defined conversion rate of 2.486 per share plus 3,921,312 shares of Redeemable Preferred Stock. There were no shares of Series&nbsp;A Preferred Stock outstanding after this
transaction, as all shares were cancelled upon the conversion. </FONT></P>

<P><FONT SIZE=2><B>Redeemable preferred stock  </B></FONT></P>

<P><FONT SIZE=2>Holders of Redeemable Preferred Stock do not have general voting rights, except for the right to elect, as a separate class, two members to the board of directors and the right
to consent or withhold consent to certain actions by the Company. The Redeemable Preferred Stock has cumulative, noncompounding dividend rights of $0.13388 per share per year. The cumulative dividends
become due and payable upon liquidation or redemption of the Redeemable Preferred Stock. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>F-14</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=108,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=896031,FOLIO='F-14',FILE='DISK112:[07ZBA1.07ZBA76601]FM76601A.;27',USER='KBLACKW',CD=';4-APR-2007;15:47' -->
<A NAME="page_fm76601_1_15"> </A>
<BR>

<P><FONT SIZE=2>As
of December&nbsp;31, 2006, the redemption amount for the Redeemable Preferred Stock was $17,283,168. The Redeemable Preferred Stock has a liquidation value of $4.463 per share plus accrued and
unpaid dividends on the Redeemable Preferred Stock, plus accrued and unpaid dividends on the Series&nbsp;A Preferred Stock as of the Conversion Date. Included in the Redeemable Preferred Stock are
cumulative unpaid dividends on the Series&nbsp;A Preferred Stock in the amount of $5,070,117, cumulative unpaid dividends on the Redeemable Preferred Stock in the amount of $484,130, and the
liquidation value of remaining outstanding Redeemable Preferred Stock, in the amount of $11,728,921. </FONT></P>

<P><FONT SIZE=2>The
Redeemable Preferred Stock is redeemable by the holders following a Qualified Public Offering, an Extraordinary Transaction as defined in the Certificate of Incorporation or if the holders elect
to redeem by giving the Company not less than 10&nbsp;days written notice according to the following schedule: up to 33% after one year from the Conversion Date, up to 66% of the
then-outstanding shares after two years from the Conversion Date and up to 100% of the then outstanding shares after three years from the Conversion Date. Additionally, the Company can
elect to redeem the Redeemable Preferred Stock upon a Qualified Public Offering or according to the following schedule: exactly 33% after one year from the Conversion Date, exactly 66% of the
then outstanding shares after two years from the Conversion Date and exactly 100% of the then outstanding shares after three years from the Conversion Date. </FONT></P>

<P><FONT SIZE=2>In
August 2006, the holders of the Redeemable Preferred Stock elected to redeem 33% of the Redeemable Preferred Stock and on August&nbsp;15, 2006 a redemption payment of $8,445,472 was made,
consisting of $5,775,000 representing the liquidation value of the surrendered shares, $173,250 of accreted dividends on the Redeemable Preferred Stock and $2,497,222 of accreted dividends on the
Series&nbsp;A Preferred Stock. </FONT></P>

<P><FONT SIZE=2>The
Company is accreting the Redeemable Preferred Stock to the redemption price as a deduction from retained earnings, to the extent available, and any remaining to additional paid-in-capital. </FONT></P>

<P><FONT SIZE=2><B>Common stock warrants  </B></FONT></P>

<P><FONT SIZE=2>In December&nbsp;1998, the Company granted warrants to purchase 100,000 shares of common stock (the "Warrants") to each of the Company's two founders. The Warrants have an
11-year term, vesting on January&nbsp;21, 2009, and expiring on January&nbsp;20, 2010. The Warrants fully vest upon a qualified public offering and have an exercise price of $2.05 per
share. The Company has recorded the Warrants as a component of equity pursuant to Emerging Issues Task Force issue No.&nbsp;00-19, </FONT><FONT SIZE=2><I>Accounting for derivative financial
instruments indexed to, and potentially settled in, a company's own stock,</I></FONT><FONT SIZE=2> at their estimated fair value at the date of issuance, which is $226,000, in the accompanying
financial statements. </FONT></P>

<P><FONT SIZE=2><B>Registration rights  </B></FONT></P>

<P><FONT SIZE=2>Certain of the Company's stockholders are entitled to require registration for the sale of their shares if the Company becomes publicly traded. The Company would be required to
bear all registration expenses if these rights are exercised, other than underwriting discounts and selling commissions. </FONT></P>

<P><FONT SIZE=2><B>Stock options  </B></FONT></P>

<P><FONT SIZE=2>The Company maintains incentive stock option plans to provide long-term incentives to its key employees, officers, directors and consultants under which 2,387,688
shares of common stock were reserved for issuance. As of December&nbsp;31, 2006, 431,742 shares remained available for grant. Options have a ten-year term and vest over terms of two,
four, five or ten years. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>F-15</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=109,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=806319,FOLIO='F-15',FILE='DISK112:[07ZBA1.07ZBA76601]FM76601A.;27',USER='KBLACKW',CD=';4-APR-2007;15:47' -->
<A NAME="page_fm76601_1_16"> </A>
<BR>

<P><FONT SIZE=2>The
following is a summary of the Company's option activity for the years ended December&nbsp;31, 2004, 2005 and 2006: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="89%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=10><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2><B>Number of<BR>
shares under<BR>
option<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Weighted<BR>
average<BR>
exercise price<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Aggregate<BR>
intrinsic<BR>
value<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=10><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><B>Outstanding, December 31, 2003</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>675,630</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>2.11</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>Granted</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>747,594</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>0.25</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>Forfeited</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(159,200</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>1.42</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>Exercised</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(2,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>2.25</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><B>Outstanding, December 31, 2004</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,262,024</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>1.09</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><B>Exercisable, December 31, 2004</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>801,244</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>1.55</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>Granted</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>442,500</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>0.53</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>Forfeited</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(63,327</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>1.89</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>Exercised</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(11,373</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>1.55</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><B>Outstanding, December 31, 2005</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,629,824</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>0.91</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><B>Exercisable, December 31, 2005</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>983,474</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>1.22</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>Granted</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>Forfeited</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(31,164</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>1.47</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>Exercised</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(149,555</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>0.45</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>444,415</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><B>Outstanding, December 31, 2006</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,449,105</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>0.94</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>5,781,929</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><B>Exercisable, December 31, 2006</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,153,087</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%" ALIGN="RIGHT"><FONT SIZE=2>1.06</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>4,462,447</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=10><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>The
following table summarizes information about stock options outstanding at December&nbsp;31, 2006: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="25%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="15%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=4 ROWSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Options outstanding<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="15%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="25%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="15%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=4 ROWSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Options exercisable<BR> </B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="25%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="15%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%" ROWSPAN=2><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="12%" ROWSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Weighted<BR>
average<BR>
remaining<BR>
contractual<BR>
life<BR>
(in years)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="25%" ALIGN="LEFT"><FONT SIZE=2><B>Range of<BR>
exercise prices<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2><B>Outstanding<BR>
as of<BR>
December 31,<BR>
2006<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Weighted<BR>
average<BR>
exercise<BR>
price<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2><B>Exercisable<BR>
as of<BR>
December 31,<BR>
2006<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Weighted<BR>
average<BR>
exercise<BR>
price<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="25%"><FONT SIZE=2>$0.00-$0.25</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>687,355</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>6.8</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>0.24</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>607,587</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>0.24</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="25%"><FONT SIZE=2>$0.26-$1.00</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>328,750</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>8.6</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>0.56</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>112,500</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>0.52</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="25%"><FONT SIZE=2>$1.01-$3.00</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>433,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>3.1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>2.35</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>433,000</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>2.35</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="25%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="25%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>1,449,105</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>6.1</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>0.94</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>1,153,087</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>1.06</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="25%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=13><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>No
stock options were granted to non-employees in 2005 or 2006. During 2004, compensation expense for the fair value of stock options granted to non-employees totaled $2,129. </FONT></P>

<P><FONT SIZE=3><B>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes  </B></FONT></P>

<P><FONT SIZE=2>As of December&nbsp;31, 2006, the Company had approximately $675,000 of general business tax credit ("GBC") carryforwards arising from research and
development activities. These GBC credits may be carried forward for a period of 20&nbsp;years and are available as an offset against any future regular tax liability. The GBC carryforwards begin to
expire in 2022. </FONT></P>

<P><FONT SIZE=2>As
of December&nbsp;31, 2006, the Company had approximately $185,000 of foreign tax credit ("FTC") carryforwards arising from foreign taxes paid. These FTC carryforwards may be carried forward for a </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>F-16</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=110,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=314283,FOLIO='F-16',FILE='DISK112:[07ZBA1.07ZBA76601]FM76601A.;27',USER='KBLACKW',CD=';4-APR-2007;15:47' -->
<A NAME="page_fm76601_1_17"> </A>
<BR>

<P><FONT SIZE=2>period
of five years and are available as an offset against any future regular tax liability if there is sufficient foreign source income in the year of use. The foreign tax credits begin to expire in
2012. </FONT></P>

<P><FONT SIZE=2>The
Company has recorded net deferred tax assets for the expected future consequences of temporary differences, including tax credit carryforwards. The level of future taxable income generation that
would be required in order to realize the benefit of certain of the Company's tax credit carryforwards is substantially higher than its historical profitability. Therefore, a valuation allowance has
been provided for certain of the Company's tax credit carryforwards that are not
expected to be realized and the resulting effect on the rate at which the deferred tax items will be realized. </FONT></P>

<P><FONT SIZE=2>As
of December&nbsp;31, 2005 and 2006, the Company had income taxes payable of approximately $165,000 and $1,100,000, respectively, which are included in accrued liabilities in the accompanying
consolidated balance sheets. </FONT></P>

<P><FONT SIZE=2>The
provision for income taxes consisted of the following for the years ended December&nbsp;31, 2004, 2005 and 2006: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="89%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=11><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="RIGHT"><FONT SIZE=2><B>Year ended December&nbsp;31<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2004<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2006<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=11><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><B>Current</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="50%"><FONT SIZE=2>Federal</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>672,778</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>985,344</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>2,804,479</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="50%"><FONT SIZE=2>State and Foreign</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>75,359</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>87,466</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>81,469</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>748,137</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,072,810</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>2,885,948</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><BR><FONT SIZE=2><B>Deferred</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="50%"><FONT SIZE=2>Federal</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>(211,953</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(98,269</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(1,161,450</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Income tax provision</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>536,184</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>974,541</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>1,724,498</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=11><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>The
differences between the effective tax rate reflected in the total provision for income taxes and the U.S. federal statutory rate of 34% for the years ended December&nbsp;31, 2004, 2005 and 2006,
were as follows: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="89%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=10><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="52%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="RIGHT"><FONT SIZE=2><B>Year ended December 31<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="52%" ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2004<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2006<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=10><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="52%"><FONT SIZE=2>Provision at the U.S. federal statutory rate</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,425,315</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,500,783</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>2,974,917</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="52%"><FONT SIZE=2>Increase (decrease) resulting from</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="52%"><FONT SIZE=2>State income taxes, net of federal taxes</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(12,116</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>31,776</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>17,510</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="52%"><FONT SIZE=2>Foreign income taxes, net of federal taxes</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>36,755</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>36,260</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="52%"><FONT SIZE=2>Nondeductible expenses</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>52,070</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>58,586</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>80,882</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="52%"><FONT SIZE=2>Extraterritorial income</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(18,506</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(47,845</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="52%"><FONT SIZE=2>Domestic production activities</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(39,935</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="52%"><FONT SIZE=2>Incremental benefits for tax credits</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(601,315</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(567,327</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(730,768</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="52%"><FONT SIZE=2>Change in tax rate/income subject</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="52%"><FONT SIZE=2>to lower tax rates and other</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(39,400</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(23,821</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(43,601</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="52%"><FONT SIZE=2>Increase (decrease) in valuation allowance</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(288,370</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(43,705</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>(522,922</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="52%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=8 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="52%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>536,184</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>974,541</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,724,498</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=10><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2>F-17</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=111,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=520792,FOLIO='F-17',FILE='DISK112:[07ZBA1.07ZBA76601]FM76601A.;27',USER='KBLACKW',CD=';4-APR-2007;15:47' -->
<A NAME="page_fm76601_1_18"> </A>

<P><FONT SIZE=2>The
tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of December&nbsp;31, 2005 and 2006, are as follows: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="85%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=8><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="RIGHT"><FONT SIZE=2><B>December 31<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>2006<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=8><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Current deferred tax asset:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="62%"><FONT SIZE=2>Accruals not currently deductible</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>624,923</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>1,348,797</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="62%"><FONT SIZE=2>Less: Valuation allowance</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(257,321</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(555,387</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=5 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Total current net deferred tax asset</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>367,602</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>793,410</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="62%"><FONT SIZE=2>Noncurrent deferred tax liability:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="62%"><FONT SIZE=2>Property and equipment</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(97,546</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=5 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Total noncurrent deferred tax liability</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(97,546</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Noncurrent deferred tax asset:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="62%"><FONT SIZE=2>GBC carryforwards</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>1,945,487</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>675,067</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="62%"><FONT SIZE=2>Property and equipment</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>24,045</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="62%"><FONT SIZE=2>Deferred revenue</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>1,129,000</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="62%"><FONT SIZE=2>FTC carryforwards</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>250,969</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>185,452</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=5 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Total noncurrent deferred tax assets</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>2,196,456</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>2,013,564</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="62%"><FONT SIZE=2>Less: Valuation allowance</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(2,156,290</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(1,335,302</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=5 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Total noncurrent deferred tax asset (liability)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(57,380</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>678,262</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=5 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>Total net deferred tax asset</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>310,222</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>1,471,672</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=8><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>The
current net deferred tax asset and noncurrent net deferred tax asset are included in prepaids and other, and other assets, respectively, in the accompanying consolidated balance sheets. </FONT></P>

<P><FONT SIZE=3><B>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commitments and contingencies  </B></FONT></P>

<P><FONT SIZE=2><B>Litigation  </B></FONT></P>

<P><FONT SIZE=2>The Company may be subject to various legal proceedings arising in the ordinary course of business. Management does not believe the outcome of current legal actions will have a
material adverse effect on the Company's financial position or results of operations. </FONT></P>

<P><FONT SIZE=2><B>Insurance  </B></FONT></P>

<P><FONT SIZE=2>The Company is self-insured for a certain portion of annual healthcare costs. Management believes the Company's accrual for estimated potential claim costs to
satisfy the self-insurance provisions of the insurance policies for claims occurring through December&nbsp;31, 2006 is adequate. As of December&nbsp;31, 2005 and 2006, the Company had
recorded a self-insurance liability totaling approximately $285,000 and $391,000, respectively, which is included in accrued liabilities within the consolidated balance sheet. </FONT></P>


<P><FONT SIZE=2><B>Indemnification  </B></FONT></P>

<P><FONT SIZE=2>The Company's software license agreements generally include certain provisions for indemnifying customers against liabilities if the Company's software products infringe a
third party's intellectual property rights. To date, the Company has not incurred any losses as a result of such indemnifications and have not accrued any liabilities related to such obligations in
the Company's consolidated financial statements. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>F-18</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=112,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=292208,FOLIO='F-18',FILE='DISK112:[07ZBA1.07ZBA76601]FM76601A.;27',USER='KBLACKW',CD=';4-APR-2007;15:47' -->
<A NAME="page_fm76601_1_19"> </A>
<BR>

<P><FONT SIZE=2><B>Lease Agreements  </B></FONT></P>

<P><FONT SIZE=2>The Company leases office space and office equipment under non-cancelable operating leases that expire at various dates through 2011. Total rent expense incurred during the
years ended December&nbsp;31, 2004, 2005 and 2006, was approximately $1,281,000, $1,281,000 and $1,080,000, respectively. Future minimum payments relating to non-cancelable operating lease
agreements at December&nbsp;31, 2006, are as follows: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="76%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=4><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="82%" ALIGN="LEFT"><FONT SIZE=2><B>Year ending December 31<BR> </B></FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Operating leases<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="82%"><FONT SIZE=2>2007</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>1,004,161</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="82%"><FONT SIZE=2>2008</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>1,126,588</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="82%"><FONT SIZE=2>2009</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>1,184,925</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="82%"><FONT SIZE=2>2010</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>1,207,800</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="82%"><FONT SIZE=2>2011</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>704,550</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="82%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="82%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>5,228,024</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>The
Company had no capital leases at December&nbsp;31, 2006. In 2006 the company renegotiated its office lease which expired in May&nbsp;2006. The new lease expires on July&nbsp;31, 2011. </FONT></P>

<P><FONT SIZE=3><B>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Geographic information  </B></FONT></P>

<P><FONT SIZE=2>The Company evaluates the performance of its geographic regions based on revenue only. The Company does not assess the performance of its geographic regions
based upon income or expenses, such as depreciation and amortization, operating income or net income. In addition, as the Company's assets are primarily located in its corporate office in the United
States and not allocated to any specific region, the Company does not produce reports for, or measure the performance of, its geographic regions based on any asset-based metrics. Therefore, geographic
information is presented only for revenue. International sales for the years ended December&nbsp;31, 2004, 2005 and 2006, amounted to approximately $17,017,651, $20,960,261 and $28,830,603,
respectively, representing 52%, 60%, 63%, and respectively, of annual revenue. </FONT></P>

<P><FONT SIZE=2>The
following geographic information is presented for the years ended December&nbsp;31, 2004, 2005 and 2006: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="97%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=18><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="RIGHT"><FONT SIZE=2><B>Year ended December 31<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=4 ALIGN="RIGHT"><FONT SIZE=2><B>2004<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=4 ALIGN="RIGHT"><FONT SIZE=2><B>2005<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=4 ALIGN="RIGHT"><FONT SIZE=2><B>2006<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Revenue<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><B>Percent<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Revenue<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><B>Percent<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Revenue<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><B>Percent<BR> </B></FONT><BR></TH>
<TH WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=18><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2>The Americas</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>United States of America</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>15,428,151</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>48</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>14,169,500</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>40</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>17,196,906</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>37</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Other</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>2,273,915</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>7</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>2,677,190</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>4,182,045</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>9</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="22%"><FONT SIZE=2>Subtotal</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>17,702,066</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>55</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>16,846,690</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>48</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>21,378,951</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>46</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2>Europe, the Middle East and Africa</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>United Kingdom</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,291,785</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,496,642</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>5,223,140</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>11</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Germany</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>2,168,359</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>7</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>4,296,647</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>12</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>3,513,916</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Other</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>4,614,634</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>14</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>5,858,794</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>17</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>8,866,331</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>19</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="22%"><FONT SIZE=2>Subtotal</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>8,074,778</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>25</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>11,652,083</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>33</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>17,603,387</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>38</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2>Asia Pacific</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>6,668,958</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>20</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>6,630,988</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>19</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>7,045,171</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>16</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3><FONT SIZE=2>Total revenue</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>32,445,802</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>100</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>35,129,761</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>100</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>%</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>46,027,509</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>100</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=14 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=18><HR NOSHADE></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2>F-19</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=113,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=873456,FOLIO='F-19',FILE='DISK112:[07ZBA1.07ZBA76601]FM76601A.;27',USER='KBLACKW',CD=';4-APR-2007;15:47' -->
<A NAME="page_fm76601_1_20"> </A>

<P><FONT SIZE=3><B>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Concentrations of credit risk  </B></FONT></P>

<P><FONT SIZE=2>For the year ended December&nbsp;31, 2006, no customer accounted for 10% or more of revenue. For the year ended December&nbsp;31, 2005, the Company had one
customer that accounted for 10.1% of revenue. </FONT></P>


<P><FONT SIZE=2>The
Company's operations could be affected, either positively or negatively, due to the level of revenue derived from the airline industry. A significant portion of the Company's airline revenue is
derived from maintenance and support revenue from over 40 different airlines. </FONT></P>

<P><FONT SIZE=2>The
Company's short-term investments on deposit with any one party and at any point in time may exceed federally insured limits. To date, the Company has not incurred any losses in
connection with short term investments. </FONT></P>

<P><FONT SIZE=3><B>10.&nbsp;&nbsp;Related-party transactions  </B></FONT></P>


<P><FONT SIZE=2>The Company currently has employment agreements with its executive officers and three other members of management. The employment agreements provide for six
months to one year of salary upon termination without cause or, in some cases, for good reason. </FONT></P>

<P><FONT SIZE=3><B>11.&nbsp;&nbsp;Employee retirement savings plan  </B></FONT></P>

<P><FONT SIZE=2>The Company sponsors the PROS Holdings,&nbsp;Inc. 401(k)&nbsp;Plan. The 401(k)&nbsp;Plan is designed to provide eligible employees with an opportunity to
make regular contributions to a long-term investment and savings program. All employees are eligible to participate in the 401(k)&nbsp;Plan following the completion of six consecutive
months of service. The Company's matching contribution is defined as 50% of the first 6% of employee contributions. The Company may also make discretionary contributions. Matching and discretionary
contributions by the Company in 2004, 2005 and 2005 totaled $375,537, $413,569 and $504,363, respectively. </FONT></P>

<P><FONT SIZE=3><B>12.&nbsp;&nbsp;Subsequent events (unaudited)  </B></FONT></P>

<P><FONT SIZE=2>On March&nbsp;29, 2007 the Company entered into a $28.0&nbsp;million credit facility with a bank consisting of a $20.0&nbsp;million term loan and
$8.0&nbsp;million line of credit. Interest is payable at a Eurodollar rate plus 2.75% or a base rate plus 1.5%, at the Company's option. The term loan requires repayment of principal of $50,000 plus
interest every three months for five years, with all unpaid principal due on March&nbsp;29, 2012. No amounts were drawn on the line of credit. The Company's term loan becomes due and payable upon
the closing of the offering. </FONT></P>

<P><FONT SIZE=2>On
March&nbsp;29, 2007 the Company also redeemed its remaining outstanding redeemable preferred stock for approximately $17.4&nbsp;million and paid a common stock dividend of $2.00 per share
totaling $41.3&nbsp;million. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>F-20</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=7,SEQ=114,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=81249,FOLIO='F-20',FILE='DISK112:[07ZBA1.07ZBA76601]FM76601A.;27',USER='KBLACKW',CD=';4-APR-2007;15:47' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_fo76601_1_21"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="fo76601_schedule_ii_valuation_and_qualifying_accounts"> </A>
<A NAME="toc_fo76601_1"> </A>
<BR></FONT><FONT SIZE=4><B>Schedule&nbsp;II<BR>  Valuation and qualifying accounts  <BR>  </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="98%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=14><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2><B>(Dollars in thousands)<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Balance at<BR>
beginning<BR>
of period<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Additions<BR>
charged to<BR>
costs and<BR>
expenses<BR> </B></FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Deductions<BR> </B></FONT><BR></TH>
<TH WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=2><B>Balance at<BR>
end of<BR>
period<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=14><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Allowance for doubtful accounts deducted from accounts receivable in the balance sheet</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="34%"><FONT SIZE=2>2006</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,020</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>205</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(35)(1)</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,190</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="34%"><FONT SIZE=2>2005</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,200</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(180)(1)</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,020</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="34%"><FONT SIZE=2>2004</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,450</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>59</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(309)(1)</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,200</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2><FONT SIZE=2>Allowance for deferred tax assets not expected to be realized</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="34%"><FONT SIZE=2>2006</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>2,414</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>1,562</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(2,085)(2)</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1,891</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="34%"><FONT SIZE=2>2005</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>2,801</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>836</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(1,223)(2)</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>2,414</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="34%"><FONT SIZE=2>2004</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>3,089</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>762</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><FONT SIZE=2>(1,050)(2)</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>2,801</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=14><HR NOSHADE></TD>
</TR>
</TABLE>
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<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>Uncollectible accounts written off, net of recoveries
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD><FONT SIZE=2>Reflects
utilization of tax assets that previously had a valuation allowance </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>F-21</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P ALIGN="CENTER"><FONT SIZE=5><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares  </I></B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=5><B>
<IMG SRC="g950845.jpg" ALT="GRAPHIC" WIDTH="216" HEIGHT="78">
  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=5><B><I>Common Stock  </I></B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=6><B>Prospectus  </B></FONT></P>

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<TD WIDTH="40%"><FONT SIZE=4><B>JPMorgan</B></FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=4><B>Deutsche Bank Securities</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="40%"><FONT SIZE=4>&nbsp;</FONT></TD>
<TD WIDTH="20%" ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="40%"><FONT SIZE=4>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="40%"><FONT SIZE=4><B><BR>
Jefferies&nbsp;&amp; Company</B></FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><FONT SIZE=4><B><BR>
Thomas Weisel Partners LLC</B></FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2><B>Until&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2007 (25&nbsp;days after the commencement of this offering),
all dealers that effect transactions in these
securities, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is an addition to the dealers' obligation to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or subscriptions.  </B></FONT></P>

<HR NOSHADE>
<HR NOSHADE>
<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=116,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="1",CHK=188881,FOLIO='blank',FILE='DISK112:[07ZBA1.07ZBA76601]HO76601A.;21',USER='JBAKER',CD=';4-APR-2007;15:53' -->
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_ja76601_1_1"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ja76601_part_ii_information_not_required_in_prospectus"> </A>
<A NAME="toc_ja76601_1"> </A>
<BR></FONT><FONT SIZE=4><B>Part II<BR>  Information not required in prospectus  <BR>  </B></FONT></P>

<P><FONT SIZE=3><B>Item 13.&nbsp;&nbsp;&nbsp;&nbsp;Other expenses of issuance and distribution  </B></FONT></P>

<P><FONT SIZE=2>The following table sets forth the expenses, other than the underwriting discounts and commissions, payable by the Registrant in connection with the sale and
distribution of the shares of common stock being registered hereby, including the shares being offered for sale by the selling stockholders. All amounts shown are estimates, except the Securities and
Exchange Commission registration fee, the National Association of Securities Dealers,&nbsp;Inc. filing fee and the Nasdaq Global Market listing fee. </FONT></P>

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<TABLE WIDTH="80%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=4><HR NOSHADE SIZE=4></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="85%"><FONT SIZE=2>SEC registration fee</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>2,763</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="85%"><FONT SIZE=2>NASD filing fee</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>9,500</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="85%"><FONT SIZE=2>Nasdaq Global Market listing fee</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>100,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="85%"><FONT SIZE=2>Legal fees and expenses</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>*</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="85%"><FONT SIZE=2>Accounting fees and expenses</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>*</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="85%"><FONT SIZE=2>Printing expenses</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>*</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="85%"><FONT SIZE=2>Blue sky fees and expenses</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>*</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="85%"><FONT SIZE=2>Transfer agent fees</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>*</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="85%"><FONT SIZE=2>Miscellaneous</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>*</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="85%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="85%"><FONT SIZE=2>Total</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="10%" ALIGN="RIGHT"><FONT SIZE=2>*</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><HR NOSHADE></TD>
</TR>
</TABLE>
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<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>*</FONT></DT><DD><FONT SIZE=2>To
be filed by amendment. </FONT></DD></DL>

<P><FONT SIZE=3><B>Item 14.&nbsp;&nbsp;&nbsp;&nbsp;Indemnification of directors and officers  </B></FONT></P>

<P><FONT SIZE=2>Section&nbsp;145 of the Delaware General Corporation Law authorizes a court to award, or a corporation's board of directors to grant, indemnity to directors
and officers under certain circumstances and subject to certain limitations. The terms of Section&nbsp;145 of the Delaware General Corporation Law are sufficiently broad to permit indemnification
under certain circumstances for liabilities, including reimbursement of expenses incurred, arising under the Securities Act. </FONT></P>


<P><FONT SIZE=2>As
permitted by the Delaware General Corporation Law, the Registrant's certificate of incorporation includes a provision that eliminates the personal liability of its directors for monetary damages
for breach of fiduciary duty as a director, except for liability: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>for
any breach of the director's duty of loyalty to the Registrant or its stockholders;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>for
acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>under
Section&nbsp;174 of the Delaware General Corporation Law regarding unlawful dividends, stock purchases and redemptions; or
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>for
any transaction from which the director derived an improper personal benefit. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>II-1</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_ja76601_1_2"> </A>

<P><FONT SIZE=2>As
permitted by the Delaware General Corporation Law, the Registrant's bylaws, which will become effective upon the closing of this offering, provide that: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
Registrant is required to indemnify its directors and officers to the fullest extent permitted by the Delaware General Corporation Law, subject to limited exceptions
where indemnification is not permitted by applicable law;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
Registrant is required to advance expenses, as incurred, to its directors and officers in connection with a legal proceeding to the fullest extent permitted by the
Delaware General Corporation Law; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>the
rights conferred in the bylaws are not exclusive. </FONT></DD></DL>

<P><FONT SIZE=2>In
addition, the Registrant has entered into indemnity agreements with each of its current directors and officers. These agreements provide for the indemnification of the Registrant's officers and
directors for all expenses and liabilities incurred in connection with any action or proceeding brought against them by reason of the fact that they are or were agents of the Registrant. At present,
there is no pending litigation or proceeding involving a director, officer or employee of the Registrant regarding which indemnification is sought, nor is the Registrant aware of any threatened
litigation that may result in claims for indemnification. </FONT></P>

<P><FONT SIZE=2>The
Registrant obtained directors' and officers' insurance to cover its directors and officers for certain liabilities, including coverage for public securities matters. </FONT></P>

<P><FONT SIZE=2>The
indemnification provisions in the Registrant's certificate of incorporation and bylaws and the indemnity agreements entered into between the Registrant and each of its directors and officers may
be sufficiently broad to permit indemnification of the Registrant's directors and officers for liabilities arising under the Securities Act. </FONT></P>

<P><FONT SIZE=2>Reference
is also made to section&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of the underwriting agreement (Exhibit&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;hereto), which provides for the indemnification by the underwriters of the
Registrant and its executive officers, directors and controlling persons against certain liabilities, including liabilities arising under the Securities Act, in connection with matters specifically
provided for in writing by the underwriters for inclusion in this Registration Statement. </FONT></P>


<P><FONT SIZE=2>See
also the undertakings set out in response to Item&nbsp;17. </FONT></P>

<P><FONT SIZE=2>Reference
is made to the following documents filed as exhibits to this Registration Statement regarding relevant indemnification provisions described above and elsewhere herein: </FONT></P>

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<TR VALIGN="TOP">
<TD COLSPAN=3><HR NOSHADE SIZE=4></TD>
</TR>
<TR VALIGN="BOTTOM">
<TH WIDTH="87%" ALIGN="LEFT"><FONT SIZE=2><B>Exhibit document<BR> </B></FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2><B>Number<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="87%"><FONT SIZE=2>Form of Underwriting Agreement</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>1.1</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="87%"><FONT SIZE=2>Form of Amended and Restated Certificate of Incorporation to be effective upon the closing of the offering</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>3.1.1</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="87%"><FONT SIZE=2>Form of Amended and Restated Bylaws to be effective upon the closing of the offering</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>3.2.1</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="87%"><FONT SIZE=2>Stock Purchase and Stockholders Agreement, dated June&nbsp;8, 1998 by and among Registrant (as successor in interest to PROS Strategic Solutions, Inc.) and certain stockholders</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>10.4</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="87%"><FONT SIZE=2>Form of Indemnification Agreement entered into among Registrant, its affiliates and its directors and officers</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="11%" ALIGN="RIGHT"><FONT SIZE=2>10.17</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><HR NOSHADE></TD>
</TR>
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<P ALIGN="CENTER"><FONT SIZE=2>II-2</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_ja76601_1_3"> </A>

<P><FONT SIZE=3><B>Item 15.&nbsp;&nbsp;&nbsp;&nbsp;Recent sales of unregistered securities  </B></FONT></P>

<P><FONT SIZE=2>From time to time we have granted stock options to employees, directors and consultants in compliance with Rule&nbsp;701. The following table sets forth
information regarding these grants: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>1.</FONT></DT><DD><FONT SIZE=2>From
May&nbsp;31, 2004 to October&nbsp;1, 2004, the Registrant issued options to purchase 747,594 shares of common stock to its employees, consultants and other service providers
under the Registrant's 1999 equity incentive plan with an exercise price of $.25 per share.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>2.</FONT></DT><DD><FONT SIZE=2>From
February&nbsp;10, 2005 to April&nbsp;28, 2005, the Registrant issued options to purchase 242,500 shares of common stock to its employees, consultants and other service
providers under the Registrant's 1999 equity incentive plan with an exercise price of $.43 per share.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>3.</FONT></DT><DD><FONT SIZE=2>On
December&nbsp;30, 2005, the Registrant issued options to purchase 200,000 shares of common stock to its employees, consultants and other service providers under the Registrant's
1999 equity incentive plan with an exercise price of $.65 per share.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>4.</FONT></DT><DD><FONT SIZE=2>On
March&nbsp;26, 2007, the Registrant issued options to purchase 860,000 shares of common stock to its employees, consultants and other service providers under the Registrant's 2007
equity incentive plan with an exercise price of $6.00 per share. </FONT></DD></DL>
</UL>
<BR>

<P><FONT SIZE=2>The
sales and issuances of securities listed in the table above were deemed to be exempt from registration under the Securities Act by virtue of Rule&nbsp;701 promulgated under Section&nbsp;3(b)
of the Securities Act as transactions pursuant to compensation benefits plans and contracts relating to compensation. All of the foregoing securities are deemed restricted securities for the purposes
of the Securities Act. </FONT></P>

<P><FONT SIZE=3><B>Item 16.&nbsp;&nbsp;&nbsp;&nbsp;Exhibits and financial statement schedules  </B></FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>(A)</B></FONT></DT><DD><FONT SIZE=2><B>Exhibits</B></FONT></DD></DL>
<BR>

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<TD COLSPAN=3><HR NOSHADE SIZE=4></TD>
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<TR VALIGN="BOTTOM">
<TH WIDTH="10%" ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="88%" ALIGN="LEFT"><FONT SIZE=2><B>Index to exhibits<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2>1.1*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>Form of Underwriting Agreement by and among Registrant and the Underwriters</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
3.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Certificate of Incorporation currently in effect</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
3.1.1*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Amended and Restated Certificate of Incorporation, to be effective upon the closing of this offering</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
3.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Bylaws currently in effect</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
3.2.1*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Amended and Restated Bylaws, to be effective upon the closing of this offering</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
4.1*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Specimen certificate for shares of common stock</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
5.1*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Opinion of DLA Piper US LLP</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
1997 Stock Option Plan, as amended to date, and form of stock option agreement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
1999 Equity Incentive Plan, as amended to date, and form of stock option agreement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.3*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
2007 Equity Incentive Plan and form of stock option agreement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.4</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Stock Purchase and Stockholders Agreement, dated June&nbsp;8, 1998, by and among Registrant (as successor in interest to PROS Strategic Solutions, Inc.) and certain stockholders</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<BR>
<P ALIGN="CENTER"><FONT SIZE=2>II-3</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_ja76601_1_4"> </A>
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<TABLE WIDTH="79%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.4.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Amendment to Stock Purchase and Stockholders Agreement dated March&nbsp;26, 2007 by and among Registrant (as successor in interest to PROS Strategic Solutions, Inc.) and certain stockholders</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.5</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Amended and Restated Stockholders' Agreement, dated June&nbsp;8, 1998, by and among Registrant (as successor in interest to PROS Strategic Solutions, Inc.) and certain stockholders</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.5.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
First Amendment to Amended and Restated Stockholders' Agreement, dated April&nbsp;8, 1999, by and among Registrant (as successor in interest to PROS Strategic Solutions, Inc.) and certain stockholders</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.6</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Registration Rights Agreement, dated May&nbsp;25, 1999, by and between Registrant (as successor in interest to PROS Strategic Solutions, Inc.) and David Samuel Coats</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.7</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Registration Rights Agreement, dated April&nbsp;13, 2000, by and between Registrant (as successor in interest to PROS Strategic Solutions, Inc.) and Robert Salter</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.8*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Registration Rights Agreement, dated&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2007, by and among Registrant, Mariette&nbsp;M. Woestemeyer and Ronald&nbsp;F. Woestemeyer</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.9</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Redemption Agreement, dated March&nbsp;26, 2007, by and among Registrant and the holders of the Company's redeemable preferred stock.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.10</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Office Lease, dated January&nbsp;31, 2001, by and between PROS Revenue Management L.P. and Houston Community College System</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.10.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
First Amendment to Office Lease, dated May&nbsp;31, 2006, by and between PROS Revenue Management L.P. and Houston Community College System</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.11</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Employment Agreement, dated September&nbsp;30, 2005, by and between PROS Revenue Management L.P. and Albert Winemiller</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.12</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Employment Agreement, dated September&nbsp;30, 2005, by and between PROS Revenue Management L.P. and Charles Murphy</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.12.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Immediately Exercisable Incentive Stock Option Grant, dated September&nbsp;30, 2005, by and between Registrant and Charles Murphy</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.13</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Employment Agreement, dated January&nbsp;15, 1999, by and between PROS Revenue Management L.P. and Ronald Woestemeyer</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.13.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Amendment No.&nbsp;1 to Employment Agreement, dated February&nbsp;2, 2004, by and between PROS Revenue Management L.P. and Ronald Woestemeyer</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.14</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Revolving Credit and Term Loan Agreement, dated March&nbsp;23, 2007, by and among PROS Revenue Management, L.P., Registrant, PROS Revenue I, LLC, PROS Revenue II, LLC, certain lenders, certain issuers of the letter of credit and Churchill Financial
LLC, as administrative agent and collateral agent for the Lenders and the L/C Issuers</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.15</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Guaranty, Pledge and Security Agreement, dated March&nbsp;23, 2007, by and among Registrant, certain grantors from time to time and Churchill Financial LLC</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.16*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Form of Indemnification Agreement entered into among Registrant, its affiliates and its directors and officers</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
21.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
List of Subsidiaries</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>II-4</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_ja76601_1_5"> </A>
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<TABLE WIDTH="79%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
23.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
23.2*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Consent of DLA Piper US LLP (included in Exhibit&nbsp;5.1)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
24.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Power of Attorney (See page II-8 of this Registration Statement)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><HR NOSHADE></TD>
</TR>
</TABLE>
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<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>*</FONT></DT><DD><FONT SIZE=2>To
be filed by amendment.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2><B>(B)</B></FONT></DT><DD><FONT SIZE=2><B>Financial statement schedule</B></FONT></DD></DL>

<P><FONT SIZE=2>All
schedules have been omitted because the information required to be presented in them are not applicable or is shown in the financial statements or related notes. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>II-5</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_ja76601_1_6"> </A>

<P><FONT SIZE=3><B>Item 17.&nbsp;&nbsp;&nbsp;&nbsp;Undertakings  </B></FONT></P>

<P><FONT SIZE=2>The undersigned hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates, in such denominations and
registered in such names as required by the underwriter to permit prompt delivery to each purchaser. </FONT></P>

<P><FONT SIZE=2>Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the DGCL, our Certificate of Incorporation
or our Bylaws, the underwriting agreement or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in
the Securities Act and is therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by one of our
directors, officers, or controlling persons in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities
being registered hereunder, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. </FONT></P>

<P><FONT SIZE=2>We
hereby undertake that: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>For
purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in
reliance upon Rule&nbsp;430A and contained in a form of prospectus filed by us pursuant to Rule&nbsp;424(b)(1) or (4)&nbsp;or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD><FONT SIZE=2>For
the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a
new registration statement relating to the securities offered therein, and this offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>II-6</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_jc76601_1_7"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="jc76601_signatures"> </A>
<A NAME="toc_jc76601_1"> </A>
<BR></FONT><FONT SIZE=4><B>Signatures  <BR>  </B></FONT></P>

<P><FONT SIZE=2>Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in Houston, Texas, on April&nbsp;4, 2007. </FONT></P>

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<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><B>PROS Holdings,&nbsp;Inc.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>ALBERT E. WINEMILLER</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Albert E. Winemiller<BR>
President and Chief Executive Officer</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>II-7</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_jc76601_1_8"> </A>
<P ALIGN="CENTER"><FONT SIZE=1><A
NAME="jc76601_power_of_attorney"> </A>
<A NAME="toc_jc76601_2"> </A>
<BR></FONT><FONT SIZE=4><B>POWER OF ATTORNEY  <BR>  </B></FONT></P>

<P><FONT SIZE=2>KNOW ALL PERSONS BY THESE PRESENTS that each individual whose signature appears below constitutes and appoints Albert&nbsp;E. Winemiller and Charles&nbsp;H.
Murphy, and each of them, his true and lawful attorneys-in-fact and agents with full power of substitution, for him and in his name, place and stead, in any and all capacities,
to sign any and all amendments,
including post-effective amendments, to this Registration Statement, and to sign any registration statement for the same offering covered by this Registration Statement that is to be
effective upon filing pursuant to Rule&nbsp;462(b) promulgated under the Securities Act, and all post-effective amendments thereto, and to file the same, with all exhibits thereto and
all documents in connection therewith, making such changes in this Registration Statement as such attorneys-in-fact and agents so acting deems appropriate, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite
and necessary to be done with respect to the offering of securities contemplated by this Registration Statement, as fully to all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by
virtue hereof. </FONT></P>

<P><FONT SIZE=2>Pursuant
to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated: </FONT></P>

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<TR VALIGN="BOTTOM">
<TH WIDTH="36%" ALIGN="CENTER"><FONT SIZE=2><B>Name<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="43%" ALIGN="CENTER"><FONT SIZE=2><B>Title</B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="16%" ALIGN="CENTER"><FONT SIZE=2><B>Date</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="36%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="36%" ALIGN="CENTER"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>ALBERT E. WINEMILLER</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Albert E. Winemiller</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="43%"><FONT SIZE=2><BR>
Chairman, President and Chief Executive Officer (principal executive officer)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2><BR>
April 4, 2007</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="36%" ALIGN="CENTER"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>CHARLES H. MURPHY</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Charles H. Murphy</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="43%"><FONT SIZE=2><BR>
Executive Vice President and Chief Financial Officer (principal financial and accounting officer)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2><BR>
April 4, 2007</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="36%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>KURT R. JAGGERS</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Kurt R. Jaggers</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP"><FONT SIZE=2><BR>
Director</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
April 4, 2007</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="36%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>HARRY S. GRUNER</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Harry S. Gruner</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP"><FONT SIZE=2><BR>
Director</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
April 4, 2007</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="36%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>MARIETTE M. WOESTEMEYER</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Mariette M. Woestemeyer</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP"><FONT SIZE=2><BR>
Director</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
April 4, 2007</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="36%" ALIGN="CENTER" VALIGN="TOP"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>RONALD F. WOESTEMEYER</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Ronald&nbsp;F. Woestemeyer</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="43%" VALIGN="TOP"><FONT SIZE=2><BR>
Director</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
April 4, 2007</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>II-8</FONT></P>

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<P style='page-break-before:always'></p>
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<TH WIDTH="10%" ALIGN="CENTER"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="88%" ALIGN="LEFT"><FONT SIZE=2><B>Index to exhibits<BR> </B></FONT><BR></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=3><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2>1.1*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>Form of Underwriting Agreement by and among Registrant and the Underwriters</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
3.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Certificate of Incorporation currently in effect</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
3.1.1*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Amended and Restated Certificate of Incorporation, to be effective upon the closing of this offering</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
3.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Bylaws currently in effect</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
3.2.1*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Amended and Restated Bylaws, to be effective upon the closing of this offering</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
4.1*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Specimen certificate for shares of common stock</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
5.1*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Opinion of DLA Piper US LLP</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
1997 Stock Option Plan, as amended to date, and form of stock option agreement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
1999 Equity Incentive Plan, as amended to date, and form of stock option agreement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.3*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
2007 Equity Incentive Plan and form of stock option agreement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.4</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Stock Purchase and Stockholders Agreement, dated June&nbsp;8, 1998, by and among Registrant (as successor in interest to PROS Strategic Solutions, Inc.) and certain stockholders</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.4.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Amendment to Stock Purchase and Stockholders Agreement dated March&nbsp;26, 2007 by and among Registrant (as successor in interest to PROS Strategic Solutions, Inc.) and certain stockholders</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.5</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Amended and Restated Stockholders' Agreement, dated June&nbsp;8, 1998, by and among Registrant (as successor in interest to PROS Strategic Solutions, Inc.) and certain stockholders</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.5.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
First Amendment to Amended and Restated Stockholders' Agreement, dated April&nbsp;8, 1999, by and among Registrant (as successor in interest to PROS Strategic Solutions, Inc.) and certain stockholders</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.6</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Registration Rights Agreement, dated May&nbsp;25, 1999, by and between Registrant (as successor in interest to PROS Strategic Solutions, Inc.) and David Samuel Coats</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.7</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Registration Rights Agreement, dated April&nbsp;13, 2000, by and between Registrant (as successor in interest to PROS Strategic Solutions, Inc.) and Robert Salter</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.8*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Registration Rights Agreement, dated&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2007, by and among Registrant, Mariette&nbsp;M. Woestemeyer and Ronald&nbsp;F. Woestemeyer</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.9</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Redemption Agreement, dated March&nbsp;26, 2007, by and among Registrant and the holders of the Company's redeemable preferred stock.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.10</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Office Lease, dated January&nbsp;31, 2001, by and between PROS Revenue Management L.P. and Houston Community College System</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.10.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
First Amendment to Office Lease, dated May&nbsp;31, 2006, by and between PROS Revenue Management L.P. and Houston Community College System</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.11</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Employment Agreement, dated September&nbsp;30, 2005, by and between PROS Revenue Management L.P. and Albert Winemiller</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.12</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Employment Agreement, dated September&nbsp;30, 2005, by and between PROS Revenue Management L.P. and Charles Murphy</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.12.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Immediately Exercisable Incentive Stock Option Grant, dated September&nbsp;30, 2005, by and between Registrant and Charles Murphy</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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10.13</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Employment Agreement, dated January&nbsp;15, 1999, by and between PROS Revenue Management L.P. and Ronald Woestemeyer</FONT></TD>
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<TD WIDTH="10%"><FONT SIZE=2><BR>
10.13.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Amendment No.&nbsp;1 to Employment Agreement, dated February&nbsp;2, 2004, by and between PROS Revenue Management L.P. and Ronald Woestemeyer</FONT></TD>
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<TD WIDTH="10%"><FONT SIZE=2><BR>
10.14</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Revolving Credit and Term Loan Agreement, dated March&nbsp;23, 2007, by and among PROS Revenue Management, L.P., Registrant, PROS Revenue I, LLC, PROS Revenue II, LLC, certain lenders, certain issuers of the letter of credit and Churchill Financial
LLC, as administrative agent and collateral agent for the Lenders and the L/C Issuers</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.15</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Guaranty, Pledge and Security Agreement, dated March&nbsp;23, 2007, by and among Registrant, certain grantors from time to time and Churchill Financial LLC</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
10.16*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Form of Indemnification Agreement entered into among Registrant, its affiliates and its directors and officers</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
21.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
List of Subsidiaries</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
23.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
23.2*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Consent of DLA Piper US LLP (included in Exhibit&nbsp;5.1)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="10%"><FONT SIZE=2><BR>
24.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="88%"><FONT SIZE=2><BR>
Power of Attorney (See page II-8 of this Registration Statement)</FONT></TD>
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<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>*</FONT></DT><DD><FONT SIZE=2>To
be filed by amendment. </FONT></DD></DL>
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<DESCRIPTION>EXHIBIT 3.1
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<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit&nbsp;3.1  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ke76602_certificate_of_incorporation_of_pros_holdings,_inc."> </A>
<A NAME="toc_ke76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>CERTIFICATE OF INCORPORATION<BR>  OF<BR>  PROS HOLDINGS,&nbsp;INC.    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I, the undersigned, for the purposes of incorporating and organizing a corporation under the General Corporate Law of the State of Delaware, do execute this
Certificate of Incorporation and do hereby CERTIFY AS FOLLOWS: </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ke76602_article_i"> </A>
<A NAME="toc_ke76602_2"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE I    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The name of the Corporation is PROS Holdings,&nbsp;Inc. (the "</FONT><FONT SIZE=2><I>Corporation</I></FONT><FONT SIZE=2>"). </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ke76602_article_ii"> </A>
<A NAME="toc_ke76602_3"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE II    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The address of the Corporation's registered office in the State of Delaware is 2711 Centreville Road, Suite 400, in the City of Wilmington, County of New Castle.
The name of the Corporation's registered agent at such address is the Corporation Service Company. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ke76602_article_iii"> </A>
<A NAME="toc_ke76602_4"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE III    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The nature of the business and purpose to be conducted or promoted by the Corporation is to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ke76602_article_iv"> </A>
<A NAME="toc_ke76602_5"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE IV    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The total number of shares of capital stock of all classes which the Corporation shall have authority to issue is 35,842,624 shares of which (a)&nbsp;7,842,624
shares shall be preferred stock, par value $.001 per share ("</FONT><FONT SIZE=2><I>Preferred Stock</I></FONT><FONT SIZE=2>"), and (b)&nbsp;28,000,000 shares shall be common stock, par value $.001
per share ("</FONT><FONT SIZE=2><I>Common Stock</I></FONT><FONT SIZE=2>"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as otherwise restricted by this Certificate of Incorporation, the Corporation is authorized to issue, from time to time, all or any portion of the capital stock of the Corporation
which may have been authorized but not issued, to such person or persons and for such lawful consideration as it may deem appropriate, and generally in its absolute discretion to determine the terms
and manner of any disposition of such authorized but unissued capital stock. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
and all such shares issued for which the full consideration has been paid or delivered shall be deemed fully paid shares of capital stock, and the holder of such shares shall not be
liable for any further call or assessment or any other payment thereon. </FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
designations and the powers, preferences and rights, and the qualifications, limitations or restrictions of the shares of each class of stock are as follows: </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ke76602_preferred_stock"> </A>
<A NAME="toc_ke76602_6"> </A>
<BR></FONT><FONT SIZE=2><B>PREFERRED STOCK    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred Stock may be issued from time to time by the Board of Directors as shares of one or more series. Subject to the provisions hereof and the limitations
prescribed by law, the Board of Directors is hereby vested with the authority and is expressly authorized, prior to issuance, by adopting resolutions providing for the issuance of, or providing for a
change in the number of, shares of any particular series and, if and to the extent from time to time required by law, by filing a certificate pursuant to the General Corporation Law (or other law
hereafter in effect relating to the same or substantially similar subject matter), to establish or change the number of shares to be included in each such series and to fix the designation and
relative powers, preferences and rights and the qualifications and limitations or restrictions thereof relating to the shares of each such series. The vested authority of the Board of Directors with
respect to each series shall include, but not be limited to, the determination of the following: </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;the
distinctive serial designation of such series and the number of shares constituting such series (provided that the aggregate number of shares constituting all series
of Preferred Stock shall not exceed 7,842,624 shares); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;the
annual dividend rate, if any, on shares of such series and the preferences, if any, over any other series (or of any other series over such series) with respect to
dividends, and whether dividends shall be cumulative and, if so, from which date or dates; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;whether
the shares of such series shall be redeemable and, if so, the terms and conditions of such redemption, including the date or dates upon and after which such
shares shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;the
obligation, if any, of the Corporation to purchase or redeem shares of such series pursuant to a sinking fund or purchase fund and, if so, the terms of such
obligation; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;whether
shares of such series shall be convertible into, or exchangeable for, shares of stock of any other class or classes or any stock of any series of the same class
or any other class or classes or any evidences of indebtedness and, if so, the terms and conditions of such conversion or exchange, including the price or prices or the rate or rates of conversion or
exchange and the terms of adjustment, if any; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;whether
the shares of such series shall have voting rights, in addition to the voting rights provided by law, and if so, the terms of such voting rights, including,
without limitation, whether such shares shall have the right to vote with the Common Stock on issues on an equal, greater or lesser basis; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;the
rights of the shares of such series in the event of a voluntary or involuntary liquidation, dissolution, winding up or distribution of assets of the Corporation; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;whether
the shares of such series shall be entitled to the benefit of conditions and restrictions upon (i)&nbsp;the creation of indebtedness of the Corporation or any
subsidiary, (ii)&nbsp;the issuance of any additional stock (including additional shares of such series or of any other series) or (iii)&nbsp;the payment of dividends or the making of other
distributions on the purchase, redemption or other acquisition by the Corporation or any subsidiary of any outstanding stock of the Corporation; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;any
other relative rights, powers, preferences, qualifications, limitations or restrictions thereof relating to any such series. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
where otherwise set forth in the resolution or resolutions adopted by the Board of Directors providing for the issuance of any series of Preferred Stock, the number of shares
comprising such series may be increased (but not above the total number of authorized shares of the class) or decreased (but not below the number of shares then outstanding) from time to time by like
action of the Board of Directors. The shares of Preferred Stock of any one series shall be identical with the other shares in such series in all respects except as to the dates from and after which
dividends thereon shall cumulate, if cumulative. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares
of any series of Preferred Stock which have been redeemed (whether through the operation of a sinking fund or otherwise) or purchased by the Corporation, or which, if convertible
or exchangeable, have been converted into or exchanged for shares of stock of any other class or classes shall have the status of authorized and unissued shares of Preferred Stock and may be reissued
as a part of the series of which they were originally a part or may be reclassified and reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of
Directors or as part of any other series of Preferred Stock, all subject to the conditions or restrictions on issuance set forth in the resolution or resolutions adopted by the Board of Directors
providing for the issuance of any series of Preferred Stock and to any filing required by law. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject
to the rights of any outstanding shares of any series of Preferred Stock, this Certificate of Incorporation may be amended from time to time in a manner that would solely modify
or change the relative powers, preferences and rights and the qualifications and limitations or restrictions of any issued shares of any series of Preferred Stock then outstanding with the only
required vote or consent for approval of such amendment being the affirmative vote or consent of the holders of a majority of the outstanding shares of the series of Preferred Stock so affected
provided that the powers, preferences and rights and the qualification and limitations or restrictions of such series after giving effect to such amendment are no greater than the powers, preferences
and rights and the qualifications and limitations or restrictions permitted to be fixed and determined by the Board of Directors with respect to the establishment of any new series of shares of
Preferred Stock pursuant to the authority vested in the Board of Directors by this Article&nbsp;IV. Approval of any such amendment by the holders of the Common Stock shall not be required and any
such amendment shall be deemed not to have affected the holders of the Common Stock adversely. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject
to the rights of any outstanding shares of any series of Preferred Stock, the number of authorized shares of Preferred Stock may be increased or decreased by the affirmative vote
of the holders of a majority of the stock of the Corporation entitled to vote without the separate vote of holders of Preferred Stock as a class. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ke76602_a._series_a_convertible_redeemable_preferred_stock"> </A>
<A NAME="toc_ke76602_7"> </A>
<BR></FONT><FONT SIZE=2><B>A.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>SERIES A CONVERTIBLE REDEEMABLE PREFERRED STOCK</I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Designation</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;A total of three million nine hundred twenty-one thousand three hundred and twelve
(3,921,312) shares of the Corporation's Preferred Stock shall be designated as Series&nbsp;A Convertible Redeemable Preferred Stock, $.001 par value per share (the
"</FONT><FONT SIZE=2><I>Convertible Preferred Stock</I></FONT><FONT SIZE=2>"). </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Election of Directors; Voting</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Election of Directors</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The holders of outstanding shares of Convertible Preferred Stock shall, voting
together as a separate class, be entitled to elect two (2)&nbsp;Directors of the Corporation. Such Directors shall be the candidates receiving the highest number of affirmative votes (with each
holder of Convertible Preferred Stock entitled to cast one vote for or against each candidate with respect to each share of Convertible Preferred Stock held by such holder) of the outstanding shares
of Convertible Preferred Stock (the "</FONT><FONT SIZE=2><I>Convertible Preferred Stock Director Designees</I></FONT><FONT SIZE=2>"), with votes cast against such candidates and votes withheld having
no legal effect. The election of the Convertible Preferred Stock Director Designees by the holders of the Convertible Preferred Stock shall occur (i)&nbsp;at the annual meeting of holders of capital
stock, (ii)&nbsp;at any special meeting of holders of capital stock, (iii)&nbsp;at any special meeting of holders of Convertible Preferred Stock called by holders of a majority of the outstanding
shares of Convertible Preferred Stock or (iv)&nbsp;by the unanimous written consent of holders of the outstanding shares of Convertible Preferred Stock. If at any time when any share of Convertible
Preferred Stock is outstanding either of the Convertible Preferred Stock Director Designees should cease to be a Director for any reason, the vacancy or vacancies shall only be filled by the vote or
written consent of the holders of the outstanding shares of Convertible Preferred Stock, voting together as a separate class, in the manner and on the basis specified above. The holders of outstanding
shares of Convertible Preferred Stock shall also be entitled to vote for all other Directors of the Corporation together with holders of all other shares of the Corporation's outstanding capital stock
entitled to vote thereon, voting as a single class, with each outstanding share entitled to the same number of votes specified in Section&nbsp;A.2(b). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Voting Generally</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The holder of each share of Convertible Preferred Stock shall be entitled to the number of
votes equal to the largest number of full shares of Common Stock into which each share of Convertible Preferred Stock could be converted pursuant to Section&nbsp;A.6 hereof on the record date for
the vote or for written consent of stockholders, if applicable, multiplied by the number of shares of Convertible Preferred Stock held of record by such holder on such date. The holder of each share
of Convertible Preferred Stock shall be entitled to notice of any stockholders' meeting in accordance with the by-laws of the Corporation and shall vote with holders of the Common Stock,
voting together as single class, upon all matters submitted to a vote of stockholders excluding those matters required to be submitted to a class or series vote pursuant to the terms hereof (including
without limitation Section&nbsp;A.8) or by law. Fractional votes shall not, however, be permitted and any fractional voting rights resulting from the above formula (after aggregating all shares of
Common Stock into which shares of Convertible Preferred Stock held by each holder could be converted) shall be rounded to the nearest whole number (with one-half rounded upward to one). </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Dividends</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The holders of Convertible Preferred Stock shall be entitled to receive, out of funds legally
available therefor, cumulative (non-compounding) dividends on the Convertible Preferred Stock in cash, at the rate per annum of four and two-tenths percent (4.2%) of the
Convertible Base Liquidation Preference Amount (as defined in Section&nbsp;A.4 below), or $0.26777 per share of Convertible Preferred Stock as of June&nbsp;8, 1998 (the
"</FONT><FONT SIZE=2><I>Convertible Cumulative Dividend</I></FONT><FONT SIZE=2>"). Such dividends will accumulate commencing as of the date of issuance of the Convertible Preferred Stock and shall be
cumulative, to the extent unpaid, whether or not they have been declared and whether or not there are profits, surplus or other funds of the Corporation legally available for the payment of dividends.
Convertible Cumulative Dividends shall become due and payable with respect to any share of Convertible Preferred Stock as provided in Sections A.4, A.5, A.6, B.4 and B.5. So long as any shares </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

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<P><FONT SIZE=2>of
Convertible Preferred Stock are outstanding and the Convertible Cumulative Dividends have not been paid in full in cash: (a)&nbsp;no dividend whatsoever shall be paid or declared, and no
distribution; except as permitted in Section&nbsp;A.8(e), shall be made, on any capital stock of the Corporation ranking junior to the Convertible Preferred Stock; and, (b)&nbsp;except as
permitted by Sections A.8(c)(ii), (iii), and (iv), no shares of capital stock of the Corporation ranking junior to the Convertible Preferred Stock shall be purchased, redeemed or acquired by the
Corporation and no monies shall be paid into or set aside or made available for a sinking fund for the purchase, redemption or acquisition thereof. All numbers relating to the calculation of dividends
pursuant to this Section&nbsp;A.3 shall be subject to equitable adjustment in the event of any stock split, combination, reorganization, recapitalization, reclassification or other similar event
involving a change in the Convertible Preferred Stock. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Liquidation</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Liquidation Preference</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Upon any liquidation, dissolution or winding up of the Corporation and its
subsidiaries, whether voluntary or involuntary (a "</FONT><FONT SIZE=2><I>Liquidation Event</I></FONT><FONT SIZE=2>") or Extraordinary Transaction (as defined in Section&nbsp;A.9(a) below), each
holder of outstanding shares of Convertible Preferred Stock shall be entitled to be paid first out of the assets of the Corporation available for distribution to stockholders, whether such assets are
capital, surplus or earnings, and before any amount shall be paid or distributed to the holders of Common Stock or of any other stock ranking on liquidation junior to the Convertible Preferred Stock,
an amount in cash equal to (i)&nbsp;$6.37542 per share of Convertible Preferred Stock held by such holder (adjusted appropriately for stock splits, stock dividends, recapitalizations and the like
with respect to the Convertible Preferred Stock) (the "</FONT><FONT SIZE=2><I>Convertible Base Liquidation Preference Amount</I></FONT><FONT SIZE=2>"), plus (ii)&nbsp;any accumulated but unpaid
dividends to which such holder of outstanding shares of Convertible Preferred Stock is then entitled pursuant to Sections A.3 and A.5(d) hereof, plus (iii)&nbsp;any interest accrued pursuant to
Section&nbsp;A.5(c) to which such holder of Convertible Preferred Stock is entitled (collectively, the "</FONT><FONT SIZE=2><I>Convertible Preferred Liquidation Preference
Amount</I></FONT><FONT SIZE=2>"), and thereafter shall share ratably with the holders of Common Stock and any other stock ranking on liquidation junior to the Convertible Preferred Stock in the assets
available for distribution, with such
distributions to be made as if each share of Convertible Preferred Stock had been converted into the number of shares of Common Stock issuable upon the conversion of such holder's shares of
Convertible Preferred Stock immediately prior to any such Liquidation Event or Extraordinary Transaction; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that if, upon any Liquidation
Event or Extraordinary Transaction, the amounts payable with respect to the Convertible Preferred Stock are not
paid in full, the holders of the Convertible Preferred Stock shall share ratably any distribution of assets in proportion to the full preferential amounts to which they are entitled. The provisions of
this Section&nbsp;A.4 shall not in any way limit the right of the holders of Convertible Preferred Stock to elect to convert their shares of Convertible Preferred Stock into Redeemable Preferred
Stock and Common Stock pursuant to Section&nbsp;A.6 prior to or in connection with any Liquidation Event or Extraordinary Transaction. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Notice</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Prior to the occurrence of any Liquidation Event or Extraordinary Transaction, the Corporation will
furnish each holder of Convertible Preferred Stock notice in accordance with Section&nbsp;A.9 hereof, together with a certificate prepared by the chief financial officer of the Corporation
describing in detail the facts of such Liquidation Event or Extraordinary Transaction, stating in detail the amount(s) per share of Convertible Preferred Stock each holder of Convertible Preferred
Stock would receive pursuant to the provisions of Section&nbsp;A.4(a) hereof and stating in detail the facts upon which such amount was determined. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Redemption</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Redemption Events</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;The
holder or holders of not less than fifty percent (50%) in voting power of the outstanding Convertible Preferred Stock may require the Corporation to redeem the
outstanding Convertible Preferred Stock in three equal installments with the first such installment for thirty-three and one-third percent (33<SUP>1</SUP>/<SMALL>3</SMALL>%) of the then outstanding
shares of Convertible Preferred Stock being due and payable on June&nbsp;8, 2004, the second such installment for fifty percent (50%) of the then outstanding shares of Convertible Preferred Stock
being due and payable on June&nbsp;8, 2005, and the third and final such installment for all remaining outstanding shares of Convertible Preferred Stock being due and payable on June&nbsp;8, 2006. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Notice</I></FONT><FONT SIZE=2>. An election pursuant to subparagraph (i)&nbsp;of this Section&nbsp;A.5(a) shall be made by such holders
giving the Corporation and each other holder of Convertible Preferred Stock not less than fifteen (15)&nbsp;days prior written notice, which notice shall set forth the date for such redemption. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Redemption Date; Redemption Price</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Upon the election of the holders of not less than fifty percent (50%) of
the voting power of the outstanding Convertible Preferred Stock to cause the Corporation to redeem the Convertible Preferred Stock pursuant to Section&nbsp;A.5(a)(i), all holders of Convertible
Preferred Stock shall be deemed to have elected to cause the Convertible Preferred Stock to be so redeemed. Any date upon which a redemption shall occur in accordance with Section&nbsp;A.5(a) shall
be referred to as a "</FONT><FONT SIZE=2><I>Convertible Preferred Redemption Date</I></FONT><FONT SIZE=2>." The redemption price for each share of Convertible Preferred Stock redeemed pursuant to
Section&nbsp;A.5 shall be an amount in cash equal to (i)&nbsp;the Convertible Base Liquidation Preference Amount plus (ii)&nbsp;any accumulated but unpaid dividends on such share of Convertible
Preferred Stock pursuant to Sections A.3 and A.5(d) hereof, plus (iii)&nbsp;any interest accrued with respect to such share of Convertible Preferred Stock pursuant to Section&nbsp;A.5(c) to which
such holder of Convertible Preferred Stock is entitled (collectively, the "</FONT><FONT SIZE=2><I>Convertible Preferred Redemption Price</I></FONT><FONT SIZE=2>"). The aggregate Convertible Preferred
Redemption Price shall be payable in cash in immediately available funds to the respective holders of the Convertible Preferred Stock on the Convertible Preferred Redemption
Date</FONT><FONT SIZE=2><B>,</B></FONT><FONT SIZE=2> subject to Section&nbsp;A.5(c). Until the full Convertible Preferred Redemption Price has been paid to such holders for all shares of
Convertible Preferred Stock being redeemed: (A)&nbsp;no dividend whatsoever shall be paid or declared, and no distribution shall be made, on any capital stock of the Corporation (other than the
Convertible Preferred Stock in accordance with Section&nbsp;A.5(d)); and (B)&nbsp;no shares of capital stock of the Corporation (other than the Convertible Preferred Stock in accordance with this
Section&nbsp;A.5) shall be purchased, redeemed or acquired by the Corporation and no monies shall be paid into or made available for a sinking fund or set aside or made available for the purchase,
redemption or acquisition thereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Redemption Prohibited</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If, at a Convertible Preferred Redemption Date, the Corporation is prohibited under
the General Corporation Law of the State of Delaware from redeeming all shares of Convertible Preferred Stock for which redemption is required hereunder, then it shall redeem such shares on a
pro-rata basis among the holders of Convertible Preferred Stock in proportion to the full respective redemption amounts to which they are entitled hereunder to the extent possible and
shall redeem the remaining shares to be redeemed as soon as the Corporation is not prohibited from redeeming some or all of such shares under the General Corporation Law of the State of Delaware,
subject to the last paragraph of Section&nbsp;A.8. The shares of Convertible Preferred Stock not redeemed shall remain outstanding and entitled to all of the rights and preferences provided in this
Certificate. In the event that the Corporation fails to redeem shares for which redemption is required pursuant to this Section&nbsp;A.5, then during the period from the </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

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<BR>

<P><FONT SIZE=2>applicable
Convertible Preferred Redemption Date through the date on which such shares are redeemed, the applicable Convertible Preferred Redemption Price of such shares shall bear interest at the per
annum rate of the greater of (i)&nbsp;12% or (ii)&nbsp;5% over the Citibank prime rate published in the Wall Street Journal on such Convertible Preferred Redemption Date, compounded annually; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>,
</FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that in no event shall such interest exceed the maximum permitted rate of interest
under applicable law (the "</FONT><FONT SIZE=2><I>Maximum Permitted Rate</I></FONT><FONT SIZE=2>"). In the event that fulfillment of any provision hereof results in such rate of interest being in
excess of the Maximum Permitted Rate, the obligation to be fulfilled shall automatically be reduced to eliminate such excess; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that any
subsequent increase in the Maximum Permitted Rate shall be retroactively effective to the applicable Convertible Preferred Redemption
Date. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Dividend After Convertible Preferred Redemption Date.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;From and after a Convertible Preferred Redemption
Date, no shares of Convertible Preferred Stock subject to redemption shall be entitled to dividends, if any, as contemplated by Section&nbsp;A.3; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT
SIZE=2>, that in the event that shares of Convertible Preferred Stock are unable to be
redeemed and continue to be outstanding in accordance with Section&nbsp;A.5(c), such shares shall continue to be entitled to dividends and interest thereon as provided in Sections A.3 and A.5(c)
until the date on which such shares are actually redeemed by the Corporation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Surrender of Certificates</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Upon receipt of the applicable Convertible Preferred Redemption Price by
certified check or wire transfer, each holder of shares of Convertible Preferred Stock to be redeemed shall surrender the certificate or certificates representing such shares to the Corporation, duly
assigned or endorsed for transfer (or accompanied by duly executed stock powers relating thereto), or, in the event the certificate or certificates are lost, stolen or missing, shall deliver an
affidavit or agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it in connection therewith (an "</FONT><FONT SIZE=2><I>Affidavit of
Loss</I></FONT><FONT SIZE=2>") with respect to such certificates at the principal executive office of the Corporation or the office of the transfer agent for the Convertible Preferred Stock or such
office or offices in the continental United States of an agent for redemption as may from time to time be designated by notice to the holders of Convertible Preferred Stock, and each surrendered
certificate shall be cancelled and retired; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that if the holder has exercised its
redemption right pursuant to Section&nbsp;A.5(a)(i)&nbsp;or the Corporation is prohibited from redeeming all shares of Convertible Preferred Stock as provided in Section&nbsp;A.5(c), the holder
shall not be required to surrender said certificate(s) to the Corporation until said holder has received a new stock certificate for those shares of Convertible Preferred Stock not so redeemed. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Conversion</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The holders of the Convertible Preferred Stock shall have the following conversion rights: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Voluntary Conversion</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The holders of shares of Convertible Preferred Stock shall be entitled at any time,
upon the written election of the holder or holders of not less than sixty-six and two-thirds percent (66<SUP>2</SUP>/<SMALL>3</SMALL>%) in voting power of the outstanding shares of
Convertible Preferred Stock, without the payment of any additional consideration, to cause each (but not less than all) of the outstanding shares of Convertible Preferred Stock to be converted into
(i)&nbsp;the number of fully paid and nonassessable shares of Common Stock (as hereinafter defined) which results from dividing the Conversion Price (as defined in this Section&nbsp;A.6(a)) per
share in effect for the Convertible Preferred Stock at the time of conversion into the per share Conversion Value (as defined in this Section&nbsp;A.6(a)) of the Convertible Preferred Stock and
(ii)&nbsp;one (1)&nbsp;fully paid and non-assessable share of Redeemable Preferred Stock per share of Convertible Preferred Stock. Upon the election to so convert in the manner and on
the basis specified in the preceding sentence, all holders of the Convertible Preferred Stock shall be deemed to have elected to voluntarily convert all outstanding shares of Convertible Preferred
Stock pursuant to this Section&nbsp;A.6. Upon the filing of this Certificate with the Delaware Secretary of State, the </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>7</FONT></P>

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<UL>

<P><FONT SIZE=2>"</FONT><FONT
SIZE=2><I>Conversion Price</I></FONT><FONT SIZE=2>" for each share of Convertible Preferred Stock shall be $2.564103, and the "</FONT><FONT SIZE=2><I>Conversion
Value</I></FONT><FONT SIZE=2>" for each share of Convertible Preferred Stock shall be $6.37542. The Conversion Price per share of Convertible Preferred Stock shall be subject to adjustment from time
to time as provided in Section&nbsp;A.7 hereof. The number of shares of Common Stock into which a share of Convertible Preferred Stock is convertible is hereinafter referred to as the
"</FONT><FONT SIZE=2><I>Common Stock Conversion Rate</I></FONT><FONT SIZE=2>." The number of shares of Redeemable Preferred Stock into which a share of Convertible Preferred Stock is convertible is
hereinafter referred to as the "</FONT><FONT SIZE=2><I>Redeemable Conversion Rate</I></FONT><FONT SIZE=2>." If the holders of shares of Convertible Preferred Stock elect to convert the outstanding
shares of Convertible Preferred Stock at a time when there are any accumulated but unpaid dividends or other amounts due on or in respect of such shares, such dividends and other amounts shall become
part of the Redeemable Liquidation Preference Amount, and shall become payable and shall be paid in full upon a Liquidation Event (as set forth in Section&nbsp;B.4) or redemption of the Redeemable
Preferred Stock (as set forth in Section&nbsp;B.5). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Automatic Conversion Upon QPO</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each share of Convertible Preferred Stock shall automatically be converted,
without the payment of any additional consideration (except as set forth in the final paragraph of this Section&nbsp;A.6(b)), into shares of Common Stock and Redeemable Preferred Stock as of, and in
all cases subject to, the closing of the Corporation's first QPO (as defined below in this Section&nbsp;A.6(b)); </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that if a closing of a QPO
occurs, all outstanding shares of Convertible Preferred Stock shall be deemed to have been converted into shares of Common Stock and Redeemable Preferred Stock as provided herein immediately prior to
such closing. Any such conversion shall be at the Common Stock Conversion Rate and Redeemable Conversion Rate in effect upon the closing of the QPO, as provided in Section&nbsp;A.6(a).
"</FONT><FONT SIZE=2><I>QPO</I></FONT><FONT SIZE=2>" and "</FONT><FONT SIZE=2><I>Qualified Public Offering</I></FONT><FONT SIZE=2>" mean a firm commitment public offering pursuant to an effective
registration statement under Securities Act of 1933, as amended, </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that (i)&nbsp;such registration statement covers the offer and sale of
Common Stock of which the aggregate net proceeds after deducting underwriting discounts and commissions
attributable to sales for the account of the Corporation exceed $20,000,000 at a per share price to public (as set forth in the final prospectus in connection with such public offering) (the
"</FONT><FONT SIZE=2><I>Price to Public</I></FONT><FONT SIZE=2>") equal to at least three (3)&nbsp;times the Conversion Price, and (ii)&nbsp;either all shares of Redeemable Preferred Stock which
are outstanding or issuable upon such automatic conversion are redeemed immediately upon and as of the closing of such offering or contemporaneously with such offering for cash or, as provided in
Section&nbsp;B.5(a), cash and Redemption Notes in an amount sufficient to redeem all such shares of Redeemable Preferred Stock are segregated and irrevocably held by the Corporation for payment to
holders of Redeemable Preferred Stock or are issued and delivered to the holders of shares of Redeemable Preferred Stock, as applicable, in connection with the redemption thereof pursuant to
Section&nbsp;B.5(a)(i). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the holders of shares of Convertible Preferred Stock are required to convert the outstanding shares of Convertible Preferred Stock pursuant to this Section&nbsp;A.6(b) at a time
when there are any accumulated but unpaid dividends or other amounts due on or in respect of such shares, such dividends and other amounts shall be paid in full in cash by the Corporation in
connection with such conversion. </FONT></P>

</UL>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Procedure for Voluntary Conversion; Effective Date</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Upon election to convert pursuant to
Section&nbsp;A.6(a), each holder of Convertible Preferred Stock (i)&nbsp;shall provide written notice of conversion (the "</FONT><FONT SIZE=2><I>Voluntary Conversion
Notice</I></FONT><FONT SIZE=2>") to the Corporation and (ii)&nbsp;shall surrender the certificate or certificates representing its Convertible Preferred Stock, duly assigned or endorsed for transfer
to the Corporation (or accompanied by duly executed stock powers relating thereto), at the principal executive office of the Corporation or the offices of the transfer agent for the Convertible
Preferred Stock or such office or offices in the continental United States of an agent for conversion as may from time to time be designated by notice to the holders of the Convertible Preferred Stock
by the Corporation, or shall deliver an Affidavit of Loss with respect to such certificates. The Voluntary Conversion Notice shall specify (i)&nbsp;the number of shares of Convertible Preferred
Stock held by such holder, (ii)&nbsp;the name or names in which such holder wishes the certificate or certificates for Common Stock and Redeemable Preferred Stock to be issued upon such conversion
and (iii)&nbsp;the address to which such holder wishes delivery to be made of such new certificates to be issued upon such conversion. The issuance by the Corporation of shares of Common Stock and
Redeemable Preferred Stock upon a conversion of Convertible Preferred Stock pursuant to Section&nbsp;A.6(a) hereof shall be effective as of the surrender of the certificate or certificates for the
Convertible Preferred Stock to be converted, duly assigned or endorsed for transfer to the Corporation (or accompanied by duly executed stock powers relating thereto), or as of the delivery of an
Affidavit of Loss and regardless of such effectiveness with respect to any particular shares of Convertible Preferred Stock, during the time that shares of Convertible Preferred Stock are being
converted pursuant to the procedure set forth in this Section&nbsp;A.6(c), the outstanding shares of Convertible Preferred Stock shall be treated for all purposes as converted into shares of
Redeemable Preferred Stock and Common Stock. Upon surrender of a certificate representing Convertible Preferred Stock for conversion, or delivery of an Affidavit of Loss, the Corporation shall issue
and send by hand delivery, by courier or by first class mail (postage prepaid) to the holder thereof or to such holder's designee, at the address designated by such holder, certificates for the number
of shares of Common Stock and Redeemable Preferred Stock to which such holder shall be entitled upon conversion. The issuance of certificates for Common Stock and Redeemable Preferred Stock upon
conversion of Convertible Preferred Stock will be made without charge to the holders of such shares for any issuance tax in respect thereof or other costs incurred by the Corporation in connection
with such conversion and the related issuance of such stock. Notwithstanding anything to the contrary set forth in this Section&nbsp;A.6(c), in the event that the holders of shares of Convertible
Preferred Stock elect to convert such shares pursuant to Section&nbsp;A.6(a) in connection with any Liquidation Event, Extraordinary Transaction or initial public offering not constituting a QPO,
then (i)&nbsp;the Voluntary Conversion Notice shall be delivered to the Corporation prior to the effective date of or record date for (as applicable) such Liquidation Event, Extraordinary
Transaction or initial public offering and such Voluntary Conversion Notice shall be effective as of, and shall in all cases be subject to, the occurrence of such Liquidation Event or closing of such
Extraordinary Transaction or initial public offering and (ii)&nbsp;if such Liquidation Event, Extraordinary Transaction or initial public offering occurs, all outstanding shares of Convertible
Preferred Stock shall be deemed to have been converted into shares of Common Stock and Redeemable Preferred Stock immediately prior thereto, </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>
that the Corporation shall make appropriate provisions (x)&nbsp;for the Common Stock issued upon such conversion to be treated on the same basis as all other Common Stock in such Liquidation Event,
Extraordinary Transaction or initial public offering; </FONT><FONT SIZE=2><I>provided further</I></FONT><FONT SIZE=2> that the foregoing shall not be construed to provide or require the registration
of any shares of Common Stock for sale and (y)&nbsp;for the payment of the Redeemable Liquidation Preference Amount (as defined in Section&nbsp;B.4) in connection with any Liquidation Event or the
redemption of the Redeemable Preferred Stock (issued upon such conversion) upon election of such redemption in connection with any Extraordinary Transaction or initial public offering, if applicable,
as provided herein. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>9</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Procedure for Automatic Conversion</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;As of, and in all cases subject to, the closing of a QPO (the
"</FONT><FONT SIZE=2><I>Automatic Conversion Date</I></FONT><FONT SIZE=2>"), all outstanding shares of Convertible Preferred Stock shall be converted automatically into shares of Common Stock and
Redeemable Preferred Stock at the applicable conversion rates specified in Section&nbsp;A.6(a) and without any further action by the holders of such shares and whether or not the certificates
representing such shares of Convertible Preferred Stock are surrendered to the Corporation or its transfer agent; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that all holders of
Convertible Preferred Stock shall be given prior written notice of the occurrence of a QPO in accordance with
Section&nbsp;A.9 hereof. The Corporation shall not be obligated to issue certificates evidencing the shares of Redeemable Preferred Stock or Common Stock issuable on the Automatic Conversion Date
(or the payment for the shares of Redeemable Preferred Stock which are redeemed immediately after such automatic conversion as provided below and in Section&nbsp;B.5(a)(i)) unless certificates
evidencing such shares of the Convertible Preferred Stock being converted, or an Affidavit or Affidavits of Loss with respect to such certificates, are delivered to the Corporation or its transfer
agent. On the Automatic Conversion Date, all rights with respect to the Convertible Preferred Stock so converted shall terminate, except any of the rights of the holders thereof upon surrender of
their certificate or certificates therefor or delivery of an Affidavit of Loss thereof to receive certificates for the number of shares of Common Stock and Redeemable Preferred Stock into which such
Convertible Preferred Stock has been converted (or the payment to which such holder is entitled as provided below and in Sections A.6(b) and B.5(a)(i)). All accrued and unpaid Convertible Cumulative
Dividends shall be paid in full prior to or upon the closing of such QPO. Certificates surrendered for conversion shall be endorsed or accompanied by written instrument or instruments of transfer, in
form satisfactory to the Corporation, duly executed by the registered holder or by his or its attorney duly authorized in writing. Upon surrender of such certificates or Affidavit of Loss the
Corporation shall issue and deliver to such holder, promptly (and in any event in such time as is sufficient to enable such holder to participate in such QPO) at such office and in its name as shown
on such surrendered certificate or certificates, a certificate or certificates for the number of shares of Common Stock and number of shares of Redeemable Preferred Stock into which the shares of the
Convertible Preferred Stock surrendered were convertible on the Automatic Conversion Date. Notwithstanding anything to the contrary set forth in this Section&nbsp;A.6(d), the Corporation may
deliver, in lieu of certificates for Redeemable Preferred Stock, a payment in an amount and form determined pursuant to Section&nbsp;B.5(b) hereof on account of the redemption of such Redeemable
Preferred Stock, and upon such payment the Redeemable Preferred Stock into which such Convertible Preferred Stock would have been converted shall be deemed to have been issued and redeemed by the
Corporation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Reservation of Stock Issuable Upon Conversion</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Corporation shall at all times reserve and keep available
out of its authorized but unissued shares of Common Stock and Redeemable Preferred Stock solely for the purpose of effecting the conversion of the shares of Convertible Preferred Stock such number of
its shares of Common Stock and Redeemable Preferred Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Convertible Preferred Stock; and if at any time
the number of authorized but unissued shares of Common Stock and Redeemable Preferred Stock shall not be sufficient to effect the conversion of all then outstanding shares of Convertible Preferred
Stock, the Corporation will take such corporate action as may be necessary to increase its authorized but unissued shares of Common Stock and Redeemable Preferred Stock to such number of shares as
shall be sufficient for such purpose. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;No Closing of Transfer Books</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Corporation shall not close its books against the transfer of shares of
Convertible Preferred Stock in any manner which would interfere with the timely conversion of any shares of Convertible Preferred Stock. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>10</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Adjustments</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Conversion Price in effect from time to time shall be subject to adjustment from and after
January&nbsp;15, 1999, and regardless of whether any shares of Convertible Preferred Stock are then issued and outstanding as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Adjustments to Conversion Price</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Stock Dividends, Subdivisions and Combinations</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Upon the issuance of additional shares of Common Stock as a
dividend or other distribution on outstanding Common Stock, the subdivision of outstanding shares of Common Stock into a greater number of shares of Common Stock, or the combination of outstanding
shares of Common Stock into a smaller number of shares of the Common Stock, the Conversion Price shall, simultaneously with the happening of such dividend, subdivision or split be adjusted by
multiplying the then effective Conversion Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator of
which shall be the number of shares of Common Stock outstanding immediately after such event. An adjustment made pursuant to this Section&nbsp;A.7(a)(i)&nbsp;shall be given effect, upon payment of
such a dividend or distribution, as of the record date for the determination of stockholders entitled to receive such dividend or distribution (on a retroactive basis) and in the case of a subdivision
or combination shall become effective immediately as of the effective date thereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Sale of Common Stock</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In the event the Corporation shall at any time, or from time to time, issue, sell or
exchange any shares of Common Stock (including shares held in the Corporation's treasury, but excluding (i)&nbsp;up to an aggregate of 4,349,076 shares of Common Stock (as appropriately adjusted for
stock splits, stock dividends and the like) issued to officers, Directors, employees of, or consultants, advisors, independent contractors to the Corporation (collectively,
"</FONT><FONT SIZE=2><I>Eligible Employees</I></FONT><FONT SIZE=2>") pursuant to the Corporation's 1997 Stock Option Plan, as amended, 1999 Stock Option Plan, as amended, and any other plan(s)
approved by vote or written consent of the holder or holders of not less than sixty-six and two-thirds percent (66<SUP>2</SUP>/<SMALL>3</SMALL>%) in voting power of the outstanding shares
of Convertible Preferred Stock (collectively, the "</FONT><FONT SIZE=2><I>Plan</I></FONT><FONT SIZE=2>") upon the exercise of options or other rights issued to such Eligible Employees pursuant to the
Plan, and (ii)&nbsp;shares issued under the Plan in an amount equal to the number of shares subject to any currently outstanding options that are cancelled or terminated or that expire
(collectively, the "</FONT><FONT SIZE=2><I>Excluded Shares</I></FONT><FONT SIZE=2>"), for a consideration per share less than the Conversion Price in effect immediately prior to the issuance, sale or
exchange of such shares, then, and thereafter successively upon each such issuance, sale or exchange, the Conversion Price in effect immediately prior to the issuance, sale or exchange of such shares
shall forthwith be reduced to an amount determined by multiplying such Conversion Price by a fraction: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)&nbsp;&nbsp;the
numerator of which shall be (X)&nbsp;the number of shares of Common Stock of all classes outstanding immediately prior to the issuance of such additional shares of
Common Stock (excluding treasury shares), plus (Y)&nbsp;the number of shares of Common Stock which the net aggregate consideration received by the Corporation for the total number of such additional
shares of Common Stock so issued would purchase at the Conversion Price (prior to adjustment), and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;&nbsp;the
denominator of which shall be (X)&nbsp;the number of shares of Common Stock of all classes outstanding immediately prior to the issuance of such additional shares
of Common Stock (excluding treasury shares), plus (Y)&nbsp;the number of such additional shares of Common Stock so issued. </FONT></P>

</UL>
</UL>
</UL>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Sale of Options, Rights or Convertible Securities.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In the event the Corporation shall at any time or from
time to time, issue options, warrants or rights to subscribe for shares of Common Stock, or issue any securities convertible into or exchangeable for shares of Common Stock (other than any options or
warrants for Excluded Shares), for a consideration per share (determined by dividing the Net Aggregate Consideration (as determined below) by the aggregate number of shares of Common Stock that would
be issued if all such options, warrants, rights or convertible securities were exercised or converted to the fullest extent permitted by their terms) less than the Conversion Price in effect
immediately prior to the issuance of such options or rights or convertible or exchangeable securities, the Conversion Price in effect immediately prior to the issuance of such options, warrants or
rights or securities shall be reduced to an amount determined by multiplying such Conversion Price by a fraction: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)&nbsp;&nbsp;the
numerator of which shall be (X)&nbsp;the number of shares of Common Stock of all classes outstanding immediately prior to the issuance of such options, rights or
convertible securities (excluding treasury shares), plus (Y)&nbsp;the number of shares of Common Stock which the total amount of consideration received by the Corporation for the issuance of such
options, warrants, rights or convertible securities plus the minimum amount set forth in the terms of such security as payable to the Corporation upon the exercise or conversion thereof (the
"</FONT><FONT SIZE=2><I>Net Aggregate Consideration</I></FONT><FONT SIZE=2>") would purchase at the Conversion Price prior to adjustment, and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;&nbsp;the
denominator of which shall be (X)&nbsp;the number of shares of Common Stock of all classes outstanding immediately prior to the issuance of such options, warrants,
rights or convertible securities (excluding treasury shares), plus (Y)&nbsp;the aggregate number of shares of Common Stock that would be issued if all such options, warrants, rights or convertible
securities were exercised or converted. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Expiration or Change in Price</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If the consideration per share provided for in any options or rights to
subscribe for shares of Common Stock or any securities exchangeable for or convertible into shares of Common Stock changes at any time, the Conversion Price in effect at the time of such change shall
be readjusted to the Conversion Price which would have been in effect at such time had such options or convertible securities provided for such changed consideration per share (determined as provided
in Section&nbsp;A.7(a)(iii)&nbsp;hereof), at the time initially granted, issued or sold; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, that such adjustment of the Conversion Price will
be made only as and to the extent that the Conversion Price effective upon such adjustment remains less than or equal to the Conversion Price that would be in effect if such options, rights or
securities had not been issued. No adjustment of the Conversion Price shall be made under this Section&nbsp;A.7(a) upon the issuance of any additional shares of Common Stock which are issued
pursuant to the exercise of any warrants, options or other subscription or purchase rights or pursuant to the exercise of any conversion or exchange rights in any convertible securities if an
adjustment shall previously have been made upon the issuance of such warrants, options or other rights. Any adjustment of the Conversion Price shall be disregarded if, as, and when the rights to
acquire shares of Common Stock upon exercise or conversion of the warrants, options, rights or convertible securities which gave rise to such adjustment expire or are canceled without having been
exercised, so that the Conversion Price effective immediately upon such cancellation or expiration shall be equal to the Conversion Price in effect at the time of the issuance of the expired or
canceled warrants, options, rights or convertible securities, with such additional adjustments as would have been made to that Conversion Price had the expired or canceled warrants, options, rights or
convertible securities not been issued. </FONT></P>

</UL>
</UL>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Other Adjustments</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In the event the Corporation shall make or issue, or fix a record date for the
determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation other than shares of Common Stock, then and in each such event
lawful and adequate provision shall be made so that the holders of Convertible Preferred Stock shall receive upon conversion thereof in addition to the number of shares of Common Stock receivable
thereupon, the number of securities of the Corporation which they would have received had their Convertible Preferred Stock been converted into Common Stock and Redeemable Preferred Stock on the date
of such event and had they thereafter, during the period from the date of such event to and including the date of conversion, retained such securities receivable by them as aforesaid during such
period, giving application to all adjustments called for during such period under this Section&nbsp;A.7 as applied to such distributed securities. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Common Stock issuable upon the conversion of the Convertible Preferred Stock shall be changed into the same or different number of shares of any class or classes of stock, whether
by reclassification or otherwise (other than a subdivision or combination of shares or stock dividend provided for above, or a reorganization, merger, consolidation or sale of assets provided for
elsewhere in this Section&nbsp;A.7), then and in each such event the holder of each share of Convertible Preferred Stock shall have the right thereafter to convert such share into the kind and
amount of shares of stock and other securities and property receivable upon such reorganization, reclassification or other change, by holders of the number of shares of Common Stock into which such
shares of Convertible Preferred Stock might have been converted immediately prior to such reorganization, reclassification or change, all subject to further adjustment as provided herein. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Mergers and Other Reorganizations</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If at any time or from time to time there shall be a capital
reorganization of the Common Stock (other than a subdivision, combination, reclassification or exchange of shares provided for elsewhere in this Section&nbsp;A.7) or a merger or consolidation of the
Corporation with or into another Corporation or the sale of all or substantially all of the Corporation's properties and assets to any other person, then, as a part of and as a condition to the
effectiveness of such reorganization, merger, consolidation or sale, lawful and adequate provision shall be made so that the holders of the Convertible Preferred Stock shall thereafter be entitled to
receive upon conversion of the Convertible Preferred Stock the number of shares of stock or other securities or property of the Corporation or of the successor Corporation resulting from such merger
or consolidation or sale, to which a holder of Common Stock deliverable upon conversion would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case,
appropriate provisions shall be made with respect to the rights of the holders of the Convertible Preferred Stock after the reorganization, merger, consolidation or sale to the end that the provisions
of this Section&nbsp;A.7 (including without limitation provisions for adjustment of the Conversion Price and the number of shares purchasable upon conversion of the Convertible Preferred Stock)
shall thereafter be applicable, as nearly as may be, with respect to any shares of stock, securities or assets to be deliverable thereafter upon the conversion of the Convertible Preferred Stock. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Calculations</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;All calculations under this Section&nbsp;A.7 shall be made to the nearest cent or to the
nearest one one-hundredth (1/100) of a share, as the case may be. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>13</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Certificate of Adjustment</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Upon the occurrence of each adjustment or readjustment pursuant to this
Section&nbsp;A.7, the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each holder of Convertible
Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon written
request at any time of any holder of Convertible Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (i)&nbsp;such adjustments and readjustments,
(ii)&nbsp;the Conversion Prices before and after such adjustment or readjustment, and (iii)&nbsp;the number of shares of Common Stock and Redeemable Preferred Stock and the amount, if any, of
other property which at the time would be received upon the conversion of such holder's shares of Convertible Preferred Stock. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Covenants</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;So long as any shares of Convertible Preferred Stock (or Redeemable Preferred Stock, as
applicable) shall be outstanding, the Corporation shall not, without first having provided the written notice of such proposed action to each holder of outstanding shares of Convertible Preferred
Stock (or Redeemable Preferred Stock, as applicable) and having obtained the affirmative vote or written consent of the holders of more than fifty percent (50%) in voting power of the outstanding
shares of Convertible Preferred Stock (or Redeemable Preferred Stock, as applicable), voting as a single class, with each share of Convertible Preferred Stock (or Redeemable Preferred Stock, as
applicable) entitling the holder thereof to one vote per share of Convertible Preferred Stock held by such holder: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;effect
(i)&nbsp;any Extraordinary Transaction or other sale or transfer of all or substantially all of the properties and assets of any direct or indirect subsidiary
of the Corporation, (ii)&nbsp;any recapitalization of the Corporation or any direct or indirect subsidiary of the Corporation or (iii)&nbsp;any other transaction or series of related transactions
in which more than 50% of the voting power of the Corporation or any direct or indirect subsidiary of the Corporation is transferred; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;dissolve,
liquidate or wind up its operations or dissolve, liquidate or wind up the operations of any direct or indirect subsidiary of the Corporation; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;directly
or indirectly redeem, purchase, or otherwise acquire for consideration any shares of its Common Stock or any other class of its capital stock except for
(i)&nbsp;redemption of Convertible Preferred Stock or Redeemable Preferred Stock pursuant to and as provided in this Certificate, (ii)&nbsp;redemption or repurchase of Common Stock issued pursuant
to the Plan from Eligible Employees (as defined in Section&nbsp;A.7(a)(ii)) pursuant to an agreement containing vesting and/or repurchase provisions approved by the Board of Directors of the
Corporation or a committee thereof, or (iii)&nbsp;repurchase of Common Stock pursuant to and only to the extent required by the Amended and Restated Stockholders' Agreement dated effective
June&nbsp;8, 1998, by and among PROS Revenue Management,&nbsp;Inc., the Investors, the Founding Stockholders and the Stockholders (as defined therein), without regard to any subsequent amendment
thereto, and as modified by that certain Supplemental Agreement effective May&nbsp;1, 1997, by and between PROS Revenue Management,&nbsp;Inc. and E. Andrew Boyd; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;propose
or adopt any amendment to this Certificate, any amendment to the Corporation's Certificate of Incorporation or Bylaws or propose or adopt any certificate of
designations, preferences and rights for another series of the Corporation's capital stock that eliminates, amends or restricts or otherwise adversely affects the rights and preferences of the
Convertible Preferred Stock or the Redeemable Preferred Stock, or increase the authorized shares of Convertible Preferred Stock or Redeemable Preferred Stock; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;declare
or make dividend payments or other distributions on any shares of Common Stock or any other class of the Corporation's capital stock; </FONT></P>

</UL>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;create,
or obligate itself to create, any class or series of shares having preference over or being on a parity with the Convertible Preferred Stock or the Redeemable
Preferred Stock; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;increase
the size of the Board of Directors to more than eight (8)&nbsp;members; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;pay
any bonuses to the Corporation's executive officers unless any such bonus shall have been unanimously approved by the compensation committee of the Board of
Directors; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;approve
the issuance of any capital stock or equity interests of any direct or indirect subsidiary of the Corporation; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;approve
any amendment to the certificate of incorporation, bylaws, operating agreement or other governing document of any direct or indirect subsidiary of the
Corporation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Further,
the Corporation and each direct or indirect subsidiary of the Corporation shall not, by amendment of this Certificate of Incorporation or any certificate of designations,
preferences and rights for another series of the Corporation's capital stock or through any Extraordinary Transaction or other reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation and each
direct and indirect subsidiary of the Corporation but shall at all times in good faith assist in the carrying out of all the provisions of this Certificate of Incorporation and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of the holders of the Convertible Preferred Stock and the Redeemable Preferred Stock set forth in this Certificate of
Incorporation against impairment. Any successor to the Corporation or any direct or indirect subsidiary of the Corporation shall agree, as a condition to such succession, to carry out and observe the
obligations of the Corporation hereunder with respect to the Convertible Preferred Stock and the Redeemable Preferred Stock. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Notice</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Liquidation Events, Extraordinary Transactions, Etc</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In the event (i)&nbsp;the Corporation establishes a
record date to determine the holders of any class of securities who are entitled to receive any dividend or other distribution or who are entitled to vote at a meeting (or by written consent) in
connection with any of the transactions identified in clause&nbsp;(ii) hereof, or (ii)&nbsp;any Liquidation Event (as defined in Section&nbsp;A.4), any Extraordinary Transaction (as defined in
this Section&nbsp;A.9(a)), QPO (as defined in Section&nbsp;A.6) or any other public offering becomes reasonably likely to occur, the Corporation shall mail or cause to be mailed by first class
mail (postage prepaid) to each holder of Convertible Preferred Stock (or each holder of Redeemable Preferred Stock, as applicable) at least twenty (20)&nbsp;business days prior to such record date
specified therein or the expected effective date of any such transaction, whichever is earlier, a notice specifying (A)&nbsp;the date of such record date for the purpose of such dividend or
distribution or meeting or consent and a description of such dividend or distribution or the action to be taken at such meeting or by such consent, (B)&nbsp;the date on which any such Liquidation
Event, Extraordinary Transaction, QPO or other public offering is expected to become effective, and (C)&nbsp;the date on which the books of the Corporation shall close or a record shall be taken
with respect to any such event. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following transactions shall be deemed "</FONT><FONT SIZE=2><I>Extraordinary Transactions</I></FONT><FONT SIZE=2>." </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(I)&nbsp;&nbsp;&nbsp;the
sale, lease or other disposition of (whether in one transaction or a series of related transactions) all or substantially all of the assets or business of the
Corporation and its direct or indirect subsidiaries; </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>15</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(II)&nbsp;&nbsp;a
merger or consolidation of the Corporation with or into another entity or any other transaction or series of related transactions, in any such case in connection with
or as a result of which the Corporation is not the surviving entity or the owners of the Corporation's outstanding equity securities prior to the transaction or series of related transactions do not
own at least a majority of the outstanding equity securities of the surviving, resulting or consolidated entity; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(III)&nbsp;any
purchase by any party of shares of capital stock of the Corporation or any direct or indirect subsidiary of the Corporation (either through a negotiated stock
purchase or a tender for such shares), the effect of which is that such party that did not beneficially own a majority of the voting power of the outstanding shares of capital stock of the Corporation
or the equity interests of such subsidiary, as applicable, immediately prior to such purchase beneficially owns at least a majority of such voting power immediately after such purchase; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(IV)&nbsp;the
redemption or repurchase of shares representing a majority of the voting power of the outstanding shares of capital stock of the Corporation. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Waiver of Notice</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The holder or holders of not less than sixty-six and two-thirds
percent (66<SUP>2</SUP>/<SMALL>3</SMALL>%) in voting power of the outstanding shares of Convertible Preferred Stock (or Redeemable Preferred Stock, as applicable) may, at any time upon written notice to the
Corporation, waive any notice provisions specified herein for the benefit of such holders, and any such waiver shall be binding upon the holders of all such securities. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;General</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In the event that the Corporation provides any notice, report or statement to any holder of Common
Stock, the Corporation shall at the same time provide a copy of any such notice, report or statement to each holder of outstanding shares of Convertible Preferred Stock (or Redeemable Preferred Stock,
as applicable). </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;No Reissuance of Convertible Preferred Stock</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;No share or shares of Convertible Preferred Stock acquired by
the Corporation by reason of redemption, purchase, conversion or otherwise shall be reissued, and all such shares shall be cancelled, retired and eliminated from the shares which the Corporation shall
be authorized to issue. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kf76602_b._redeemable_preferred_stock"> </A>
<A NAME="toc_kf76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>B.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>REDEEMABLE PREFERRED STOCK</I></B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Designation; Ranking</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;A total of three million nine hundred twenty-one thousand three hundred and
twelve (3,921,312) shares of the Corporation's Preferred Stock shall be designated as Redeemable Preferred Stock, $.001 par value per share (the "</FONT><FONT SIZE=2><I>Redeemable Preferred
Stock</I></FONT><FONT SIZE=2>"). </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>16</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_kf76602_1_17"> </A>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Election of Directors; Voting</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Election of Directors</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The holders of outstanding shares of Redeemable Preferred Stock shall, voting
together as a separate class, be entitled to elect two (2)&nbsp;Directors. Such Directors shall be the candidates receiving the highest number of affirmative votes (with each holder of Redeemable
Preferred Stock entitled to cast one vote for or against each candidate with respect to each share of Redeemable Preferred Stock held by such holder) of the outstanding shares of Redeemable Preferred
Stock (the "</FONT><FONT SIZE=2><I>Redeemable Preferred Stock Director Designees</I></FONT><FONT SIZE=2>"), with votes cast against such candidate and votes withheld having no legal effect. The
election of the Redeemable Preferred Stock Director Designees by the holders of the Redeemable Preferred Stock shall occur (i)&nbsp;at the annual meeting of holders of capital stock, (ii)&nbsp;at
any special meeting of holders of capital stock, (iii)&nbsp;at any special meeting of holders of Redeemable Preferred Stock called by holders of a majority of the outstanding shares of Redeemable
Preferred Stock or (iv)&nbsp;by the unanimous written consent of holders of the outstanding shares of Redeemable Preferred Stock. Upon conversion of the Convertible Preferred Stock, the Convertible
Preferred Stock Director Designees then serving on the Corporation's board of directors shall continue in such capacity as the Redeemable Preferred Stock Designees. If at any time when any share of
Redeemable Preferred Stock is outstanding either Redeemable Preferred Stock Director Designee should cease to be a Director for any reason, the vacancy shall only be filled by the vote or written
consent of holders of the outstanding shares of Redeemable Preferred Stock, voting together as a separate class, in the manner and on the basis specified above. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Voting Generally</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Except with respect to (i)&nbsp;the provision of consent, or lack thereof, to those
actions identified in Section&nbsp;A.8, (ii)&nbsp;the election of the Redeemable Preferred Stock Director Designees pursuant to Section&nbsp;B.2(a), and (iii)&nbsp;the election to redeem the
Redeemable Preferred Stock pursuant to Section&nbsp;B.5, the holders of Redeemable Preferred Stock shall not be entitled to vote on any matters except to the extent otherwise required under the
General Corporation Law of the State of Delaware. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Waiver of Notice</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The holder or holders of not less than sixty-six and two-thirds
percent (66<SUP>2</SUP>/<SMALL>3</SMALL>%) in voting power of the outstanding shares of Redeemable Preferred Stock may, at any time upon written notice to the Corporation, waive any notice provisions specified
herein for the benefit of such holders, and any such waiver shall be binding upon the holders of all such securities. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Dividends</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The holders of outstanding shares of Redeemable Preferred Stock shall be entitled to receive, out
of any funds legally available therefor, cumulative (non-compounding) dividends on the Redeemable Preferred Stock in cash, at the rate per annum of 3% of $4.46279 per share (adjusted
appropriately for stock splits, stock dividends, recapitalizations and the like with respect to the Redeemable Preferred Stock), or $0.13388 per share of Redeemable Preferred Stock (a
"</FONT><FONT SIZE=2><I>Redeemable Cumulative Dividend</I></FONT><FONT SIZE=2>"). Such dividends will accrue commencing as of the date of issuance of the Redeemable Preferred Stock and be cumulative,
to the extent unpaid, whether or not they have been declared and whether or not there are profits, surplus or other funds of the Corporation legally available for the payment of dividends. Redeemable
Cumulative Dividends shall become due and payable with respect to any share of Redeemable Preferred Stock as provided in Section&nbsp;B.4 and Section&nbsp;B.5. So long as any shares of Redeemable
Preferred Stock are outstanding and either the </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>17</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_kf76602_1_18"> </A>

<P><FONT SIZE=2>Redeemable
Cumulative Dividends or the Convertible Cumulative Dividends, have not been paid in full in cash: (A)&nbsp;no dividend whatsoever shall be paid or declared, and no distribution shall be
made, on any capital stock of the Corporation ranking junior to the Redeemable Preferred Stock; and (B)&nbsp;no shares of capital stock of the Corporation ranking junior to the Redeemable Preferred
Stock shall be purchased, redeemed or acquired by the Corporation and no monies shall be paid into or set aside or made available for a sinking fund for the purchase, redemption or acquisition thereof
except as permitted by Section&nbsp;A.8(c)(iv). All numbers relating to the calculation of dividends pursuant to this Section&nbsp;B.3 shall be subject to equitable adjustment in the event of any
stock split, combination, reorganization, recapitalization, reclassification or other similar event involving a change in the Redeemable Preferred Stock. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Liquidation</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Upon any Liquidation Event, each holder of outstanding shares of Redeemable Preferred Stock
shall be entitled to be paid out of the assets of the Corporation available for the distribution to stockholders, whether such assets are capital, surplus or earnings, and before any amount shall be
paid or distributed to the holders of Common Stock or of any other stock ranking on liquidation junior to the Redeemable Preferred Stock, an amount in cash equal to the sum of (a)&nbsp;$4.46279 per
share of Redeemable Preferred Stock held by such holder (adjusted appropriately for stock splits, stock dividends, recapitalizations and the like with respect to the Redeemable Preferred Stock), plus
(b)&nbsp;any accumulated but unpaid dividends to which such holder of outstanding shares of Redeemable Preferred Stock is entitled pursuant to Sections B.3 and B.5(d) hereof (the sum of clauses
(a)&nbsp;and (b)&nbsp;being referred to herein as the "</FONT><FONT SIZE=2><I>Redeemable Base Liquidation Amount</I></FONT><FONT SIZE=2>"), plus (c)&nbsp;any accumulated but unpaid dividends or
other amounts due in respect of the shares Convertible Preferred Stock converted into such shares of Redeemable Preferred Stock, plus (d)&nbsp;any interest accrued pursuant to Section&nbsp;B.5(c)
to which such holder of outstanding shares of Redeemable Preferred Stock is entitled, if any (the sum of clauses (a), (b)&nbsp;and (c)&nbsp;being referred to herein as the
"</FONT><FONT SIZE=2><I>Redeemable Liquidation Preference Amount</I></FONT><FONT SIZE=2>"; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that if, upon any Liquidation Event, the
amounts payable with respect to the Redeemable Liquidation Preference Amount are not paid in full, the
holders of the Redeemable Preferred Stock shall share ratably in any distribution of assets in proportion to the full respective preferential amounts to which they are entitled. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Redemption</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Redemption Events</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Upon Election of Holders upon a QPO</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Upon the election of the holder or holders of not less than
sixty-six and two-thirds percent (66<SUP>2</SUP>/<SMALL>3</SMALL>%) of the outstanding Redeemable Preferred Stock, the Corporation shall redeem all (and not less than all, except as set
forth in the third sentence of this Section&nbsp;B.5(a)) of the outstanding shares of Redeemable Preferred Stock upon the closing of the QPO. The foregoing election shall be made by such holders
giving the Corporation and each other holder of the Redeemable Preferred Stock written notice not less than five (5)&nbsp;days prior to the closing of the QPO. In the event that the principal
underwriter for the QPO shall reasonably and in good faith request in writing, or cause the Corporation to so request in writing, that the holders of Redeemable Preferred Stock waive the holders'
right to elect to have such holder's shares of Redeemable Preferred Stock redeemed pursuant to this Section&nbsp;B.5(a)(i)&nbsp;and the holders of sixty-six and two-thirds
percent (66<SUP>2</SUP>/<SMALL>3</SMALL>%) in voting power of the outstanding shares of the Redeemable Preferred Stock </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>18</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<UL>
<UL>

<P><FONT SIZE=2>agree
to so waive such redemption election, then all outstanding shares of Redeemable Preferred Stock shall be exchanged, without the payment of additional consideration, for notes of the Corporation
("</FONT><FONT SIZE=2><I>Redemption Notes</I></FONT><FONT SIZE=2>") in an aggregate principal amount equal to the aggregate Redemption Price (as defined in Section&nbsp;B.5(b) below), which
Redemption Notes shall (i)&nbsp;mature on the second anniversary of the effective date of such QPO and (ii)&nbsp;bear interest on the outstanding principal balance thereof at the rate of ten
percent (10%) per annum, which interest shall accrue daily in arrears and be paid on the last day of each month, commencing on the last day of the first month following the effective date of such QPO;
provided, however, that in no event shall such interest rate exceed the Maximum Permitted Rate. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Upon Election of Corporation upon a QPO</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Corporation may elect to redeem all (but not less than all,
other than pursuant to Section&nbsp;B.5(c) below) of the outstanding shares of Redeemable Preferred Stock at any time upon the closing of a QPO. The foregoing election shall be made by the
Corporation giving each holder of Redeemable Preferred Stock written notice not less than five (5)&nbsp;days prior to the closing of a QPO. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Lapse of Time</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)&nbsp;&nbsp;At
any time after the later of the first anniversary of the date of the conversion of the Convertible Preferred Stock as set forth in Section&nbsp;A.6 (other than in
connection with an Extraordinary Transaction) and June&nbsp;8, 2004, on any one occasion any holder of Redeemable Preferred Stock may require the Corporation to redeem up to thirty-three percent
(33%) of the outstanding shares of Redeemable Preferred Stock held by such holder at such time. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;&nbsp;At
any time after the later of the second anniversary of the date of the conversion of the Convertible Preferred Stock as set forth in Section&nbsp;A.6 (other than in
connection with an Extraordinary Transaction) and June&nbsp;8, 2005, on any one occasion any holder of Redeemable Preferred Stock may require the Corporation to redeem up to sixty-six
percent (66%) of the outstanding shares of Redeemable Preferred Stock held by such holder at such time. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)&nbsp;&nbsp;At
any time after the later of the third anniversary of the date of the conversion of the Convertible Preferred Stock as set forth in Section&nbsp;A.6 (other than in
connection with an Extraordinary Transaction) and June&nbsp;8, 2006, on any one occasion any holder of Redeemable Preferred Stock may require the Corporation to redeem up to one hundred percent
(100%) of the outstanding shares of Redeemable Preferred Stock held by such holder at such time. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Upon Extraordinary Transactions</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Upon the election of the holder or holders of not less than
sixty-six and two-thirds percent (66<SUP>2</SUP>/<SMALL>3</SMALL>%) in voting power of the outstanding Redeemable Preferred Stock, the Corporation shall redeem all (and not less than all,
other than pursuant to Section&nbsp;B.5(c) below) of the outstanding shares of Redeemable Preferred Stock upon the occurrence of an Extraordinary Transaction (as defined in Section&nbsp;A.9(a)) or
public offering not constituting a QPO. The foregoing election shall be made by such holders giving the Corporation and each other holder of Redeemable Preferred Stock (or Convertible Stock, as
applicable) not less than five (5)&nbsp;days prior written notice, which notice shall set forth the date for such redemption. </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>19</FONT></P>

<HR NOSHADE>
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<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Upon Election of Corporation</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)&nbsp;&nbsp;At
any time after the later of the first anniversary of the date of the conversion of the Convertible Preferred Stock as set forth in Section&nbsp;A.6 and
June&nbsp;8, 2004, the Corporation may redeem thirty-three percent (33%) (but not less than thirty-three percent (33%)) of the outstanding shares of Redeemable Preferred Stock. The foregoing
election shall be made by the Corporation giving each holder of Redeemable Preferred Stock written notice not less than five (5)&nbsp;days prior to the date for such redemption. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;&nbsp;At
any time after the later of the second anniversary of the date of the conversion of the Convertible Preferred Stock as set forth in Section&nbsp;A.6 and
June&nbsp;8, 2005, the Corporation may redeem sixty-six percent (66%) (but not less than sixty-six percent (66%) of the outstanding shares of Redeemable Preferred Stock. The
foregoing election shall be made by the Corporation giving each holder of the Redeemable Preferred Stock written notice not less than five (5)&nbsp;days prior to such redemption. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)&nbsp;&nbsp;At
any time after the later of the third anniversary of the date of the conversion of the Convertible Preferred Stock as set forth in Section&nbsp;A.6 and
June&nbsp;8, 2006, the Corporation may redeem one hundred percent (100%) (but not less than one hundred percent (100%) of the outstanding shares of Redeemable Preferred Stock. The foregoing election
shall be made by the Corporation giving each holder of the Redeemable Preferred Stock written notice not less than five (5)&nbsp;days prior to such redemption. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Redemption Date; Redemption Price</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Any holder of Redeemable Preferred Stock may exercise such holder's right
of redemption pursuant to Section&nbsp;B.5(a)(iii)&nbsp;by such holder giving the Corporation not less than ten (10)&nbsp;days prior written notice, which notice shall set forth the date for
such redemption. Upon the election of the holders of not less than sixty-six and two-thirds percent (66<SUP>2</SUP>/<SMALL>3</SMALL>%) in voting power of the outstanding Redeemable
Preferred Stock to cause the Corporation to redeem the Redeemable Preferred Stock pursuant to Section&nbsp;B.5(a)(i)&nbsp;or (a)(iv), all holders of Redeemable Preferred Stock shall be deemed to
have elected to cause the Redeemable Preferred Stock subject to such election to be so redeemed. Any date upon which a redemption shall actually occur in accordance with Section&nbsp;B.5(a) shall be
referred to as a "</FONT><FONT SIZE=2><I>Redemption Date</I></FONT><FONT SIZE=2>." The redemption price for each share of Redeemable Preferred Stock redeemed pursuant to this Section&nbsp;B.5 shall
be the per share Redeemable Liquidation Preference Amount (the "</FONT><FONT SIZE=2><I>Redemption Price</I></FONT><FONT SIZE=2>"). The aggregate Redemption Price shall be payable in cash in
immediately available funds on the Redemption Date. Until the aggregate Redemption Price, including any interest thereon, has been paid in cash for all shares of Redeemable Preferred Stock redeemed as
of the applicable Redemption Date or Redemption Notes have been issued pursuant to Section&nbsp;B.5(a)(i); (A)&nbsp;no dividend whatsoever shall be paid or declared, and no distribution shall be
made, on any capital stock of the Corporation (other than the Redeemable Preferred Stock in accordance with Section&nbsp;B.5(d)); and (B)&nbsp;no shares of capital stock of the Corporation (other
than the Redeemable Preferred Stock in accordance with this Section&nbsp;B.5) shall be purchased, redeemed or acquired by the Corporation and no monies shall be paid into or set aside or made
available for a sinking fund for the purchase, redemption or acquisition thereof. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>20</FONT></P>

<HR NOSHADE>
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<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Redemption Prohibited</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If, at a Redemption Date, the Corporation is prohibited under the General Corporation
Law of the State of Delaware from redeeming all shares of Redeemable Preferred Stock for which redemption is required hereunder, then it shall redeem such shares on a pro-rata basis among
the holders of Redeemable Preferred Stock in proportion to the full respective redemption amounts to which they are entitled hereunder to the extent possible and shall redeem the remaining shares to
be redeemed as soon as the Corporation is not prohibited from redeeming some or all of such shares under the General Corporation Law of the State of Delaware, subject to the last paragraph of
Section&nbsp;A.8. The shares of Redeemable Preferred Stock not redeemed shall remain outstanding and entitled to all of the rights and preferences provided in this Certificate. In the event that the
Corporation fails for any reason to redeem shares for which redemption is triggered pursuant to Section&nbsp;B.5 (other than pursuant to the third sentence of Section&nbsp;B.5(a)(i)), including
without limitation due to a prohibition of such redemption under the General Corporation Law of the State of Delaware, then during the period from the applicable Redemption Date through the date on
which such shares are redeemed, the applicable Redeemable Base Liquidation Amount of such shares shall bear interest at the rate of ten percent (10%) per annum, with such interest to accrue daily in
arrears and to be compounded annually; provided, however, that in no event shall such interest rate exceed the Maximum Permitted Rate. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Dividend After Redemption Date</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;From and after the closing of a QPO or an Extraordinary Transaction or a
public offering not constituting a QPO (in the case of a redemption pursuant to Section&nbsp;B.5(a)(i)&nbsp;or (iv)) or the date specified for redemption in the election notice as set forth in
Section&nbsp;B.5(a)(ii)&nbsp;or (v)&nbsp;or Section&nbsp;B.5(b), no shares of Redeemable Preferred Stock subject to redemption shall be entitled to any further dividends pursuant to
Section&nbsp;B.3 hereof; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that in the event that shares of Redeemable Preferred
Stock are unable to be redeemed and continue to be outstanding in accordance with Section&nbsp;B.5(c), such shares shall continue to be entitled to dividends and interest thereon as provided in
Sections B.3 and B.5(c) until the date on which such shares are actually redeemed by the Corporation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Surrender of Certificates.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Upon receipt of the applicable Redemption Price by certified check or wire
transfer or receipt of the Redemption Notes pursuant to the third sentence of Section&nbsp;B.5(a)(i), each holder of shares of Redeemable Preferred stock to be redeemed shall surrender the
certificate or certificates representing such shares to the Corporation, duly assigned or endorsed for transfer (or accompanied by duly executed stock powers relating thereto), or shall deliver an
Affidavit of Loss with respect to such certificates at the principal executive office of the Corporation or the office of the transfer agent for the Redeemable Preferred Stock or such office or
offices in the continental United States of an agent for redemption as may from time to time be designated by notice to the holders of Redeemable Preferred Stock (or the holders of Convertible
Preferred Stock, as applicable), and each surrendered certificate shall be canceled and retired; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that if the holder has exercised its
redemption right pursuant to Section&nbsp;B.5(a)(iii)(A) or the Corporation has exercised its right
pursuant to Section&nbsp;B.5(a)(v)(A), the holder shall not be required to surrender said certificate(s) to the Corporation until said holder has received a new stock certificate for those shares of
Redeemable Preferred Stock not so redeemed. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Notice</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In the event that the Corporation provides or is required to provide notice to any holder of
Convertible Preferred Stock or any holder of Common Stock in accordance with the provisions of this Certificate (including the provisions of Section&nbsp;A.9) and/or the Corporation's bylaws, the
Corporation shall at the same time provide a copy of any such notice to each holder of outstanding shares of Redeemable Preferred Stock. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>21</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;No Reissuance of Redeemable Preferred Stock</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;No share or shares of Redeemable Preferred Stock acquired by the
Corporation by reason of redemption, purchase, conversion or otherwise shall be reissued, and all such shares shall be cancelled, retired and eliminated from the shares which the Corporation shall be
authorized to issue. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Covenants</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;So long as any shares of Redeemable Preferred Stock shall be outstanding, the provisions of
Section&nbsp;A.8 shall apply to all shares of Redeemable Preferred Stock as if such shares were shares of Convertible Preferred Stock. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kf76602_common_stock"> </A>
<A NAME="toc_kf76602_2"> </A>
<BR></FONT><FONT SIZE=2><B>COMMON STOCK    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to all of the rights of the Preferred Stock, and except as may be expressly provided with respect to the Preferred Stock herein, by law or by the Board of
Directors pursuant to this Article&nbsp;IV: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;dividends
may be declared and paid or set apart for payment upon Common Stock out of any assets or funds of the Corporation legally available for the payment of
dividends and may be payable in cash, stock or otherwise; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;the
holders of Common Stock shall have the exclusive right to vote for the election of directors and on all other matters requiring stockholder action, each share being
entitled to one vote; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;upon
the voluntary or involuntary liquidation, dissolution or winding up of the Corporation, after the payment or provision for payment of all debts and liabilities of
the Corporation and all preferential amounts to which the holders of Preferred Stock are entitled with respect to the distribution of assets in liquidation, the net assets of the Corporation shall be
distributed pro rata to the holders of Common Stock in accordance with their respective rights and interests to the exclusion of the holders of Preferred Stock. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kf76602_article_v"> </A>
<A NAME="toc_kf76602_3"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE V    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The name and address of the sole incorporator is John J. Gilluly III, Gray Cary Ware&nbsp;&amp; Freidenrich LLP, 1221 South MoPac Expressway, Suite 400, Austin, TX
78746-6875. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kf76602_article_vi"> </A>
<A NAME="toc_kf76602_4"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE VI    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation is to have a perpetual existence. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kf76602_article_vii"> </A>
<A NAME="toc_kf76602_5"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE VII    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Election of directors need not be by written ballot unless the bylaws of the Corporation shall so provide. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>22</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kf76602_article_viii"> </A>
<A NAME="toc_kf76602_6"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE VIII    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No person shall be personally liable to the Corporation or its stockholders for monetary damages for breach of his or her fiduciary duty as a Director of the
Corporation, except for liability (i)&nbsp;for any breach of the Director's duty of loyalty to the Corporation or its stockholders, (ii)&nbsp;for any acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)&nbsp;under Section&nbsp;174 of the General Corporation Law of the State of Delaware or (iv)&nbsp;for any transaction from
which the Director derived an improper personal benefit. If the General Corporation Law of the State of Delaware hereafter is amended to authorize further elimination or limitation of the liability of
directors, then the liability of a Director of the Corporation, in addition to the limitation on personal liability provided herein, shall be limited to the fullest extent permitted by the amended
General Corporation Law of the State of Delaware. Any repeal or modification of this paragraph by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a Director of the Corporation existing at the time of such repeal or modification. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Corporation shall indemnify any director or officer to the fullest extent permitted by Delaware law. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kf76602_article_ix"> </A>
<A NAME="toc_kf76602_7"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE IX    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All of the powers of the Corporation, insofar as the same may be lawfully vested by this Certificate of Incorporation in the Board of Directors of the
Corporation, are hereby conferred upon the Board of Directors of the Corporation. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
furtherance of and not in limitation of the foregoing provisions of this Article&nbsp;IX, and for the purpose of the orderly management of the business and the conduct of the
affairs of the Corporation, the Board of Directors of the Corporation shall have the power to adopt, amend or repeal from time to time the bylaws of the Corporation, subject to the right of the
stockholders of the Corporation entitled to vote thereon to adopt, amend or repeal the bylaws of the Corporation. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kf76602_article_x"> </A>
<A NAME="toc_kf76602_8"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE X    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter
prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. </FONT></P>

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<TR VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>Dated: August 29, 2002</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="49%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>JOHN J. GILLULY III</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2><I>John J. Gilluly III, Sole Incorporator</I></FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>23</FONT></P>

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<BR>
<P><br><A NAME="07ZBA76601_2">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ke76602_1">CERTIFICATE OF INCORPORATION OF PROS HOLDINGS, INC.</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ke76602_2">ARTICLE I</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ke76602_3">ARTICLE II</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ke76602_4">ARTICLE III</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ke76602_5">ARTICLE IV</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ke76602_6">PREFERRED STOCK</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ke76602_7">A. SERIES A CONVERTIBLE REDEEMABLE PREFERRED STOCK</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_kf76602_1">B. REDEEMABLE PREFERRED STOCK</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kf76602_2">COMMON STOCK</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kf76602_3">ARTICLE V</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kf76602_4">ARTICLE VI</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kf76602_5">ARTICLE VII</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kf76602_6">ARTICLE VIII</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kf76602_7">ARTICLE IX</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kf76602_8">ARTICLE X</A></FONT><BR>

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<TYPE>EX-3.2
<SEQUENCE>3
<FILENAME>a2176970zex-3_2.htm
<DESCRIPTION>EXHIBIT 3.2
<TEXT>
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<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit&nbsp;3.2  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kg76602_bylaws_of_pros_holding__kg701918"> </A>
<A NAME="toc_kg76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>BYLAWS<BR>  <BR>    OF<BR>  <BR>    PROS HOLDINGS,&nbsp;INC.<BR>  <BR>    </B></FONT><FONT SIZE=2>Adopted as of August&nbsp;29, 2002    <BR></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kg76602_article_i"> </A>
<A NAME="toc_kg76602_2"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE I    <BR>    </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>OFFICES
</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
1.01.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Registered Office.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The registered office of the corporation in the State of Delaware shall be 2711
Centreville Road, Suite 400, in the City of Wilmington, County of New Castle, and the name of its registered agent shall be the Corporation Service Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
1.02.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Other Offices.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The corporation may also have offices at such other places both within and without
the State of Delaware as the Board of Directors may from time to time determine or the business of the corporation may require. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kg76602_article_ii"> </A>
<A NAME="toc_kg76602_3"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE II    <BR>    </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>MEETINGS
OF STOCKHOLDERS </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
2.01.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Place of Meeting.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;All meetings of stockholders for the election of directors shall be held at such
place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
2.02.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Annual Meeting.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The annual meeting of stockholders shall be held at such date and time as shall be
designated from time to time by the Board of Directors and stated in the notice of the meeting. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
2.03.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Voting List.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The officer who has charge of the stock ledger of the corporation shall prepare and
make, at least 10&nbsp;days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least 10&nbsp;days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice, or if not
so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any
stockholder who is present. </FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
2.04.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Special Meeting.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Special meetings of the stockholders, for any purpose or purposes, unless
otherwise prescribed by statute or by the Certificate of Incorporation, as it may be amended from time to time (the "Certificate of Incorporation"), may be called by the Chairman of the Board or by
the President of the corporation or by the Board of Directors or by written order of a majority of the directors and shall be called by the President or the Secretary at the request in writing of
stockholders owning not less than 20% of the entire capital stock of the corporation, on an as converted to common stock basis, issued and outstanding and entitled to vote. Notwithstanding the
foregoing, special meetings of the holders of any class of the Corporation's capital stock, for any purpose or purposes, unless otherwise prescribed by statute or by the Certificate of Incorporation,
shall be called by the President or Secretary at the request in writing of stockholders owning a majority in amount of the entire shares of such class outstanding and entitled to vote. Any written
request pursuant to this Section&nbsp;2.04 shall state the purposes of the proposed meeting. The Chairman of the Board or the President of the corporation or directors so calling, or the
stockholders so requesting, any such meeting shall fix the time and any place, either within or without the State of Delaware, as the place for holding such meeting. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
2.05.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Notice of Meeting.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Written notice of the annual, and each special meeting of stockholders, stating
the time, place and purpose or purposes thereof, shall be given to each stockholder entitled to vote thereat, not less than 10 nor more than 60&nbsp;days before the meeting. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
2.06.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Quorum.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The holders of a majority of the shares of the corporation's capital stock issued and
outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at any meeting of stockholders for the transaction of business, except as otherwise
provided by statute or by the Certificate of Incorporation. Notwithstanding the other provisions of the Certificate of Incorporation or these bylaws, the holders of a majority of the shares of the
corporation's capital stock entitled to vote thereat, present in person or represented by proxy, whether or not a quorum is present, shall have power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present or represented. If the adjournment is for more than 30&nbsp;days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
2.07.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Proxies and Voting</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;At any meeting of the stockholders, every stockholder entitled to vote may
vote in person or by proxy authorized by an instrument in writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting. Any copy, facsimile
telecommunication or other reliable reproduction of the writing or transmission created pursuant to this paragraph may be substituted or used in lieu of the original writing or transmission for any
and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire
original writing or transmission. All voting, including on the election of directors but excepting where otherwise required by law, may be by a voice vote; provided, however, that upon demand
therefore by a stockholder entitled to vote or by his or her proxy, a stock vote shall be taken. Every stock vote shall be taken by ballots, each of which shall state the name of the stockholder or
proxy voting and such other information as may be required under the procedure established for the meeting. The corporation may, and to the extent required by law, shall, in advance of any meeting of
stockholders, </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

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<P><FONT SIZE=2>appoint
one or more inspectors to act at the meeting and make a written report thereof. The corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to
act. If no inspector or alternate is able to act at a meeting of stockholders, the person presiding at the meeting may, and to the extent required by law, shall, appoint one or more inspectors to act
at the meeting. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to
the best of his ability. Every vote taken by ballots shall be counted by an inspector or inspectors appointed by the chairman of the meeting. All elections shall be determined by a plurality of the
votes cast, and except as otherwise required by statute, the Certificate of Incorporation or these bylaws, all other matters shall be determined by a majority of the votes cast affirmatively or
negatively. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
2.08.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Consent of Stockholders</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Whenever the vote of stockholders at a meeting thereof is required or
permitted to be taken for or in connection with any corporate action by any provision of the statutes, the meeting and vote of stockholders may be dispensed with if all the stockholders who would have
been entitled to vote upon the action if such meeting were held shall consent in writing to such corporate action being taken; or on the written consent of the holders of shares of the corporation's
capital stock having not less than the minimum percentage of the vote required by statute for the proposed corporate action, and provided that prompt notice must be given to all stockholders of the
taking of corporate action without a meeting and by less than unanimous written consent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
2.09.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Voting of Stock of Certain Holders</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Shares of the corporation's capital stock standing in the name
of another corporation, domestic or foreign, may be voted by such officer, agent or proxy as the bylaws of such corporation may prescribe, or in the absence of such provision, as the Board of
Directors of such corporation may determine. Shares standing in the name of a deceased person may be voted by the executor or administrator of such deceased person, either in person or by proxy.
Shares standing in the name of a guardian, conservator or trustee may be voted by such fiduciary, either in person or by proxy, but no such fiduciary shall be entitled to vote shares held in such
fiduciary capacity without a transfer of such shares into the name of such fiduciary. Shares standing in the name of a receiver may be voted by such receiver. A stockholder whose shares are pledged
shall be entitled to vote such shares, unless in the transfer by the pledgor on the books of the corporation, he has expressly empowered the pledgee to vote thereon, in which case only the pledgee, or
his proxy, may represent the stock and vote thereon. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
2.10.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Treasury Stock</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The corporation shall not vote, directly or indirectly, shares of its own capital
stock owned by it; and such shares shall not be counted in determining the total number of outstanding shares of the corporation's capital stock. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
2.11.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Fixing Record Date</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors may fix in advance a date, which shall not be more than
60&nbsp;days nor less than 10&nbsp;days preceding the date of any meeting of stockholders, nor more than 60&nbsp;days preceding the date for payment of any dividend or distribution, or the date
for the allotment of rights, or the date when any change, or conversion or exchange of capital stock shall go into effect, or a date in connection with obtaining a consent, as a record date for the
determination of the stockholders entitled to notice of, and to vote at, any such meeting and any adjournment thereof, or entitled to receive payment of any such dividend or distribution, or to
receive any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, or to give such consent, and in such case such stockholders and
only such stockholders as shall be stockholders of record on the date so fixed, shall be entitled to such notice of, and to vote at, any such meeting and any adjournment thereof, or to receive payment
of such dividend or distribution, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be, notwithstanding any transfer of any stock on the
books of the corporation after any such record date fixed as aforesaid. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

<HR NOSHADE>
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<BR>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kg76602_article_iii"> </A>
<A NAME="toc_kg76602_4"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE III    <BR>    </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>BOARD
OF DIRECTORS </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
3.01.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Powers</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The business and affairs of the corporation shall be managed by its Board of Directors,
which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these bylaws directed or required to be
exercised or done by the stockholders. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
3.02.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Number, Election and Term</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The number of directors that shall constitute the whole Board of
Directors shall be not less than one. Such number of directors shall from time to time be fixed and determined by the directors and shall be set forth in the notice of any meeting of stockholders held
for the purpose of electing directors. The directors shall be elected at the annual meeting of stockholders, except as provided in the Certificate of Incorporation or Section&nbsp;3.03 of these
bylaws, and each director elected shall hold office until his successor shall be elected and shall qualify. Directors need not be residents of Delaware or stockholders of the corporation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
3.03.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Vacancies, Additional Directors and Removal From Office</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Except as otherwise provided in the
Certificate of Incorporation, if any vacancy occurs in the Board of Directors caused by death, resignation, retirement, disqualification or removal from office of any director, or otherwise, or if any
new directorship is created by an increase in the authorized number of directors, a majority of the directors then in office, though less than a quorum, or a sole remaining director, may choose a
successor or fill the newly created directorship; and a director so chosen shall hold office until the next election and until his successor shall be duly elected and shall qualify, unless sooner
displaced. Any director may be removed either for or without cause at any special meeting of stockholders duly called and held for such purpose. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
3.04.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Regular Meeting</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;A regular meeting of the Board of Directors shall be held each year, without
other notice than this bylaw, at the place of, and immediately following, the annual meeting of stockholders; and other regular meetings of the Board of Directors shall be held each year, at such time
and place as the Board of Directors may provide, by resolution, either within or without the State of Delaware, without other notice than such resolution. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
3.05.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Special Meeting</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;A special meeting of the Board of Directors may be called by the Chairman of the
Board of Directors or by the President of the corporation and shall be called by the Secretary on the written request of any two directors. The Chairman or President so calling, or the directors so
requesting, any such meeting shall fix the time and any place, either within or without the State of Delaware, as the place for holding such meeting. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
3.06.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Notice of Special Meeting</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Written notice of special meetings of the Board of Directors shall be
given to each director at least 48&nbsp;hours prior to the time of such meeting. Any director may waive notice of any meeting. The attendance of a director at any meeting shall constitute a waiver
of notice of such meeting, except where a director attends a meeting for the purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting, except that notice shall be given
of any proposed amendment to the bylaws if it is to be adopted at any special meeting or with respect to any other matter where notice is required by statute. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
3.07.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Quorum</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;A majority of the Board of Directors shall constitute a quorum for the transaction of
business at any meeting of the Board of Directors, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as
may be otherwise specifically provided by statute, by the Certificate of Incorporation or by these bylaws. If a quorum shall not be present at any meeting of the Board of Directors, the directors
present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
3.08.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Action Without Meeting</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Unless otherwise restricted by the Certificate of Incorporation or these
bylaws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof as provided in Article&nbsp;IV of these bylaws, may be taken without a
meeting, if a written consent thereto is signed by all members of the Board of Directors or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of
the Board of Directors or such committee. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
3.09.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Compensation</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Directors, as such, shall not be entitled to any stated salary for their services
unless voted by the stockholders or the Board of Directors; but by resolution of the Board of Directors, a fixed sum and expenses of attendance, if any, may be allowed for attendance at each regular
or special meeting of the Board of Directors or any meeting of a committee of directors. No provision of these bylaws shall be construed to preclude any director from serving the corporation in any
other capacity and receiving compensation therefor. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kg76602_article_iv"> </A>
<A NAME="toc_kg76602_5"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE IV    <BR>    </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>COMMITTEE
OF DIRECTORS </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
4.01.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Designation, Powers and Name</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors may, by resolution passed by a majority of
the whole Board of Directors, designate one or more committees, including, if they shall so determine, an Executive Committee, each such committee to consist of two or more of the directors of the
corporation. The committee shall have and may exercise such of the powers of the Board of Directors in the management of the business and affairs of the corporation as may be provided in such
resolution. The committee may authorize the seal of the corporation to be affixed to all papers that may require it. The Board of Directors may designate one or more directors as alternate members of
any committee, who may replace any absent or disqualified member at any meeting of such committee. In the absence or disqualification of any member of such committee or committees, the member or
members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Such committee or committees shall have such name or names and such limitations of authority as may be determined from time to time by
resolution adopted by the Board of Directors. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
4.02.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Minutes</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each committee of directors shall keep regular minutes of its proceedings and report the
same to the Board of Directors when required. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
4.03.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Compensation</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Members of special or standing committees may be allowed compensation for attending
committee meetings, if the Board of Directors shall so determine. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

<HR NOSHADE>
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<BR>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kg76602_article_v"> </A>
<A NAME="toc_kg76602_6"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE V    <BR>    </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>NOTICE
</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
5.01.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Methods of Giving Notice</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Whenever under the provisions of applicable statutes, the Certificate of
Incorporation or these bylaws, notice is required to be given to any director, member of any committee or stockholder, such notice shall be in writing and delivered personally or mailed to such
director, member or stockholder; provided that in the case of a director or a member of any committee such notice may be given orally or by telephone or telegram. If mailed, notice to a director,
member of a committee or stockholder shall be deemed to be given when deposited in the United States mail first class in a sealed envelope, with postage thereon prepaid, addressed, in the case of a
stockholder, to the stockholder at the stockholder's address as it appears on the records of the corporation or, in the case of a director or a member of a committee, to such person at his business
address. If sent by telegraph, notice to a director or member of a committee shall be deemed to be given when the telegram, so addressed, is delivered to the telegraph company. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
5.02.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Written Waiver</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Whenever any notice is required to be given under the provisions of an applicable
statute, the Certificate of Incorporation or these bylaws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kg76602_article_vi"> </A>
<A NAME="toc_kg76602_7"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE VI    <BR>    </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>OFFICERS </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
6.01.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Officers</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The officers of the corporation shall be a Chairman of the Board, a President, one or
more Vice Presidents, any one or more of which may be designated Executive Vice President or Senior Vice President, a Secretary and a Treasurer. The Board of Directors may appoint such other officers
and agents, including Assistant Vice Presidents, Assistant Secretaries and Assistant Treasurers, in each case as the Board of Directors shall deem necessary, who shall hold their offices for such
terms and shall exercise such powers and perform such duties as shall be determined by the Board. Any two or more offices may be held by the same person. The Chairman of the Board shall be elected
from among the directors. With the foregoing exceptions, none of the other officers need be a director, and none of the officers need be a stockholder of the corporation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
6.02.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Election and Term of Office</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The officers of the corporation shall be elected annually by the
Board of Directors at its first regular meeting held after the annual meeting of stockholders or as soon thereafter as conveniently possible. Each officer shall hold office until his successor shall
have been chosen and shall have qualified or until his death or the effective date of his resignation or removal, or until he shall cease to be a director in the case of the Chairman. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
6.03.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Removal and Resignation</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Any officer or agent elected or appointed by the Board of Directors may
be removed without cause by the affirmative vote of a majority of the Board of Directors whenever, in its judgment, the best interests of the corporation shall be served thereby, but such removal
shall be without prejudice to the contractual rights, if any, of the person so removed. Any officer may resign at any time by giving written notice to the corporation. Any such resignation shall take
effect at the date of the receipt of such notice or at any later time specified therein, and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it
effective. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
6.04.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Vacancies</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Any vacancy occurring in any office of the corporation by death, resignation, removal
or otherwise, may be filled by the Board of Directors for the unexpired portion of the term. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
6.05.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Salaries</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The salaries of all officers and agents of the corporation shall be fixed by the Board
of Directors or pursuant to its direction; and no officer shall be prevented from receiving such salary by reason of his also being a director. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
6.06.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Chairman of the Board</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Chairman of the Board shall preside at all meetings of the Board of
Directors and of the stockholders of the corporation. The Chairman shall formulate and submit to the Board of Directors or the Executive Committee matters of general policy for the corporation and
shall perform such other duties as usually appertain to the office or as may be prescribed by the Board of Directors or the Executive Committee. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
6.07.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;President</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The President shall be the chief executive officer of the corporation and, subject to
the control of the Board of Directors, shall in general supervise and control the business and affairs of the corporation. In the absence of the Chairman of the Board, the President shall preside at
all meetings of the Board of Directors and of the stockholders. He may also preside at any such meeting attended by the Chairman if he is so designated by the Chairman. He shall have the power to
appoint and remove subordinate officers, agents and employees, except those elected or appointed by the Board of Directors. The President shall keep the Board of Directors and the Executive Committee
fully informed and shall consult them concerning the business of the corporation. He may sign with the Secretary or any other officer of the corporation thereunto authorized by the Board of Directors,
certificates for shares of the corporation and any deeds, bonds, mortgages, contracts, checks, notes, drafts or other instruments that the Board of Directors has authorized to be executed, except in
cases where the signing and execution thereof has been expressly delegated by these bylaws or by the Board of Directors to some other officer or agent of the corporation, or shall be required by law
to be otherwise executed. He shall vote, or give a proxy to any other officer of the corporation to vote, all shares of stock of any other corporation standing in the name of the corporation and in
general he shall perform all other duties normally incident to the office of President and such other duties as may be prescribed by the stockholders, the Board of Directors or the Executive Committee
from time to time. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
6.08.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Vice Presidents</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In the absence of the President, or in the event of his inability or refusal to
act, the Executive Vice President (or in the event there shall be no Vice President designated Executive Vice President, any Vice President designated by the Board) shall perform the duties and
exercise the powers of the President. Any Vice President may sign, with the Secretary or Assistant Secretary, certificates for shares of the corporation. The Vice Presidents shall perform such other
duties as from time to time may be assigned to them by the President, the Board of Directors or the Executive Committee. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
6.09.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Secretary</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Secretary shall (a)&nbsp;keep the minutes of the meetings of the stockholders,
the Board of Directors and committees of directors; (b)&nbsp;see that all notices are duly given in accordance with the provisions of these bylaws and as required by law; (c)&nbsp;be custodian of
the corporate records and of the seal of the corporation, and see that the seal of the corporation or a facsimile thereof is affixed to all certificates for shares prior to the issue thereof and to
all documents, the execution of which on behalf of the corporation under its seal is duly authorized in accordance with the provisions of these bylaws; (d)&nbsp;keep or cause to be kept a register
of the post office address of each stockholder which shall be furnished by such stockholder; (e)&nbsp;sign with the President, or an Executive Vice President or Vice President, certificates for
shares of the corporation, the issue of which shall have been authorized by resolution of the Board of Directors; (f)&nbsp;have general charge of the stock transfer books of the corporation; and
(g)&nbsp;in general, perform all duties normally incident to the office of Secretary and such other duties as from time to time may be assigned to him by the President, the Board of Directors or the
Executive Committee. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>7</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
6.10.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Treasurer</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If required by the Board of Directors, the Treasurer shall give a bond for the faithful
discharge of his duties in such sum and with such surety or sureties as the Board of Directors shall determine. He shall (a)&nbsp;have charge and custody of and be responsible for all funds and
securities of the corporation; (b)&nbsp;receive and give receipts for moneys due and payable to the corporation from any source whatsoever and deposit all such moneys in the name of the corporation
in such banks, trust companies or other depositories as shall be selected in accordance with the provisions of Section&nbsp;7.03 of these bylaws; (c)&nbsp;prepare, or cause to be prepared, for
submission at each regular meeting of the Board of Directors, at each annual meeting of the stockholders, and at such other times as may be required by the Board of Directors, the President or the
Executive Committee, a statement of financial condition of the corporation in such detail as may be required; and (d)&nbsp;in general, perform all the duties incident to the office of Treasurer and
such other duties as from time to time may be assigned to him by the President, the Board of Directors or the Executive Committee. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
6.11.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Assistant Secretary and Treasurer</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Assistant Secretaries and Assistant Treasurers shall, in
general, perform such duties as shall be assigned to them by the Secretary or the Treasurer, respectively, or by the President, the Board of Directors or the Executive Committee. The Assistant
Secretaries and Assistant Treasurers shall, in the absence of the Secretary or Treasurer, respectively, perform all functions and duties which such absent officers may delegate, but such delegation
shall not relieve the absent officer from the responsibilities and liabilities of his office. The Assistant Secretaries may sign, with the President or a Vice President, certificates for shares of the
corporation, the issue of which shall have been authorized by a resolution of the Board of Directors. The Assistant Treasurers shall respectively, if required by the Board of Directors, give bonds for
the faithful discharge of their duties in such sums and with such sureties as the Board of Directors shall determine. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kg76602_article_vii"> </A>
<A NAME="toc_kg76602_8"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE VII    <BR>    </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>CONTRACTS,
CHECKS AND DEPOSITS </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
7.01.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Contracts</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Subject to the provisions of Section&nbsp;6.01, the Board of Directors may authorize
any officer, officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined
to specific instances. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
7.02.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Checks</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;All checks, demands, drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the corporation, shall be signed by such officer or officers or such agent or agents of the corporation, and in such manner, as shall be determined by
the Board of Directors. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
7.03.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Deposits</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;All funds of the corporation not otherwise employed shall be deposited from time to time
to the credit of the corporation in such banks, trust companies or other depositories as the Board of Directors may select. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>8</FONT></P>

<HR NOSHADE>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kg76602_article_viii"> </A>
<A NAME="toc_kg76602_9"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE VIII    <BR>    </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>CERTIFICATES
OF STOCK </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
8.01.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Issuance</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each stockholder of this corporation shall be entitled to a certificate or certificates
showing the number of shares of capital stock registered in his name on the books of the corporation. The certificates shall be in such form as may be determined by the Board of Directors, shall be
issued in numerical order and shall be entered in the books of the corporation as they are issued. They shall exhibit the holder's name and number of shares and shall be signed by the President or a
Vice President and by the Secretary or an Assistant Secretary. If any certificate is countersigned (1)&nbsp;by a transfer agent other than the corporation or any employee of the corporation, or
(2)&nbsp;by a registrar other than the corporation or any employee of the corporation, any other signature on the certificate may be a facsimile. If the corporation shall be authorized to issue more
than one class of stock or more than one series of any class, the designations, preferences and relative participating, optional or other special rights of each class of stock or series thereof and
the qualifications, limitations or restrictions of such preferences and rights shall be set forth in full or summarized on the face or back of the certificate which the corporation shall issue to
represent such class of stock; provided that, except as otherwise provided by statute, in lieu of the foregoing requirements there may be set forth on the face or back of the certificate which the
corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish to each stockholder who so requests the designations, preferences and relative,
participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and rights. All certificates
surrendered to the corporation for transfer shall be canceled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and canceled,
except that in the case of a lost, stolen, destroyed or mutilated certificate a new one may be issued therefor upon such terms and with such indemnity, if any, to the corporation as the Board of
Directors may prescribe. Certificates shall not be issued representing fractional shares of stock. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
8.02.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Lost Certificates</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors may direct a new certificate or certificates to be
issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require (1)&nbsp;the owner of such lost, stolen or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it
shall require, (2)&nbsp;such owner to give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate
or certificates alleged to have been lost, stolen or destroyed, or (3)&nbsp;both. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
8.03.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Transfers</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Upon surrender to the corporation or the transfer agent of the corporation of a
certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the
person entitled thereto, cancel the old certificate and record the transaction upon its books. Transfers of shares shall be made only on the books of the corporation by the registered holder thereof,
or by his attorney thereunto authorized by power of attorney and filed with the Secretary of the corporation or the Transfer Agent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
8.04.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Registered Stockholders</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The corporation shall be entitled to treat the holder of record of any
share or shares of the corporation's capital stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or shares
on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Delaware. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>9</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_kg76602_1_10"> </A>
<BR>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kg76602_article_ix"> </A>
<A NAME="toc_kg76602_10"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE IX    <BR>    </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>DIVIDENDS </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
9.01.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Declaration</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Dividends with respect to the shares of the corporation's capital stock, subject to
the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, pursuant to applicable law. Dividends may be paid in cash, in
property or in shares of capital stock, subject to the provisions of the Certificate of Incorporation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
9.02.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Reserve</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Before payment of any dividend, there may be set aside out of any funds of the
corporation available for dividends such sum or sums as the Board of Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the Board of Directors shall think conducive to the interest of the corporation, and
the Board of Directors may modify or abolish any such reserve in the manner in which it was created. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kg76602_article_x"> </A>
<A NAME="toc_kg76602_11"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE X    <BR>    </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>INDEMNIFICATION </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
10.01.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Third Party Actions</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The corporation shall indemnify any director or officer of the corporation,
and may indemnify any other person, who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order, settlement or conviction, or upon a plea of </FONT><FONT SIZE=2><I>nolo contendere</I></FONT><FONT SIZE=2> or its
equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
10.02.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Actions by or in the Right of the Corporation</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The corporation shall indemnify any director or
officer and may indemnify any other person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and
except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent
that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such expenses as the Court of Chancery or such other court shall deem proper. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>10</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
10.03.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Mandatory Indemnification</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;To the extent that a director, officer, employee or agent of the
corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Sections 10.01 and 10.02, or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
10.04.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Determination of Conduct</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The determination that a director, officer, employee or agent has met
the applicable standard of conduct set forth in Sections 10.01 and 10.02 (unless indemnification is ordered by a court) shall be made (1)&nbsp;by the Board of Directors by a majority vote of a
quorum consisting of directors who were not parties to such action, suit or proceeding, or (2)&nbsp;if such quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (3)&nbsp;by the stockholders. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
10.05.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Payment of Expenses in Advance</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Expenses incurred in defending a civil or criminal action, suit
or proceeding shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee
or agent to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the corporation as authorized in this Article&nbsp;X. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
10.06.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Indemnity Not Exclusive</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The indemnification and advancement of expenses provided or granted
hereunder shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Certificate of Incorporation, any other bylaw,
agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
10.07.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Definitions</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this Article&nbsp;X: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;"the
corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a
consolidation or merger that, if its separate existence had continued, would have had power and authority to indemnify its directors, officers and employees or agents, so that any person who is or was
a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Article&nbsp;X with respect to the resulting or surviving corporation as he would have
with respect to such constituent corporation if its separate existence had continued; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;"other
enterprises" shall include employee benefit plans; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;"fines"
shall include any excise taxes assessed on a person with respect to any employee benefit plan; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;"serving
at the request of the corporation" shall include any service as a director, officer, employee or agent of the corporation that imposes duties on, or involves
services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;a
person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of the corporation" as referred to in this Article&nbsp;X. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
10.08.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Continuation of Indemnity</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The indemnification and advancement of expenses provided or granted
hereunder shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>11</FONT></P>

<HR NOSHADE>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kg76602_article_xi"> </A>
<A NAME="toc_kg76602_12"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE XI    <BR>    </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>MISCELLANEOUS
</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
11.01.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Seal</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The corporate seal, if one is authorized by the Board of Directors, shall have inscribed
thereon the name of the corporation, and the words "Corporate Seal, Delaware." The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION
11.02.</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Books</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The books of the corporation may be kept (subject to any provision contained in the
statutes) outside the State of Delaware at the offices of the corporation, or at such other place or places as may be designated from time to time by the Board of Directors. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kg76602_article_xii"> </A>
<A NAME="toc_kg76602_13"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE XII    <BR>    </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>AMENDMENT </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as otherwise required by the Certificate of Incorporation, these bylaws may be altered, amended or repealed by a majority of the number of directors then constituting the Board of
Directors at any regular meeting of the Board of Directors without prior notice, or at any special meeting of the Board of Directors if notice of such alteration, amendment or repeal be contained in
the notice of such special meeting. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><I>[The remainder of this page intentionally left blank.]</I></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>12</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kg76602_secretary_s_certificate_of_ado__sec02805"> </A>
<A NAME="toc_kg76602_14"> </A>
<BR></FONT><FONT SIZE=2><B>SECRETARY'S CERTIFICATE OF ADOPTION OF<BR>  <BR>    THE BYLAWS OF<BR>  <BR>    PROS HOLDINGS,&nbsp;INC.    <BR>    </B></FONT></P>


<P><FONT SIZE=2>I
hereby certify: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That
I am the duly elected Secretary of PROS Holdings,&nbsp;Inc., a Delaware corporation; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;That
the foregoing Bylaws constitute the Bylaws of said corporation as duly adopted by the Board of Directors of the Corporation on August&nbsp;29, 2002. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, I have hereunder subscribed my name this 29th day of August, 2002. </FONT></P>

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<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="49%"><FONT SIZE=2>/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>CHARLES MURPHY</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2><I>Charles Murphy,<BR>
Secretary</I></FONT></TD>
</TR>
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<P ALIGN="CENTER"><FONT SIZE=2>13</FONT></P>

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<P><br><A NAME="07ZBA76601_3">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_kg76602_1">BYLAWS OF PROS HOLDINGS, INC. Adopted as of August 29, 2002</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kg76602_2">ARTICLE I</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kg76602_3">ARTICLE II</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kg76602_4">ARTICLE III</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kg76602_5">ARTICLE IV</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kg76602_6">ARTICLE V</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kg76602_7">ARTICLE VI</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kg76602_8">ARTICLE VII</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kg76602_9">ARTICLE VIII</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kg76602_10">ARTICLE IX</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kg76602_11">ARTICLE X</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kg76602_12">ARTICLE XI</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kg76602_13">ARTICLE XII</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kg76602_14">SECRETARY'S CERTIFICATE OF ADOPTION OF THE BYLAWS OF PROS HOLDINGS, INC.</A></FONT><BR>
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<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>4
<FILENAME>a2176970zex-10_1.htm
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
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<FONT SIZE=3 ><A HREF="#07ZBA76601_4">QuickLinks</A></FONT>
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<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit&nbsp;10.1  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ki76602_pros_strategic_solutio__ki701956"> </A>
<A NAME="toc_ki76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>PROS STRATEGIC SOLUTIONS,&nbsp;INC.<BR>  1997 STOCK OPTION PLAN    <BR>    </B></FONT></P>

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NAME="ki76602_pros_strategic_solutio__ki701970"> </A>
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<BR></FONT><FONT SIZE=2><B>PROS STRATEGIC SOLUTIONS,&nbsp;INC.<BR>  <BR>    1997 STOCK OPTION PLAN    <BR>    </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ki76602_table_of_contents"> </A>
<A NAME="toc_ki76602_3"> </A></FONT> <FONT SIZE=2><B>TABLE OF CONTENTS    <BR>    </B></FONT></P>

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<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER"><FONT SIZE=1><B>Section</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><B>ARTICLE I&#151;Plan</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><BR><FONT SIZE=2> Purpose</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
1.1</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Effective Date of Plan</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>1.2</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><BR><FONT SIZE=2><B>ARTICLE II&#151;Definitions</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><BR><FONT SIZE=2> Affiliate</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
2.1</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Board of Directors</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2.2</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Code</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2.3</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Committee</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2.4</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Company</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2.5</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Disability</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2.6</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Fair Market Value</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2.7</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Incentive Option</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2.8</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Nonqualified Option</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2.9</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Option</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2.10</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Option Agreement</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2.11</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Optionee</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2.12</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Plan</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2.13</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Retirement</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2.14</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Stock</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2.15</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>10% Shareholder</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>2.16</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><BR><FONT SIZE=2><B>ARTICLE III&#151;Eligibility</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><BR><FONT SIZE=2><B>ARTICLE IV&#151;General Provisions Relating to Options</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><BR><FONT SIZE=2> Authority to Grant Options</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
4.1</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Dedicated Shares</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4.2</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Non-Transferability</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4.3</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Requirements of Law</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4.4</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Changes in the Company's Capital Structure</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4.5</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Market Stand-Off Agreement</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>4.6</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><BR><FONT SIZE=2><B>ARTICLE V&#151;Options</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><BR><FONT SIZE=2> Type of Option</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
5.1</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Option Price</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>5.2</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Duration of Options</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>5.3</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Amount Exercisable&#151;Incentive Options</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>5.4</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Exercise of Options</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>5.5</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Exercise on Termination of Employment</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>5.6</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Substitution Options</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>5.7</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>No Rights as Shareholder</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>5.8</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><BR><FONT SIZE=2><B>ARTICLE VI&#151;Administration</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><BR><FONT SIZE=2><B>ARTICLE VII&#151;Amendment or Termination of Plan</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<BR>
<P ALIGN="CENTER"><FONT SIZE=2>i</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=2><BR><FONT SIZE=2><B>ARTICLE VIII&#151;Miscellaneous</B></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><BR><FONT SIZE=2> No Employment or Affiliation Obligation</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2><BR>
8.1</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Forfeiture</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8.2</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Tax Withholding</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8.3</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Written Agreement</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8.4</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Indemnification of the Committee and the Board of Directors</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8.5</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Gender</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8.6</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Headings</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8.7</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Other Compensation Plans</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8.8</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Other Options or Awards</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8.9</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="87%"><FONT SIZE=2>Governing Law</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%" ALIGN="RIGHT"><FONT SIZE=2>8.10</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>ii</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_kj76602_1_1"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kj76602_article_i_plan"> </A>
<A NAME="toc_kj76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE I<BR>  <BR>    Plan    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Purpose</B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Plan is intended to advance the best interests of the Company, its Affiliates, and its
shareholders by providing those persons who have substantial responsibility for the management and growth of the Company and its Affiliates with additional incentives and an opportunity to obtain or
increase their proprietary interest in the Company, thereby encouraging them to continue to provide services to the Company or any of its Affiliates. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Effective Date of Plan.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Plan is effective May&nbsp;1, 1997, if within one year of that date it shall
have been approved by at least a majority vote of shareholders voting in person or by proxy at a duly held shareholders' meeting, or if the provisions of the Company's Articles of Incorporation or
By-laws or applicable state law prescribes a greater degree of shareholder approval for this action, the approval by the holders of that percentage, at a duly held meeting of shareholders.
No Incentive Option or Nonqualified Option shall be granted pursuant to this Plan after April&nbsp;30, 2007. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kj76602_article_ii_definitions"> </A>
<A NAME="toc_kj76602_2"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE II<BR>  <BR>    Definitions    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The words and phrases defined in this Article shall have the meaning set out in these definitions throughout this Plan, unless the context in which any such word
or phrase appears reasonably requires a broader, narrower, or different meaning. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>"Affiliate"</B></FONT><FONT SIZE=2> means any parent corporation and any subsidiary corporation. The term "parent corporation" means any
corporation (other than the Company) in an unbroken chain of corporations ending with the Company if, at the time of the action or transaction, each of the corporations other than the Company owns
stock possessing more than 50% of the total combined voting power of all classes of stock in one of the other corporations in the chain. The term "subsidiary corporation" means any corporation (other
than the Company) in an unbroken chain of corporations beginning with the Company if, at the time of the action or transaction, each of the corporations other than the last corporation in the unbroken
chain owns stock possessing more than 50% of the total combined voting power of all classes of stock in one of the other corporations in the chain. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>"Board of Directors"</B></FONT><FONT SIZE=2> means the board of directors of the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>"Code"</B></FONT><FONT SIZE=2> means the Internal Revenue Code of 1986, as amended. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>"Committee"</B></FONT><FONT SIZE=2> means the Board of Directors or a committee of the Board of Directors designated by the Board of Directors to
administer the Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>"Company"</B></FONT><FONT SIZE=2> means PROS Strategic Solutions,&nbsp;Inc., a Texas corporation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>"Disability"</B></FONT><FONT SIZE=2> means the medically determinable mental or physical incapability of an employee to engage in any substantial
gainful activity, which incapacity is reasonably expected to (or does in fact) continue for 12&nbsp;months or more. If there is any disagreement between an employee and the Company with respect to
whether such employee is disabled, then the Company and such employee shall obtain a determination from an impartial reputable physician selected for the purpose of making such determination, whose
decision shall be binding upon all parties. If the Company and such employee cannot agree upon the selection of such physician, the then current president of the Harris County, Texas, Medical Society
may make the selection of such physician, which selection shall be binding upon all parties and such physician's decision shall be binding upon all parties. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>"Fair Market Value"</B></FONT><FONT SIZE=2> of the Stock as of any date means the value of the Stock as determined by the Committee in its sole
discretion. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>1</FONT></P>

<HR NOSHADE>
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<A NAME="page_kj76602_1_2"> </A>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>"Incentive Option"</B></FONT><FONT SIZE=2> means an option granted under this Plan which is designated as an "Incentive Option" and satisfies the
requirements of section&nbsp;422 of the Code. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>"Nonqualified Option"</B></FONT><FONT SIZE=2> means an option granted under this Plan other than an Incentive Option. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10&nbsp;</FONT><FONT
SIZE=2><B>"Option"</B></FONT><FONT SIZE=2> means both an Incentive Option and a Nonqualified Option granted under this Plan to purchase shares of Stock. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11&nbsp;</FONT><FONT
SIZE=2><B>"Option Agreement"</B></FONT><FONT SIZE=2> means the written agreement that sets out the terms of an Option, as such written agreement may be
amended from time to time. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12&nbsp;</FONT><FONT
SIZE=2><B>"Optionee"</B></FONT><FONT SIZE=2> means a person to whom an Option is granted. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13&nbsp;</FONT><FONT
SIZE=2><B>"Plan"</B></FONT><FONT SIZE=2> means the PROS Strategic Solutions,&nbsp;Inc. 1997 Stock Option Plan, as set out in this document and as it may
be amended from time to time. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14&nbsp;</FONT><FONT
SIZE=2><B>"Retirement"</B></FONT><FONT SIZE=2> means retirement in good standing from the employ of the Company and all Affiliates under the rules of the
Company in effect at the time of the Optionee's severance from employment with the Company and all Affiliates. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.15&nbsp;</FONT><FONT
SIZE=2><B>"Stock"</B></FONT><FONT SIZE=2> means the common stock of the Company, or, in the event that the outstanding shares of common stock are later
changed into or exchanged for a different class of stock or securities of the Company or another corporation, that other stock or security. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.16&nbsp;</FONT><FONT
SIZE=2><B>"10% Shareholder"</B></FONT><FONT SIZE=2> means an individual who, at the time the Option is granted, owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or of any Affiliate. An individual shall be considered as owning the stock owned, directly or indirectly, by or for his brothers and
sisters (whether by the whole or half blood), spouse, ancestors, and lineal descendants; and stock owned, directly or indirectly, by or for a corporation, partnership, estate, or trust, shall be
considered as being owned proportionately by or for its shareholders, partners, or beneficiaries. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kj76602_article_iii_eligibility"> </A>
<A NAME="toc_kj76602_3"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE III<BR>  <BR>    Eligibility    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The individuals who shall be eligible to receive Incentive Options shall be those employees of the Company or any of its Affiliates as the Committee shall
determine from time to time. The individuals who shall be eligible to receive Nonqualified Stock Options shall be such individuals as the Committee shall determine from time to time. The Board of
Directors may designate one or more individuals who shall not be eligible to receive any Option under this Plan. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kj76602_article_iv_general_provisions_relating_to_options"> </A>
<A NAME="toc_kj76602_4"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE IV<BR>  <BR>    General Provisions Relating to Options    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Authority to Grant Options</B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Committee may grant Options to persons selected by it in accordance with the
terms and conditions of this Plan. Subject only to any applicable limitations set out in this Plan, the number of shares of Stock to be covered by any Option to be granted to an Optionee shall be as
determined by the Committee. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Dedicated Shares.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The total number of shares of Stock with respect to which Options may be granted under the
Plan shall be 58,665 shares. The shares may be treasury shares or authorized but unissued shares. The number of shares stated in this Section&nbsp;4.2 shall be subject to adjustment in accordance
with the provisions of Section&nbsp;4.5. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event that any outstanding Option shall expire or terminate for any reason or any Option is surrendered, the shares of Stock allocable to the unexercised portion of that Option
may again be subject to an Option under the Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Non-Transferability.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Options shall not be transferable by the Optionee otherwise than by will or
under the laws of descent and distribution, and shall be exercisable, during the Optionee's lifetime, only by him. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Requirements of Law.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company shall not be required to sell or issue any Stock under any Option if
issuing that Stock would constitute or result in a violation by the Optionee or the Company of any provision of any law, statute, or regulation of any governmental authority. Specifically, in
connection with any applicable statute or regulation relating to the registration of securities, upon exercise of any Option, the Company shall not be required to issue any Stock unless the Committee
has received evidence satisfactory to it to the effect that the holder of that Option will not transfer the Stock except in accordance with applicable law, including receipt of an opinion of counsel
satisfactory to the Company to the effect that any proposed transfer complies with applicable law. The determination by the Committee on this matter shall be final, binding and conclusive. The Company
may, but shall in no event be obligated to, register any Stock covered by this Plan pursuant to applicable securities laws of any country or any political subdivision. In the event the Stock issuable
on exercise of an Option is not registered, the Company may imprint on the certificate evidencing the Stock any legend that counsel for the Company considers necessary or advisable to comply with
applicable law. The Company shall not be obligated to take any other affirmative action in order to cause the exercise of an Option and the issuance of shares thereunder, to comply with any law or
regulation of any governmental authority. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Changes in the Company's Capital Structure.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The existence of outstanding Options shall not affect
in any way the right or power of the Company or its shareholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company's capital structure or
its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Stock or its rights, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;If
the Company shall effect a subdivision or consolidation of shares or other capital adjustment of, or the payment of a dividend in capital stock or other equity
securities of the Company on, Stock, or other increase or reduction of the number of shares of Stock without receiving consideration therefor in money, services, or property, or the reclassification
of Stock, in whole or in part, into other equity securities of the Company, then (i)&nbsp;the number, class and per share price of shares of Stock subject to outstanding Options hereunder shall be
appropriately adjusted (or in the case of the issuance of other equity securities as a dividend on, or in a reclassification of, Stock, the Options shall extend to such other securities) in such a
manner as to entitle an Optionee to receive, upon exercise of an Option, for the same aggregate cash consideration, the same total number and class or classes of shares (or in the case of a dividend
of, or reclassification into, other equity securities, such other securities) he would have held after such adjustment if he had exercised his Option in full </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

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<P><FONT SIZE=2>immediately
prior to the event requiring the adjustment, or, if applicable, the record date for determining shareholders to be affected by such adjustment; and (ii)&nbsp;the number and class of
shares then reserved for issuance under this Plan (or in the case of a dividend of, or reclassification into, other equity securities, such other securities) shall be adjusted by substituting for the
total number and class of shares of Stock then received, the number and class or classes of shares of Stock (or in the case of a dividend of, or reclassification into, other equity securities, such
other securities) that would have been received by the owner of an equal number of outstanding shares of Stock as a result of the event requiring the adjustment. Comparable rights shall accrue to each
Optionee in the event of successive subdivisions, consolidations, capital adjustments, dividends or reclassifications of the character described above. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;If
(i)&nbsp;the Company shall not be the surviving entity in any merger, consolidation or other reorganization (or survives only as a subsidiary of an entity other
than a previously wholly-owned subsidiary of the Company), (ii)&nbsp;the Company sells, leases or exchanges or agrees to sell, lease or exchange all or substantially all of its assets to any other
person or entity (other than a wholly-owned subsidiary of the Company), or (iii)&nbsp;the Company is to be dissolved and liquidated (each such event is referred to herein as a "Corporate Change"),
no later than ten (10)&nbsp;days after the approval by the shareholders of the Company of such merger, consolidation, reorganization, sale, lease or exchange of assets or dissolution, the Committee,
acting in its sole discretion without the consent or approval of any Optionee, shall act to effect one or more of the following alternatives, which may vary among individual Optionees and which may
vary among Options held by any individual Optionee: (1)&nbsp;accelerate the time at which Options then outstanding may be exercised so that such Options may be exercised in full for a limited period
of time on or before a specified date (before or after such Corporate Change) fixed by the Committee, after which specified date all unexercised Options and all rights of Optionees thereunder shall
terminate, (2)&nbsp;require the mandatory surrender to the Company by selected Optionees of some or all of the outstanding Options held by such Optionees (irrespective of whether such Options are
then exercisable under the provisions of this Plan or the Option Agreements evidencing such Options) as of a date, before or after such Corporate Change, specified by the Committee, in which event the
Committee shall thereupon cancel such Options and the Company shall pay to each Optionee an amount of cash per share equal to the excess, if any, of the per share price offered to shareholders of the
Company in any such merger, consolidation, reorganization, sale of assets or dissolution transaction over the exercise price(s) under such Options for such shares, (3)&nbsp;make such adjustments to
the number and class of shares then reserved for issuance under this Plan and/or to Options then outstanding as the Committee deems appropriate to reflect such Corporate Change, including, but not
limited to, having Options then outstanding assumed by the corporation surviving as a result of such Corporate Change and/or having a new option substituted by such surviving corporation for Options
then outstanding (provided, however, that the Committee may determine in its sole discretion that no such adjustment is necessary), or (4)&nbsp;provide that the number and class of shares of Stock
covered by an Option theretofore granted shall be adjusted so that such Option shall thereafter cover the number and class of shares of stock or other securities or property (including, without
limitation, cash) to which the Optionee would have been entitled pursuant to the terms of the agreement of merger, consolidation or sale of assets and dissolution if, immediately prior to such merger,
consolidation or sale of assets and dissolution, the Optionee had been the holder of record of the number of shares of Stock then covered by such Option. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;In
the event of changes in the outstanding Stock by reason of recapitalizations, reorganizations, mergers, consolidations, combinations, exchanges or other relevant
changes in capitalization occurring after the date of the grant of any Option and not otherwise provided for by this Section&nbsp;4.5, any outstanding Options and any agreements evidencing such
Options shall be subject to adjustment by the Committee at its discretion as to the number and price of shares of stock or other consideration subject to such Options. In the event of any such change
in the outstanding Stock, the aggregate number of shares available under this Plan may be appropriately adjusted by the Committee, whose determination shall be conclusive. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;The
issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services
either upon direct sale or upon the exercise of rights or warrants to subscribe for them, or upon conversion of shares or obligations of the Company convertible into shares or other securities, shall
not affect, and no adjustment by reason of such issuance shall be made with respect to, the number, class, or price of shares of Stock then subject to outstanding Options. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Market Stand-Off Agreement</B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In connection with any underwritten public offering after the
effective date of this Plan pursuant to an effective registration statement under the Securities Act of 1933, as amended, or any successor Federal statute, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder, as in effect from time to time (the "Securities Act"), covering the offering and sale of shares of Stock, or of any equity security that as a
part of a unit includes Stock, for the account of the Company, an Optionee, if and to the extent requested in good faith by the Company and the managing underwriter of securities of the Company, shall
agree not to sell or otherwise transfer or dispose of any shares of Stock held by him or her or acquired by him or her pursuant to the exercise of an Option (except shares of Stock included in the
registration statement relating to such underwritten public offering) at any time during a period following the effective date of the registration statement relating to such underwritten public
offering; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that in no event shall such period exceed 180&nbsp;days. In order to
enforce the foregoing covenant, subject to the foregoing exceptions, the Company may impose stop-transfer instructions with respect to such shares of Stock of an Optionee (and the
securities of every other person subject to such restriction) until the end of such period. The provisions of this Section&nbsp;4.6 shall apply until the earlier to occur of (i)&nbsp;five
(5)&nbsp;years following the effective date of the "First Qualified Public Offering" (as hereinafter defined), or (ii)&nbsp;such time as an Optionee can sell all remaining shares of Stock held by
him or her within a ninety (90)&nbsp;day period pursuant to Rule&nbsp;144 or 145 under the Securities Act. For purposes of this Section&nbsp;4.6, the term "First Qualified Public Offering" means
a firm commitment underwriting that satisfies any requirement contained in the Company's charter document relating to the aggregate net proceeds attributable to sales for the account of the Company
with respect to an underwritten public offering or, if the Company's charter document contains no such requirement, the first underwritten public offering of the Company for the sale of Stock of which
the aggregate net proceeds attributable to sales for the account of the Company exceed $20,000,000. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kj76602_article_v_options"> </A>
<A NAME="toc_kj76602_5"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE V<BR>  <BR>    Options    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Type of Option.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Committee shall specify whether a given Option shall constitute an Incentive Option or a
Nonqualified Option. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Option Price.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The price at which Stock may be purchased under an Incentive Option shall not be less than the
greater of: (a)&nbsp;100% of the Fair Market Value of the shares of Stock on the date the Option is granted or (b)&nbsp;the aggregate par value of the shares of Stock on the date the Option is
granted or, if the Shares are without par value on the date the Option is granted, such consideration, expressed in dollars, as may be fixed from time to time by the Board of Directors. The Committee
in its discretion may provide that the price at which shares of Stock may be purchased under an Incentive Option shall be more than 100% of Fair Market Value. In the case of any 10% Shareholder, the
price at which shares of Stock may be purchased under an Incentive Option shall not be less than 110% of the Fair Market Value of the Stock on the date the Incentive Option is granted. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
price at which shares of Stock may be purchased under a Nonqualified Option shall not be less than the greater of: (a)&nbsp;80% of the Fair Market Value of the shares of Stock on
the date the Option is granted or (b)&nbsp;the aggregate par value of the shares of Stock on the date the Option is granted or, if the Shares are without par value on the date the Option is granted,
such consideration, expressed in dollars, as may be fixed from time to time by the Board of Directors. The Committee in its discretion may provide that the price at which shares of Stock may be
purchased under a Nonqualified Option shall be more than 100% of Fair Market Value. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Duration of Options.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No Option shall be exercisable after the expiration of ten (10)&nbsp;years from the
date the Option is granted. In the case of a 10% Shareholder, no Incentive Option shall be exercisable after the expiration of five years from the date the Incentive Option is granted. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Amount Exercisable&#151;Incentive Options.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Option may be exercised from time to time, in whole
or in part, in the manner and subject to the conditions the Committee, in its sole discretion, may provide in the Option Agreement, as long as the Option is valid and outstanding. To the extent that
the aggregate Fair Market Value (determined as of the time an Incentive Option is granted) of the Stock with respect to which Incentive Options first become exercisable by the Optionee during any
calendar year (under this Plan and any other incentive stock option plan(s) of the Company or any Affiliate) exceeds $100,000, the Incentive Options shall be treated as Nonqualified Options. In making
this determination, Incentive Options shall be taken into account in the order in which they were granted. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Exercise of Options.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Option shall be exercised by the delivery of written notice to the Committee
setting forth the number of shares of Stock with respect to which the Option is to be exercised, together with: (a)&nbsp;cash, certified check, bank draft, or postal or express money order payable
to the order of the Company, (b)&nbsp;Stock at its Fair Market Value on the date of exercise, and/or (c)&nbsp;any other form of payment which is acceptable to the Committee, in each case for an
amount equal to the exercise price of such shares, and specifying the address to which the certificates for such shares are to be mailed; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>,
 that any share of Stock delivered as payment, in whole or in part, of such exercise price must either (i)&nbsp;not have been acquired by the
Optionee from the Company, or (ii)&nbsp;have been held by the Optionee for at least six (6)&nbsp;months prior to such exercise. As promptly as practicable after receipt of written notification and
payment, the Company shall deliver to the Optionee certificates for such shares, issued in the Optionee's name. If shares of Stock are used in payment of the exercise price, the aggregate Fair Market
Value of the shares of Stock tendered must be equal to or less than the aggregate exercise price of the shares being purchased upon exercise of the Option, and any difference must be paid by cash,
certified check, bank draft or postal or express money order payable to the Company. Delivery of the shares shall be deemed effected for all purposes when a stock transfer agent of the Company shall
have deposited the certificates in the United States mail, addressed to the Optionee, at the address specified by the Optionee in his notice of exercise. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Whenever
an Option is exercised by exchanging shares of Stock owned by the Optionee, the Optionee shall deliver to the Company certificates registered in the name of the Employee
representing a number of shares of Stock legally and beneficially owned by the Optionee, free of all liens, claims, and encumbrances of every kind, accompanied by stock powers duly endorsed in blank
by the record holder of the shares represented by the certificates, (with signature guaranteed by a commercial bank or trust company or by a brokerage firm having a membership on a registered national
stock exchange). The delivery of certificates upon the exercise of Options is subject to the condition that the person exercising the Option provide the Company with the information the Company might
reasonably request pertaining to exercise, sale or other disposition of an Option. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Exercise on Termination of Employment</B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B>Termination Other Than By Death or Disability</B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Unless it is expressly provided
otherwise in the Option Agreement, each Option shall terminate on the earlier of the date of expiration of the Option or the date that is one day less than three months after the severance of the
employment relationship between the Optionee and the Company and all Affiliates for any reason (including, but not limited to, Retirement), whether with or without cause, other than death or
Disability (the earlier of such dates being referred to herein as the "Option Termination (Severance) Date"), and during such period the Optionee shall be entitled, at any time prior to the Option
Termination (Severance) Date, to exercise the Option in respect of the number of shares that the Optionee would have been entitled to purchase had the Optionee exercised the Option immediately prior
to such severance of employment. If such Optionee should die after such severance of employment and prior to the Option Termination (Severance) Date, any rights such Optionee may have to exercise the
Option shall be exercisable by the Optionee's executors or administrators or the person or persons to whom the Option shall have been transferred by his will or by the laws of descent or distribution,
as applicable, for the remainder of the period prior to the Option Termination (Severance) Date, unless it is expressly provided otherwise in the Option Agreement. Whether authorized leave of absence
or absence on military or government service shall constitute severance of the employment of the Employee shall be determined by the Committee at that time. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
determining the employment relationship between the Company and the Employee, employment by any Affiliate shall be considered employment by the Company, as shall employment by a
corporation issuing or assuming a stock option in a transaction to which Section&nbsp;424(a) of the Code applies, or by a parent corporation or subsidiary corporation of the corporation issuing or
assuming a stock option (and for this purpose, the phrase "corporation issuing or assuming a stock option" shall be substituted for the word "Company" in the definitions of parent corporation and
subsidiary corporation in Section&nbsp;2.1, and the parent-subsidiary relationship shall be determined at the time of the corporate action described in Section&nbsp;424(a) of the Code). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B>Death</B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If the Optionee, while in the employ of the Company and before the date of
expiration of the Option, dies, the Option shall terminate on the earlier of the date of expiration of the Option or the date that is one day less than one year following the date of the Optionee's
death (the earlier of such dates being referred to herein as the "Option Termination (Death) Date"), unless it is expressly provided otherwise in the Option Agreement. After the death of the Optionee
while in the employ of the Company and before the Option Termination (Death) Date, the Optionee's executors or administrators or any person or persons to whom his Option shall have been transferred by
his will or by the laws of descent and distribution, as applicable, shall have the right, at any time prior to the Option Termination (Death) Date, to exercise the Option in respect of the number of
shares that the Optionee would have been entitled to purchase had he exercised the Option immediately prior to his death, unless it is expressly provided otherwise in the Option Agreement. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>7</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2><B>Disability</B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If, before the expiration of an Option, the Optionee shall be severed
from the employ of the Company and all Affiliates for Disability, the Option shall terminate on the earlier of the date of expiration of the Option or the date that is one day less than one year after
the date the Optionee was severed because of Disability (the earlier of such dates being referred to herein as the "Option Termination (Disability) Date"), unless it is expressly provided otherwise in
the Option Agreement. Unless it is expressly provided otherwise in the Option Agreement, in the event that the Optionee shall be severed from the employ of the Company and all Affiliates for
Disability, the Optionee shall have the right prior to the Option Termination (Disability) Date to exercise the Option in respect of the number of shares that the Optionee would have been entitled to
purchase had the Optionee exercised the Option immediately prior to his severance of employment for Disability. If such Optionee should die after such severance of employment for Disability and prior
to the Option Termination (Disability) Date, any rights such Optionee may have to exercise the Option shall be exercisable by his executors or administrators or the person or persons to whom the
Option shall have been transferred by his will or by the laws of descent or distribution, as applicable, for the remainder of the period prior to the Option Termination (Disability) Date, unless it is
expressly provided otherwise in the Option Agreement. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Substitution Options.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Options may be granted under this Plan from time to time in substitution for stock
options held by employees of other corporations who are about to become employees of or affiliated with the Company or any Affiliate as the result of a merger or consolidation of the employing
corporation with the Company or any Affiliate, or the acquisition by the Company or any Affiliate of the assets of the employing corporation, or the acquisition by the Company or any Affiliate of
stock of the employing corporation as the result of which it becomes an Affiliate of the Company. The terms and conditions of the substitute Options granted may vary from the terms and conditions set
out in this Plan to the extent the Committee, at the time of grant, may deem appropriate to conform, in whole or in part, to the provisions of the stock options in substitution for which they are
granted. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;No Rights as Shareholder.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No Optionee shall have any rights as a shareholder with respect to Stock covered
by his Option until the date a stock certificate is issued for the Stock. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kj76602_article_vi_administration"> </A>
<A NAME="toc_kj76602_6"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE VI<BR>  <BR>    Administration    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Plan shall be administered by the Committee. All questions of interpretation and application of this Plan and Options shall be subject to the determination
of the Committee. A majority of the members of the Committee shall constitute a quorum. All determinations of the Committee shall be made by a majority of its members. Any decision or determination
reduced to writing and signed by a majority of the members shall be as effective as if it had been made by a majority vote at a meeting properly called and held. This Plan shall be administered in
such a manner as to permit the Options granted under it that are designated to be Incentive Options to qualify as Incentive Options. In carrying out its authority under this Plan, the Committee shall
have full and final authority and discretion, including but not limited to the following rights, powers and authorities, to: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;determine
the individuals to whom and the time or times at which Options will be made, </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;determine
the number of shares and the purchase price of Stock covered in each Option, subject to the terms of this Plan, </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;determine
the terms, provisions and conditions of each Option, which need not be identical, </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;accelerate
the time at which any outstanding Option may be exercised, </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>8</FONT></P>

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<UL>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;prescribe,
amend and rescind rules and regulations relating to administration of this Plan, and </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;make
all other determinations and take all other actions deemed necessary, appropriate, or advisable for the proper administration of this Plan. </FONT></P>

</UL>

<P><FONT SIZE=2>The
actions of the Committee in exercising all of the rights, powers, and authorities set out in this Article and all other Articles of this Plan, when performed in good faith and in its sole
judgment, shall be final, conclusive and binding on all parties. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kj76602_article_vii_amendment_or_termination_of_plan"> </A>
<A NAME="toc_kj76602_7"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE VII<BR>  <BR>    Amendment or Termination of Plan    <BR>    </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors of the Company may amend, terminate or suspend this Plan at any time, in its sole and absolute discretion; provided, however, that to the
extent required to maintain the status of any Incentive Option under the Code, no amendment that would (a)&nbsp;change the aggregate number of shares of Stock that may be issued under Incentive
Options, (b)&nbsp;change the class of employees eligible to receive Incentive Options, or (c)&nbsp;decrease the exercise price for Incentive Options below the Fair Market Value of the Stock at the
time it is granted, shall be made without the approval of the holders of a majority of the outstanding shares of the Company's voting stock present in person or by proxy and entitled to vote thereon.
Subject to the preceding sentence, the Board shall have the power to make any changes in this Plan and in the regulations and administrative provisions under it or in any outstanding Incentive Option
as in the opinion of counsel for the Company may be necessary or appropriate from time to time to enable any Incentive Option granted under this Plan to continue to qualify as an incentive stock
option or such other stock option as may be defined under the Code so as to receive preferential federal income tax treatment. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kj76602_article_viii_miscellaneous"> </A>
<A NAME="toc_kj76602_8"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE VIII<BR>  <BR>    Miscellaneous    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;No Employment or Affiliation Obligation.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The granting of any Option shall not constitute an employment or
consulting contract, express or implied, nor impose upon the Company or any Affiliate any obligation to employ or to retain or to continue to retain the services of any Optionee. The right of the
Company or any Affiliate to terminate the employment or retention of any person shall not be diminished or affected by reason of the fact that an Option has been granted to him. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Forfeiture</B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding any other provisions of this Plan, if during the time that an Optionee holds an
Option the Committee finds by a majority vote after full consideration of the facts that the Optionee (a)&nbsp;committed or engaged in fraud, embezzlement, theft, commission of a felony, or proven
dishonesty in the course of his employment by or affiliation with the Company or an Affiliate, which conduct damaged the Company or an Affiliate, or disclosed trade secrets of the Company or an
Affiliate, or (b)&nbsp;participated, engaged in or had a material, financial or other interest, whether as an employee, officer, director, consultant, contractor, shareholder, owner, or otherwise,
in any commercial endeavor anywhere in the world where the Company conducts business that is competitive with the business of the Company or an Affiliate without the written consent of the Company or
such Affiliate, then the Optionee shall forfeit all outstanding Options, including all exercised Options pursuant to which the Company has not yet delivered a stock certificate. Clause&nbsp;(b)
shall not be deemed to have been violated solely by reason of the Optionee's ownership of stock or securities of any publicly owned corporation, if that ownership does not result in effective control
of such corporation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
decision of the Committee as to the damage done to the Company or an Affiliate, and the extent of the Optionee's competitive activity shall be final. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>9</FONT></P>

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<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Tax Withholding.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company or any Affiliate shall be entitled to deduct from other compensation payable to
each Optionee who is an employee of the Company or an Affiliate any sums required by federal, state, or local tax law to be withheld with respect to the grant or exercise of an Option. In the
alternative, the Company may require the Optionee (or other person exercising the Option) to pay the sum directly to the employer corporation. If the Optionee (or other person exercising the Option)
is required to pay the sum directly, payment in cash or by check of such sums for taxes shall be delivered within 10&nbsp;days after the date of exercise or lapse of restrictions. The Company shall
have no obligation upon exercise of any Option until payment has been received, unless withholding (or offset against a cash payment) as of or prior to the date of exercise is sufficient to cover all
sums due with respect to that exercise. The Company and its Affiliates shall not be obligated to advise an Optionee of the existence of the tax or the amount that the employer corporation will be
required to withhold. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Written Agreement.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Option shall be embodied in a written Option Agreement which shall be subject to the
terms and conditions of this Plan and shall be signed by the Optionee and by a member of the Committee on behalf of the Committee and the Company. The Option Agreement may contain any other provisions
that the Committee in its discretion shall deem advisable which are not inconsistent with the terms of this Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Indemnification of the Committee and the Board of Directors.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;With respect to administration of this Plan,
the Company shall indemnify each present and future member of the Committee and the Board of Directors against, and each member of the Committee and the Board of Directors shall be entitled without
further act on his part to indemnity from the Company for, all expenses (including attorney's fees, the amount of judgments and the amount of approved settlements made with a view to the curtailment
of costs of litigation, other than amounts paid to the Company itself) reasonably incurred by him in connection with or arising out of any action, suit, or proceeding in which he may be involved by
reason of his being or having been a member of the Committee and/or the Board of Directors, whether or not he continues to be a member of the Committee and/or the Board of Directors at the time of
incurring the expenses&#151;including, without limitation, matters as to which he shall be finally adjudged in any action, suit or proceeding to have been found to have been negligent in the
performance of his duty as a member of the Committee of the Board of Directors. However, this indemnity shall not include any expenses incurred by any member of the Committee and/or the Board of
Directors in respect of matters as to which he shall be finally adjudged in any action, suit or proceeding to have been guilty of gross negligence or willful misconduct in the performance of his duty
as a member of the Committee or the Board of Directors. In addition, no right of indemnification under this Plan shall be available to or enforceable by any member of the Committee and the Board of
Directors unless, within 60&nbsp;days after institution of any action, suit or proceeding, he shall have offered the Company, in writing, the opportunity to handle and defend same at its own
expense. This right of indemnification shall inure to the benefit of the heirs, executors or administrators of each member of the Committee and the Board of Directors and shall be in addition to all
other rights to which a member of the Committee and the Board of Directors may be entitled as a matter of law, contract, or otherwise. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.6</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Gender</B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If the context requires, words of one gender when used in this Plan shall include the others and
words used in the singular or plural shall include the other. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.7</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Headings</B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Headings of Articles and Sections are included for convenience of reference only and do not
constitute part of this Plan and shall not be used in construing the terms of this Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.8</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Other Compensation Plans</B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The adoption of this Plan shall not affect any other stock option, incentive or
other compensation or benefit plans in effect for the Company or any Affiliate, nor shall this Plan preclude the Company from establishing any other forms of incentive or other compensation for
employees of the Company or any Affiliate. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>10</FONT></P>

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<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.9</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Other Options</B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The grant of an Option shall not confer upon the Optionee the right to receive any future or
other Options under this Plan, whether or not Options may be granted to similarly situated Optionees, or the right to receive future Options upon the same terms or conditions as previously granted. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.10</FONT><FONT
SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;Governing Law</B></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The provisions of this Plan shall be construed, administered, and governed under the laws of
the State of Texas. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>11</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ta76602_incentive_stock_option_agreeme__inc03273"> </A>
<A NAME="toc_ta76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>INCENTIVE STOCK OPTION AGREEMENT<BR>  PROS STRATEGIC SOLUTIONS,&nbsp;INC.<BR>  1997 STOCK OPTION PLAN    <BR>    </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This </FONT><FONT SIZE=2><B>INCENTIVE STOCK OPTION AGREEMENT</B></FONT><FONT SIZE=2> (this "Agreement") is made between PROS Strategic Solutions,&nbsp;Inc., a
Texas corporation (the "Company"), and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(the "Employee"). The Company considers that its interests will be
served by granting the Employee an option to purchase shares of common stock
of the Company as an inducement for his continued and effective performance of services for the Company. The Board of Directors of the Company (the "Board") has adopted, and the shareholders have
approved, the PROS Strategic Solutions,&nbsp;Inc. 1997 Stock Option Plan (the "Plan"), a copy of which is attached hereto and incorporated by reference herein. The Employee has been designated as a
participant in the Plan. Terms that are not specifically defined in this Agreement shall have the meanings ascribed to them in the Plan. </FONT></P>

<UL>

<P><FONT SIZE=2><B> IT IS AGREED:  </B></FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;Subject
to the terms of the Plan and this Agreement, as of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(the "Date of Grant"), the Company hereby grants to the
Employee an incentive stock option (the "Option") to purchase&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of the common stock of the Company, no par value per share ("Stock"), at a price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share,
subject to adjustment as provided in the Plan (the "Option Price"). Subject to earlier expiration of the Option as herein provided, the Option is exercisable in accordance with the following schedule: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;the
Option may not be exercised until the Employee has completed one year of continuous employment with the Company or any Affiliate following the Date of Grant; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;beginning
on the day after the first anniversary of the Date of Grant, the Option may be exercised with respect to up to <SUP>1</SUP>/<SMALL>5</SMALL> of the shares subject to the
Option; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;beginning
on the day after the date that is one month after the first anniversary of the Date of Grant, and after the expiration of each succeeding one-month
period, the Option may be exercised with respect to up to an additional 1/60th of the shares subject to the Option, so that after the expiration of the fifth anniversary of the Date of Grant, the
Option shall be exercisable in full; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;&nbsp;to
the extent not exercised, installments shall be cumulative and may be exercised in whole or in part until the Option expires on the seventh anniversary of the Date of
Grant. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Notwithstanding
the provisions of Section&nbsp;1(a) hereof, the Option shall be fully exercisable upon the occurrence of any of the following on or after
a "Change in Control" (as defined in Section&nbsp;1(c)(1) hereof): </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;the
Employee's death; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;the
Employee's Disability; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;the
Employee's Retirement; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;&nbsp;the
Employee's employment with the Company is terminated by the Company without "Cause" (as defined in Section&nbsp;1(c)(2) hereof); or </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)&nbsp;&nbsp;&nbsp;the
Employee voluntarily terminates his employment with the Company for "Good Reason" (as defined in Section&nbsp;1(c)(3) hereof). </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>1</FONT></P>

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<UL>
<UL>
<BR>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;As
used in this Agreement, the following terms or phrases shall have the indicated meanings: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;"Change
in Control" shall mean the occurrence of one or more of the following events: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;any
person, entity, or "group", as such term is used in Section&nbsp;13(d)(3) of the Securities Exchange Act of 1934, (excluding, for this purpose, the Company, its
subsidiaries, and the shareholders of the Company as of the date after the Date of Grant) becomes the beneficial owner, directly or indirectly, of fifty percent (50%) or more of either the then
outstanding shares of Common Stock or the combined voting power of the Company's then outstanding voting securities entitled to vote; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;as
a result of a merger, consolidation, reorganization, recapitalization, exchange offer, acquisition of assets or stock, or other transaction (each, a "Major Corporate
Event"), the persons who were the shareholders of the Company immediately prior to such Major Corporate Event do not, immediately thereafter, own more than fifty percent (50%) of the combined voting
power of the outstanding voting securities of the surviving or resulting entity; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;any
sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company and its
subsidiaries taken as a whole; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;the
shareholders shall approve the dissolution of the Company. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;"Cause"
shall mean the occurrence of any of the following events: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;the
Employee is found guilty of, admits in writing facts amounting to, or is held civilly liable for fraud, embezzlement or dishonesty; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;the
Employee is convicted of a felony involving a crime of moral turpitude which through the lapse of time or otherwise is not subject to appeal; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;the
Employee knowingly discloses trade secrets or confidential Company information or matters to unauthorized persons; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;the
Employee willfully breaches or habitually neglects any duties the Employee is required to perform under the terms of the employment agreement or any other agreement
or arrangement between the Employee and the Company then in effect and such breach or neglect is not cured within fifteen (15)&nbsp;days after the Company has provided the Employee with written
notice of such breach or neglect; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;the
Employee materially breaches any of the other material terms of any employment agreement or any other agreement or arrangement between the Employee and the Company
then in effect and any
such breach is not cured within fifteen (15)&nbsp;days after the Company has provided the Employee with written notice of such breach. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;"Good
Reason" shall mean the occurrence of any of the following events which is not cured by the Company within fifteen (15)&nbsp;days after the Employee has provided
the Company with written notice of such event: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;the
assignment to the Employee of any duties materially inconsistent with the Employee's position, authority, duties or responsibilities with the Company as established
pursuant to the employment agreement or any other agreement or arrangement between the Employee and the Company then in effect; </FONT></P>

</UL>
</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

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<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;any
reduction in the Employee's salary as established pursuant to the employment agreement or any other agreement or arrangement between the Employee and the Company
then in effect; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;the
relocation of the Company's principal executive offices or the Employee's principal place of performance of his duties and responsibilities of employment with the
Company to a location more than 50 miles outside of the central business district of the City of Houston, Texas; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;a
material breach by the Company of any of its obligations to the Employee under the employment agreement or any other agreement or arrangement between the Employee and
the Company then in effect. </FONT></P>

</UL>
</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
any other provision of this Agreement, this Option, to the extent not previously exercised, must be exercised in full or in an installment of not less
than 500 shares of stock subject to the Option. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
the extent that the aggregate fair market value of Stock with respect to which incentive stock options are exercisable for the first time by the Employee during any
calendar year (under the Plan or any other plan of the Company or its Affiliates) exceeds $100,000, the options will be treated as nonqualified stock options. For purposes of this rule, the fair
market value of the Stock is determined at the time the option for the Stock is granted. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Option granted to the Employee under this Agreement shall not be transferable or assignable by the Employee other than by will or the laws of descent and
distribution, and shall be exercisable during the Employee's lifetime only by him. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares
of Stock purchased pursuant to the exercise of the Option shall be subject to the terms and provisions of that certain Shareholders' Agreement dated May&nbsp;1,
1997, among the Company and the shareholders of the Company that are parties thereto, as the same may be amended or restated from time to time (the "Shareholders Agreement"), including, but not
limited to, any term or provision of the Shareholders Agreement that has survived the termination of the Shareholders Agreement and continues in effect at the time of such exercise. The Employee
agrees that the Employee and the Employee's spouse, if any, will, on the first date of exercise of the Option, execute and deliver to the Company such documents and instruments as the Board of
Directors of the Company, in its discretion, may require to evidence such persons' agreement to be bound by the terms and provisions of the Shareholders Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>THE EMPLOYEE IS HEREBY NOTIFIED THAT IF HE DISPOSES OF STOCK TRANSFERRED TO HIM UPON HIS EXERCISE OF THIS OPTION WITHIN TWO YEARS AFTER THE DATE
OF THE GRANTING OF THE OPTION OR WITHIN ONE YEAR AFTER THE TRANSFER OF THE STOCK TO HIM, ALL OR A PORTION OF HIS OPTION WILL BE TAXED AS IF IT WERE A NONQUALIFIED STOCK OPTION RATHER THAN AN INCENTIVE
STOCK OPTION.</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Option may be exercised only while the Employee remains an employee of the Company or an Affiliate, except that: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;If,
before the "Expiration Date" (as defined below), the employment relationship between the Employee and the Company and all Affiliates shall be severed for any reason
(including, but not limited to, Retirement), whether with or without Cause, other than death or Disability, the Option shall terminate on the earlier of the Expiration Date or the date that is one day
less than three months after such severance of employment (the earlier of such dates being referred to herein as the "Option Termination (Severance) Date"), and during such period the Employee shall
be entitled, at any time prior to the Option Termination (Severance) Date, to exercise the Option </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

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<UL>

<P><FONT SIZE=2>in
respect of the number of shares that the Employee would have been entitled to purchase had the Employee exercised the Option immediately prior to such severance of employment. If the Employee
should die after such severance of employment and prior to the Option Termination (Severance) Date, any rights the Employee may have to exercise the Option shall be exercisable by his executors or
administrators or the person or persons to whom the Option shall have been transferred by his will or by the laws of descent and distribution, as applicable, for the remainder of the period prior to
the Option Termination (Severance) Date. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;If,
before the Expiration Date, the Employee dies while in the employ of the Company or an Affiliate, the Option shall terminate on the earlier of the Expiration Date or
the date that is one day less than one year following the date of his death (the earlier of such dates being referred to herein as the "Option Termination (Death) Date"), and during such period the
Employee's executors or administrators or the person or persons to whom the Option shall have been transferred by his will or by the laws of descent and distribution, as applicable, shall have the
right, at any time prior to the Option Termination (Death) Date, to exercise the Option in respect of the number of shares that the Employee would have been entitled to purchase had the Employee
exercised the Option immediately prior to his death. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;If,
before the Expiration Date, the Employee shall be severed from the employ of the Company and all Affiliates for Disability, the Option shall terminate on the earlier
of the Expiration Date or the date that is one day less than one year after the date of such severance of employment because of Disability (the earlier of such dates being referred to herein as the
"Option Termination (Disability) Date"), and during such period the Employee shall have the right, at any time prior to the Option Termination (Disability) Date, to exercise the Option in respect of
the number of shares that the Employee would have been entitled to purchase had the Employee exercised the Option immediately prior to such severance of employment for Disability. If the Employee
should die after such severance of employment for Disability and prior to the Option Termination (Disability) Date, any rights the Employee may have to exercise the Option shall be exercisable by his
executors or administrators or the person or persons to whom the Option shall have been transferred by his will or by the laws of descent or distribution, as applicable, for the remainder of the
period prior to the Option Termination (Disability) Date. </FONT></P>

</UL>

<P><FONT SIZE=2>The
Option shall terminate and shall not be exercisable in any event after&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(the "Expiration Date"). In the event of the severance of the employment relationship
between the Employee and the Company and all Affiliates for any reason, whether with or without Cause, and including death, Retirement or Disability, the Option shall in no event continue to vest
after such severance of employment except as expressly provided otherwise in Section&nbsp;1(b) hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Agreement may not be changed or terminated orally but only by an agreement in writing signed by the party against whom enforcement of any such change or termination
is sought. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall not be deemed by the grant of the Option (as distinguished from a separate employment agreement, if any) to be required to employ the Employee for any
period. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;&nbsp;&nbsp;The
Employee shall not have any rights as a shareholder with respect to any shares covered by the Option until the date of the issuance of the stock certificate or
certificates to him for such shares following his exercise of the Option pursuant to its terms and conditions and payment for the shares. No adjustment shall be made for dividends or other rights for
which the record date is prior to the date such certificate or certificates are issued. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;&nbsp;&nbsp;In
the event of any difference of opinion concerning the meaning or effect of the Plan or this Agreement, such difference shall be resolved by the Committee referred to
in the Plan. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

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<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;&nbsp;&nbsp;The
validity, construction and performance of this agreement shall be governed by the laws of the State of Texas. Any invalidity of any provision of this Agreement shall
not affect the validity of any other provision. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;&nbsp;&nbsp;All
offers, notices, demands, requests, acceptances or other communications hereunder shall be in writing and shall be deemed to have been duly made or given if mailed
by registered or certified mail, return receipt requested. Any such notice mailed to the Company shall be addressed to its principal office, and any notice mailed to the Employee shall be addressed to
the Employee's residence address as it appears on the books and records of the Company or to such other address as either party may hereafter designate in writing to the other. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;&nbsp;&nbsp;This
Agreement shall, except as herein stated to the contrary, inure to the benefit of and bind the legal representatives, successors and assigns of the parties hereto. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;&nbsp;&nbsp;This
Option is an incentive stock option which is intended to be governed by section&nbsp;422 of the Internal Revenue Code of 1986, as amended. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.&nbsp;&nbsp;&nbsp;In
accepting this Option, the Employee accepts and agrees to be bound by all the terms and conditions of the Plan which pertain to incentive stock options granted under
the Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>IN CONSIDERATION OF THE GRANT OF THE OPTION UNDER THIS AGREEMENT AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF ALL OF
WHICH ARE HEREBY ACKNOWLEDGED AND CONFESSED, (A)&nbsp;THE EMPLOYEE HEREBY ACKNOWLEDGES AND AGREES THAT THE OPTION GRANTED TO THE EMPLOYEE UNDER THIS AGREEMENT CONSTITUTE FULL AND COMPLETE
SATISFACTION OF ANY AND ALL OBLIGATIONS OF THE COMPANY AND/OR ANY OF THE "WOESTEMEYER BUSINESSES" (AS HEREINAFTER DEFINED) TO PROVIDE THE EMPLOYEE WITH OPTIONS TO ACQUIRE SHARES OF STOCK OF, AND/OR
OPPORTUNITIES TO PURCHASE SHARES OF STOCK OF, AND/OR TO OTHERWISE PROVIDE THE EMPLOYEE WITH EQUITY PARTICIPATION IN, THE COMPANY OR ANY OF THE WOESTEMEYER BUSINESSES, AND (B)&nbsp;THE EMPLOYEE
HEREBY RELEASES, RELINQUISHES, ACQUITS, AND FOREVER DISCHARGES THE COMPANY AND THE WOESTEMEYER BUSINESSES AND THEIR RESPECTIVE DIRECTORS, OFFICERS, SHAREHOLDERS, MEMBERS, PARTNERS, OWNERS, MANAGERS,
JOINT VENTURERS, AGENTS, EMPLOYEES, AFFILIATES, TRUSTEES, ATTORNEYS, HEIRS, SUCCESSORS, AND ASSIGNS FROM ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION, LOSSES, DEBTS, OBLIGATIONS AND LIABILITIES OF
EVERY KIND, KNOWN AND UNKNOWN, WHETHER IN CONTRACT OR IN TORT, OR ARISING UNDER OR BY VIRTUE OF ANY STATUTE, REGULATION, OR JUDICIAL DECISION, FOR OR WITH RESPECT TO ANY ADDITIONAL OR FUTURE OPTIONS
TO ACQUIRE SHARES OF STOCK OF, OPPORTUNITIES TO PURCHASE SHARES OF STOCK OF, OR OTHER RIGHTS TO EQUITY PARTICIPATION IN, THE COMPANY OR ANY OF THE WOESTEMEYER BUSINESSES, ALL OF WHICH ADDITIONAL OR
FUTURE OPTIONS, OPPORTUNITIES, AND OTHER RIGHTS ARE HEREBY DECLARED TERMINATED, NULL, VOID, AND OF NO FURTHER FORCE OR EFFECT WHATSOEVER. AS USED HEREIN, THE TERM "WOESTEMEYER BUSINESSES" MEANS ANY
AND ALL BUSINESS ENTITIES (INCLUDING, BUT NOT LIMITED TO, ANY CORPORATION, PARTNERSHIP, JOINT VENTURE, LIMITED LIABILITY COMPANY, ASSOCIATION, UNINCORPORATED SOLE PROPRIETORSHIP, OR OTHER BUSINESS
ENTITY, OR ANY DIVISION, BRANCH OR SEGMENT OF ANY THEREOF) WHICH, DIRECTLY OR INDIRECTLY, THROUGH ONE OR MORE INTERMEDIARIES IS CONTROLLED BY RONALD F. WOESTEMEYER AND/OR MARIETTE MELCHIOR
WOESTEMEYER, INCLUDING, BUT NOT LIMITED TO, PROS ENERGY TECHNOLOGIES CORPORATION (FORMERLY KNOWN AS PROS ENERGY TECHNOLOGIES,&nbsp;INC.), A TEXAS CORPORATION, AND PROS-AVIATION
INTELLIGENCE,&nbsp;INC., A TEXAS CORPORATION.</B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

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<A NAME="page_ta76602_1_6"> </A>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>IN WITNESS WHEREOF</B></FONT><FONT SIZE=2>, this Agreement has been duly executed and delivered to be effective as of the day and year first above written. </FONT></P>

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<TD COLSPAN=2><FONT SIZE=2><B>COMPANY:</B></FONT></TD>
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&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>PROS STRATEGIC SOLUTIONS, INC.</B></FONT></TD>
</TR>
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<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
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By:</FONT></TD>
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<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%"><FONT SIZE=2>Printed Name:</FONT></TD>
<TD WIDTH="35%"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
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<TD WIDTH="17%"><FONT SIZE=2>Printed Title:</FONT></TD>
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<TD COLSPAN=2><FONT SIZE=2><B>EMPLOYEE:</B></FONT></TD>
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&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
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&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
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<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

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<P><br><A NAME="07ZBA76601_4">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ki76602_1">PROS STRATEGIC SOLUTIONS, INC. 1997 STOCK OPTION PLAN</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ki76602_2">PROS STRATEGIC SOLUTIONS, INC. 1997 STOCK OPTION PLAN</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ki76602_3">TABLE OF CONTENTS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_kj76602_1">ARTICLE I Plan</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kj76602_2">ARTICLE II Definitions</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kj76602_3">ARTICLE III Eligibility</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kj76602_4">ARTICLE IV General Provisions Relating to Options</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kj76602_5">ARTICLE V Options</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kj76602_6">ARTICLE VI Administration</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kj76602_7">ARTICLE VII Amendment or Termination of Plan</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kj76602_8">ARTICLE VIII Miscellaneous</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ta76602_1">INCENTIVE STOCK OPTION AGREEMENT PROS STRATEGIC SOLUTIONS, INC. 1997 STOCK OPTION PLAN</A></FONT><BR>
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<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>5
<FILENAME>a2176970zex-10_2.htm
<DESCRIPTION>EXHIBIT 10.2
<TEXT>
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<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit&nbsp;10.2  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk76602_pros_holdings,_inc._19__kk702010"> </A>
<A NAME="toc_kk76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>PROS Holdings,&nbsp;Inc.<BR>  <BR>    1999 EQUITY INCENTIVE PLAN<BR>  <BR>    1. Purposes.    <BR>    </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;The purpose of the Plan is to provide a means by which selected Employees and Directors of and Consultants to the
Company, and its Affiliates, may be given an opportunity to benefit from increases in value of the stock of the Company through the granting of (i)&nbsp;Incentive Stock Options,
(ii)&nbsp;Nonstatutory Stock Options, (iii)&nbsp;stock bonuses, (iv)&nbsp;rights to purchase restricted stock, and (v)&nbsp;Stock Appreciation Rights, all as defined below. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;The Company, by means of the Plan, seeks to retain the services of persons who are now Employees or Directors of or
Consultants to the Company or its Affiliates, to secure and retain the services of new Employees, Directors and Consultants, and to provide incentives for such persons to exert maximum efforts for the
success of the Company and its Affiliates. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;The Company intends that the Stock Awards issued under the Plan shall, in the discretion of the Board or any Committee to
which responsibility for administration of the Plan has been delegated pursuant to subsection 3(c), be either (i)&nbsp;Options granted pursuant to Section&nbsp;6 hereof, including Incentive Stock
Options and Nonstatutory Stock Options, (ii)&nbsp;stock bonuses or rights to purchase restricted stock granted pursuant to Section&nbsp;7 hereof, or (iii)&nbsp;Stock Appreciation Rights granted
pursuant to Section&nbsp;8 hereof. All Options shall be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and in such form as issued pursuant to
Section&nbsp;6, and a separate certificate or certificates will be issued for shares purchased on exercise of each type of Option. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk76602_2._definitions."> </A>
<A NAME="toc_kk76602_2"> </A>
<BR></FONT><FONT SIZE=2><B>2. Definitions.    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Affiliate"</I></FONT><FONT SIZE=2> means any parent corporation or subsidiary corporation, whether now or hereafter
existing, as those terms are defined in Sections 424(e) and (f)&nbsp;respectively, of the Code. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Board"</I></FONT><FONT SIZE=2> means the Board of Directors of the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Code"</I></FONT><FONT SIZE=2> means the Internal Revenue Code of 1986, as amended. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(d)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Committee"</I></FONT><FONT SIZE=2> means a Committee appointed by the Board in accordance with subsection 3(c) of the
Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(e)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Company"</I></FONT><FONT SIZE=2> means PROS Holdings,&nbsp;Inc., a Delaware corporation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(f)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Concurrent Stock Appreciation Right"</I></FONT><FONT SIZE=2> or </FONT><FONT SIZE=2><I>"Concurrent
Right"</I></FONT><FONT SIZE=2> means a right granted pursuant to subsection 8(b)(2) of the Plan. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(g)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Consultant"</I></FONT><FONT SIZE=2> means any person, including an advisor, engaged by the Company or an Affiliate to
render consulting services and who is compensated for such services, provided that the term "Consultant" shall not include Directors who are paid only a director's fee by the Company or who are not
compensated by the Company for their services as Directors. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(h)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Continuous Status (or Continuous Service) as an Employee, Director or Consultant"</I></FONT><FONT SIZE=2> means that the
service of an individual to the Company or any Affiliate of the Company, whether as an Employee, Director or Consultant, is not interrupted or terminated. The Board, or the chief executive officer of
the Company, may determine, in that party's sole discretion, whether Continuous Status as an Employee, Director or Consultant shall be considered interrupted in the case of: (i)&nbsp;any leave of
absence approved by the Board or the chief executive officer of the Company, including sick leave, military leave, or any other personal leave; or (ii)&nbsp;transfers between the Company, Affiliates
or their successors. </FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Covered Employee"</I></FONT><FONT SIZE=2> means the chief executive officer and the other four highest compensated
officers of the Company for whom total compensation is required to be reported to shareholders under the Exchange Act, as determined for purposes of Section&nbsp;162(m) of the Code. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(j)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Director"</I></FONT><FONT SIZE=2> means a member of the Board. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(k)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Employee"</I></FONT><FONT SIZE=2> means any person, including Officers and Directors, employed by the Company or any
Affiliate of the Company. Neither service as a Director nor payment of a director's fee by the Company shall be sufficient to constitute "employment" by the Company. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(l)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Exchange Act"</I></FONT><FONT SIZE=2> means the Securities Exchange Act of 1934, as amended. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(m)&nbsp;&nbsp;"</B></FONT><FONT SIZE=2><I>Fair Market Value"</I></FONT><FONT SIZE=2> means, as of any date, the value of the common stock of the Company
determined as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(1)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;If the common stock is listed on any established stock exchange or traded on the Nasdaq National Market or the Nasdaq
Small Cap Market, the Fair Market Value of a share of common stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or market
(or the exchange or market with the greatest volume of trading in the Company's common stock) on the last market trading day prior to the day of determination, as reported in </FONT> <FONT SIZE=2><I>The Wall Street Journal</I></FONT><FONT SIZE=2> or
such other source as the Board deems reliable. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(2)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;In the absence of such markets for the common stock, the Fair Market Value shall be determined in good faith by the Board
or the Committee. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(n)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Incentive Stock Option"</I></FONT><FONT SIZE=2> means an Option intended to qualify as an incentive stock option within
the meaning of Section&nbsp;422 of the Code and the regulations promulgated thereunder. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(o)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Independent Stock Appreciation Right"</I></FONT><FONT SIZE=2> or </FONT><FONT SIZE=2><I>"Independent
Right"</I></FONT><FONT SIZE=2> means a right granted pursuant to subsection 8(b)(3) of the Plan. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(p)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Listing Date"</I></FONT><FONT SIZE=2> means the first date upon which any security of the Company is listed (or approved
for listing) upon notice of issuance on any securities exchange, or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(q)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Non-Employee Director"</I></FONT><FONT SIZE=2> means a Director who either (i)&nbsp;is not a current
Employee or Officer of the Company or its parent or subsidiary, does not receive compensation (directly or indirectly) from the Company or its parent or subsidiary for services rendered as a
consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation&nbsp;S-K promulgated pursuant to
the Securities Act ("Regulation&nbsp;S-K")), does not possess an interest in any other transaction as to which disclosure would be required under Item 404(a) of
Regulation&nbsp;S-K, and is not engaged in a business relationship as to which disclosure would be required under Item 404(b) of Regulation&nbsp;S-K; or (ii)&nbsp;is
otherwise considered a "non-employee" for purposes of Rule&nbsp;16b-3. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(r)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Nonstatutory Stock Option"</I></FONT><FONT SIZE=2> means an Option not intended to qualify as an Incentive Stock Option. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(s)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Officer"</I></FONT><FONT SIZE=2> means a person who is an officer of the Company within the meaning of Section&nbsp;16
of the Exchange Act and the rules and regulations promulgated thereunder. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(t)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Option"</I></FONT><FONT SIZE=2> means a stock option granted pursuant to the Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(u)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Option Agreement"</I></FONT><FONT SIZE=2> means a written agreement between the Company and an Optionee evidencing the
terms and conditions of an individual Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(v)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Optionee"</I></FONT><FONT SIZE=2> means a person to whom an Option is granted pursuant to the Plan or, if applicable,
such other person who holds an outstanding Option. </FONT></P>

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<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(w)&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Outside Director"</I></FONT><FONT SIZE=2> means a Director who either (i)&nbsp;is not a current employee of the
Company or an "affiliated corporation" (within the meaning of the Treasury regulations promulgated under Section&nbsp;162(m) of the Code), is not a former employee of the Company or an "affiliated
corporation" receiving compensation for prior services (other than benefits under a tax qualified pension plan), was not an officer of the Company or an "affiliated corporation" at any time, and is
not currently receiving direct or indirect remuneration from the Company or an "affiliated corporation" for services in any capacity other than as a Director, or (ii)&nbsp;is otherwise considered an
"outside director" for purposes of Section&nbsp;162(m) of the Code. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(x)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Plan"</I></FONT><FONT SIZE=2> means this 1999 Equity Incentive Plan. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(y)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Rule&nbsp;16b-3"</I></FONT><FONT SIZE=2> means Rule&nbsp;16b-3 of the Exchange Act or any
successor to Rule&nbsp;16b-3, as in effect with respect to the Company at the time of discretion is being exercised regarding the Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(z)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><I>"Securities Act"</I></FONT><FONT SIZE=2> means the Securities Act of 1933, as amended. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(aa) </B></FONT><FONT SIZE=2><I>"Stock Appreciation Right"</I></FONT><FONT SIZE=2> means any of the various types of rights which may be granted under
Section&nbsp;8 of the Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(bb) </B></FONT><FONT SIZE=2><I>"Stock Award"</I></FONT><FONT SIZE=2> means any right granted under the Plan, including any Option, any stock bonus, any right to
purchase restricted stock, and any Stock Appreciation Right. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(cc) </B></FONT><FONT SIZE=2><I>"Stock Award Agreement"</I></FONT><FONT SIZE=2> means a written agreement between the Company and a holder of a Stock Award
evidencing the terms and conditions of an individual Stock Award grant. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(dd) </B></FONT><FONT SIZE=2><I>"Tandem Stock Appreciation Right"</I></FONT><FONT SIZE=2> or </FONT><FONT SIZE=2><I>"Tandem Right"</I></FONT><FONT SIZE=2> means a
right granted pursuant to subsection 8(b)(1) of the Plan. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk76602_3._administration."> </A>
<A NAME="toc_kk76602_3"> </A>
<BR></FONT><FONT SIZE=2><B>3. Administration.    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;The Plan shall be administered by the Board unless and until the Board delegates administration to a Committee, as
provided in subsection 3(c). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;The Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(1)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;To determine from time to time which of the persons eligible under the Plan shall be granted Stock Awards; when and how
each Stock Award shall be granted; whether a Stock Award will be an Incentive Stock Option, a Nonstatutory Stock Option, a stock bonus, a right to purchase restricted stock, a Stock Appreciation
Right, or a combination of the foregoing; the provisions of each Stock Award granted (which need not be identical), including the time or times when a person shall be permitted to receive stock
pursuant to a Stock Award; whether a person shall be permitted to receive stock upon exercise of an Independent Stock Appreciation Right; and the number of shares with respect to which a Stock Award
shall be granted to each such person. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(2)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;To construe and interpret the Plan and Stock Awards granted under it, and to establish, amend and revoke rules and
regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement, in a manner and to the
extent it shall deem necessary or expedient to make the Plan fully effective. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(3)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;To amend the Plan or a Stock Award as provided in Section&nbsp;14. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(4)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best
interests of the Company which are not in conflict with the provisions of the Plan. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;The Board may delegate administration of the Plan to a committee of the Board composed of not fewer than two
(2)&nbsp;members (the "Committee"), all of the members of which Committee may be, </FONT></P>

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<P><FONT SIZE=2>in
the discretion of the Board, Non-Employee Directors and/or Outside Directors. If administration is delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board, including the power to delegate to a subcommittee of two (2)&nbsp;or more Outside Directors any of the administrative
powers the Committee is authorized to exercise (and references in this Plan to the Board shall thereafter be to the Committee or such a subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan.
Notwithstanding anything in this Section&nbsp;3 to the contrary, the Board or the Committee may delegate to a committee of one or more members of the Board the authority to grant Stock Awards to
eligible persons who (1)&nbsp;are not then subject to Section&nbsp;16 of the Exchange Act and/or (2)&nbsp;are either (i)&nbsp;not then Covered Employees and are not expected to be Covered
Employees at the time of recognition of income resulting from such Stock Award, or (ii)&nbsp;not persons with respect to whom the Company wishes to comply with Section&nbsp;162(m) of the Code. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk76602_4._shares_subject_to_the_plan."> </A>
<A NAME="toc_kk76602_4"> </A>
<BR></FONT><FONT SIZE=2><B>4. Shares Subject to the Plan.    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Subject to the provisions of Section&nbsp;13 relating to adjustments upon changes in stock, the stock that may be
issued pursuant to Stock Awards shall not exceed in the aggregate Two Million, Two Hundred Seventy Thousand, Eight Hundred Fifty Eight Shares and no/100 (2,270,858.00) shares of the Company's common
stock. If any Stock Award shall for any reason expire or otherwise terminate, in whole or in part, without having been exercised in full, the stock not acquired under such Stock Award shall revert to
and again become available for issuance under the Plan. Shares subject to Stock Appreciation Rights exercised in accordance with Section&nbsp;8 of the Plan shall not be available for subsequent
issuance under the Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;The stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or otherwise. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk76602_5._eligibility."> </A>
<A NAME="toc_kk76602_5"> </A>
<BR></FONT><FONT SIZE=2><B>5. Eligibility.    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Incentive Stock Options and Stock Appreciation Rights appurtenant thereto may be granted only to Employees. Stock Awards
other than Incentive Stock Options and Stock Appreciation Rights appurtenant thereto may be granted only to Employees, Directors or Consultants. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;No person shall be eligible for the grant of an Option or an award to purchase restricted stock if, at the time of grant,
such person owns (or is deemed to own pursuant to Section&nbsp;424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the
Company or of any of its Affiliates unless the exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value of such stock at the date of grant and the Option is
not exercisable after the expiration of five (5)&nbsp;years from the date of grant, or in the case of a restricted stock purchase award, the purchase price is at least one hundred percent (100%) of
the Fair Market Value of such stock at the date of grant. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Subject to the provisions of Section&nbsp;13 relating to adjustments upon changes in stock, no person shall be eligible
to be granted Options and Stock Appreciation Rights covering more than One Million Two Hundred Fifty Thousand (1,250,000) shares of the Company's common stock in any twelve (12)&nbsp;month period.
This subsection 5(c) shall not apply prior to the Listing Date and, following the Listing Date, shall not apply until (i)&nbsp;the earliest of: (A)&nbsp;the first material modification of the Plan
(including any increase to the number of shares reserved for issuance under the Plan in accordance with Section&nbsp;4; (B)&nbsp;the issuance of all of the shares of common stock reserved for
issuance under the Plan; (C)&nbsp;the expiration of the Plan; or (D)&nbsp;the first meeting of shareholders at which directors are to be elected that occurs after the close of the third calendar
year following the calendar year in which occurred the first registration of an equity security under section&nbsp;12 of the Exchange Act; or (ii)&nbsp;such </FONT></P>

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<BR>

<P><FONT SIZE=2>other
date required by Section&nbsp;162(m) of the Code and the rules and regulations promulgated thereunder. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk76602_6._option_provisions."> </A>
<A NAME="toc_kk76602_6"> </A>
<BR></FONT><FONT SIZE=2><B>6. Option Provisions.    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Option shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. The provisions of separate Options need not be
identical, but each Option shall
include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;&nbsp;Term.</B></FONT><FONT SIZE=2> No Option shall be exercisable after the expiration of ten (10)&nbsp;years from the date it was granted. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;&nbsp;Price.</B></FONT><FONT SIZE=2> The exercise price of each Incentive Stock Option shall be not less than one hundred percent (100%) of the Fair
Market Value of the stock subject to the Option on the date the Option is granted; the exercise price of each Nonstatutory Stock Option shall be not less than eighty-five percent (85%) of
the Fair Market Value of the stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or a Nonstatutory Stock Option)
may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying
the provisions of Section&nbsp;424(a) of the Code. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)&nbsp;&nbsp;&nbsp;Consideration.</B></FONT><FONT SIZE=2> The purchase price of stock acquired pursuant to an Option shall be paid, to the extent permitted by
applicable statutes and regulations, either (i)&nbsp;in cash at the time the Option is exercised, or (ii)&nbsp;at the discretion of the Board or the Committee, at the time of the grant of the
Option, (A)&nbsp;by delivery to the Company of other common stock of the Company, (B)&nbsp;according to a deferred payment or other arrangement (which may include, without limiting the generality
of the foregoing, the use of other common stock of the Company) with the person to whom the Option is granted or to whom the Option is transferred pursuant to subsection 6(d), or (C)&nbsp;in any
other form of legal consideration that may be acceptable to the Board. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the case of any deferred payment arrangement, interest shall be compounded at least annually and shall be charged at the minimum rate of interest necessary to avoid the treatment as
interest, under any applicable provisions of the Code, of any amounts other than amounts stated to be interest under the deferred payment arrangement. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(d)&nbsp;&nbsp;&nbsp;Transferability.</B></FONT><FONT SIZE=2> An Option shall not be transferable except by will or by the laws of descent and distribution, and shall
be exercisable during the lifetime of the person to whom the Option is granted only by such person. The person to whom the Option is granted may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of the death of the Optionee, shall thereafter be entitled to exercise the Option. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(e)&nbsp;&nbsp;&nbsp;Vesting.</B></FONT><FONT SIZE=2> The total number of shares of stock subject to an Option may, but need not, be allotted in periodic installments
(which may, but need not, be equal). The Option Agreement may provide that from time to time during each of such installment periods, the Option may become exercisable ("vest") with respect to some or
all of the shares allotted to that period, and may be exercised with respect to some or all of the shares allotted to such period and/or any prior period as to which the Option became vested but was
not fully exercised. The Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary but in each case will provide for vesting of at least twenty percent (20%) per year of the total number of shares subject to the
Option. The provisions of this subsection 6(e) are subject to any Option provisions governing the minimum number of shares as to which an Option may be exercised. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(f)&nbsp;&nbsp;&nbsp;&nbsp;Termination of Employment or Relationship as a Director or Consultant.</B></FONT><FONT SIZE=2> In the event an Optionee's Continuous Status as an
Employee, Director or Consultant terminates (other than upon the Optionee's death or disability), the Optionee may exercise his or her Option (to the extent that the </FONT></P>

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<BR>

<P><FONT SIZE=2>Optionee
was entitled to exercise it as of the date of termination) but only within such period of time ending on the earlier of (i)&nbsp;the date three (3)&nbsp;months following the termination
of the Optionee's Continuous Status as an Employee, Director or Consultant (or such longer or shorter period, which shall not be less than thirty (30)&nbsp;days, unless such termination is for
cause, specified in the Option Agreement), or (ii)&nbsp;the expiration of the term of the Option as set forth in the Option Agreement. If, after termination, the Optionee does not exercise his or
her Option within the time specified in the Option Agreement, the Option shall terminate, and the shares covered by such Option shall revert to and again become available for issuance under the Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An
Optionee's Option Agreement may also provide that if the exercise of the Option following the termination of the Optionee's Continuous Status as an Employee, Director, or Consultant
(other than upon the Optionee's death or disability) would result in liability under Section&nbsp;16(b) of the Exchange Act, then the Option shall terminate on the earlier of (i)&nbsp;the
expiration of the term of the Option set forth in the Option Agreement, or (ii)&nbsp;the tenth (10th) day after the last date on which such exercise would result in such liability under
Section&nbsp;16(b) of the Exchange Act. Finally, an Optionee's Option Agreement may also provide that if the exercise of the Option following the termination of the Optionee's Continuous Status as
an Employee, Director or Consultant (other than upon the Optionee's death or disability) would be prohibited at any time solely because the issuance of shares would violate the registration
requirements under the Securities Act, then the Option shall terminate on the earlier of (i)&nbsp;the expiration of the term of the Option set forth in the first paragraph of this subsection 6(f),
or (ii)&nbsp;the expiration of a period of three (3)&nbsp;months after the termination of the Optionee's Continuous Status as an Employee, Director or Consultant during which the exercise of the
Option would not be in violation of such registration requirements. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(g)&nbsp;&nbsp;&nbsp;Disability of Optionee.</B></FONT><FONT SIZE=2> In the event an Optionee's Continuous Status as an Employee Director or Consultant terminates as
a result of the Optionee's disability, the Optionee may exercise his or her Option (to the extent that the Optionee was entitled to exercise it as of the date of termination), but only within such
period of time ending on the earlier of (i)&nbsp;the date twelve (12)&nbsp;months following such termination (or such longer or shorter period, which in no event shall be less than six
(6)&nbsp;months, specified in the Option Agreement), or (ii)&nbsp;the expiration of the term of the Option as set forth in the Option Agreement. If, at the date of termination, the Optionee is not
entitled to exercise his or her entire Option, the shares covered by the unexercisable portion of the Option shall revert to and again become available for issuance under the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and the shares covered by such Option shall revert to and again become
available for issuance under the Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(h)&nbsp;&nbsp;&nbsp;Death of Optionee.</B></FONT><FONT SIZE=2> In the event of the death of an Optionee during, or within a period specified in the Option Agreement
after the termination of, the Optionee's Continuous Status as an Employee, Director or Consultant, the Option may be exercised (to the extent the Optionee was entitled to exercise the Option as of the
date of death) by the Optionee's estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the option upon the Optionee's death
pursuant to subsection 6(d), but only within the period ending on the earlier of (i)&nbsp;the date eighteen (18)&nbsp;months following the date of death (or such longer or shorter period, which in
no event shall be less than six (6)&nbsp;months, specified in the Option Agreement), or (ii)&nbsp;the expiration of the term of such Option as set forth in the Option Agreement. If, at the time of
death, the Optionee was not entitled to exercise his or her entire Option, the shares covered by the unexercisable portion of the Option shall revert to and again become available for issuance under
the Plan. If, after death, the Option is not exercised within the time specified herein, the Option shall terminate, and the shares covered by such Option shall revert to and again become available
for issuance under the Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;Early Exercise.</B></FONT><FONT SIZE=2> The Option may, but need not, include a provision whereby the Optionee may elect at any time while an
Employee, Director or Consultant to exercise the Option as to any part or all of the shares subject to the Option prior to the full vesting of the Option. Any unvested shares so purchased shall be
subject to a repurchase right in favor of the Company, with the repurchase price to be equal to the original purchase price of the stock, or to any other restriction the Board determines to </FONT></P>

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<BR>

<P><FONT SIZE=2>be
appropriate; </FONT><FONT SIZE=2><I>provided, however,</I></FONT><FONT SIZE=2> that (i)&nbsp;the right to repurchase at the original purchase price shall lapse at a minimum rate of twenty
percent (20%) per year over five (5)&nbsp;years from the date the Option was granted, and (ii)&nbsp;such repurchase right shall be exercisable only within (A)&nbsp;the one hundred and twenty
(120)&nbsp;day period following the termination of employment or the relationship as a Director or Consultant, or (B)&nbsp;such longer period as may be agreed to by the Company and the Optionee
(for example, for purposes of satisfying the requirements of Section&nbsp;1202(c)(3) of the Code (regarding "qualified small business stock")), and (iii)&nbsp;such right shall be exercisable only
for cash or cancellation of purchase money indebtedness for the shares. Should the right of repurchase be assigned by the Company, the assignee shall pay the Company cash equal to the difference
between the original purchase price and the stock's Fair Market Value if the original purchase price is less than the stock's Fair Market Value. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(j)&nbsp;&nbsp;&nbsp;&nbsp;Right of Repurchase.</B></FONT><FONT SIZE=2> The Option may, but need not, include a provision whereby the Company may elect, prior to the
Listing Date, to repurchase all or any part of the vested shares exercised pursuant to the Option; </FONT><FONT SIZE=2><I>provided, however,</I></FONT><FONT SIZE=2> that (i)&nbsp;such repurchase
right shall be exercisable only within (A)&nbsp;the one hundred and twenty (120)&nbsp;day period following the termination of employment or the relationship as a Director or Consultant, or
(B)&nbsp;such longer period as may be agreed to by the Company and the Optionee (for example, for purposes of satisfying the requirements of Section&nbsp;1202(c)(3) of the Code (regarding
"qualified small business stock")), (ii)&nbsp;such repurchase right shall be exercisable for less than all of the vested shares only with the Optionee's consent, and (iii)&nbsp;such right shall be
exercisable only for cash or cancellation of purchase money indebtedness for the shares at a repurchase price equal to the greater of (A)&nbsp;the stock's Fair Market Value at the time of such
termination or (B)&nbsp;the original purchase price paid for such shares by the Optionee. Should the right of repurchase be assigned by the Company, the assignee shall pay the Company cash equal to
the difference between the original purchase price and the stock's Fair Market Value if the original purchase price is less than the stock's Fair Market Value. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(k)&nbsp;&nbsp;&nbsp;Right of First Refusal.</B></FONT><FONT SIZE=2> The Option may, but need not, include a provision whereby the Company may elect, prior to the
Listing Date, to exercise a right of first refusal following receipt of notice from the Optionee of the intent to transfer all or any part of the shares exercised pursuant to the Option. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(l)&nbsp;&nbsp;&nbsp;&nbsp;Re-Load Options.</B></FONT><FONT SIZE=2> Without in any way limiting the authority of the Board or Committee to make or not to make
grants of Options hereunder, the Board or Committee shall have the authority (but not an obligation) to include as part of any Option Agreement a provision entitling the Optionee to a further Option
(a "Re-Load Option") in the event the Optionee exercises the Option evidenced by the Option agreement, in whole or in part, by surrendering other shares of Common Stock in accordance with
this Plan and the terms and conditions of the Option Agreement. Any such Re-Load Option (i)&nbsp;shall be for a number of shares equal to the number of shares surrendered as part or all
of the exercise price of such Option; (ii)&nbsp;shall have an expiration date which is the same as the expiration date of the Option the exercise of which gave rise to such Re-Load
Option; and (iii)&nbsp;shall have an exercise price which is equal to one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Re-Load Option on the date of
exercise of the original Option. Notwithstanding the foregoing, a Re-Load Option which is granted to a 10% shareholder (as described in subsection 5(b)), shall have an exercise price which
is equal to one hundred ten percent (110%) of the Fair Market Value of the stock subject to the Re-Load Option on the date of exercise of the original Option and shall have a term which is
no longer than five (5)&nbsp;years. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
such Re-Load Option may be an Incentive Stock Option or a Nonstatutory Stock Option, as the Board or Committee may designate at the time of the grant of the original
Option; </FONT><FONT SIZE=2><I>provided, however,</I></FONT><FONT SIZE=2> that the designation of any Re-Load Option as an Incentive Stock Option shall be subject to the one hundred
thousand dollar ($100,000) annual limitation on exercisability of Incentive Stock Options described in subsection 12(e) of the Plan and in Section&nbsp;422(d) of the Code. There shall be no
Re-Load Options on a Re-Load Option. Any such Re-Load Option shall be subject to the availability of sufficient shares under subsection 4(a) and the limits on the
grants of Options under subsection 5(c) </FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=7,SEQ=7,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="5",CHK=43660,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]KK76602B.;4',USER='BSKELLE',CD=';2-APR-2007;18:33' -->
<BR>

<P><FONT SIZE=2>and
shall be subject to such other terms and conditions as the Board or Committee may determine which are not inconsistent with the express provisions of the Plan regarding the terms of Options. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk76602_7._terms_of_stock_bonu__kk702358"> </A>
<A NAME="toc_kk76602_7"> </A>
<BR></FONT><FONT SIZE=2><B>7. Terms of Stock Bonuses and Purchases of Restricted Stock.    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each stock bonus or restricted stock purchase agreement shall be in such form and shall contain such terms and conditions as the Board or the Committee shall deem
appropriate. The terms and conditions of stock bonus or restricted stock purchase agreements may change from time to time, and the terms and conditions of separate agreements need not be identical,
but each stock bonus or restricted stock purchase agreement shall include (through incorporation of provisions hereof by reference in the agreement or otherwise) the substance of each of the following
provisions as appropriate: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;&nbsp;Purchase Price.</B></FONT><FONT SIZE=2> The purchase price under each restricted stock purchase Stock Award Agreement shall be such amount as the
Board or Committee shall determine and designate in such agreement, but in no event shall the purchase price be less than eighty-five percent (85%) of the stock's Fair Market Value on the
date such award is made. Notwithstanding the foregoing, the Board or the Committee may determine that eligible participants in the Plan may be awarded stock pursuant to a stock bonus agreement in
consideration for past services actually rendered to the Company or for its benefit. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;&nbsp;Transferability.</B></FONT><FONT SIZE=2> Rights under a stock bonus or restricted stock purchase agreement shall be transferable by the grantee
only upon such terms and conditions as are set forth in the applicable Stock Award Agreement, as the Board or the Committee shall determine in its discretion, so long as stock awarded under such Stock
Award Agreement remains subject to the terms of the agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)&nbsp;&nbsp;&nbsp;Consideration.</B></FONT><FONT SIZE=2> The purchase price of stock acquired pursuant to a stock purchase agreement shall be paid either:
(i)&nbsp;in cash at the time of purchase; (ii)&nbsp;at the discretion of the Board or the Committee, according to a deferred payment or other arrangement with the person to whom the stock is sold;
or (iii)&nbsp;in any other form of legal consideration that may be acceptable to the Board or the Committee in its discretion. Notwithstanding the foregoing, the Board or the Committee to which
administration of the Plan has been delegated may award stock pursuant to a stock bonus agreement in consideration for past services actually rendered to the Company or for its benefit. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(d)&nbsp;&nbsp;&nbsp;Vesting.</B></FONT><FONT SIZE=2> Shares of stock sold or awarded under the Plan may, but need not, be subject to a repurchase option in favor of
the Company in accordance with a vesting schedule to be determined by the Board or the Committee. The applicable agreement shall provide that (i)&nbsp;the right to repurchase at the original
purchase price shall lapse at a minimum rate of twenty percent (20%) per year over five (5)&nbsp;years from the date the Stock Award was granted, and (ii)&nbsp;such right shall be exercisable only
(A)&nbsp;within the one hundred and twenty (120)&nbsp;day period following the termination of employment or the relationship as a Director or Consultant, or (B)&nbsp;such longer period as may be
agreed to by the Company and the holder of the Stock Award (for example, for purposes of satisfying the requirements of Section&nbsp;1202(c)(3) of the Code (regarding "qualified small business
stock")), and (iii)&nbsp;such right shall be exercisable only for cash or cancellation of purchase money indebtedness for the shares. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(e)&nbsp;&nbsp;&nbsp;Termination of Employment or Relationship as a Director or Consultant.</B></FONT><FONT SIZE=2> In the event a Participant's Continuous Status as
an Employee, Director or Consultant terminates, the Company may repurchase or otherwise reacquire, subject to the limitations described in subsection 7(d), any or all of the shares of stock held by
that person which have not vested as of the date of termination under the terms of the stock bonus or restricted stock purchase agreement between the Company and such person. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk76602_8._stock_appreciation_rights."> </A>
<A NAME="toc_kk76602_8"> </A>
<BR></FONT><FONT SIZE=2><B>8. Stock Appreciation Rights.    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;The Board or Committee shall have full power and authority, exercisable in its sole discretion, to grant Stock
Appreciation Rights under the Plan to Employees or Directors of or Consultants to the Company or its Affiliates. To exercise any outstanding Stock Appreciation Right, the holder must </FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=8,SEQ=8,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="5",CHK=233506,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]KK76602B.;4',USER='BSKELLE',CD=';2-APR-2007;18:33' -->
<BR>

<P><FONT SIZE=2>provide
written notice of exercise to the Company in compliance with the provisions of the Stock Award Agreement evidencing such right. Except as provided in subsection 5(c), no limitation shall exist
on the aggregate amount of cash payments the Company may make under the Plan in connection with the exercise of a Stock Appreciation Right. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Three types of Stock Appreciation Rights shall be authorized for issuance under the Plan: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(1)&nbsp;&nbsp;&nbsp;Tandem Stock Appreciation Rights.</B></FONT><FONT SIZE=2> Tandem Stock Appreciation Rights will be granted appurtenant to an Option, and shall,
except as specifically set forth in this Section&nbsp;8, be subject to the same terms and conditions applicable to the particular Option grant to which it pertains. Tandem Stock Appreciation Rights
will require the holder to elect between the exercise of the underlying Option for shares of stock and the surrender, in whole or in part, of such Option for an appreciation distribution. The
appreciation distribution payable on the exercised Tandem Right shall be in cash (or, if so provided, in an equivalent number of shares of stock based on Fair Market Value on the date of the Option
surrender) in an amount up to the excess of (A)&nbsp;the Fair Market Value (on the date of the Option surrender) of the number of shares of stock covered by that portion of the surrendered Option in
which the Optionee is vested over (B)&nbsp;the aggregate exercise price payable for such vested shares. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(2)&nbsp;&nbsp;&nbsp;Concurrent Stock Appreciation Rights.</B></FONT><FONT SIZE=2> Concurrent Rights will be granted appurtenant to an Option and may apply to all or
any portion of the shares of stock subject to the underlying Option and shall, except as specifically set forth in this Section&nbsp;8, be subject to the same terms and conditions applicable to the
particular Option grant to which it pertains. A Concurrent Right shall be exercised automatically at the same time the underlying Option is exercised with respect to the particular shares of stock to
which the Concurrent Right pertains. The appreciation distribution payable on an exercised Concurrent Right shall be in cash (or, if so provided, in an equivalent number of shares of stock based on
Fair Market Value on the date of the exercise of the Concurrent Right) in an amount equal to such portion as shall be determined by the Board or the Committee at the time of the grant of the excess of
(A)&nbsp;the aggregate Fair Market Value (on the date of the exercise of the Concurrent Right) of the vested shares of stock purchased under the underlying Option which have Concurrent Rights
appurtenant to them over (B)&nbsp;the aggregate exercise price paid for such shares. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(3)&nbsp;&nbsp;&nbsp;Independent Stock Appreciation Rights.</B></FONT><FONT SIZE=2> Independent Rights will be granted independently of any Option and shall, except
as specifically set forth in this Section&nbsp;8, be subject to the same terms and conditions applicable to Nonstatutory Stock Options as set forth in Section&nbsp;6. They shall be denominated in
share equivalents. The appreciation distribution payable on the exercised Independent Right shall be not greater than an amount equal to the excess of (A)&nbsp;the aggregate Fair Market Value (on
the date of the exercise of the Independent Right) of a number of shares of Company stock equal to the number of share equivalents in which the holder is vested under such Independent Right, and with
respect to which the holder is exercising the Independent Right on such date, over (B)&nbsp;the aggregate Fair Market Value (on the date of the grant of the Independent Right) of such number of
shares of Company stock. The appreciation distribution payable on the exercised Independent Right shall be in cash or, if so provided, in an equivalent number of shares of stock based on Fair Market
Value on the date of the exercise of the Independent Right. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk76602_9._cancellation_and_re-grant_of_options."> </A>
<A NAME="toc_kk76602_9"> </A>
<BR></FONT><FONT SIZE=2><B>9. Cancellation and Re-Grant of Options.    <BR>    </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;The Board or the Committee shall have the authority to effect, at any time and from time to time, (i)&nbsp;the
repricing of any outstanding Options and/or any Stock Appreciation Rights under the Plan and/or (ii)&nbsp;with the consent of the affected holders of Options and/or Stock Appreciation Rights, the
cancellation of any outstanding Options and/or any Stock Appreciation Rights under the Plan and the grant in substitution therefor of new Options and/or Stock Appreciation Rights under the Plan
covering the same or different numbers of shares of stock, but having an exercise price per share not less than eighty-five percent (85%) of the Fair Market Value (one hundred percent
(100%) of the Fair Market </FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=9,SEQ=9,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="5",CHK=101734,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]KK76602B.;4',USER='BSKELLE',CD=';2-APR-2007;18:33' -->
<BR>

<P><FONT SIZE=2>Value
in the case of an Incentive Stock Option) or, in the case of a 10% shareholder (as described in subsection 5(b)), not less than one hundred ten percent (110%) of the Fair Market Value) per share
of stock on the new grant date. Notwithstanding the foregoing, the Board or the Committee may grant an Option and/or Stock Appreciation Right with an exercise price lower than that set forth above if
such Option and/or Stock Appreciation Right is granted as part of a transaction to which section&nbsp;424(a) of the Code applies. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Shares subject to an Option or Stock Appreciation Right canceled under this Section&nbsp;9 shall continue to be counted
against the maximum award of Options and Stock Appreciation Rights permitted to be granted pursuant to subsection 5(c) of the Plan. The repricing of an Option and/or Stock Appreciation Right under
this Section&nbsp;9, resulting in a reduction of the exercise price, shall be deemed to be a cancellation of the original Option and/or Stock Appreciation Right and the grant of a substitute Option
and/or Stock Appreciation Right; in the event of such repricing, both the original and the substituted Options and Stock Appreciation Rights shall be counted against the maximum awards of Options and
Stock Appreciation Rights permitted to be granted pursuant to subsection 5(c) of the Plan. The provisions of this subsection 9(b) shall be applicable only to the extent required by
Section&nbsp;162(m) of the Code. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk76602_10._covenants_of_the_company."> </A>
<A NAME="toc_kk76602_10"> </A>
<BR></FONT><FONT SIZE=2><B>10. Covenants of the Company.    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;During the terms of the Stock Awards, the Company shall keep available at all times the number of shares of stock
required to satisfy such Stock Awards. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;The Company shall seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to issue and sell shares of stock upon exercise of the Stock Award; provided, however, that this undertaking shall not require the Company to register under the Securities
Act either the Plan, any Stock Award or any stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission
or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of stock under the Plan, the Company shall be relieved from any liability for failure to issue
and sell stock upon exercise of such Stock Awards unless and until such authority is obtained. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk76602_11._use_of_proceeds_from_stock."> </A>
<A NAME="toc_kk76602_11"> </A>
<BR></FONT><FONT SIZE=2><B>11. Use of Proceeds from Stock.    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the sale of stock pursuant to Stock Awards shall constitute general funds of the Company. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk76602_12._miscellaneous."> </A>
<A NAME="toc_kk76602_12"> </A>
<BR></FONT><FONT SIZE=2><B>12. Miscellaneous.    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;The Board shall have the power to accelerate the time at which a Stock Award may first be exercised or the time during
which a Stock Award or any part thereof will vest pursuant to subsection 6(e), 7(d) or 8(b), notwithstanding the provisions in the Stock Award stating the time at which it may first be exercised or
the time during which it will vest. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Neither an Employee, Director or Consultant nor any person to whom a Stock Award is transferred under subsection 6(d),
7(b), or 8(b) shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares subject to such Stock Award unless and until such person has satisfied all
requirements for exercise of the Stock Award pursuant to its terms. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Nothing in the Plan or any instrument executed or Stock Award granted pursuant thereto shall confer upon any Employee,
Director, Consultant or other holder of Stock Awards any right to continue in the employ of the Company or any Affiliate (or to continue acting as a Director or Consultant) or shall affect the right
of the Company or any Affiliate to terminate the employment of any Employee with or without cause, the right of the Company's Board of Directors and/or the Company's shareholders to remove any
Director as provided in the Company's By-Laws and the </FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=10,SEQ=10,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="5",CHK=948337,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]KK76602B.;4',USER='BSKELLE',CD=';2-APR-2007;18:33' -->
<BR>

<P><FONT SIZE=2>provisions
of the Delaware General Corporation Law, or the right to terminate the relationship of any Consultant subject to the terms of such Consultant's agreement with the Company or Affiliate. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(d)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;To the extent that the aggregate Fair Market Value (determined at the time of grant) of stock with respect to which
Incentive Stock Options are exercisable for the first time by any Optionee during any calendar year under all plans of the Company and its Affiliates exceeds one hundred thousand dollars ($100,000),
the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as Nonstatutory Stock Options. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(e)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;The Company may require any person to whom a Stock Award is granted, or any person to whom a Stock Award is transferred
pursuant to subsection 6(d), 7(b) or 8(b), as a condition of exercising or acquiring stock under any Stock Award, (1)&nbsp;to give written assurances satisfactory to the Company as to such person's
knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and
business matters, and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Stock Award; and (2)&nbsp;to give written
assurances satisfactory to the Company stating that such person is acquiring the stock subject to the Stock Award for such person's own account and not with any present intention of selling or
otherwise distributing the stock. The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if (i)&nbsp;the issuance of the shares upon the exercise or
acquisition of stock under the Stock Award has been registered under a then currently effective registration statement under the Securities Act, or (ii)&nbsp;as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the
Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to,
legends restricting the transfer of the stock. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(f)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;To the extent provided by the terms of a Stock Award Agreement, the person to whom a Stock Award is granted may satisfy
any federal, state or local tax withholding obligation relating to the exercise or acquisition of stock under a Stock Award by any of the following means or by a combination of such means:
(1)&nbsp;tendering a cash payment; (2)&nbsp;authorizing the Company to withhold shares from the shares of the common stock otherwise issuable to the participant as a result of the exercise or
acquisition of stock under the Stock Award; or (3)&nbsp;delivering to the Company owned and unencumbered shares of the common stock of the Company. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk76602_13._adjustments_upon_changes_in_stock."> </A>
<A NAME="toc_kk76602_13"> </A>
<BR></FONT><FONT SIZE=2><B>13. Adjustments upon Changes in Stock.    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;In the event of: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;any
merger or consolidation (regardless of whether the Company is the surviving entity) except for a merger or consolidation for the sole purpose of changing the state
of incorporation of the Company and except for a merger or consolidation that does not result in the stockholders of the Company before such event retaining, directly or indirectly, less than a
majority of the voting stock of the surviving or resulting corporation; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;a
sale of all or substantially all of the assets of the Company; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;any
other capital reorganization in which more than fifty percent (50%) of the shares of the Company entitled to vote are exchanged except for a reorganization that does
not result in the stockholders of the Company before such event retaining, directly or indirectly, less than a majority of the voting stock of the reorganized corporation </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(each
of (1), (2)&nbsp;and (3)&nbsp;being a "Change in Control") then: (i)&nbsp;any surviving corporation shall assume any Stock Awards outstanding under the Plan or shall
substitute similar Stock Awards for those outstanding under the Plan, or (ii)&nbsp;such Stock Awards shall continue in full force and effect. In the event any surviving corporation refuses to assume
or continue such Stock Awards, or to substitute </FONT></P>

<HR NOSHADE>
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<!-- ZEQ.=11,SEQ=11,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="5",CHK=151195,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]KK76602B.;4',USER='BSKELLE',CD=';2-APR-2007;18:33' -->

<P><FONT SIZE=2>similar
stock awards for those outstanding under the Plan, then, with respect to Stock Awards held by persons then performing services as Employees, Directors or Consultants for the Company, the time
at which such Stock Awards may first be exercised shall be accelerated and the Stock Awards terminated if not exercised prior to such event. In addition, the Option may, but need not, include a
provision whereby the Option shall in any event be accelerated in full and become fully and immediately vested and exercisable immediately before the occurrence of a Change in Control. In the event of
a dissolution or liquidation of the Company, any Stock Awards outstanding under the Plan shall terminate if not exercised prior to such event. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;In addition, with respect to any person who was providing Continuous Service as an Employee, Director or Consultant
immediately prior to the consummation of the Change in Control, any Stock Awards held by such person shall immediately become fully vested and exercisable (and any repurchase right by the Company with
respect to shares acquired by such person under an Option shall lapse) if such person is Involuntarily Terminated Without Cause or Constructively Terminated within eighteen (18)&nbsp;months
following the Change in Control. Notwithstanding the preceding sentence, in the event all of the following occurs: (i)&nbsp;such contemplated Change in Control would occur prior to the date two
(2)&nbsp;years following the adoption of this Section&nbsp;13(b); (ii)&nbsp;such potential acceleration of vesting (and exercisability) would </FONT><FONT SIZE=2><I>by
itself</I></FONT><FONT SIZE=2> result in a contemplated Change in Control that would otherwise be eligible to be accounted for as a "pooling of interests" accounting transaction to become ineligible
for such accounting treatment; and (iii)&nbsp;the potential acquiror of the Company desires to account for such contemplated Change in Control as a "pooling of interests" transaction, then such
acceleration shall not occur unless otherwise expressly provided in an Option. Additionally, in the event that the restrictions upon acceleration provided for in the immediately preceding sentence </FONT> <FONT SIZE=2><I>by itself</I></FONT><FONT
SIZE=2> would result in a contemplated Change in Control to become ineligible to be accounted for as a "pooling of interests" accounting transaction,
then such restrictions shall be deemed inoperative. Accounting issues shall be determined by the Company's independent public accountants applying generally accepted accounting principles. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of the Plan, Constructively Terminated shall mean the voluntary termination of employment by Stock Award recipient after a reduction by the Company in Stock Award
recipient's base salary of fifteen percent (15%) or greater without Stock Award recipient's express written consent. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of the Plan, Involuntarily Terminated Without Cause shall mean dismissal or discharge of Stock Award recipient for any reason other than Cause, death or Disability. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of the Plan, Cause shall mean any of the following: (a)&nbsp;an intentional act which materially injures the Company; (b)&nbsp;an intentional refusal or failure to
follow lawful and reasonable directions of the Board or an individual to whom participant reports (as appropriate); (c)&nbsp;a willful and habitual neglect of duties; or (d)&nbsp;a conviction of a
felony involving moral turpitude which is reasonably likely to inflict or has inflicted material injury on the Company. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk76602_14._amendment_of_the_plan_and_stock_awards."> </A>
<A NAME="toc_kk76602_14"> </A>
<BR></FONT><FONT SIZE=2><B>14. Amendment of the Plan and Stock Awards.    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;The Board at any time, and from time to time, may amend the Plan. However, except as provided in Section&nbsp;13
relating to adjustments upon changes in stock, no amendment shall be effective unless approved by the shareholders of the Company within twelve (12)&nbsp;months before or after the adoption of the
amendment, where the amendment will: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(1)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Increase the number of shares reserved for Stock Awards under the Plan; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(2)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Modify the requirements as to eligibility for participation in the Plan (to the extent such modification requires
shareholder approval in order for the Plan to satisfy the requirements of Section&nbsp;422 of the Code); or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(3)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Modify the Plan in any other way if such modification requires shareholder approval in order for the Plan to satisfy the
requirements of Section&nbsp;422 of the Code or to comply with the requirements of Rule&nbsp;16b-3. </FONT></P>

</UL>
<HR NOSHADE>
<P style='page-break-before:always'></p>
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<UL>
<BR>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;The Board may in its sole discretion submit any other amendment to the Plan for shareholder approval, including, but not
limited to, amendments to the Plan intended to satisfy the requirements of Section&nbsp;162(m) of the Code and the regulations promulgated thereunder regarding the exclusion of performance-based
compensation from the limit on corporate deductibility of compensation paid to certain executive officers. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to
provide eligible Employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to Incentive Stock Options and/or
to bring the Plan and/or Incentive Stock Options granted under it into compliance therewith. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(d)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Rights and obligations under any Stock Award granted before amendment of the Plan shall not be impaired by any amendment
of the Plan unless (i)&nbsp;the Company requests the consent of the person to whom the Stock Award was granted and (ii)&nbsp;such person consents in writing. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(e)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;The Board at any time, and from time to time, may amend the terms of any one or more Stock Award; provided, however, that
the rights and obligations under any Stock Award shall not be impaired by any such amendment unless (i)&nbsp;the Company requests the consent of the person to whom the Stock Award was granted and
(ii)&nbsp;such person consents in writing. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk76602_15._termination_or_suspension_of_the_plan."> </A>
<A NAME="toc_kk76602_15"> </A>
<BR></FONT><FONT SIZE=2><B>15. Termination or Suspension of the Plan.    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate ten
(10)&nbsp;years from the date the Plan is adopted by the Board or approved by the shareholders of the Company, whichever is earlier. No Stock Awards may be granted under the Plan while the Plan is
suspended or after it is terminated. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;Rights and obligations under any Stock Award granted while the Plan is in effect shall not be impaired by suspension or
termination of the Plan, except with the written consent of the person to whom the Stock Award was granted. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kk76602_16._effective_date_of_plan."> </A>
<A NAME="toc_kk76602_16"> </A>
<BR></FONT><FONT SIZE=2><B>16. Effective Date of Plan.    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Plan shall become effective as determined by the Board, but no Stock Awards granted under the Plan shall be exercised unless and until the Plan has been
approved by the shareholders of the Company, which approval shall be within twelve (12)&nbsp;months before or after the date the Plan is adopted by the Board. </FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_kl76602_1_1"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kl76602_pros_holdings,_inc._1999_equit__pro02790"> </A>
<A NAME="toc_kl76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>PROS HOLDINGS,&nbsp;INC.<BR>  1999 EQUITY INCENTIVE PLAN<BR>  INCENTIVE STOCK OPTION GRANT    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
Optionee: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PROS
Holdings,&nbsp;Inc., a Delaware corporation (the "Company"), pursuant to its 1999 Equity Incentive Plan (the "Plan"), has granted to you, the Optionee named above, an option to
purchase shares of the common stock of the Company ("Common Stock"). This option is intended to qualify as an "incentive stock option" within the meaning of Section&nbsp;422 of the Internal Revenue
Code of 1986, as amended (the "Code"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
grant hereunder is in connection with and in furtherance of the Company's compensatory benefit plan for participation of the Company's employees (including officers) directors or
consultants and is intended to comply with the provisions of Rule&nbsp;701 promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Act"). Defined
terms not explicitly defined in this agreement but defined in the Plan shall have the same definitions as in the Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
details of your option are as follows: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Number of Shares Subject to this Option.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The total number of shares of Common Stock subject to this
option is&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vesting.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subject to the limitations contained herein, twenty-five percent (25%) of the shares
will vest (become exercisable) on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, and the shares will then vest twenty-five percent (25%)
each&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;thereafter until either (i)&nbsp;you cease to provide
services to the Company for any reason, or (ii)&nbsp;this option becomes fully vested. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exercise Price And Method Of Payment.</B></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;&nbsp;Exercise Price.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The exercise price of this option
is&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;($&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;) per share, being not
less than the fair market value of the Common Stock on the date of grant of this option. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;&nbsp;Method of Payment.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Payment of the exercise price per share is due in full upon exercise of all or any part
of each installment which has accrued to you. You may elect, to the extent permitted by applicable statutes and regulations, to make payment of the exercise price under one of the following
alternatives: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Payment of the exercise price per share in cash (including check) at the time of exercise; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(ii)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Payment pursuant to a program developed under Regulation&nbsp;T as promulgated by the Federal Reserve Board which,
prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company
from the sales proceeds; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(iii)&nbsp;</B></FONT><FONT SIZE=2>Provided that at the time of exercise the Company's Common Stock is publicly traded and quoted regularly in the Wall
Street Journal, payment by delivery of already-owned shares of Common Stock, held for the period required to avoid a charge to the Company's reported earnings, and owned free and clear of any liens,
claims, encumbrances or security interests, which Common Stock shall be valued at its fair market value on the date of exercise; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(iv)&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Payment by a combination of the methods of payment permitted by subparagraph 3(b)(i)&nbsp;through
3(b)(iii)&nbsp;above. </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>1</FONT></P>

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<P style='page-break-before:always'></p>
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<A NAME="page_kl76602_1_2"> </A>
<UL>
<UL>
<BR>
</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Whole Shares.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This option may not be exercised for any number of shares which would require the issuance of
anything other than whole shares. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities Law Compliance.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary contained herein, this option may not be
exercised unless the shares issuable upon exercise of this option are then registered under the Act or, if such shares are not then so registered, the Company has determined that such exercise and
issuance would be exempt from the registration requirements of the Act. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Term.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The term of this option commences
on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, the date of grant, and expires
on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(the "Expiration Date," which date shall be no more than ten (10)&nbsp;years from the date this option is granted), unless this option expires sooner as set forth below or in the Plan. In no event
may this option be exercised on or after the Expiration Date. This option shall terminate prior to the Expiration Date as follows: three (3)&nbsp;months after the termination of your Continuous
Status as an Employee, Director or Consultant with the Company or an Affiliate of the Company unless one of the following circumstances exists: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Your termination of Continuous Status as an Employee, Director, or Consultant is due to your disability (within the
meaning of Section&nbsp;422(c)(6) of the Code). This option will then expire on the earlier of the Expiration Date set forth above or twelve (12)&nbsp;months following such termination of
Continuous Status as an Employee, Director or Consultant. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Your termination of Continuous Status as an Employee, Director or Consultant is due to your death or your death occurs
within three (3)&nbsp;months following your termination of Continuous Status as an Employee, Director or Consultant for any other reason. This option will then expire on the earlier of the
Expiration Date set forth above or six (6)&nbsp;months after your death. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>If during any part of such three (3)&nbsp;months period you may not exercise your option solely because of the
condition set forth in paragraph&nbsp;5 above, then your option will not expire until the earlier of the Expiration Date set forth above or until this option shall have been exercisable for an
aggregate period of three (3)&nbsp;months after your termination of the Continuous Status as an Employee, Director, or Consultant. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(d)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>If your exercise of the option within three (3)&nbsp;months after termination of your Continuous Status as an Employee,
Director, or Consultant with the Company or with an Affiliate of the Company would result in liability under section&nbsp;16(b) of the Securities Exchange Act of 1934, then your option will expire
on the earlier of (i)&nbsp;the Expiration Date set forth above, (ii)&nbsp;the tenth (10th) day after the last date upon which exercise would result in such liability or (iii)&nbsp;six
(6)&nbsp;months and ten (10)&nbsp;days after the termination of your Continuous Status as an Employee, Director or Consultant with the Company or an Affiliate of the Company. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;However,
this option may be exercised following termination of Continuous Status as an Employee, Director or Consultant only as to that number of shares as to which it was exercisable on
the date of termination of Continuous Status as an Employee, Director or Consultant under the provisions of paragraph&nbsp;2 of this option. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
order to obtain the federal income tax advantages associated with an "incentive stock option," the Code requires that at all times beginning on the date of grant of the option and
ending on the day three (3)&nbsp;months before the date of the option's exercise, you must be an employee of the Company or an Affiliate of the Company, except in the event of your death or
permanent and total disability. The Company has provided for continued vesting or extended exercisability of your option under certain circumstances for your benefit, but cannot guarantee that your
option will necessarily be treated as an "incentive stock option" if you provide services to the Company or an Affiliate of the Company as a consultant or exercise your option more than three
(3)&nbsp;months after the date your employment with the Company and all Affiliates of the Company terminates. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

<HR NOSHADE>
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<A NAME="page_kl76602_1_3"> </A>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exercise.</B></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>This option may be exercised, to the extent specified above, by delivering a notice of exercise (in a form designated by
the Company) together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such additional
documents as the Company may then require pursuant to subsection 12(e) of the Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>By exercising this option, you agree that: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>as a precondition to the completion of any exercise of this option, the Company may require you to enter an arrangement
providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (1)&nbsp;the exercise of this option; (2)&nbsp;the lapse of any substantial
risk of forfeiture to which the shares are subject at the time of exercise; or (3)&nbsp;the disposition of shares acquired upon such exercise; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(ii)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>you will notify the Company in writing within fifteen (15)&nbsp;days after the date of any disposition of any of the
shares of the Common Stock issued upon exercise of this option that occurs within two (2)&nbsp;years after the date of this option grant or within one (1)&nbsp;year after such shares of Common
Stock are transferred upon exercise of this option; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(iii)&nbsp;</B></FONT><FONT SIZE=2>the Company (or a representative of the underwriters) may, in connection with the first underwritten registration of
the offering of any securities of the Company under the Act, require that you not sell or otherwise transfer or dispose of any shares of Common Stock or other securities of the Company during such
period (not to exceed one hundred eighty (180)&nbsp;days) following the effective date (the "Effective Date") of the registration statement of the Company filed under the Act as may be requested by
the Company or the representative of the underwriters. You further agree that the
Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such period. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Right of Repurchase; Right of First Refusal.</B></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>The Company may elect, prior to the Listing Date, to repurchase all or any part of the vested shares exercised pursuant
to the Option; </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, that (i)&nbsp;such repurchase right shall be exercisable only within (A)&nbsp;the one hundred and twenty
(120)&nbsp;day period following the termination of employment or the relationship as a Director or Consultant, or (B)&nbsp;such longer period as may be agreed to by the Company and the Optionee
(for example, for purposes of satisfying the requirements of Section&nbsp;1202(c)(3) of the Code (regarding "qualified small business stock")), (ii)&nbsp;such repurchase right shall be exercisable
for less than all of the vested shares only with the Optionee's consent, and (iii)&nbsp;such right shall be exercisable only for cash or cancellation of purchase money indebtedness for the shares at
a repurchase price equal to the greater of (A)&nbsp;the stock's Fair Market Value at the time of such termination or (B)&nbsp;the original purchase price paid for such shares by the Optionee. Such
right of repurchase may be assigned by the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>If the Company does not elect to exercise its right of repurchase under Section&nbsp;8(a) above, and at any time
thereafter but prior to the Listing Date the Optionee (including any permitted transferee of the Optionee's shares under Section&nbsp;8(c)) receives a bona fide offer to purchase all or any of the
vested shares exercised pursuant to the Option (the "Offer") from a third party other than a permitted transferee of his shares under Section&nbsp;8(c) (the "Offeror") </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

<HR NOSHADE>
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<A NAME="page_kl76602_1_4"> </A>
<UL>
<BR>

<P><FONT SIZE=2>which
the Optionee wishes to accept, the Optionee may transfer such shares pursuant to and in accordance with the following provisions: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>the Optionee shall cause the Offer to be reduced to writing and shall notify the Company in writing of his or her desire
to accept the Offer and otherwise comply with the provisions of this Section&nbsp;8(b). The Optionee's notice shall constitute an irrevocable offer to sell such shares to the Company at a price
equal to the price contained in, and on the same terms and conditions of, the Offer. The notice shall be accompanied by a true copy of the Offer (which shall identify the Offeror). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(ii)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>the Company shall have the right to offer to purchase all, but not less than all, of the shares covered by the Offer. To
exercise such right, the Company shall, within fifteen (15)&nbsp;days of receipt of such written notice, communicate in writing such election to the Optionee. Such written election to purchase shall
constitute a valid, legally binding and enforceable agreement for the sale and purchase of all of the shares covered by the Offer. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Permitted transfers by an Optionee are (i)&nbsp;transfers to the Optionee's spouse or children, to a trust of which the
Optionee is the settlor or a trustee for the benefit of his spouse or children, and (ii)&nbsp;transfers upon an Optionee's death to his heirs, executors or administrators or to a trust under his or
her will or to his or her guardian or conservator, provided that in any such case the transferee shall have entered into an enforceable written agreement providing that all shares so transferred shall
continue to be subject to the provisions of Section&nbsp;8(b) and (c)&nbsp;as if such shares were still held by the Optionee, and provided further that such permitted transferee shall not be
permitted to make any further transfers without complying with the provisions of Section&nbsp;8(b) and (c). Anything to the contrary herein notwithstanding, transferees permitted by this
Section&nbsp;8(c) shall take any shares so transferred subject to all obligations under Section&nbsp;8(b) and (c)&nbsp;as if such shares were still held by the Optionee whether or not such
transferees so expressly agree. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transferability.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This option is not transferable, except by will or by the laws of descent and distribution,
and is exercisable during your life only by you. Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you may designate a third party who,
in the event of your death, shall thereafter be entitled to exercise this option. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>10.&nbsp;&nbsp;&nbsp;Option Not a Service Contract.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This option is not an employment contract and nothing in this option shall be
deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company, or of the Company to continue your employment with the Company. In addition, nothing in
this option shall obligate the Company or any Affiliate of the Company, or their respective stockholders, Board of Directors, officers or employees to continue any relationship which you might have as
a Director or Consultant for the Company or Affiliate of the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>11.&nbsp;&nbsp;&nbsp;Notices.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Any notices provided for in this option or the Plan shall be given in writing and shall be deemed
effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5)&nbsp;days after deposit in the United States mail, postage prepaid, addressed to you at the
address specified below or at such other address as you hereafter designate by written notice to the Company. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>12.&nbsp;&nbsp;&nbsp;Governing Plan Document.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This option is subject to all the provisions of the Plan, a copy of which is
attached hereto and its provisions are hereby made a part of this option, including without limitation the provisions of Section&nbsp;6 of the Plan relating to option provisions, and is further
subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of
this option and those of the Plan, the provisions of the Plan shall control. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

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<A NAME="page_kl76602_1_5"> </A>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dated
the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;day
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
</FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Very truly yours,</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>Duly authorized on behalf of the Board of Directors</FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2><B>Attachments:</B></FONT><FONT SIZE=2><BR>
PROS Holdings, Inc. 1999 Equity Incentive Plan<BR>
Notice of Exercise </FONT></P>

<P><FONT SIZE=2>The
undersigned: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Acknowledges receipt of the foregoing option and the attachments referenced therein and understands that all rights and
liabilities with respect to this option are set forth in the option and the Plan; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Acknowledges that as of the date of grant of this option, it sets forth the entire understanding between the undersigned
Optionee and the Company and its Affiliates regarding the acquisition of stock in the Company and supersedes all prior oral and written agreements on that subject with the exception of (i)&nbsp;the
options previously granted and delivered to the undersigned under stock option plans of the Company, and (ii)&nbsp;the following agreements only: </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>NONE</B></FONT></P>

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<TD WIDTH="26%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=4><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2><I>(Initial Here if No Other Agreements)</I></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="26%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=4><FONT
SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>OTHER</B></FONT></P>

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<TR VALIGN="TOP">
<TD WIDTH="25%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=4><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="25%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD COLSPAN=4><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2><I>(If Other Agreements Please Identify Here)</I></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="25%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="17%"><BR><FONT SIZE=2><I>Signature:</I></FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="25%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%"><FONT SIZE=2><I>Printed Name:</I></FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="25%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%"><FONT SIZE=2><I>Address:</I></FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=18,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="5",CHK=438757,FOLIO='5',FILE='DISK130:[07ZBA2.07ZBA76602]KL76602A.;7',USER='LHOUSE',CD=';3-APR-2007;03:44' -->
<A NAME="page_kl76602_1_6"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kl76602_notice_of_exercise"> </A>
<A NAME="toc_kl76602_2"> </A>
<BR></FONT><FONT SIZE=2><B>NOTICE OF EXERCISE    <BR>    </B></FONT></P>

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<TD WIDTH="27%" VALIGN="TOP"><FONT SIZE=2><B>PROS HOLDINGS, INC.</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="65%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="27%" VALIGN="TOP"><FONT SIZE=2>3100 Main Street, Suite 900</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="65%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="27%"><FONT SIZE=2>Houston, Texas 77002-9312</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="65%" ALIGN="RIGHT"><FONT SIZE=2>Date of Exercise:&nbsp;&nbsp;_______________________________</FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>Ladies
and Gentlemen: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
constitutes notice under my stock option that I elect to purchase the number of shares for the price set forth below. </FONT></P>

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<DIV ALIGN="CENTER"><TABLE WIDTH="70%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TD WIDTH="30%"><FONT SIZE=2>Type of option (check one):</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="33%" ALIGN="CENTER"><FONT SIZE=2>Incentive&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%" ALIGN="CENTER"><FONT SIZE=2>Nonstatutory&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="30%"><FONT SIZE=2><BR>
Stock option dated:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="33%"><FONT SIZE=2><BR>
&nbsp;&nbsp;________________________</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="30%"><FONT SIZE=2><BR>
Number of shares as to which option is exercised:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="33%"><FONT SIZE=2><BR>
&nbsp;&nbsp;________________________</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="30%"><FONT SIZE=2><BR>
Certificates to be issued in name of:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="33%"><FONT SIZE=2><BR>
&nbsp;&nbsp;________________________</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="30%"><FONT SIZE=2><BR>
Total exercise price:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="33%"><FONT SIZE=2><BR>
$&nbsp;________________________</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="30%"><FONT SIZE=2><BR>
Cash payment delivered here with:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="33%"><FONT SIZE=2><BR>
$&nbsp;________________________</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="30%"><FONT SIZE=2><BR>
Value of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of PROS HOLDINGS, INC.:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="33%"><FONT SIZE=2><BR>
$&nbsp;________________________</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By
this exercise, I agree (i)&nbsp;to provide such additional documents as you may require pursuant to the terms of the 1999 Equity Incentive Plan, (ii)&nbsp;to provide for the
payment by me to you (in the manner designated by you) of your withholding obligation, if any, relating to the exercise of this option, and (iii)&nbsp;if this exercise relates to an incentive stock
option, to notify you in writing within fifteen (15)&nbsp;days after the date of any disposition of any of the shares of Common Stock issued upon exercise of this option that occurs within two
(2)&nbsp;years after the date of grant of this option or within one (1)&nbsp;year after such shares of Common Stock are issued upon exercise of this option. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I
hereby make the following certifications and representations with respect to the number of shares of Common Stock of the Company listed above (the "Shares"), which are being acquired
by me for my own account upon exercise of the Option as set forth above: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I
acknowledge that the Shares have not been registered under the Securities Act of 1933, as amended (the "Act"), and are deemed to constitute "restricted securities" under
Rule&nbsp;701 and "control securities" under Rule&nbsp;144 promulgated under the Act. I warrant and represent to the Company that I have no present intention of distributing or selling said
Shares, except as permitted under the Act and any applicable state securities laws. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I
further acknowledge that I will not be able to resell the Shares for at least ninety days after the stock of the Company becomes publicly traded (i.e., subject to the reporting
requirements of Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934) under Rule&nbsp;701 and that more restrictive conditions apply to affiliates of the Company under Rule&nbsp;144. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I
further acknowledge and agree that under the provisions of the Option, the Company may elect, prior to the first date upon which any security of the Company is listed (or approved for
listing) upon notice of issuance on any securities exchange, or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system (the
"Listing Date"), to repurchase all or any part of the Shares on the terms and conditions provided in the Option and that </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=19,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="5",CHK=968978,FOLIO='6',FILE='DISK130:[07ZBA2.07ZBA76602]KL76602A.;7',USER='LHOUSE',CD=';3-APR-2007;03:44' -->
<A NAME="page_kl76602_1_7"> </A>
<BR>

<P><FONT SIZE=2>such
right of repurchase may be assigned by the Company. I further acknowledge and agree that if the Company does not elect to exercise such right of repurchase, and at any time thereafter but prior
to the Listing Date, I (including any permitted transferee of the Shares under the provisions of the Option) receive a bona fide offer to purchase all or any of the Shares from a third party (other
than such a permitted transferee) which I wish to accept, I may only transfer such Shares pursuant to and in accordance with the provisions of the Option which provide the Company with a right of
first refusal. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I
further acknowledge that all certificates representing any of the Shares subject to the provisions of the Option shall have endorsed thereon appropriate legends reflecting the
foregoing limitations, as well as any legends reflecting restrictions pursuant to the Company's Articles of Incorporation, Bylaws, and/or applicable securities laws. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I
further agree that, if required by the Company (or a representative of the underwriters) in connection with the first underwritten registration of the offering of any securities of the
Company under the Act, I will not sell or otherwise transfer or dispose of any shares of Common Stock or other securities of the Company during such period (not to exceed one hundred eighty
(180)&nbsp;days) following the effective date of the registration statement of the Company filed under the Act (the "Effective Date") as may be requested by the Company or the representative of the
underwriters. I further agree that the Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such period. </FONT></P>

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<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Very truly yours,</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Printed Name</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>7</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=7,SEQ=20,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="5",CHK=320024,FOLIO='7',FILE='DISK130:[07ZBA2.07ZBA76602]KL76602A.;7',USER='LHOUSE',CD=';3-APR-2007;03:44' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<BR>
<P><br><A NAME="07ZBA76601_5">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_kk76602_1">PROS Holdings, Inc. 1999 EQUITY INCENTIVE PLAN 1. Purposes.</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk76602_2">2. Definitions.</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk76602_3">3. Administration.</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk76602_4">4. Shares Subject to the Plan.</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk76602_5">5. Eligibility.</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk76602_6">6. Option Provisions.</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk76602_7">7. Terms of Stock Bonuses and Purchases of Restricted Stock.</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk76602_8">8. Stock Appreciation Rights.</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk76602_9">9. Cancellation and Re-Grant of Options.</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk76602_10">10. Covenants of the Company.</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk76602_11">11. Use of Proceeds from Stock.</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk76602_12">12. Miscellaneous.</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk76602_13">13. Adjustments upon Changes in Stock.</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk76602_14">14. Amendment of the Plan and Stock Awards.</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk76602_15">15. Termination or Suspension of the Plan.</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kk76602_16">16. Effective Date of Plan.</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_kl76602_1">PROS HOLDINGS, INC. 1999 EQUITY INCENTIVE PLAN INCENTIVE STOCK OPTION GRANT</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kl76602_2">NOTICE OF EXERCISE</A></FONT><BR>
<!-- SEQ=,FILE='QUICKLINK',USER=MTRAN,SEQ=,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="5" -->
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</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>6
<FILENAME>a2176970zex-10_4.htm
<DESCRIPTION>EXHIBIT 10.4
<TEXT>
<HTML>
<HEAD>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
<BR>
<FONT SIZE=3 ><A HREF="#07ZBA76601_6">QuickLinks</A></FONT>
<font size=3> -- Click here to rapidly navigate through this document</font>
<!-- TOC_END -->
<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit&nbsp;10.4  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="km76602_pros_strategic_solutions,_inc."> </A>
<A NAME="toc_km76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>PROS Strategic Solutions,&nbsp;Inc.    <BR>    </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="km76602_stock_purchase_and_stockholders_agreement"> </A>
<A NAME="toc_km76602_2"> </A>
<BR></FONT><FONT SIZE=2><B>STOCK PURCHASE<BR>  AND STOCKHOLDERS AGREEMENT    <BR>    </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>As
of June&nbsp;8, 1998 </FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=1,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="6",CHK=348958,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]KM76602A.;9',USER='BSKELLE',CD=';2-APR-2007;18:33' -->

<P><FONT SIZE=2>EXHIBITS
</FONT></P>

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<TR VALIGN="TOP">
<TD WIDTH="3%"><FONT SIZE=2>A.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="94%"><FONT SIZE=2>Investors</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="3%"><FONT SIZE=2>B.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="94%"><FONT SIZE=2>Certificate of Incorporation; Certificate of Designation</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="3%"><FONT SIZE=2>C.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="94%"><FONT SIZE=2>Selling Stockholders</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="3%"><FONT SIZE=2>D.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="94%"><FONT SIZE=2>Repurchase Agreement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="3%"><FONT SIZE=2>E.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="94%"><FONT SIZE=2>Disclosure Exceptions</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="3%"><FONT SIZE=2>F.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="94%"><FONT SIZE=2>Indemnification Agreement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="3%"><FONT SIZE=2>G.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="94%"><FONT SIZE=2>Opinion of Counsel (Company)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="3%"><FONT SIZE=2>H.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="94%"><FONT SIZE=2>Release and Settlement Agreement</FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>SCHEDULES
</FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>4.4</FONT></DT><DD><FONT SIZE=2>Agreements
Regarding Repurchase of Shares </FONT></DD></DL>
<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=2,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="6",CHK=906765,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]KM76602A.;9',USER='BSKELLE',CD=';2-APR-2007;18:33' -->
<A NAME="page_km76602_1_1"> </A>

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<TD COLSPAN=4><FONT SIZE=2>SECTION 1. PURCHASE AND SALE OF SHARES; REDEMPTION</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>1</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>1.1</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Description of Securities</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>1</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>1.2</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Sale and Purchase; Redemption</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>1</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>1.3</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Closing</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>2</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2><BR>
SECTION 2. REPRESENTATIONS AND WARRANTIES</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2><BR>
2</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.1</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Organization and Corporate Power</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>2</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.2</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Authorization and Non-Contravention</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>2</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.3</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Capitalization</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>3</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.4</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Subsidiaries; Investments</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>4</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.5</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Financial Statements and Matters</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>4</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.6</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Absence of Undisclosed Liabilities</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>5</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.7</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Absence of Certain Developments</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>5</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.8</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Ordinary Course</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>5</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.9</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Receivables</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>5</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.10</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Title to Properties</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>5</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.11</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Tax Matters</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>6</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.12</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Certain Contracts and Arrangements</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>6</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.13</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Intellectual Property Rights; Employee Restrictions</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>7</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.14</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Litigation</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>8</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.15</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Employee Benefit Plans</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>8</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.16</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Labor Laws</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>9</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.17</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Key Employees</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>9</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.18</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Hazardous Waste, Etc</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>9</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.19</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Business; Compliance with Laws</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>9</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.20</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Investment Banking; Brokerage</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>9</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.21</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Insurance</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>9</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.22</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Transactions with Affiliates</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>10</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.23</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Customers and Distributors</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>10</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.24</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Disclosure</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>10</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.25</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Qualified Small Business Stock</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>10</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>2.26</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Consolidation and Reincorporation Effective.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>10</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><FONT SIZE=2><BR>
SECTION 2A. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2><BR>
11</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2><BR>
SECTION 3. CONDITIONS OF PURCHASE</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2><BR>
12</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>3.1</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Satisfaction of Conditions</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>12</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>3.2</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Director Election and Indemnification</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>12</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>3.3</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Opinions of Counsel</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>12</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>3.4</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Reincorporation</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>12</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>3.5</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Authorization</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>12</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>3.6</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Investors' Fees</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>12</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>3.7</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>No Violation or Injunction</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>12</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>3.8</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Consents and Waivers</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>12</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>3.9</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Repurchase Agreement</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>13</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>3.10</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Repayment of Company Loans</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>13</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>3.12</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Securities Compliance</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>13</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2><BR>
SECTION 4. COVENANTS</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2><BR>
13</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>4.1</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Financial Statements and Budget Information; Inspections</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>13</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>4.2</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Indemnification; Insurance</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>13</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>4.3</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Board of Directors</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>14</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>4.4</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Restrictive Covenants</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>14</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- insert table folio -->
<BR>
<P ALIGN="CENTER"><FONT SIZE=2>i</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=3,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="6",CHK=920184,FOLIO='i',FILE='DISK130:[07ZBA2.07ZBA76602]KM76602A.;9',USER='BSKELLE',CD=';2-APR-2007;18:33' -->
<A NAME="page_km76602_1_2"> </A>
<!-- end of table folio -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>4.5</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Repurchase; Use of Proceeds</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>15</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>4.6</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Key Person Insurance</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>15</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>4.7</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Stock Awards</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>15</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>4.8</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Assignment</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>15</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2><BR>
SECTION 5. RIGHTS TO PURCHASE</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2><BR>
15</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>5.1</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Right to Participate in Certain Sales of Additional Securities</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>16</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>5.2</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Assignment of Rights</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>16</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2><BR>
SECTION 6. REGISTRATION RIGHTS</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2><BR>
16</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>6.1</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Optional Registrations</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>16</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>6.2</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Required Registrations</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>17</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>6.3</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Registrable Securities</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>19</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>6.4</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Further Obligations of the Company</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>19</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>6.5</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Indemnification: Contribution</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>21</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>6.6</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Rule 144 and Rule 144A Requirements</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>24</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>6.7</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Transfer of Registration Rights</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>24</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>6.8</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>"Market Stand-off" Agreement</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>24</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>6.9</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Termination of Registration Rights Provisions</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>24</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2><BR>
SECTION 7. GENERAL</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2><BR>
24</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>7.1</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Amendments, Waivers and Consents</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>24</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>7.2</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Survival of Representations, Warranties and Covenants; Assignability</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>25</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>7.3</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Legend on Securities</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>25</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>7.4</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Governing Law</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>25</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>7.5</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Section Headings and Gender</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>25</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>7.6</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Counterparts</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>25</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>7.7</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Notices and Demands</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>26</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>7.8</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Dispute Resolution</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>26</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>7.9</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Remedies; Severability</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>26</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>7.10</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="80%"><FONT SIZE=2>Integration</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>27</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>ii</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kn76602_stock_purchase_and_stockholders_agreement"> </A>
<A NAME="toc_kn76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>STOCK PURCHASE<BR>  AND STOCKHOLDERS AGREEMENT    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;STOCK PURCHASE AND STOCKHOLDERS AGREEMENT ("Agreement") made as of this 8th day of June, 1998, by and among PROS Strategic Solutions,&nbsp;Inc., a Delaware
corporation (together with any predecessors or successors thereto and, subject to Section&nbsp;2, the "</FONT><FONT SIZE=2><I>Company</I></FONT><FONT SIZE=2>"), Ronald F. Woestmeyer, Mariette M.
Woestmeyer and Robert Salter (collectively the "Stockholders" and individually a "</FONT><FONT SIZE=2><I>Stockholder</I></FONT><FONT SIZE=2>"), and the investment partnerships and other investors
named in </FONT><FONT SIZE=2><I>Exhibit&nbsp;A</I></FONT><FONT SIZE=2> hereto (together with their successors and assigns, collectively the
"</FONT><FONT SIZE=2><I>Investors</I></FONT><FONT SIZE=2>," and each individually an "</FONT><FONT SIZE=2><I>Investor</I></FONT><FONT SIZE=2>"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the majority of the outstanding shares of the Company's capital stock prior to the date hereof are owned by the Stockholders; and </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Company has authorized the issuance and sale to the Investors of a total of 3,921,312 shares of Series&nbsp;A Convertible Redeemable Preferred Stock, par value $0.001 per
share ("</FONT><FONT SIZE=2><I>Convertible Preferred Stock</I></FONT><FONT SIZE=2>"), having the rights and preferences set forth in </FONT><FONT SIZE=2><I>Exhibit&nbsp;B</I></FONT><FONT SIZE=2>
for an aggregate purchase price of $25&nbsp;million; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Company has agreed to repurchase and certain Stockholders named in </FONT><FONT SIZE=2><I>Exhibit&nbsp;C</I></FONT><FONT SIZE=2> hereto (the
"</FONT><FONT SIZE=2><I>Selling Stockholders</I></FONT><FONT SIZE=2>") have agreed to sell to the Company, an aggregate of 784,262 shares of the Company's Common Stock, par value $0.001 per share
("</FONT><FONT SIZE=2><I>Common Stock</I></FONT><FONT SIZE=2>"), for an aggregate purchase price of $5&nbsp;million; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the parties hereto desire to set forth the terms of their ongoing relationship in connection with the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW
THEREFORE, in consideration of the foregoing and the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows: </FONT></P>

<P><FONT SIZE=2>SECTION
1. PURCHASE AND SALE OF SHARES; REDEMPTION </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Description of Securities</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Company's authorized capital stock consists of Common Stock, Convertible
Preferred Stock and Redeemable Preferred Stock, par value $.001 per share (the "</FONT><FONT SIZE=2><I>Redeemable Preferred Stock</I></FONT><FONT SIZE=2>"). The Convertible Preferred Stock and the
Redeemable Preferred Stock have the rights, preferences and other terms set forth in </FONT><FONT SIZE=2><I>Exhibit&nbsp;B</I></FONT><FONT SIZE=2>. For purposes of this Agreement, the shares of
Convertible Preferred Stock to be acquired by the Investors from the Company hereunder are referred to as the "</FONT><FONT SIZE=2><I>Convertible Preferred Shares</I></FONT><FONT SIZE=2>," the shares
of Redeemable Preferred Stock and Common Stock issuable upon conversion of the Convertible Preferred Shares are referred to as the "</FONT><FONT SIZE=2><I>Conversion Shares</I></FONT><FONT SIZE=2>,"
and the Convertible Preferred Shares and the Conversion Shares are sometimes referred to herein as the "</FONT><FONT SIZE=2><I>Securities</I></FONT><FONT SIZE=2>." </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Sale and Purchase; Redemption</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Upon the terms and subject to the conditions herein, and in reliance on the
representations and warranties set forth in Section&nbsp;2, (a)&nbsp;at the Closing (as defined in Section&nbsp;1.3) the Investors shall purchase from the Company, and the Company shall issue
and sell to each of the Investors, at the Closing (as defined in Section&nbsp;1.3), the number of shares of Convertible Preferred Stock set forth opposite the name of such Investor in </FONT> <FONT SIZE=2><I>Exhibit&nbsp;A</I></FONT><FONT SIZE=2> for
the purchase price of $6.3754 per share, and the Company shall without further action grant the Investors the rights set forth
herein. Concurrently therewith, the Company shall acquire from the Selling Stockholders, and each Selling Stockholder shall sell to the Company that number of shares of Common Stock set forth opposite
the name of such Selling Stockholder in </FONT><FONT SIZE=2><I>Exhibit&nbsp;C</I></FONT><FONT SIZE=2> for the purchase price of $6.3754 per share, (the "</FONT><FONT SIZE=2><I>Redemption
Shares</I></FONT><FONT SIZE=2>") for an aggregate repurchase price of $5&nbsp;million, pursuant to the Repurchase Agreement in the form attached hereto as </FONT> <FONT SIZE=2><I>Exhibit&nbsp;D</I></FONT><FONT SIZE=2> (the "</FONT><FONT
SIZE=2><I>Repurchase Agreement</I></FONT><FONT SIZE=2>"). All purchase and redemption payments hereunder shall be
made by wire transfer of next day available funds. </FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Closing</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The closing of the purchases and sales of the Convertible Preferred Stock and the repurchase of
Common Stock from the Selling Stockholders of the Company contemplated by Section&nbsp;1.2 (the "</FONT><FONT SIZE=2><I>Closing</I></FONT><FONT SIZE=2>") shall take place at 1:00&nbsp;p.m.
Central Time on June&nbsp;8, 1998 or such later date as each of the conditions set forth in Section&nbsp;3 hereof shall have been satisfied or waived by the Investors (the
"</FONT><FONT SIZE=2><I>Closing Date</I></FONT><FONT SIZE=2>"); provided, however, that the Investors shall have the right, exercisable in their sole discretion, to terminate this Agreement if the
conditions set forth in Section&nbsp;3 hereof shall not have been satisfied by June&nbsp;8, 1998, and this Agreement shall automatically terminate if the conditions set forth in Section&nbsp;3
hereof shall not have been satisfied by June&nbsp;8, 1998 and the Investors have not waived such conditions by June&nbsp;8, 1998. </FONT></P>

<P><FONT SIZE=2>SECTION
2. REPRESENTATIONS AND WARRANTIES </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
order to induce the Investors to enter into this Agreement, the Company and each Stockholder jointly and severally represents and warrants to each of the Investors the following,
except as set forth in the schedule of exceptions attached hereto as </FONT><FONT SIZE=2><I>Exhibit&nbsp;E</I></FONT><FONT SIZE=2> (the "</FONT><FONT SIZE=2><I>Disclosure
Schedule</I></FONT><FONT SIZE=2>"). For purposes of this Section&nbsp;2, references to the "</FONT><FONT SIZE=2><I>Company</I></FONT><FONT SIZE=2>" shall mean and refer to PROS Strategic
Solutions,&nbsp;Inc., a Delaware corporation, and its subsidiaries (including, without limitation, with respect to Section&nbsp;2.12 hereof) and predecessors, as the context requires. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Organization and Corporate Power</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and is qualified to do business as a foreign corporation in each jurisdiction in which the failure to be so qualified could have a material adverse
effect on its assets, liabilities, condition (financial or other), business, results of operations or prospects (a "</FONT><FONT SIZE=2><I>Material Adverse Effect</I></FONT><FONT SIZE=2>"). The
Company has all required corporate power and authority to carry on its business as presently conducted, to enter into and perform this Agreement and the agreements contemplated hereby to which it is a
party and to carry out the transactions contemplated hereby and thereby, including the issuance of the Securities and the repurchase of the Redemption Shares. The copies of the Company's Certificate
of Incorporation together with the Company's Certificate of Designations, Preferences and Rights of Series&nbsp;A Convertible Redeemable Preferred Stock and Redeemable Preferred Stock as each is set
forth in </FONT><FONT SIZE=2><I>Exhibit&nbsp;B</I></FONT><FONT SIZE=2> (and as further amended to date, referred to collectively as the "</FONT><FONT SIZE=2><I>Certificate of
Incorporation</I></FONT><FONT SIZE=2>") and Bylaws of the Company, as amended to date (the "</FONT><FONT SIZE=2><I>Bylaws</I></FONT><FONT SIZE=2>"), all of which have been furnished to the Investors
by the Company, are correct and complete at the date hereof. The Company has complied with all terms of its Certificate of Incorporation and Bylaws. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Authorization and Non-Contravention</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;The
execution, delivery and performance by the Company of this Agreement and all other agreements, documents and instruments to be executed and delivered by the Company
as contemplated hereby (including, without limitation, the Repurchase Agreement) and the issuance and delivery of (i)&nbsp;the Convertible Preferred Shares, and (ii)&nbsp;upon the conversion of
the Convertible Preferred Shares, the Conversion Shares, have been duly authorized by all necessary corporate and other action of the Company. This Agreement and all documents executed by the Company
pursuant hereto (including, without limitation, the Repurchase Agreement) are valid and binding obligations of the Company, enforceable in accordance with their terms. The execution, delivery and
performance by the Company of this Agreement and all other agreements, documents and instruments to be executed and delivered by the Company as contemplated hereby (including, without limitation, the
Repurchase Agreement) and the issuance and delivery of (i)&nbsp;the Convertible Preferred Shares and (ii)&nbsp;upon the conversion of the Convertible Preferred Shares, the Conversion Shares, do
not and will not: (A)&nbsp;except as disclosed in the Disclosure Schedule, violate, conflict with or result in a default (whether after the giving of notice, lapse of time or both) under any
contract or obligation to which the Company is a party or by which it or its assets are bound, or </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

<HR NOSHADE>
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<A NAME="page_kn76602_1_3"> </A>
<UL>

<P><FONT SIZE=2>any
provision of the Certificate of Incorporation or Bylaws of the Company, or cause the creation of any encumbrance upon any of the assets of the Company except as contemplated herein or in the
Certificate of Incorporation; (B)&nbsp;violate or result in a violation of, or constitute a default under, any provision of any law, regulation or rule, or any order of, or any restriction imposed
by, any court or governmental agency applicable to the Company; (C)&nbsp;except as disclosed in the Disclosure Schedule, require from the Company any notice to, declaration or filing with, or
consent or approval of any governmental authority or third party; or (D)&nbsp;except as disclosed in the Disclosure Schedule, accelerate any obligation under, or give rise to a right of termination
of, any agreement, permit, license or authorization to which the Company is a party or by which the Company is bound. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Each
Stockholder has all right, authority, power and (if applicable) capacity to enter into this Agreement and each agreement, document and instrument to be executed and
delivered by or on behalf of such Stockholder pursuant to or as contemplated by this Agreement (including, without limitation, the Repurchase Agreement) and to carry out the transactions contemplated
hereby and thereby. This Agreement and each agreement, document and instrument executed and delivered by each Stockholder pursuant to or as contemplated by this Agreement (including, without
limitation, the Repurchase Agreement) constitute, or when executed and delivered will constitute, valid and binding obligations of such Stockholder enforceable in accordance with its respective terms.
The execution, delivery and performance by each Stockholder of this Agreement and each such other agreement, document and instrument (including, without limitation, the Repurchase Agreement), and the
performance by such Stockholder of the transactions contemplated hereby and thereby do not and will not: (A)&nbsp;violate, conflict with or result in a default (whether after the giving of notice,
lapse of time or both) under any contract or obligation to which such Stockholder or the Company is a party or by which he or its assets are bound, or any provision of the Certificate of Incorporation
or Bylaws of the Company, or cause the creation of any encumbrance upon any of the assets of such Stockholder or the Company; (B)&nbsp;violate or result in a violation of, or constitute a default
under, any provision of any law, regulation or rule, or any order of, or any restriction imposed by, any court or other governmental agency applicable to the Company or such Stockholder;
(C)&nbsp;require from such Stockholder or the Company any notice to, declaration or filing with, or consent or approval of any governmental authority or other third party; or (D)&nbsp;accelerate
any obligation under, or give rise to a right of termination of, any agreement, permit, license or authorization to which such Stockholder or the Company is a party or by which such Stockholder or the
Company is bound. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Capitalization</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;As of the Closing and after giving effect to the transactions contemplated hereby, the
authorized capital stock of the Company will consist of 20,000,000 shares of Common Stock, of which 8,492,868 shares will be issued and outstanding, 3,921,312 shares of Convertible Preferred Stock, of
which 3,921,312 shares will be issued and outstanding, and 3,921,312 shares of Redeemable Preferred Stock, of which no shares will be issued and outstanding. The Company has authorized and reserved
for issuance upon conversion of the Convertible Preferred Shares up to 5,008,809 shares of Common Stock and 3,921,312 shares of Redeemable Preferred Stock (subject to adjustment for stock splits,
stock dividends and the like), has authorized and reserved for issuance upon exercise of options under the Company's 1997 Stock Option Plan (the "</FONT><FONT SIZE=2><I>Option
Plan</I></FONT><FONT SIZE=2>") 1,231,985 shares of Common Stock (subject to adjustments for stock splits, stock dividends and the like). Except for the 549,677 shares of Common Stock issuable upon
exercise of outstanding options under the Option Plan and the Conversion Shares, the Company has not issued or agreed to issue and is not obligated to issue any outstanding warrants, options or other
rights to purchase or acquire any shares of its capital stock, nor any outstanding securities convertible into such shares or any warrants, options or other rights to acquire any such convertible
securities. As of the Closing, and after giving effect to the transactions contemplated hereby, all of the outstanding shares of capital stock of the Company (including, without limitation, the
Convertible Preferred Shares) will have been duly and validly authorized and issued and </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

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<A NAME="page_kn76602_1_4"> </A>

<P><FONT SIZE=2>will
be fully paid and nonassessable and, assuming the accuracy of the Investors' representations herein, will have been offered, issued, sold and delivered in compliance with applicable federal and
state securities laws and not subject to any preemptive rights. The Conversion Shares issuable upon conversion of the Convertible Preferred Shares will upon issuance be duly and validly authorized and
issued, fully paid and nonassessable and not subject to any preemptive rights and, assuming the accuracy of the Investors' representations herein, will be issued in compliance with federal and state
securities laws. The relative rights, preferences and other provisions relating to the Convertible Preferred Shares and the Redeemable Preferred Stock are as set forth in </FONT> <FONT SIZE=2><I>Exhibit&nbsp;B</I></FONT><FONT SIZE=2> attached hereto.
Except as set forth in Section&nbsp;2.3 of the Disclosure Schedule, there are no preemptive rights, rights of first
refusal, put or call rights or obligations or anti-dilution rights with respect to the issuance, sale or redemption of the Company's capital stock, other than rights to which the Investors
and Stockholders are entitled as set forth in this Agreement and the Certificate of Incorporation, and except as described in the Repurchase Agreement. Except as set forth herein, there are no rights
to have the Company's capital stock registered for sale to the public under the laws of any jurisdiction, no agreements relating to the voting of the Company's voting securities, and no restrictions
on the transfer of the Company's capital stock, except as set forth in Section&nbsp;2.3 of the Disclosure Schedule. After giving effect to the transactions contemplated hereby, the outstanding
shares of the Company's capital stock are held beneficially and of record by the persons identified in Section&nbsp;2.3 of the Disclosure Schedule in the amounts indicated thereon. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Subsidiaries; Investments</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Company has no subsidiaries or interests in any corporation, joint venture,
partnership or other entity. The Company is not controlled by or under common control with any third party except as disclosed in Section&nbsp;2.4 of the Disclosure Schedule. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements and Matters</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;The
Company has previously furnished to the Investors copies of its audited financial statements for the fiscal years ended December&nbsp;31, 1995, 1996 and 1997
together with copies of its unaudited financial statements for the three-month period ended March&nbsp;31, 1998 (the "</FONT><FONT SIZE=2><I>Financial Statements</I></FONT><FONT SIZE=2>"). Such
financial statements referred to in this Section&nbsp;2.5(a) were prepared in conformity with generally accepted accounting principles applied on a consistent basis, are complete, correct and
consistent in all material respects with the books and records of the Company and fairly and accurately present the financial position of the Company as of the dates thereof and the results of
operations and cash flows of the Company for the periods shown therein (subject to the absence of footnotes and normal year-end adjustments in the case of the unaudited statements). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Without
limiting the generality of the foregoing, the Company's recognition of revenue in each period reflected in the Financial Statements has complied in all material
respects with American Institute of Certified Public Accountants ("</FONT><FONT SIZE=2><I>AICPA</I></FONT><FONT SIZE=2>") Statement of Position ("</FONT><FONT SIZE=2><I>SOP</I></FONT><FONT SIZE=2>")
91-1, </FONT><FONT SIZE=2><I>Software Revenue Recognition</I></FONT><FONT SIZE=2>, or AICPA SOP 97-2, </FONT><FONT SIZE=2><I>Software Revenue
Recognition</I></FONT><FONT SIZE=2>, as applicable. The Company does not believe, after investigation, that AICPA SOP 97-2 will have a significant impact on the Company's Financial
Statements or operating results. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;The
projections which have been separately disclosed in writing to the Investors in the Company's Private Placement Memorandum dated as of February&nbsp;1998 as
revised, updated and provided to the Investors (the "</FONT><FONT SIZE=2><I>PPM</I></FONT><FONT SIZE=2>"), represent reasonable objectives for the Company's performance for 1998 based upon reasonable
assumptions, which the Company believes continue to be reasonable as of the date hereof. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

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<UL>
<BR>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Absence of Undisclosed Liabilities</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Except as set forth in the Disclosure Schedule and except as and to the
extent reflected or reserved against in the unaudited balance sheet of the Company at March&nbsp;31, 1998 contained in the financial statements referred to in Section&nbsp;2.5(a) (the
"</FONT><FONT SIZE=2><I>Base Balance Sheet</I></FONT><FONT SIZE=2>"), the Company does not have and is not subject to any material liability or obligation of any nature, whether accrued, absolute,
contingent or otherwise. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Absence of Certain Developments</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Except as set forth in the Disclosure Schedule, since the date of the Base
Balance Sheet, there has not been any: (i)&nbsp;material adverse change in the financial condition of the Company or in the assets, liabilities, condition (financial or other), business, results of
operations or prospects of the Company (a "</FONT><FONT SIZE=2><I>Material Adverse Change</I></FONT><FONT SIZE=2>"), (ii)&nbsp;declaration, setting aside or payment of any dividend or other
distribution with respect to, or any direct or indirect redemption or acquisition of, any of the capital stock of the Company, (iii)&nbsp;waiver of any valuable right of the Company or cancellation
of any debt or claim held by the Company, (iv)&nbsp;loss, destruction or damage to any property which is material to the assets, liabilities, condition (financial or other), properties, business,
results of operations or prospects of the Company, whether or not insured, (v)&nbsp;acquisition or disposition of any assets or other transaction by the Company other than in the ordinary course of
business, (vi)&nbsp;material
transaction or agreement involving the Company and any officer, director, employee or stockholder of the Company, (vii)&nbsp;material increase, direct or indirect, in the compensation paid or
payable to any officer, key employee or director of the Company or any establishment or creation of any employment or severance agreement or employee benefit plan with respect to such persons,
(viii)&nbsp;material loss of personnel of the Company, material change in the terms and conditions of the employment of the Company's key personnel or any labor disputes involving the Company,
(ix)&nbsp;arrangements relating to any royalty, dividend or similar payment based on the sales volume of the Company, whether as part of the terms of the Company's capital stock or by any separate
agreement, (x)&nbsp;agreement with respect to the endorsement of the Company's products, (xi)&nbsp;loss or any development that is reasonably likely to result in a loss of any significant
customer, account or employee of the Company, (xii)&nbsp;incurrence of indebtedness or any lien, (xiii)&nbsp;transaction not occurring in the ordinary course of business, or (xiv)&nbsp;any
agreement with respect to any of the foregoing actions. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Ordinary Course</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Since the date of the Base Balance Sheet, the Company has conducted its business only in
the ordinary course and consistent with its prior practices. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Receivables</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;All of the accounts and other amounts receivable by the Company, however styled and whether
shown or reflected on the Base Balance Sheet or otherwise, represent bona fide completed sales made in the ordinary course of business, are valid and enforceable claims, are subject to no known
set-offs or counterclaims, and are, in the best judgment of the Company, fully collectible in the normal course of business after deducting the reserve set forth in the Base Balance Sheet
and adjusted since that date, which reserve is a reasonable estimate of the Company's uncollectible accounts. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Title to Properties</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;2.10 of the Disclosure Schedule sets forth the addresses and uses of
all real property that the Company owns, leases or subleases. The Company has good, valid and marketable title to or other valid and enforceable rights to use all assets material to its business
including without limitation all rights to the Company's facility located in Houston, Texas and to those assets reflected on the Base Balance Sheet or acquired by it after the date thereof (except for
properties disposed of since that date in the ordinary course of business), free and clear of all liens, claims or encumbrances of any nature, other than liens for taxes not yet due and payable, minor
liens and encumbrances that do not materially detract from the value of the property subject thereto or materially impair the operations of the Company, and liens that have otherwise arisen in the
ordinary course of business. All equipment included in such properties which is necessary to the business of the Company is in good condition and repair (ordinary wear and tear excepted) and all
leases of real or </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

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<P><FONT SIZE=2>personal
property to which the Company is a party are fully effective and afford the Company peaceful and undisturbed possession of the subject matter of the lease. The property and assets of the
Company are sufficient for the conduct of its business as presently conducted. The Company is not in violation of any zoning, building or safety ordinance, regulation or requirement or other law or
regulation applicable to the operation of its owned or leased properties, which violation would have a Material Adverse Effect, nor has it received any notice of any such violation. There are no
defaults by the Company or to the best knowledge of the Company, by any other party, which might curtail in any material respect the present use of the Company's property. The performance by the
Company of this Agreement will not result in the termination of, or in any increase of any amounts payable under, any of its leases. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Tax Matters</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Company has filed all federal, state, local and foreign income, excise and franchise tax
returns, real estate and personal property tax returns, sales and use tax returns and other tax returns required to be filed by it, such returns have been prepared and filed in the manner required by
applicable law, and the Company has paid all taxes owing by it, except taxes which have not yet accrued or otherwise become due and for which adequate provision has been made in the Financial
Statements. The provision for taxes on the Base Balance Sheet is sufficient as of its date for the payment of all accrued and unpaid federal, state, county and local taxes of any nature of the
Company, and any applicable taxes owing to any foreign jurisdiction, whether or not assessed or disputed. With regard to the federal income tax returns of the Company, the Company has never received
notice of any audit or of any proposed deficiencies from the Internal Revenue Service. There are in effect no waivers of applicable statutes of limitations with respect to any taxes owed by the
Company for any year. Neither the Internal Revenue Service nor any other taxing authority is now asserting or, to the best knowledge of the Company, threatening to assert against the Company any
deficiency or claim for additional taxes or interest thereon or penalties in connection therewith. All taxes and other assessments which the Company is required to collect or withhold have been duly
withheld or collected and have been paid to the proper domestic or foreign taxing authority, as applicable. The Company is not a party to any tax-sharing agreement or similar arrangement
with any other party. Except as set forth in Sections 2.10 and 2.12 of the Disclosure Schedule with respect to leases of real and personal property, the Company is not currently under any contractual
or legal obligation to pay any tax obligations of, or with respect to, any transaction relating to any other person or to indemnify any other person with respect to any tax. The Company has made a
valid election under Section&nbsp;1362 of the Internal Revenue Code and under any corresponding provision of applicable state law to be an S Corporation, and has been an S Corporation since
July&nbsp;1, 1989. Such election has been terminated effective January&nbsp;1, 1998. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Certain Contracts and Arrangements</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Except as set forth in Section&nbsp;2.12 of the Disclosure Schedule
(with true and correct copies delivered to the Investors), the Company is not a party or subject to or bound by: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;any
plan or contract providing for collective bargaining or the like, or any contract or agreement with any labor union; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;any
contract, lease or agreement creating any obligation of the Company to pay to any third party $100,000 or more with respect to any single such contract or agreement; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;any
contract or agreement for the sale, license, lease or disposition of products in excess of $100,000; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;any
contract containing covenants directly or explicitly limiting the freedom of the Company to compete in any line of business or with any person or entity; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;any
license agreement (as licensor or licensee) material to the Company's business or projected business; </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

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<UL>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;any
contract or agreement for the purchase of any leasehold improvements, equipment or fixed assets for a price in excess of $100,000; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;any
indenture, mortgage, promissory note, loan agreement, guaranty or other agreement or commitment for borrowing in excess of $100,000 or any pledge or security
arrangement; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;any
material joint venture, partnership, manufacturing, development or supply agreement; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;any
endorsement or any other advertising, promotional or marketing agreement; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;any
employment contracts, or agreements with officers, key employees, directors or stockholders of the Company or persons or organizations related to or affiliated with
any such persons; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;except
as contemplated by this Agreement, any stock redemption or purchase agreements or other agreements affecting or relating to the capital stock of the Company,
including without limitation any agreement with any stockholder of the Company which includes without limitation, anti-dilution rights, registration rights, voting arrangements, operating
covenants or similar provisions; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;any
pension, profit sharing, retirement or stock options plans; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;any
material royalty, dividend or similar arrangement based on the sales volume of the Company; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;&nbsp;any
acquisition, merger or similar agreement; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;&nbsp;any
contract with a governmental body under which the Company may have an obligation for renegotiation; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;&nbsp;any
agreement with any stockholder of the Company or any affiliate of any such stockholder; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;&nbsp;&nbsp;any
other contract not executed in the ordinary course of business. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
of the Company's contracts and commitments are in full force and effect and neither the Company, nor, to the best knowledge of the Company, any other party is in default thereunder
(nor, to the best knowledge of the Company, has any event occurred which with notice, lapse of time or both would constitute a default thereunder), and the Company has not received notice of any
alleged default under any such contract, agreement, understanding or commitment. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Intellectual Property Rights; Employee Restrictions</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Except as set forth in Section&nbsp;2.13 of the
Disclosure Schedule: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;The
Company has exclusive ownership of, with the exclusive right to use, sell, license, dispose of, and bring actions for infringement of, all Intellectual Property
Rights (as hereinafter defined) material to the conduct of its business as presently conducted, including without limitation all rights to the Company name "PROS Strategic Solutions,&nbsp;Inc." and
to the trademarks and product names listed on Section&nbsp;2.13 of the Disclosure Schedule hereof (the "</FONT><FONT SIZE=2><I>Company Rights</I></FONT><FONT SIZE=2>"). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;The
business of the Company as presently conducted and the manufacturing and marketing of the products of the Company do not violate any agreements which the Company has
with any third party or infringe any patent, trademark, copyright or trade secret or, to the best knowledge of the Company, any other Intellectual Property Rights of any third party. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>7</FONT></P>

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<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;No
claim is pending or, to the best knowledge of the Company, threatened against the Company nor has the Company received any notice or claim from any person asserting
that any of the Company's present or contemplated activities infringe or may infringe any Intellectual Property Rights of such person, and the Company is not aware of any infringement by any other
person of any rights of the Company under any Intellectual Property Rights. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;The
Company has taken all steps required to establish and preserve its ownership of all of the Company Rights; each current and former employee of the Company, and each
of the Company's consultants and independent contractors involved in development of any of the Company Rights, has executed an agreement regarding confidentiality, proprietary information and
assignment of inventions and copyrights to the Company, and, to the best knowledge of the Company, none of such employees, consultants or independent contractors is in violation of any agreement or in
breach of any agreement or arrangement with former or present employers relating to proprietary information or assignment of inventions. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
used herein, the term "</FONT><FONT SIZE=2><I>Intellectual Property Rights</I></FONT><FONT SIZE=2>" shall mean all intellectual property rights, including, without limitation, all of
the registered rights set forth on Section&nbsp;2.13 of the Disclosure Schedule and all patents, patent applications, patent rights, trademarks, trademark applications, trade names, service marks,
service mark applications, copyrights, copyright applications, computer programs and other computer software, inventions, designs, samples, specifications, schematics, know-how, trade
secrets, proprietary processes and formulae, including production technology and processes, all source and object code, algorithms, promotional materials, customer lists, supplier and dealer lists and
marketing research, and all documentation and media constituting, describing or relating to the foregoing, including without rotation, manuals, memoranda and records. Section&nbsp;2.14 of the
Disclosure Schedule contains a list and brief description of all Intellectual Property Rights owned by, or registered in the name of, the Company or of which the Company is the licensor or a licensee
of a material right or in which the Company has any material right and, in each case, a brief description of the nature of the right </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.14</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Litigation</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Except as set forth in the Disclosure Schedule, there is no litigation or governmental
proceeding or investigation pending or, to the best knowledge of the Company, threatened against the Company or affecting any of its properties or assets or against any officer, director or key
employee of the Company in his or her capacity as an officer, director or employee of the Company, which litigation, proceeding or investigation is reasonably expected to have a Material Adverse
Effect, or which may call into question the validity or hinder the enforceability of this Agreement or any other agreements or transactions contemplated hereby; nor to the best knowledge of the
Company has there occurred any event nor does there exist any condition on the basis of which any such litigation, proceeding or investigation might be properly instituted or commenced. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.15</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Employee Benefit Plans</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Company does not maintain or contribute to any employee benefit plan, stock
option, bonus or incentive plan, severance pay policy or agreement, deferred compensation agreement, or any similar plan or agreement (an "</FONT><FONT SIZE=2><I>Employee Benefit
Plan</I></FONT><FONT SIZE=2>") other than the Employee Benefit Plans identified and described in Section&nbsp;2.15 of the Disclosure Schedule. The terms and operation of each Employee Benefit Plan
comply in all material respects with all applicable laws and regulations relating to such Employee Benefit Plans. There are no unfunded obligations of the Company under any retirement, pension,
profit-sharing, deferred compensation plan or similar program. The Company is not required to make any payments or contributions to any Employee Benefit Plan pursuant to any collective bargaining
agreement or, to the knowledge of the Company, any applicable labor relations law, and all Employee Benefit Plans are terminable at the discretion of </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>8</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2>the
Company without liability to the Company upon or following such termination. The Company has never maintained or contributed to any Employee Benefit Plan providing or promising any health or other
nonpension benefits to terminated employees. With respect to any Employee Benefit Plan, there has occurred no "prohibited transaction," as defined in Section&nbsp;406 of the Employee Retirement
Income Security Act of 1974, as amended ("</FONT><FONT SIZE=2><I>ERISA</I></FONT><FONT SIZE=2>") or Section&nbsp;4975 of the Code, or breach of any duty under ERISA or other applicable law which
could result, directly or indirectly, in any taxes, penalties or other liability to the Company. No litigation, arbitration or governmental administrative proceeding (or investigation) or other
proceeding (other than those relating to routine claims for benefits) is pending or, to the best knowledge of the Company, threatened with respect to any such Employee Benefit Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.16</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Labor Laws</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Company employs approximately 155 employees and generally enjoys good employer-employee
relationships. The Company is not delinquent in payments to any of its employees for any wages, salaries, commissions, bonuses or other direct compensation for any services performed for it as of the
date hereof or amounts required to be reimbursed to such employees. The Company is in compliance in all material respects with all applicable laws and regulations respecting labor, employment, fair
employment practices, terms and conditions of employment, and wages and hours. There are no charges of employment discrimination or unfair labor practices or strikes, slowdowns, stoppages of work or
any other concerted interference with normal operations existing, pending or, to the best knowledge of the Company, threatened against or involving the Company. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.17</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Key Employees</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Except as set forth in Section&nbsp;2.17 of the Disclosure Schedule, to the knowledge of
the Company, no key employee of the Company has any plan or intention to terminate his employment with the Company and no supplier has any plan or intention to terminate or reduce its business with
the Company or to materially and adversely modify its relationship with the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.18</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Hazardous Waste, Etc</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;No hazardous wastes, substances or materials, or oil or petroleum products have been
generated, transported, used, disposed, stored or treated by the Company and no hazardous wastes, substances or materials, or oil or petroleum products have been released, discharged, disposed,
transported, placed or otherwise caused to enter the soil or water in, under or upon any real property owned, leased or operated by the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.19</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Business; Compliance with Laws</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Company has all necessary franchises, permits, licenses and other
rights and privileges necessary to permit it to own its property and so conduct its business as it is presently or contemplated to be conducted, except for those which the failure of the Company to
obtain would not have a Material Adverse Effect. The Company is currently and has heretofore been in compliance in all material respects with all federal, state, local and foreign laws and
regulations, including without limitation all laws and regulations administered by or promulgated by the Federal Trade Commission and/or the Food and Drug Administration. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.20</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Investment Banking; Brokerage</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Except as set forth in Section&nbsp;2.20 of the Disclosure Schedule, there
are no claims for investment banking fees, brokerage commissions, finder's fees or similar compensation (exclusive of professional fees to lawyers and accountants) in connection with the transactions
contemplated by this Agreement payable by the Company or based on any arrangement or agreement made by or on behalf of the Company or any of the Stockholders. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.21</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Insurance</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Company has fire, casualty and business interruption and other insurance policies, with
extended coverage, sufficient in amount to allow it to replace any of its material properties which might be damaged or destroyed, and such types and amounts of other insurance with respect to its
business and properties, on both a per occurrence and an aggregate basis, as are customarily carried by persons engaged in the same or similar business as the Company. There is no default or event
which could give rise to a default under any such policy. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>9</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.22</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Transactions with Affiliates</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;There are no loans, leases, contracts or other transactions between the
Company and any officer, director or five percent (5%) stockholder of the Company or any family member or affiliate of the foregoing persons and there have been no such transactions within the past
five (5)&nbsp;years, except as set forth in Section&nbsp;2.22 of the Disclosure Schedule. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.23</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Customers and Distributors</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;2.23 of the Disclosure Schedule sets forth each representative
and distributor of the Company at the date hereof (whether pursuant to a commission, royalty or other arrangement), and each customer, distributor and/or broker of the Company who accounted for more
than 5% of the sales of the Company for the twelve (12)&nbsp;months ended March&nbsp;31, 1998 (collectively, the "</FONT><FONT SIZE=2><I>Customers, Distributors and
Brokers</I></FONT><FONT SIZE=2>"). The relationships of the Company with its Customers, Distributors, and Brokers are good commercial working relationships. No Customer, Distributor or Broker of the
Company has canceled or otherwise terminated its relationship with the Company, or has during the last twelve (12)&nbsp;months decreased materially its services, supplies or materials to the Company
or its usage or purchases of the services or products of the Company. No Customer, Distributor or Broker has, to the best knowledge of the Company, any plan or intention to terminate, to cancel or
otherwise materially and adversely modify its relationship with the Company or to decrease materially or limit its services, supplies or materials to the Company or its usage, purchase or distribution
of the services or products of the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.24</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Disclosure</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The representations, warranties and disclosures made or contained in this Agreement, the
schedules and exhibits hereto, the certificates and statements executed or delivered in connection herewith and the PPM, when taken together, do not and shall not contain any untrue statement of a
material fact and do not and shall not omit to state a material fact required to be stated therein or necessary in order to make such representations, warranties or other material not misleading in
light of the circumstances in which they were made or delivered. There have been no events or transactions, or information which has come to the attention of the management of the Company, having a
direct impact on the Company or its assets, liabilities, financial condition, business, results of operations or prospects which, in the reasonable judgment of such management, could be expected to
have a Material Adverse Effect. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.25</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Qualified Small Business Stock</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;As of the Closing, (i)&nbsp;the Company will be a domestic C Corporation,
(ii)&nbsp;the Company will not have, during the one-year period preceding the Closing, made any purchases of its own stock (other than stock issued to employees pursuant to the Option
Plan (as defined in Section&nbsp;4.7 hereof) and in connection with termination of employment), (iii)&nbsp;the Company's (and any predecessor's) aggregate gross assets, as defined by
Section&nbsp;1202(d)(2) of the Internal Revenue Code of 1986, as amended (the "</FONT><FONT SIZE=2><I>Code</I></FONT><FONT SIZE=2>"), at no time between the date of incorporation of the Company and
through the Closing have exceeded or will exceed $50,000,000, taking into account the assets of any corporations required to be aggregated with the Company in accordance with Section&nbsp;1202(d)(3)
of the Code, and (iv)&nbsp;the Company will be an eligible corporation, as defined by Section&nbsp;1202(e)(4) of the Code. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.26</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Consolidation and Reincorporation Effective</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;As of the Closing, the Company together with its
predecessors-in-interest, as applicable, will have taken all requisite corporate governance and other actions and made all requisite filings with applicable governmental
authorities to authorize, ratify and make effective the merger of all subsidiaries of PROS Strategic Solutions,&nbsp;Inc., a Texas corporation and predecessor-in-interest to
the Company ("PROS-Texas"), with and into PROS-Texas and the issuance and cancellation of the shares of the Company to PROS-Texas, and the merger of
PROS-Texas with and into the Company. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>10</FONT></P>

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<BR>

<P><FONT SIZE=2>SECTION
2A. </FONT><FONT SIZE=2><I>REPRESENTATIONS AND WARRANTIES OF THE INVESTORS</I></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;Each
Investor represents to the Company that it has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks
of the investment contemplated by this Agreement and making an informed investment decision with respect thereto. Each Investor represents that it is an "accredited investor" as such term is defined
in Rule&nbsp;501 under the Securities Act of 1933, as amended (the "</FONT><FONT SIZE=2><I>Securities Act</I></FONT><FONT SIZE=2>"). Each Investor represents to the Company that it is purchasing
the Convertible Preferred Shares for its own account, for investment only and not with a view to, or any present intention of, effecting a distribution of such securities or any part thereof except
pursuant to a registration or an available exemption under applicable law. Such Investor acknowledges that its respective Convertible Preferred Shares have not been registered under the Securities Act
or the securities laws of any state or other jurisdiction and cannot be disposed of unless they are subsequently registered under the Securities Act and any applicable state laws or exemption from
such registration is available. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;Each
Investor has full right, authority and power as an individual or under a governing partnership, governing agreement, or otherwise, to enter into this Agreement and
each agreement, document and instrument to be executed and delivered by or on behalf of such Investor pursuant to or as contemplated by this Agreement and to carry out the transactions contemplated
hereby and thereby, and the execution, delivery and performance by such Investor of this Agreement and each such other agreement, document and instrument have been duly authorized by all necessary
action under such Investor's governing partnership or other governing agreement, if any. This Agreement and each agreement, document and instrument executed and delivered by each Investor pursuant to
or as contemplated by this Agreement constitute, or when executed and delivered will constitute, valid and binding obligations of each of the Investors enforceable in accordance with their respective
terms. The execution, delivery and performance by each Investor of this Agreement and each such other
agreement, document and instrument, and the performance of the transactions contemplated hereby and thereby do not and will not: (A)&nbsp;violate, conflict with or result in a default (whether after
the giving of notice, lapse of time or both) under any contract or obligation to which any Investor is a party or by which it or its assets are bound, or cause the creation of any encumbrance upon any
of the assets of any Investor; (B)&nbsp;violate or result in a violation of, or constitute a default under, any provision of any law, regulation or rule, or any order of, or any restriction imposed
by, any court or other governmental agency applicable to such Investor; (C)&nbsp;require from such Investor any notice to, declaration or filing with, or consent or approval of any governmental
authority or other third party; or (D)&nbsp;accelerate any obligation under, or give rise to a right of termination of, any agreement, permit, license or authorization to which any Investor is a
party or by which such Investor is bound. </FONT></P>

</UL>

<P><FONT SIZE=2>Each
Investor represents that there are no claims for investment banking fees, brokerage commissions, finder's fees or similar compensation (exclusive of professional fees to lawyers and accountants)
in connection with the transactions contemplated by this Agreement based on any arrangement or agreement made by or on behalf of such Investor. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>11</FONT></P>

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<P><FONT SIZE=2>SECTION
3. CONDITIONS OF PURCHASE </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
Investor's obligation to purchase and pay for the Convertible Preferred Shares to be purchased by it shall be subject to compliance by the Company and the Stockholders with their
agreements herein contained and to the fulfillment to the Investors' satisfaction, or the waiver by the Investors, on or before and at the Closing Date of the following conditions: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Satisfaction of Conditions</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The representations and warranties of the Company and the Stockholders contained
in this Agreement shall be true and correct on and as of the Closing Date; each of the conditions specified in this Section&nbsp;3 shall have been satisfied or waived in writing by the Investors;
there shall have been no Material Adverse Change since March&nbsp;31, 1998; and, on the Closing Date, certificates to such effect executed by the President and Chairman of the Board of the Company
shall have been delivered to the Investors. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Director Election and Indemnification</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Kurt R. Jaggers, as the nominee of the TA Funds, shall have been
elected as a director of the Company (together with any subsequent nominee of TA Funds or JMI, the "</FONT><FONT SIZE=2><I>TA Nominee</I></FONT><FONT SIZE=2>") and Harry S. Gruner, as the nominee of
JMI Equity Fund, L.P., ("</FONT><FONT SIZE=2><I>JMI"</I></FONT><FONT SIZE=2>) shall have been elected as a Director of the Company (together with any subsequent nominee, the
"</FONT><FONT SIZE=2><I>JMI Nominee</I></FONT><FONT SIZE=2>" and together with the TA Nominee, the "</FONT><FONT SIZE=2><I>Investors' Nominees</I></FONT><FONT SIZE=2>") and the Company shall have
entered into an Indemnification Agreement with the Investors' Nominees and the Investors in the form attached hereto as </FONT><FONT SIZE=2><I>Exhibit&nbsp;F</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Opinions of Counsel</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Investors shall have received from Fulbright&nbsp;&amp; Jaworski LLP an opinion dated
as of the Closing Date substantially in the form attached hereto as </FONT><FONT SIZE=2><I>Exhibit&nbsp;G</I></FONT><FONT SIZE=2>. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Reincorporation</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Company's predecessor, PROS Strategic Solutions,&nbsp;Inc., a Texas corporation,
shall have been reincorporated under the laws of Delaware pursuant to a Certificate of Incorporation in the form included in </FONT><FONT SIZE=2><I>Exhibit&nbsp;B</I></FONT><FONT SIZE=2> and
otherwise on terms and conditions satisfactory to the Investors. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Authorization</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors of the Company shall have duly adopted resolutions in the form
reasonably satisfactory to the Investors and shall have taken all action necessary for the purpose of authorizing the Company to consummate the transactions contemplated hereby in accordance with the
terms hereof and to cause the Certificate of Incorporation and the rights, preferences, and designations of the Convertible Preferred Stock and the Redeemable Preferred Stock as set forth in </FONT> <FONT SIZE=2><I>Exhibit&nbsp;B</I></FONT><FONT
SIZE=2> to become effective; and the Investors shall have received a certificate of the Secretary of the Company setting forth a copy of the
resolution and the Certificate of Incorporation and Bylaws of the Company and such other matters as may be reasonably requested by the Investors. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Investors' Fees</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Company shall have paid on behalf of the Investors all reasonable legal fees and
related expenses incurred by the Investors in connection with the transactions contemplated by this Agreement. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.7</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;No Violation or Injunction</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The consummation of the actions contemplated by this Agreement shall not be in
violation of any law or regulation, and shall not be subject to any injunction, stay or restraining order. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.8</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Consents and Waivers</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Company and the Stockholders shall have obtained all consents or waivers necessary
to execute this Agreement and the other agreements and documents contemplated herein, to issue and sell the Securities to be sold to the Investors hereunder, to repurchase the shares of Common Stock
as contemplated by the Repurchase Agreement and to carry out the transactions contemplated hereby and thereby and shall have delivered evidence thereof to the Investors. All corporate and other action
and governmental filings necessary to effectuate the terms of this Agreement and other agreements and instruments executed and delivered by the Company in connection herewith shall have been made or
taken. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>12</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.9</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Repurchase Agreement</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Repurchase Agreement shall be executed by the Selling Stockholders who agree in
the aggregate to the sale of 784,262 shares of their Common Stock to the Company on the Closing Date (adjusted appropriately for stock splits, stock dividends, recapitalizations and the like). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.10</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Repayment of Company Loans</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;From the proceeds of the redemptions of their Common Stock contemplated by the
Repurchase Agreement, the Selling Stockholders shall repay in full any and all Promissory Notes issued by the Selling Stockholders to the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.11</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Securities Compliance</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The offer, sale and issuance of the Securities to the Investors shall have been
qualified or registered in compliance with applicable Blue Sky and Federal Securities laws, or exemptions from such qualification or registration requirements shall have been obtained. </FONT></P>

<P><FONT SIZE=2>SECTION
4. COVENANTS </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company agrees for the benefit of the Investors that it shall comply with the following covenants, provided that the covenants set forth in Sections 4.1, 4.3 (except to the extent
provided therein), 4.4 and 4.7 shall terminate as of the closing of the Company's first Qualified Public Offering, unless earlier terminated as may be agreed to in writing by two-thirds in
interest of the Investors. A "</FONT><FONT SIZE=2><I>Qualified Public Offering</I></FONT><FONT SIZE=2>" shall have the meaning provided in the Certificate of Incorporation attached hereto as </FONT> <FONT SIZE=2><I>Exhibit&nbsp;B</I></FONT><FONT
SIZE=2>. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements and Budget Information; Inspections</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;So long as the Investors hold at least 390,000
Convertible Preferred Shares or shares of Common Stock (subject to adjustments for stock splits, stock dividends and the like), the Investors shall have the rights, and the Company shall have the
obligations, set forth in this Section&nbsp;4.1. The Company will deliver to TA Associates,&nbsp;Inc. as representative of the Investors, internally prepared unaudited monthly and quarterly
financial statements and audited annual financial statements, as well as annual budgets and operating plans. The monthly and quarterly financial information will be provided within 45&nbsp;days
after the end of each month and quarter. Notwithstanding the foregoing sentence, the Company agrees that it will make commercially reasonable efforts to reduce the number of days required to generate
monthly and quarterly financial information. The annual budget and operating plan will be presented at a Board of Directors meeting at least one month prior to the end of the fiscal year of the
Company preceding the year covered. An annual audit by an accounting firm of national recognition selected by the Board of Directors will be provided within 90&nbsp;days after each fiscal
year-end of the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company will, upon reasonable prior notice to the Company and for corporate purposes, permit authorized representatives of TA Associates,&nbsp;Inc. as representative of the
investors to visit and inspect any of the properties of the Company, including its books of account (and to make copies thereof and take extracts therefrom), and to discuss its affairs, finances and
accounts with its officers, administrative employees and independent accountants, all at such reasonable times and as often as may be reasonably requested. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Indemnification; Insurance</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;For so long as any of the Securities remains outstanding, the Certificate of
Incorporation or Bylaws of the Company will at all times during which any nominee of any of the Investors serves as director of the Company provide for indemnification of the directors and limitations
on the liability of the directors to the fullest extent permitted under applicable state law. Prior to any initial public offering, the Company will purchase a directors and officers insurance policy
on terms reasonably acceptable to the Investors' Nominees (who shall be third party beneficiaries of this Agreement) covering directors and officers of the Company in the amount of at least
$5&nbsp;million, covering, among other things, violations of federal or state securities laws. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>13</FONT></P>

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<P><FONT SIZE=2><A
NAME="page_ko76602_1_14"> </A> </FONT> <FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Board of Directors</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors of the Company shall consist of no more than eight
(8)&nbsp;members including the Investors' Nominees. The Company shall cause meetings of its Board of Directors to be held at least four (4)&nbsp;times each year at intervals of not more than four
(4)&nbsp;months and shall pay all reasonable out-of-pocket expenses incurred by the Investors' Nominees in connection with attending meetings or other functions of the
Company's Board of Directors or any committees thereof and shall pay the Investors' Nominees fees in an amount equal to any fees that are paid to the other non-management directors of the
Company; provided, however, that prior to the Company's initial public offering the Company shall not be obligated to issue options or related awards to the Investors' Nominees that it issues to the
other non-management directors of the Company, but upon the closing of such offering the Investors' Nominees shall, for purposes of compensation, be considered new members of the Board of
Directors and receive compensation (including options and related awards) consistent with the Company's policies for new non-management directors of the Company and thereafter shall be
compensated in the same manner as each of the other non-management directors of the Company. Compensation (including option and related awards) for members of management will be determined
by a Compensation Committee of the Board of Directors comprised of one member of management who is also a director, an Investors' Nominee and one independent director (the
"</FONT><FONT SIZE=2><I>Compensation Committee</I></FONT><FONT SIZE=2>"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Restrictive Covenants</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Company will not, without the consent of two
thirds-in-interest of the Investors: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;sell,
lease or otherwise dispose of (whether in one transaction or a series of related transactions) all or substantially all of its assets or business, except in a
transaction constituting a "</FONT><FONT SIZE=2><I>Extraordinary Transaction</I></FONT><FONT SIZE=2>" (as such term is defined in the Certificate of Incorporation in the form attached as </FONT> <FONT SIZE=2><I>Exhibit&nbsp;B)</I></FONT><FONT SIZE=2>,
 </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;merge
with or into or consolidate with another entity or enter into or engage in any other transaction or series of related transactions, in any such case in connection
with or as a result of which the Company is not the surviving entity or the owners of the Company's outstanding equity securities prior to the transaction or series of related transactions do not own
at least a majority of the outstanding equity securities of the surviving, resulting or consolidated entity, </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;dissolve,
liquidate or wind up its operations, </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;directly
or indirectly redeem, purchase, or otherwise acquire for consideration any shares of its Common Stock or any other class of its capital stock except
(i)&nbsp;for redemption of Convertible Preferred Shares or Redeemable Preferred Stock pursuant to and as provided in the Certificate of Incorporation, (ii)&nbsp;as contemplated by Sections 1.2 and
4.5, or (iii)&nbsp;repurchase of shares of Common Stock from stockholders pursuant to the agreements described in </FONT><FONT SIZE=2><I>Schedule&nbsp;4.4</I></FONT><FONT SIZE=2>
hereto</FONT><FONT SIZE=2><B>,</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;propose
or adopt any amendment to Article&nbsp;IV of its Certificate of Incorporation, or any other amendment to its Certificate of Incorporation or Bylaws that
eliminates, amends or restricts or otherwise adversely affects the rights and preferences of the Convertible Preferred Stock or the Redeemable Preferred Stock, or increase the authorized shares of
Preferred Stock, Convertible Preferred Stock or Redeemable Preferred Stock, </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;except
for a one-time distribution of $2,750,000 paid within two (2)&nbsp;business days of the Closing (the "One-Time Distribution"), declare
or make any distribution or dividend payments on any shares of its Common Stock or any other class of its capital stock, </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;create,
or obligate itself to create, any class or series of shares having preference over or being on a parity with the Convertible Preferred Stock or the Redeemable
Preferred Stock, </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;increase
the size of the Board of Directors to more than eight (8)&nbsp;members, </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>14</FONT></P>

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<UL>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;enter
into any agreement or arrangement or take any other action that eliminates, amends, restricts or otherwise adversely affects the rights of the Investors hereunder
or as holders of securities of the relevant class or its ability to perform its obligations hereunder; without limitation of the foregoing, the Company shall take all commercially reasonable action
necessary or appropriate to remove promptly any impediment to the redemption of the Securities as contemplated by the Certificate of Incorporation, or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;pay
any bonuses to the Company's executive officers or unless any such bonus shall have been unanimously approved by the Compensation Committee. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Repurchase; Use of Proceeds</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Immediately upon the sale of the Convertible Preferred Shares, the Company
shall complete the repurchase of 784,262 shares of Common Stock from the Selling Stockholders of the Company for aggregate cash payments of $5&nbsp;million pursuant to this Agreement, in each case
on terms reasonably satisfactory to the Investors and in accordance with </FONT><FONT SIZE=2><I>Exhibit&nbsp;D</I></FONT><FONT SIZE=2> hereto. The Company shall use the remaining net proceeds from
the sale of the Convertible Preferred Stock for working capital, the One-Time Distribution, acquisitions, debt repayment purposes and payments to James V. O'Donnel in accordance with the
terms of that certain Release and Settlement Agreement attached as </FONT><FONT SIZE=2><I>Exhibit&nbsp;H</I></FONT><FONT SIZE=2> hereto. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Key Person Insurance</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Within 120&nbsp;days after the date hereof, the Company will purchase and maintain
"key person" term life insurance policies of $3&nbsp;million each on the lives of Ronald F. Woestmeyer and Mariette M. Woestmeyer with the Company named as beneficiary. The Company hereby agrees
that such policy shall not be assigned, borrowed against or pledged. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Stock Awards</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Except for the issuance of up to an aggregate 1,231,985 shares of Common Stock pursuant to
option and stock awards under the Option Plan as in effect as of the date hereof, the Company will not grant or award options, stock or other equity-based or quasi-equity rights (collectively,
"</FONT><FONT SIZE=2><I>Equity</I></FONT><FONT SIZE=2>") to officers, employees, advisers, consultants, or directors without the consent of the Investors' Nominee, and the Company will in no event
grant Equity to the Stockholders without the consent of the Investors' Nominees. The Option Plan and grant awards thereunder may not be amended, revised or waived after the date hereof without the
consent of the Investors' Nominees. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Assignment</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each Investor shall have the right to assign its rights under this Section&nbsp;4 in
connection with any transaction or series of related transactions involving the direct or indirect offer, transfer, donation, sale assignment, pledge, hypothecation or other disposition (the
"</FONT><FONT SIZE=2><I>Transfer</I></FONT><FONT SIZE=2>") to one or more transferees of at least 390,000 shares of capital stock of the Company (subject to adjustments for stock splits, stock
dividends and the like and aggregating all contemporaneous Transfers by two or more Investors), or to any fund managed by or associated with TA Associates,&nbsp;Inc. (collectively,
"</FONT><FONT SIZE=2><I>TA Funds</I></FONT><FONT SIZE=2>") or JMI Equity Fund ("</FONT><FONT SIZE=2><I>JMI Funds</I></FONT><FONT SIZE=2>"). Upon any such Transfer, such transferee or TA Fund or JMI
Fund, as applicable, thereupon shall be deemed an "</FONT><FONT SIZE=2><I>Investor</I></FONT><FONT SIZE=2>" for purposes of this Section&nbsp;4. </FONT></P>

<P><FONT SIZE=2>SECTION
5. RIGHTS TO PURCHASE </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
anything herein to the contrary, the following provisions of this Section&nbsp;5 shall terminate immediately prior to the closing of a Qualified Public Offering and
shall not apply with respect to any Qualified Public Offering. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>15</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Right to Participate in Certain Sales of Additional Securities.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Company agrees that it will not sell or
issue any shares of capital stock of the Company, or other securities convertible into or exchangeable for capital stock of the Company, or options, warrants or rights carrying any rights to purchase
capital stock of the Company unless the Company first submits a written offer to the Investors identifying the terms of the proposed sale (including price, number or aggregate principal amount of
securities and all other material terms), and offers to each Investor the opportunity to purchase its Pro Rata Share (as hereinafter defined) of the securities (subject to increase for
over-allotment if some Investors do not fully exercise their rights) on terms and conditions, including price, not less favorable to the Investors than those on which the Company proposes
to sell such securities to a third party or parties. Each Investor's "</FONT><FONT SIZE=2><I>Pro Rata Share</I></FONT><FONT SIZE=2>" of such securities shall be based on the ratio which the shares of
Common Stock held by it bears to all the issued and outstanding shares of Common Stock calculated on a fully-diluted basis giving effect to the conversion of convertible securities as of the date of
such written offer. The Company's offer to the Investors shall remain open and irrevocable for a period of 30&nbsp;days, and Investors who elect to purchase shall have the first right to take up and
purchase any shares or other securities which other Investors do not elect to purchase, based on the relative holdings of the electing purchasers. Any securities so offered which are not purchased
pursuant to such offer may be sold by the Company but only on the terms and conditions set forth in the initial offer to the Investors, at any time within 90&nbsp;days following the termination of
the above-referenced 30-day period but may not be sold to any other person or on terms and conditions, including price, that are more favorable to the purchaser than those set forth in
such offer or after such 90-day period without renewed compliance with this Section&nbsp;5.1. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
the foregoing, the Company may (i)&nbsp;issue shares of its Common Stock to its officers, employees, advisors, consultants, and directors with respect to options to
purchase up to an aggregate 1,231,985 shares pursuant to the Option Plan as in effect as of the date hereof, and (ii)&nbsp;issue Conversion Shares upon the conversion of the Convertible Preferred
Shares, and this Section&nbsp;5 shall not apply with respect to such issuances. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Assignment of Rights</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each Investor may assign its rights under this Section&nbsp;5 in connection with any
transaction or series of related transactions involving the transfer to one or more transferees of at least 390,000 shares of capital stock of the Company (subject to adjustments for stock splits,
stock dividends and the like and aggregating all contemporaneous transfers by Investors), or to any TA Fund or JMI Fund Upon any such transfer such transferee or TA Fund or JMI Fund shall be deemed an
"</FONT><FONT SIZE=2><I>Investor</I></FONT><FONT SIZE=2>" or "</FONT><FONT SIZE=2><I>Stockholder</I></FONT><FONT SIZE=2>," as the case may be, for purposes of Sections 5.1 and 5.2 with the rights
set forth in such Sections. </FONT></P>

<P><FONT SIZE=2>SECTION
6. REGISTRATION RIGHTS </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Optional Registrations</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If at any time or times after the date hereof, the Company shall seek to register
any shares of its capital stock or securities convertible into capital stock under the Securities Act (whether in connection with a public offering of securities by the Company (a
"</FONT><FONT SIZE=2><I>primary offering</I></FONT><FONT SIZE=2>"), a public offering of securities by stockholders of the Company (a "</FONT><FONT SIZE=2><I>secondary
offering</I></FONT><FONT SIZE=2>"), or both), the Company will promptly give written notice thereof to each Investor (including any permitted transferee thereof) (the
"</FONT><FONT SIZE=2><I>Holders</I></FONT><FONT SIZE=2>," subject to Section&nbsp;6.7) holding Registrable Securities as hereinafter defined in Section&nbsp;6.3 below. If within 20&nbsp;days
after their receipt of such notice one or more Holders request the inclusion of some or all of the Registrable Securities owned by them in such registration, the Company will use its best efforts to
effect the registration under the Securities Act of all Registrable Securities which such Holders may request in a writing delivered to the Company within 20&nbsp;days after their receipt of the
notice given by the Company. In the case of the registration of shares of capital stock by the Company in connection with any underwritten public offering, if the underwriter(s) determines that
marketing factors require a limitation on the number of Registrable Securities to be offered, the Company shall not be required to register Registrable Securities of the Holders in excess of the
amount, if any, of shares of the capital stock which the principal underwriter of such underwritten </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>16</FONT></P>

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<P><FONT SIZE=2>offering
shall reasonably and in good faith agree to include in such offering in excess of any amount to be registered for the Company; provided, however, that the number of shares of Registrable
Securities of the Holders included in any such offering subsequent to the Company's first Qualified Public Offering shall in no event be less than thirty percent (30%) of the aggregate number of
shares of capital stock to be registered, unless the aggregate number of shares of Registrable Securities the Holders requested in writing to be in such offering is less than thirty percent (30%) of
the aggregate number of shares of capital stock to be registered; and provided further that shares of capital stock held by any Holder may not be excluded from any offering in reliance upon this
Section if any shares of capital stock other than those offered by the Company are included in such offering. If any limitation of the number of shares of Registrable Securities to be registered by
the Holders is required pursuant to this Section&nbsp;6.1, the number of shares that may be included in the registration on behalf of the Holders shall be allocated among the Holders or the holders
of any other registration rights in proportion, as nearly as practicable, to the respective holdings of Registrable Securities of all Holders requesting registration. The provisions of this Section
will not apply to a registration effected solely to implement (i)&nbsp;an employee benefit plan, or (ii)&nbsp;a transaction to which Rule&nbsp;145 or any other similar rule of the Securities and
Exchange Commission (the "</FONT><FONT SIZE=2><I>SEC</I></FONT><FONT SIZE=2>" or the "</FONT><FONT SIZE=2><I>Commission</I></FONT><FONT SIZE=2>") under the Securities Act is applicable. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Required Registrations</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Demand Registration</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;On one or more occasions at any time after the earlier of December&nbsp;8, 1999 or
twelve (12)&nbsp;months following the effective date of the Company's first registration statement under the Securities Act, an Investor or Investors holding at least 40% of the Registrable
Securities held by the Investors may request that the Company register under the Securities Act all or a portion of the Registrable Securities held by such requesting Investors. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Form&nbsp;S-3</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;After the first public offering of its securities registered under the
Securities Act, the Company shall use its best efforts to qualify and remain qualified to register securities on Form&nbsp;S-3 (or any successor form) under the Securities Act. Any
Investor or Investors shall have the right to request any number (not exceeding one registration annually) of registrations on Form&nbsp;S-3 (or any successor form) for the Registrable
Securities held by such requesting Investor, including registrations for the sale of such Registrable Securities on a delayed or continuous basis pursuant to Rule&nbsp;415 under the Securities Act.
Such requests shall be in writing and shall state the number of shares of Registrable Securities to be disposed of and the intended method of disposition of such shares by such Investor or Investors. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Registration Requirements</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Following a request pursuant to Section&nbsp;6.2(a) or (b)&nbsp;above, the
Company will notify all of the Holders who would be entitled to notice of a proposed registration under Section&nbsp;6.1 above and any other holder of piggyback registration rights of its receipt of
such notification from such Investor or Investors. Upon the written request of any such Holder or other holder of the Company's securities delivered to the Company within 20&nbsp;days after receipt
from the Company of such notification, the Company will either (i)&nbsp;elect to make a primary offering, in which case the rights of such Holders shall be as set forth in Section&nbsp;6.1 above
(in which case the registration shall not count as one of the Investors' permitted demand registrations hereunder), or (ii)&nbsp;use its best efforts to cause such of the Registrable Securities as
may be requested by any Holders and any other holders of piggyback registration rights to be registered under the Securities Act in accordance with the terms of this Section&nbsp;6.2; provided,
however, that the number of shares of Registrable Securities of the Holders included in any such offering shall in no event be less than thirty percent (30%) of the aggregate number of shares of
capital stock to be registered, unless the aggregate number of shares of Registrable Securities the Holders requested in writing to be in such offering is less than thirty percent (30%) of the
aggregate number of shares of capital stock to be registered. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>17</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Limitations on Registration Obligations</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Company will not be obligated pursuant to this
Section&nbsp;6.2 to effect more than two (2)&nbsp;registration statements pursuant to Section&nbsp;6.2(a), but shall be obligated to file an unlimited number of registration statements on
Form&nbsp;S-3. The Company shall not be obligated to effect any registration on Form&nbsp;S-3 pursuant to Section&nbsp;6.2(b): (i)&nbsp;if Form&nbsp;S-3
is not available for such offering by the holders (in which case the Company shall be obligated to effect such registration on either Form&nbsp;S-1 or S-2 and such
registration shall not be counted as a registration pursuant to Section&nbsp;6.2(a) hereof for purposes of the limitations set forth in the first sentence of this Section&nbsp;6.2(d)), or
(ii)&nbsp;if the Company has, within the twelve (12)&nbsp;month period preceding the date of such request, already effected one (1)&nbsp;registration of its securities either pursuant to
Section&nbsp;6.2(a) or pursuant to which the Holders had rights (which they exercised) to include their shares in such registration pursuant to Section&nbsp;6.1. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Postponement</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Company may postpone the filing of any registration statement required hereunder for a
reasonable period of time, not to exceed 90&nbsp;days in the aggregate during any twelve-month period, if the Company has been advised by legal counsel that such filing would require a special audit
or the disclosure of a material impending transaction or other matter or the Company's Board of Directors determines reasonably and in good faith that such disclosure would have a Material Adverse
Effect. The Company shall not be required to cause a registration statement requested pursuant to this Section&nbsp;6.2 to become effective prior to 90&nbsp;days following the effective date of a
registration statement initiated by the Company, if the request for registration has been received by the Company subsequent to the giving of written notice by the Company, made in good faith, to the
Investors that the Company is commencing to prepare a Company-initiated registration statement (other than a registration effected solely to implement an employee benefit plan or a transaction to
which Rule&nbsp;145 or any other similar rule of the SEC under the Securities Act is applicable); provided, however, that the Company shall use its best efforts to achieve such effectiveness
promptly. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Suspension</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In the case of a registration for the sale of Registrable Securities, upon receipt of any notice
(a "</FONT><FONT SIZE=2><I>Suspension Notice</I></FONT><FONT SIZE=2>") from the Company of the happening of any event which makes any statement made in the registration statement or related
prospectus untrue or which requires the making of any changes in such registration statement or prospectus so that they will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements therein in light of the circumstances under which they were made not misleading, each holder of Registrable Securities
registered under such registration statement shall forthwith discontinue disposition of such Registrable Securities pursuant to such registration statement until such holder's receipt of the copies of
the supplemented or amended prospectus or until it is advised in writing (the "</FONT><FONT SIZE=2><I>Advice</I></FONT><FONT SIZE=2>") by the Company that the use of the prospectus may be resumed,
and has received copies of any additional or supplemental filings which are incorporated by reference in the prospectus; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that the
Company shall not give a Suspension Notice until after the registration statement has been declared effective and shall not give more
than one Suspension Notice to the Holders in respect to all Registrable Securities and pursuant to this Section&nbsp;6 during any period of twelve (12)&nbsp;consecutive months and in no event
shall the period from the date on which any Holder receives a Suspension Notice to the date on which any Holder receives either the Advice or copies of the supplemented or amended prospectus (the
"</FONT><FONT SIZE=2><I>Suspension Period</I></FONT><FONT SIZE=2>") exceed 90&nbsp;days. In the event that the Company shall give any Suspension Notice, the Company shall use its best efforts and
take such actions as are reasonably necessary to render the Advice and end the Suspension Period as promptly as practicable. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>18</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Registrable Securities</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;For the purposes of this Section&nbsp;6, the term
"</FONT><FONT SIZE=2><I>Registrable Securities</I></FONT><FONT SIZE=2>" shall mean any shares of Common Stock held by a Holder or subject to acquisition by a Holder upon conversion of Convertible
Preferred Shares, as applicable, including any shares issued by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other
reorganization; </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, that if an Investor owns Convertible Preferred Shares, the Investor may exercise its registration rights hereunder by
converting the shares to be sold publicly into Common Stock as of the closing of the relevant offering and shall not be required to cause such Convertible Preferred Shares to be converted to Common
Stock until and unless such Closing occurs, it being understood that the Company shall at the request of the relevant Investor effect the reconversion of Common Stock and any Redeemable Preferred
Stock to Convertible Preferred Stock if such a conversion occurs notwithstanding the foregoing and a public offering does not close; and </FONT><FONT SIZE=2><I>provided,
further</I></FONT><FONT SIZE=2>, that any Common Stock that is sold in a registered sale pursuant to an effective registration statement under the Securities Act or pursuant to Rule&nbsp;144
thereunder, or that may be sold without restriction as to volume or otherwise pursuant to Rule&nbsp;144 under the Securities Act (as confirmed by an unqualified opinion of counsel to the Company),
shall not be deemed Registrable Securities. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Further Obligations of the Company</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Whenever the Company is required hereunder to register any Registrable
Securities, it agrees that it shall also do the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Pay
all expenses of such registrations and offerings (exclusive of underwriting discounts and commissions) and the reasonable fees and expenses of not more than one
independent counsel for the Holders satisfactory to the Investors in connection with any registrations pursuant to Section&nbsp;6. Notwithstanding the foregoing, the Company shall not be required to
pay for expenses of any registration proceeding begun pursuant to Section&nbsp;6.2, the request for which has been subsequently withdrawn by the initiating Holders, in which case, such expenses
shall be borne by the Holders requesting such withdrawal and the registration initiated shall not be counted for purposes of the limitation set forth in Section&nbsp;6.2(d). The preceding sentence
shall not apply, and the Company shall bear the expenses of such registration if, at the time of such withdrawal, (i)&nbsp;the Holder has learned of a Material Adverse Change in the condition,
business or prospects of the Company from that known to the Holder at the time of its request, and (ii)&nbsp;the Company knew or had reason to know of the likelihood of such Material Adverse Change
at the time of its request and did not inform the Holder thereof; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Use
its best efforts (with due regard to management of the ongoing business of the Company and the allocation of managerial resources) diligently to prepare and file
with the SEC a registration statement and such amendments and supplements to said registration statement and the prospectus used in connection therewith as may be necessary to keep said registration
statement effective for at least 180&nbsp;days or until the Holder or Holders have completed the distribution described in the registration statement relating thereto, whichever first occurs, and to
comply with the provisions of the Securities Act with respect to the sale of securities covered by said registration statement for the period necessary to complete the proposed public offering; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Furnish
to each selling Holder such copies of each preliminary and final prospectus and such other documents as such Holder may reasonably request to facilitate the
public offering of its Registrable Securities; </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>19</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;Enter
into any reasonable underwriting agreement required by the proposed underwriter (which underwriter shall be selected by the selling Investors in connection with
any registration requested pursuant to Section&nbsp;6.2), if any, in such form and containing such terms as are customary; </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, that no
Holder shall be required to make any representations or warranties other than with respect to its title to the Registrable Securities and any written information provided by the Holder to the Company,
and if the underwriter requires that representations or warranties be made and that indemnification be provided, the Company shall make all such representations and warranties and provide all such
indemnities, including, without limitation, in respect of the Company's business, operations and financial information and the disclosures relating thereto in the prospectus; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;Use
its best efforts (with due regard to management of the ongoing business of the Company and the allocation of managerial resources) to register or qualify the
securities covered by said registration statement under the securities or "blue sky" laws of such jurisdictions as any selling Holder may reasonably request, provided that the Company shall not be
required to register or qualify the securities in any jurisdictions which require it to qualify to do business therein; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;Immediately
notify each selling Holder, at any time when a prospectus relating to its Registrable Securities is required to be delivered under the Securities Act, of the
happening of any event as a result of which such prospectus contains an untrue statement of a material fact or omits any material fact necessary to make the statements therein not misleading, and,
subject to Section&nbsp;6.2(f) hereof, at the request of any such selling Holder, prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;Cause
all such Registrable Securities to be listed on each securities exchange or quotation system on which similar securities issued by the Company are then listed or
quoted; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;Otherwise
use its best efforts to comply with the securities laws of the United States and other applicable jurisdictions and all applicable rules and regulations of the
SEC and comparable governmental agencies in other applicable jurisdictions and make generally available to its holders, in each case as soon as practicable, but not later than 45&nbsp;days after the
close of the period covered thereby, an earnings statement of the Company which will satisfy the provisions of Section&nbsp;11 (a)&nbsp;of the Securities Act; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;Obtain
and furnish to each selling Holder, immediately prior to the effectiveness of the registration statement (and, in the case of an underwritten offering, at the
time of delivery of any Registrable Securities sold pursuant thereto), a cold comfort letter from the Company's independent public accountants in customary form and covering such matters of the type
customarily covered by cold comfort letters as the Holders of a majority of the Registrable Securities being sold may reasonably request; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;Otherwise
cooperate with the underwriter or underwriters, the Commission and other regulatory agencies and take all actions and execute and deliver or cause to be
executed and delivered all documents necessary to effect the registration of any Registrable Securities under this Section&nbsp;6. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>20</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Indemnification: Contribution</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Incident
to any registration statement referred to in this Section&nbsp;6, the Company will indemnify and hold harmless each underwriter, each Holder who offers or
sells any such Registrable Securities in connection with such registration statement (including its partners (including partners of partners and stockholders of any such partners), and directors,
officers, employees and agents of any of them (a "</FONT><FONT SIZE=2><I>Selling Holder</I></FONT><FONT SIZE=2>"), and each person who controls any of them within the meaning of Section&nbsp;15 of
the Securities Act or Section&nbsp;20 of the Securities Exchange Act of 1934 (the "</FONT><FONT SIZE=2><I>Exchange Act</I></FONT><FONT SIZE=2>") (a "</FONT><FONT SIZE=2><I>Controlling
Person</I></FONT><FONT SIZE=2>"), from and against any and all losses, claims, damages, expenses and liabilities, joint or several (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted, as the same are incurred), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities arise out of or are based on
(i)&nbsp;any untrue statement or alleged untrue statement of a material fact contained in such registration statement (including any related preliminary or definitive prospectus, or any amendment or
supplement to such registration statement or prospectus), (ii)&nbsp;any omission or alleged omission to state in such document a material fact required to be stated in it or necessary to make the
statements in it not misleading, or (iii)&nbsp;any violation by the Company of the Securities Act, any state securities or "blue sky" laws or any rule or regulation thereunder in connection with
such registration; </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, that the Company will not be liable to the extent that such loss, claim, damage, expense or liability arises from
and is based on an untrue statement or omission or alleged untrue statement or omission made in reliance on and in conformity with information furnished in writing to the Company by such underwriter,
Selling Holder or Controlling Person expressly for use in such registration statement. With respect to such untrue statement or omission or alleged untrue statement or omission in the information
furnished in writing to the Company by such Selling Holder expressly for use in such registration statement, such Selling Holder will indemnify and hold harmless each underwriter, the Company
(including its directors, officers, employees and agents), each other Holder (including its partners (including partners of partners and stockholders of such partners) and directors, officers,
employees and agents of any of them, and each person who controls any of them within the meaning of Section&nbsp;15 of the Securities Act or Section&nbsp;20 of the Exchange Act), from and against
any and all losses, claims, damages, expenses and liabilities, joint or several, to which they, or any of them, may become subject under the Securities Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, to the same extent provided in the immediately preceding sentence. The Company shall not be obligated hereunder to indemnify any Holder for any
amount paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld). In
no event, however, shall the liability of a Selling Holder for indemnification under this Section&nbsp;6.5(a) exceed the lesser of (i)&nbsp;that proportion of the total of such losses, claims,
damages or liabilities indemnified against equal to the proportion of the total securities sold under such registration statement which is being sold by such Selling Holder or (ii)&nbsp;the proceeds
received by such Selling Holder from its sale of Registrable Securities under such registration statement. </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2>21</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;If
the indemnification provided for in Section&nbsp;6.5(a) above for any reason is held by a court of competent jurisdiction to be unavailable to an indemnified party
in respect of any losses, claims, damages, expenses or liabilities referred to therein, then each indemnifying party under this Section&nbsp;6.5, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, expenses or liabilities (i)&nbsp;in such proportion as is
appropriate to reflect the relative benefits received by the Company, the other Selling Holders and the underwriters from the offering of the Registrable Securities, or (ii)&nbsp;if the allocation
provided by clause&nbsp;(i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause&nbsp;(i) above but also
the relative fault of the Company, the other Selling Holders and the underwriters in connection with the statements or omissions which resulted in such losses, claims, damages, expenses or
liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company, the Selling Holders and the underwriters shall be deemed to be in the same
respective proportions that the net proceeds from the offering (before deducting expenses) received by the Company and the Selling Holders and the underwriting discount received by the underwriters,
in each case as set forth in the table on the cover page of the applicable prospectus, bear to the aggregate public offering price of the Registrable Securities. The relative fault of the Company, the
Selling Holders and the underwriters shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company, the Selling Holders or the underwriters and the parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company, the Selling Holders, and the underwriters agree that it would not be just and equitable if contribution pursuant to this Section&nbsp;6.5(b) were determined by pro rata or
per capita allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. In no event, however, shall a
Selling Holder be required to contribute any amount under this Section&nbsp;6.5(b) in excess of the lesser of (i)&nbsp;that proportion of the total of such losses, claims, damages or liabilities
indemnified against equal to the proportion of the total Registrable Securities sold under such registration statement which are being sold by such Selling Holder or (ii)&nbsp;the proceeds received
by such Selling Holder from its sale of Registrable Securities under such registration statement. No person found guilty of fraudulent misrepresentation (within the meaning of Section&nbsp;11(f) of
the Securities Act) shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;The
amount paid by an indemnifying party or payable to an indemnified party as a result of the losses, claims, damages and liabilities referred to in this
Section&nbsp;6.5 shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or
defending any such action or claim, payable as the same are incur-red. The indemnification and contribution provided for in this Section&nbsp;6.5 will remain in full force and effect
regardless of any investigation made by or on behalf of the indemnified parties or any officer, director, employee, agent or controlling person of the indemnified parties. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>22</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Notice: Defense of Claim</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Promptly after receipt by an indemnified party of notice of any claim, liability
or expense to which the indemnification obligations set forth in this Section&nbsp;6.5 would apply, the indemnified party shall give notice thereof in writing to the indemnifying party, but the
omission to so notify the indemnifying party promptly will not relieve the indemnifying party from any liability except to the extent that the indemnifying party shall have been prejudiced as a result
of the failure or delay in giving such notice. Such notice shall state the information then available regarding the amount and nature of such claim, liability or expense and shall specify the
provision or provisions of this Agreement under which the liability or obligation is asserted. If within twenty (20)&nbsp;days after receiving such notice the indemnifying party gives written notice
to the indemnified party stating that (a)&nbsp;it would be liable under the provisions hereof for indemnity in the amount of such claim if such claim were successful and (b)&nbsp;that it disputes
and intends to defend against such claim, liability or expense at its own cost and expense, then counsel for the defense shall be selected by the indemnifying party (subject to the consent of the
indemnified party, which consent shall not be unreasonably withheld) and the indemnified party shall not be required to make any payment with respect to such claim, liability or expense as long as the
indemnifying party is conducting a good faith and diligent defense at its own expense; </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, that the assumption of defense of any such
matters by the indemnifying party shall relate solely to the claim, liability or expense that is subject or potentially subject to indemnification. The indemnifying party shall have the right, with
the consent of the indemnified party, which consent shall not be unreasonably withheld, to settle all indemnifiable matters related to claims by third parties which are susceptible to being settled
provided its obligation to indemnify the indemnifying party therefor will be fully satisfied. The indemnifying party shall keep the indemnified party apprised of the status of the claim, liability or
expense and any resulting suit, proceeding or enforcement action, shall furnish the indemnified party with all documents and information that the indemnified party shall reasonably request and shall
consult with the indemnified party prior to acting on major matters, including settlement discussions. Notwithstanding anything herein stated to the contrary, the indemnified party shall at all times
have the right to fully participate in such defense at its own expense directly or through counsel; </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, if the named parties to the
action or proceeding include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate under applicable standards of
professional conduct, the expense of separate counsel for the indemnified party shall be paid by the indemnifying party. If no such notice of intent to dispute and defend is given by the indemnifying
party, or if such diligent good faith defense is not being or ceases to be conducted, the indemnified party shall, at the expense of the indemnifying party, undertake the defense of (with counsel
selected by the indemnified party), and shall have the right to compromise or settle (exercising reasonable business judgment), such claim, liability or expense. If such claim, liability or expense is
one that by its nature cannot be defended solely by the indemnifying party, then the indemnified party shall make available all information and assistance that the indemnifying party may reasonably
request and shall cooperate with the indemnifying party in such defense. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Prospectus Delivery</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The foregoing indemnity agreements of the Company and Selling Holders are subject to
the condition that, insofar as they relate to any misstatement or omission in a preliminary prospectus that was eliminated or remedied in the amended prospectus on file with the SEC at the time the
registration statement in question becomes effective or the amended prospectus filed with the SEC pursuant to Rule&nbsp;424(b) (the "</FONT><FONT SIZE=2><I>Final
Prospectus</I></FONT><FONT SIZE=2>"), such indemnity agreement shall not inure to the benefit of any person if a copy of the Final Prospectus was furnished to the indemnified party and was not
furnished to the person asserting the loss, liability, claim or damage at or prior to the time such action is required by the Securities Act. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>23</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Rule&nbsp;144 and Rule&nbsp;144A Requirements</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In the event that the Company becomes subject to
Section&nbsp;13 or Section&nbsp;15(d) of the Exchange Act, the Company shall use its best efforts to take all action as may be required as a condition to the availability of Rule&nbsp;144 or
Rule&nbsp;144A under the Securities Act (or any successor or similar exemptive rules hereafter in effect). The Company shall furnish to any Holder, within 15&nbsp;days of a written request, a
written statement executed by the Company as to the steps it has taken to comply with the current public information requirement of Rule&nbsp;144 or Rule&nbsp;144A or such successor rules. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.7</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Transfer of Registration Rights</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The registration rights and related obligations under this Section&nbsp;6
of the Holders with respect to their Registrable Securities may be assigned in connection with any transaction or series of related transactions involving the Transfer to one or more transferees of at
least 390,000 shares of capital stock of the Company, other than pursuant to an effective registration statement under the Securities Act or pursuant to Rule&nbsp;144 thereunder (subject to
adjustments for stock splits, stock dividends and the like and aggregating all contemporaneous transfers by Holders), or to any TA Funds or JMI Funds or permitted transferee, and upon any such
transfer such transferee or TA Fund or JMI Fund shall be deemed to be included within the definition of a "Holder" for purposes of this Section&nbsp;6 with the rights set forth herein. The relevant
Holder as the case may be, shall notify the Company at the time of such transfer. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.8</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Market Stand-off" Agreement</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In connection with any underwritten public offering by the
Company, the Holders, if requested in good faith by the Company and the managing underwriter of the Company's securities, shall agree not to sell or otherwise transfer or dispose of any securities of
the Company held by them (except for any securities sold pursuant to such registration statement) for a period following the effective date of the applicable registration statement; </FONT> <FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>
that in no event shall such period exceed 180&nbsp;days; and </FONT><FONT SIZE=2><I>provided further</I></FONT><FONT SIZE=2> that
such agreement shall not be required unless all officers and directors and one percent (1%) or greater stockholders (other than institutional investors in the case of follow-on or
secondary offerings) of the Company and all other persons with registration rights enter into similar agreements. In order to enforce the foregoing, the Company may impose stop-transfer
instructions with respect to the Registrable Securities of each Holder (and the shares of securities of every other person subject to the foregoing restriction) until the end of such period. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.9</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Termination of Registration Rights Provisions</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The provisions of this Section&nbsp;6 shall terminate and
have no further force and effect upon the earlier to occur of (i)&nbsp;five (5)&nbsp;years following the effectiveness of the Company's First Qualified Public Offering; and (ii)&nbsp;such time
as each Investor can sell all remaining Registrable Securities held by it within a ninety (90)&nbsp;day period pursuant to Rules&nbsp;144 or 145 under the Securities Act. </FONT></P>

<P><FONT SIZE=2>SECTION
7. GENERAL </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Amendments, Waivers and Consents</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;For the purposes of this Agreement and all agreements executed pursuant
hereto, no course of dealing between or among any of the parties hereto and no delay on the part of any party hereto in exercising any rights hereunder or thereunder shall operate as a waiver of the
rights hereof and thereof. No provision hereof may be waived otherwise than by a written instrument signed by the party or parties so waiving such covenant or other provision. No amendment to this
Agreement may be made without the written consent of the Company and the Investors; provided that the written consent of the Stockholders shall be required for any amendment of Sections 5, 6 or 7
hereof. Any actions required to be taken or consents, approvals, votes or waivers required or contemplated to be given by the Investors or the Stockholders shall require a vote of a
two-thirds in interest of the Investors or two-thirds in interest of the Stockholders, as applicable, based on the relative holdings of capital stock of the Company of the
Investors as a group or of the Stockholders as a group, as applicable, at the relevant time, and any such action by such Investors or Stockholders, as applicable, shall bind all of the Investors, or
Stockholders, as applicable. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>24</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Survival of Representations, Warranties and Covenants; Assignability</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;All covenants, agreements,
representations and warranties of the Company, the Stockholders and the Investors made herein and in the certificates, lists, exhibits, schedules or other written information delivered or furnished to
any Investor in connection herewith (a)&nbsp;are material, shall be deemed to have been relied upon by the party or parties to whom they are made and shall survive the Closing until the applicable
statutes of limitation related to the matters expire regardless of any investigation or knowledge on the part of such party or its representatives, and (b)&nbsp;shall bind the parties' successors
and assigns (including without limitation any successor to the Company by way of acquisition, merger or otherwise), whether so expressed or not, and, except as otherwise provided in this Agreement,
all such covenants, agreements, representations and warranties shall inure to the benefit of the Investors' successors and assigns and to their transferees of Securities, whether so expressed or not,
subject to the provisions of Sections 4.8, 5.2 and 6.7, and any such transferee shall be deemed an "Investor" for purposes hereof. Notwithstanding the foregoing, the aggregate liability of Ronald F.
Woestemeyer and Mariette M. Woestemeyer pursuant to the representations and warranties provided under Section&nbsp;2 of this Agreement shall be limited to $6,900,000, and the aggregate liability of
Robert Salter pursuant to the representations and warranties provided under Section&nbsp;2 of this Agreement shall be limited to $1,000,000; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT
SIZE=2>, that nothing herein shall limit any potential remedies and liabilities of the Company and/or the Investors, as applicable, arising under state
and federal laws with respect to any fraudulent act committed by any Stockholder, the Company, or director and/or officer thereof. To the extent permitted by law, the Company and/or the Investors, as
applicable, shall have a right of offset against any amount to be received by the Stockholders under this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Legend on Securities</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Company, the Investors and the Stockholders acknowledge and agree that the
following legend shall be typed on each certificate evidencing any of the securities issued hereunder held at any time by an Investor (together with any other legends required by applicable federal or
state laws): </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "</FONT><FONT SIZE=2><I>ACT</I></FONT><FONT SIZE=2>"), OR ANY STATE
SECURITIES OR BLUE SKY LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT (1)&nbsp;PURSUANT TO A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH
IS EFFECTIVE UNDER THE ACT OR (2)&nbsp;PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES AND (3)&nbsp;IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES AND BLUE SKY LAWS; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Governing Law</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall be deemed to be a contract made under, and shall be construed in
accordance with, the laws of the State of Delaware, without giving effect to conflict of laws principles thereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Section Headings and Gender</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The descriptive headings in this Agreement have been inserted for convenience
only and shall not be deemed to limit or otherwise affect the construction of any provision thereof or hereof. The use in this Agreement of the masculine pronoun in reference to a party hereto shall
be deemed to include the feminine or neuter, and vice versa, as the context may require. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Counterparts</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be executed simultaneously in any number of counterparts, each of which
when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute but one and the same document. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>25</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Notices and Demands</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Any notice or demand which is required or provided to be given under this Agreement
shall be deemed to have been sufficiently given and received for all purposes when delivered by hand, telecopy, telex or other method of facsimile, or five days after being sent by certified or
registered mail, postage and charges prepaid, return receipt requested, or two days after being sent by overnight delivery providing receipt of delivery, to the following addresses: if to the Company
or the Stockholders, PROS Strategic Solutions,&nbsp;Inc., 3223 Smith Street, Suite 100, Houston, Texas 77006, or at any other address designated by the Company or the Stockholders, respectively, to
the Investors and the other parties hereto in writing; if to an Investor, one (1)&nbsp;copy c/o TA Associates,&nbsp;Inc. and (1)&nbsp;copy c/o JMI Equity Fund, L.P., in each case at its mailing
address as shown on </FONT><FONT SIZE=2><I>Exhibit&nbsp;A</I></FONT><FONT SIZE=2> hereto, or at any other address designated by TA Associates,&nbsp;Inc. or JMI to the Company and the Stockholders
in writing. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Dispute Resolution</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Except with respect to matters as to which injunctive relief is being sought, any
dispute arising out of or relating to this Agreement that has not been settled within thirty (30)&nbsp;days (the "</FONT><FONT SIZE=2><I>Negotiation Period</I></FONT><FONT SIZE=2>") by good faith
negotiation between the parties to this Agreement shall be submitted to an arbitrator mutually agreeable to the parties for final and binding arbitration pursuant to arbitration rules to be determined
by the chosen arbitrator within the limits set forth below. In the event the parties are unable to agree upon an arbitrator within ten (10)&nbsp;days of expiration of the Negotiation Period, the
Company and the Investors shall, within five (5)&nbsp;days of the expiration of such ten day period each select one arbitrator and such arbitrators shall select a third arbitrator within five
(5)&nbsp;days who shall be the arbitrator designated hereunder. Any such arbitration shall be conducted in San Francisco, California. Such proceedings shall be guided by the following agreed upon
procedures: </FONT></P>

<UL>
<UL>
<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>mandatory
exchange of all relevant documents, to be accomplished within forty-five (45)&nbsp;days of the initiation of the procedure;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD><FONT SIZE=2>no
other discovery;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD><FONT SIZE=2>hearings
before the neutral advisor which shall consist of a summary presentation by each side of not more than three hours; such hearings to take place on one or two days at a
maximum; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD><FONT SIZE=2>decision
to be rendered not more than ten (10)&nbsp;days following such hearings. </FONT></DD></DL>
</UL>
</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.9</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Remedies; Severability</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding Section&nbsp;7.9, it is specifically understood and agreed that
any breach of the provisions of this Agreement by any person subject hereto will result in irreparable injury to the other parties hereto, that the remedy at law alone will be an inadequate remedy for
such breach, and that, in addition to any other remedies which they may have, such other parties may enforce their respective rights by actions for specific performance (to the extent permitted by
law). The Company may refuse to recognize any unauthorized transferee as one of its stockholders for any purpose, including, without limitation, for purposes of dividend and voting rights, until the
relevant party or parties have complied with all applicable provisions of this Agreement. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective
and valid under applicable law, but if any provision of this Agreement shall be deemed prohibited or invalid under such applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, and such prohibition or invalidity shall not invalidate the remainder of such provision or the other provisions of this Agreement. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>26</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.10</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Integration</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement, including the exhibits, documents and instruments referred to herein or
therein, constitutes the entire agreement, and supersedes all other prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof, including,
without limitation, the letter of intent between the parties hereto in respect of the transactions contemplated herein, which letter of intent shall be completely superseded by the representations,
warranties and covenants of the Company contained herein. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written. </FONT></P>

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<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>COMPANY:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>PROS STRATEGIC SOLUTIONS,&nbsp;INC.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>DAVID SAMUEL COATS</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> David Samuel Coats<BR>
President and Chief Executive Officer</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
STOCKHOLDERS:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>RONALD F. WOESTEMEYER</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Ronald F. Woestemeyer</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>MARIETTE M. WOESTEMEYER</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Mariette M. Woestemeyer</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>ROBERT SALTER</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Robert Salter</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
INVESTORS:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>TA/ADVENT VIII L.P.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2><BR>
TA Associates VIII LLC, its General Partner</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>By:</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>TA Associates,&nbsp;Inc., its Manager</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>KURT R. JAGGERS</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Kurt R. Jaggers<BR>
Attorney-in-Fact</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>ADVENT ATLANTIC AND PACIFIC III, L.P.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2><BR>
TA Associates AAP III Partners, its General Partner</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>By:</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>TA Associates,&nbsp;Inc.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>KURT R. JAGGERS</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Kurt R. Jaggers<BR>
Attorney-in-Fact</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<BR>
<P ALIGN="CENTER"><FONT SIZE=2>27</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>TA VENTURE INVESTORS L.P.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>KURT R. JAGGERS</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Kurt R. Jaggers<BR>
Attorney-in-Fact</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>TA EXECUTIVES FUND LLC</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2><BR>
TA Associates VIII LLC, its General Partner</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>By:</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2>TA Associates,&nbsp;Inc., its Manager</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>KURT R. JAGGERS</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Kurt R. Jaggers<BR>
Attorney-in-Fact</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>JMI EQUITY FUND III, L.P.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2><BR>
JMI Associates III, LLC, its General Partner</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>CHARLES E. NOELL</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Charles E. Noell<BR>
Managing Member</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>GLENYS A. WOLF</B></FONT><FONT SIZE=2> and </FONT><FONT SIZE=2><B>WILLIAM H. WOLF</B></FONT><FONT SIZE=2>, as Husband and Wife</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>GLENYS A. WOLF</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Glenys A. Wolf</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>WILLIAM H. WOLF</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> William H. Wolf</FONT></TD>
</TR>
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<P ALIGN="CENTER"><FONT SIZE=2>28</FONT></P>

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<P style='page-break-before:always'></p>
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<BR>
<P><br><A NAME="07ZBA76601_6">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_km76602_1">PROS Strategic Solutions, Inc.</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_km76602_2">STOCK PURCHASE AND STOCKHOLDERS AGREEMENT</A></FONT><BR>

<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_kn76602_1">STOCK PURCHASE AND STOCKHOLDERS AGREEMENT</A></FONT><BR>
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<DOCUMENT>
<TYPE>EX-10.4.1
<SEQUENCE>7
<FILENAME>a2176970zex-10_41.htm
<DESCRIPTION>EXHIBIT 10.4.1
<TEXT>
<HTML>
<HEAD>
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<FONT SIZE=3 ><A HREF="#07ZBA76601_7">QuickLinks</A></FONT>
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<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit&nbsp;10.4.1  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="mq76602_amendment_to_stock_pur__mq702265"> </A>
<A NAME="toc_mq76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>AMENDMENT TO<BR>  STOCK PURCHASE AND STOCKHOLDERS AGREEMENT    <BR>    </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Amendment to Stock Purchase And Stockholder Agreement (this "</FONT><FONT SIZE=2><B><I>Amendment</I></B></FONT><FONT SIZE=2>") is entered into as of
March&nbsp;26, 2007, by and among PROS Holdings,&nbsp;Inc., a Delaware corporation (the "</FONT><FONT SIZE=2><B><I>Company</I></B></FONT><FONT SIZE=2>"), and the holders of at least a
two-third-in-interest of the Investors (as defined in the Purchase Agreement described below), who have consented to this Amendment in writing (collectively the
"</FONT><FONT SIZE=2><B><I>Requisite Investors</I></B></FONT><FONT SIZE=2>" and each individually, an "</FONT><FONT SIZE=2><B><I>Investor</I></B></FONT><FONT SIZE=2>"), pursuant to that certain Stock Purchase and
Stockholders Agreement, dated as of June&nbsp;8, 1998, by and among the Company and the Investors identified on Exhibit&nbsp;A thereto (the "</FONT><FONT SIZE=2><B><I>Purchase
Agreement</I></B></FONT><FONT SIZE=2>"), and amends the Purchase Agreement as set forth herein. All capitalized terms not otherwise defined herein shall have the respective meanings ascribed to such terms
in the Purchase Agreement. Each reference to a section number below shall, unless otherwise expressly provided herein, refer to such enumerated section of the Purchase Agreement. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><I>RECITALS</I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Company and the Requisite Investors desire to amend one of the restrictive covenants contained in the Purchase Agreement; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
Section&nbsp;7.1 of the Purchase Agreement provides that the Purchase Agreement may be amended with the written consent of the Company and the holders of at least a
two-thirds in interest of the Investors; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
any amendment effected in accordance with Section&nbsp;7.1 of the Purchase Agreement shall be binding upon (i)&nbsp;each holder of any securities purchased under the
Purchase Agreement at the time outstanding (including securities into which such securities are convertible), (ii)&nbsp;each future holder of all such securities and (iii)&nbsp;the Company; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Requisite Investors represent those Investors necessary to amend the Purchase Agreement with the consent of the Company; and </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Requisite Investors and the Company now desire to amend the Purchase Agreement as set forth herein to provide for the Additional Funding and certain other changes; </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><I>AGREEMENT</I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows: </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.4(a)</I></FONT><FONT SIZE=2>. Section&nbsp;4.4(a) of the Purchase Agreement is hereby amended and restated in its entirety to
read as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"(a)&nbsp;sell,
lease or otherwise dispose of (whether in one transaction or a series of related transactions) all or substantially all of its assets or business," </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Miscellaneous</I></FONT><FONT SIZE=2>. </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Except
as expressly amended hereby, the Purchase Agreement (including all previous adopted amendments thereto) remains unmodified and in full force and effect and is
hereby renewed, ratified and affirmed by the Company and the Investors. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;This
Amendment shall be binding upon each of the parties to the Purchase Agreement, whether or not all of such parties have executed a counterpart of this Amendment. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;This
Amendment may be executed in one or more counterparts, each of which shall be deemed an original. Any party may execute this Amendment by facsimile signature, which
shall be deemed to constitute an original for all purposes. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2><B><I>Signature page follows.  </I></B></FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date and year first above written. </FONT></P>

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<TD WIDTH="1%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=4><BR><FONT SIZE=2><B>PROS HOLDINGS, INC.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="1%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
/s/ Albert E. Winemiller</FONT><HR NOSHADE><FONT SIZE=2> Albert E. Winemiller<BR>
President and Chief Executive Officer</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="1%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>TA/ADVENT VIII L.P.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="1%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2><BR>
TA Associates VIII LLC, its General Partner</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="1%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>By:</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2>TA Associates, Inc., its Manager</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="1%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="41%" ALIGN="CENTER"><FONT SIZE=2><BR>
*</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="1%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>ADVENT ATLANTIC AND PACIFIC III L.P.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="1%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2><BR>
TA Associates AAP III Partners, its General Partner</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="1%" ALIGN="RIGHT"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>By:</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2>TA Associates, Inc.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="1%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="41%" ALIGN="CENTER"><FONT SIZE=2><BR>
*</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="1%" ALIGN="RIGHT"><FONT SIZE=2>*</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2>/s/ Kurt R. Jaggers</FONT><HR NOSHADE><FONT SIZE=2> Kurt R. Jaggers, Attorney-in-Fact</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>TA VENTURE INVESTORS L.P.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="1%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="41%" ALIGN="CENTER"><FONT SIZE=2><BR>
*</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="1%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>TA EXECUTIVES FUND LLC</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="1%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2><BR>
TA Associates, Inc., its Manager</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="1%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="41%" ALIGN="CENTER"><FONT SIZE=2><BR>
*</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="1%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>JMI EQUITY FUND III, L.P.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="1%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2><BR>
JMI Associates III LLC, its General Partner</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="1%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="41%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>HARRY S. GRUNER</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="77%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="1%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="36%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
Name:</FONT></TD>
<TD WIDTH="36%"><FONT SIZE=2><BR>
Harry S. Gruner</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="1%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="36%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
Title:</FONT></TD>
<TD WIDTH="36%"><FONT SIZE=2><BR>
Managing Member</FONT><HR NOSHADE></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2><B><I>Signature Page to Amendment to Stock Purchase and Stockholder Agreement</I></B></FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<FONT SIZE=2><A HREF="#toc_mq76602_1">AMENDMENT TO STOCK PURCHASE AND STOCKHOLDERS AGREEMENT</A></FONT><BR>
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<TYPE>EX-10.5
<SEQUENCE>8
<FILENAME>a2176970zex-10_5.htm
<DESCRIPTION>EXHIBIT 10.5
<TEXT>
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<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit&nbsp;10.5  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ks76602_pros_strategic_solutions,_inc.__pro02948"> </A>
<A NAME="toc_ks76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>PROS STRATEGIC SOLUTIONS,&nbsp;INC.<BR>  <BR>    AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT (this "Agreement") dated effective June&nbsp;8, 1998, is entered by and among PROS Strategic
Solutions,&nbsp;Inc., a Delaware corporation (the "Company"), the investors in the Company identified in </FONT><FONT SIZE=2><I>Exhibit&nbsp;A</I></FONT><FONT SIZE=2> attached hereto (the
"Investors"), Ronald F. Woestemeyer and Mariette Melchior Woestemeyer (individually a "Founding Stockholder," collectively, the "Founding Stockholders") and those stockholders of the Company
identified in </FONT><FONT SIZE=2><I>Exhibit&nbsp;B</I></FONT><FONT SIZE=2> attached hereto (collectively, the "Stockholders"). </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>W
I T N E S S E T H: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Company, the Founding Stockholders and the Stockholders entered into that certain Shareholders' Agreement, dated as of May&nbsp;1, 1997 (the "Original Agreement"), to
impose certain restrictions and obligations upon the shareholders and the common stock of PROS Strategic Solutions, a Texas corporation and predecessor-in-interest to the
Company ("PROS-Texas"); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
contemporaneously with the execution and delivery of this Agreement, PROS-Texas was merged with and into the Company; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the parties to this Agreement wish to amend and restate the Original Agreement to include the Investors and to further amend certain provisions of the Original Agreement; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW,
THEREFORE, in consideration of the premises, mutual promises and covenants contained in this Agreement, each of the undersigned agree among themselves and with the Company, and the
Company agrees with each of the undersigned, as follows: </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>SECTION
1<BR></FONT> <FONT SIZE=2><I>DEFINITIONS</I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of this Agreement: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Addendum Agreement"</I></FONT><FONT SIZE=2> means an agreement in the form attached hereto as </FONT><FONT SIZE=2><I>Exhibit&nbsp;C</I></FONT><FONT SIZE=2>
with blanks appropriately completed. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Adjusted Book Value"</I></FONT><FONT SIZE=2> means the book value of the Company less intangibles and the aggregate amount of the consideration received by the
Company for any equity securities of the Company (other than the Common Stock) that may not be converted or exchanged into Common Stock (all as determined as of the date of the most recent audited
financial statement of the Company, if the Company has audited financial statements which are dated as of a date no more than 15&nbsp;months before the Computation Date, or as of the date of the
most recent unaudited financial statements of the Company if the Company does not have such audited financial statements). For purposes of calculating the book value of the Company pursuant to this
Agreement, such calculation shall be made in accordance with generally accepted accounting principles consistently applied by the Company. </FONT></P>

</UL>
<HR NOSHADE>
<P style='page-break-before:always'></p>
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<UL>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Adjusted Price"</I></FONT><FONT SIZE=2> means, for purposes of </FONT><FONT SIZE=2><I>Section&nbsp;2.5</I></FONT><FONT SIZE=2> hereof, an amount stated in
dollars equal to the total value per share of a bona fide written offer from a Bona Fide Offeror determined as follows: (i)&nbsp;cash payable upon consummation of such purchase shall be valued at
its face amount, (ii)&nbsp;a security trading on a public market and for which published trading prices are readily available shall be valued at its closing sales price (or if a sales price is not
available, at the average of its closing bid and asked prices) on the last business day preceding the date of the first Offering Notice with respect to such offer, and (iii)&nbsp;a security not
described in clause&nbsp;(ii) or other property, including cash payable in one or more installments after consummation of such purchase, shall be valued at its fair market value on the last business
day preceding the date of the first Offering Notice with respect to such offer as determined in good faith by the Board of Directors of the Company (excluding any member of the Board of Directors of
the Company who is the Selling Stockholder (as that term is defined in </FONT><FONT SIZE=2><I>Section&nbsp;2.5</I></FONT><FONT SIZE=2> hereof)). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Agreement</I></FONT><FONT SIZE=2>" has the meaning set forth in the introductory paragraph hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Bank"</I></FONT><FONT SIZE=2> means NationsBank of Texas, N.A., and any successor institution. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Bona Fide Offeror"</I></FONT><FONT SIZE=2> means the person from whom any of the Select Stockholders or the Stockholders has received a bona fide written offer
to purchase shares of Common Stock owned by such Select Stockholder or Stockholder. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Book Value Price"</I></FONT><FONT SIZE=2> means an amount computed by dividing (i)&nbsp;the Adjusted Book Value of the Company by (ii)&nbsp;the total number
of shares of Common Stock (as determined under Section&nbsp;3.7 hereof). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Business Day"</I></FONT><FONT SIZE=2> means a day other than a Saturday, a Sunday or a legal holiday in the State of Texas. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Closing Date"</I></FONT><FONT SIZE=2> shall have the meaning set forth in </FONT><FONT SIZE=2><I>Section&nbsp;2.1(g)</I></FONT><FONT SIZE=2> hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Co-Sale Notice</I></FONT><FONT SIZE=2>" has the meaning set forth in Section&nbsp;2.13 hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Co-Sale Notice Period"</I></FONT><FONT SIZE=2> has the meaning set forth in Section&nbsp;2.13 hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Code"</I></FONT><FONT SIZE=2> shall mean the Internal Revenue Code of 1986, as amended from time to time, or similar legislation that replaces such law from time
to time. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Common Stock"</I></FONT><FONT SIZE=2> means the common stock, par value $.001 per share, of the Company, including shares of common stock, par value $.001 per
share, of the Company equal to the largest number of full shares of common stock issued or issuable upon conversion of Preferred Stock. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Computation Date"</I></FONT><FONT SIZE=2> means the last day of the month immediately preceding the date of the first Offering Notice given pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;2.6, 2.7, 2.8, 2.9, 2.10, 2.11 or
2.12</I></FONT><FONT SIZE=2>. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Consummation Date</I></FONT><FONT SIZE=2>" has the meaning set forth in Section&nbsp;2.12 hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Disabled"</I></FONT><FONT SIZE=2> means the medically determinable mental or physical incapability of an Employee Stockholder to engage in any substantial
gainful activity, which incapacity is reasonably expected to (or does in fact) continue for twelve (12)&nbsp;months or more. If there is any disagreement between an Employee Stockholder and the
Company with respect to whether such Employee Stockholder is disabled, then the Company and such Employee Stockholder shall obtain a determination from an impartial reputable physician selected for
the purpose of making such determination, whose decision shall be binding upon all parties. If the Company and such Employee Stockholder cannot agree upon the selection of such physician, the then
president of the Harris County, Texas, Medical Society may make the selection of such physician, which selection shall be binding upon all parties and such physician's decision shall be binding upon
all parties. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

<HR NOSHADE>
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<UL>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Disposition"</I></FONT><FONT SIZE=2> means any sale, charge, gift, pledge, encumbrance, mortgage, transfer or any other disposition of Common Stock (or any
interest therein) whatsoever, whether voluntary or involuntary. A Disposition shall be deemed to be involuntary if it involves any transaction, proceeding or action by or in which the Stockholder
shall be involuntarily deprived or divested of any right, title or interest in or to any of the shares of Common Stock (including, without limitation, any seizure under levy of attachment or
execution, transfer in connection with bankruptcy or other court proceeding to a trustee in bankruptcy or receiver or other officer or agency or any transfer to a state or to a public officer or
agency pursuant to any statute pertaining to escheat or abandoned property). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Employee Stockholder"</I></FONT><FONT SIZE=2> means an Executive Stockholder or a Stockholder who is an officer or employee of the Company. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Executive Stockholders"</I></FONT><FONT SIZE=2> means David Samuel Coats and Robert Salter. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Founding Stockholder</I></FONT><FONT SIZE=2>" has the meaning set forth in the introductory paragraph hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Individual Stockholder</I></FONT><FONT SIZE=2>" means any natural person who is now or who may hereafter become an Executive Stockholder or a Stockholder and
shall include the successors, assigns, heirs, executors and administrators of such Executive Stockholder or Stockholder. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Offer</I></FONT><FONT SIZE=2>" has the meaning set forth in Section&nbsp;2.13 hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Offering Notice"</I></FONT><FONT SIZE=2> means (i)&nbsp;for purposes of </FONT><FONT SIZE=2><I>Section&nbsp;2.5</I></FONT><FONT SIZE=2> hereof, a notice
from an offering Select Stockholder or Stockholder specifying (a)&nbsp;the number of shares of Common Stock the offering Select Stockholder or Stockholder desires to dispose of, (b)&nbsp;the
identity of the Bona Fide Offeror (including the name, address and telephone number of the Bona Fide Offeror and a complete description of the relationship (personal, business and otherwise) between
the offering Select Stockholder or Stockholder and the Bona Fide Offeror), if any, (c)&nbsp;the price per share set forth in the offer received by the offering Select Stockholder or Stockholder, if
any, (d)&nbsp;the Adjusted Price or the Book Value Price, as the case may be, and (e)&nbsp;a written representation executed by the offering Select Stockholder or Stockholder and the Bona Fide
Offeror stating that such offer is bona fide, if applicable, and the notice from the offering Select Stockholder or Stockholder shall further offer such shares to the Company, the Investors, or to the
Select Stockholders and the Stockholders, as the case may be; attached to the notice from the offering Select Stockholder or Stockholder shall be a legible copy of the offer received by the offering
Stockholder from the Bona Fide Offeror, if applicable, and (ii)&nbsp;for purposes of </FONT><FONT SIZE=2><I>Sections 2.6, 2.7, 2.8, 2.9, 2.10, 2.11 or 2.12</I></FONT><FONT SIZE=2> hereof, a notice
from the party obligated under any such section of this Agreement to offer shares of Common Stock stating the price at which such party is obligated to offer such shares and specifying the manner in
which such price has been computed. "Offering Notice" shall include notice pursuant to paragraph&nbsp;(d) of </FONT><FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2> hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Other Stockholders</I></FONT><FONT SIZE=2>" has the meaning set forth in Section&nbsp;2.12 hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Person</I></FONT><FONT SIZE=2>" means an individual, a corporation, a trust, a partnership, a limited liability company, a joint stock association, a business
trust or a government or an agency or subdivision thereof, and shall include the singular and the plural. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Preferred Stock</I></FONT><FONT SIZE=2>" means the preferred stock, par value $.001 per share, of the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Purchasers</I></FONT><FONT SIZE=2>" has the meaning set forth in Section&nbsp;2.12 hereof. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

<HR NOSHADE>
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<UL>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Qualified Public Offering</I></FONT><FONT SIZE=2>" means a firm commitment underwriting that satisfies any requirement contained in the Company's certificate of
incorporation or any certificate of designations, preferences and rights related to Preferred Stock, in each case as amended, relating to the aggregate net proceeds attributable to sales for the
account of the Company with respect to an underwritten public offering or, if the Company's certificate of incorporation or any certificate of designations, preferences and rights related to Preferred
Stock, in each case as amended, contains no such requirement, the first underwritten public offering of the Company for the sale of Common Stock of which the aggregate net proceeds after deducting
underwriting discounts and commissions attributable to sales for the account of the Company exceed $20,000,000. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Reply Notice"</I></FONT><FONT SIZE=2> means a notice from any party hereto receiving an Offering Notice stating whether such party accepts or rejects the offer
made by an Offering Notice. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Retirement"</I></FONT><FONT SIZE=2> means retirement in good standing from full-time employment with the Company under the rules of the Company in
effect at the time of the Employee Stockholder's severance from full-time employment with the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Sale</I></FONT><FONT SIZE=2>" has the meaning set forth in Section&nbsp;2.12 hereof. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Securities Act"</I></FONT><FONT SIZE=2> means the Securities Act of 1933, as amended, or any successor Federal statute, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder, as in effect from time to time. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Select Stockholders"</I></FONT><FONT SIZE=2> means the Founding Stockholders and the Executive Stockholders, collectively. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Selling Group</I></FONT><FONT SIZE=2>" has the meaning set forth in Section&nbsp;2.12 hereof. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Selling Stockholder"</I></FONT><FONT SIZE=2> has the meaning set forth in Section&nbsp;2.5 hereof, except as otherwise provided herein. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Stockholders"</I></FONT><FONT SIZE=2> has the meaning set forth in the introductory paragraph hereof, and for Sections 1, 2 and 3 hereof, all persons and their
spouses (other than the Investors and the Select Stockholders) who become parties to this Agreement whether by the execution of an Addendum Agreement or otherwise, all persons (other than the
Investors and their respective successors, assigns, heirs, executors and administrators, and the Founding Stockholders) to whom shares of Common Stock may hereafter be transferred in accordance with
the terms of this Agreement and their respective successors, assigns, heirs, executors and administrators. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Transferring Stockholder</I></FONT><FONT SIZE=2>" has the meaning set forth in Section&nbsp;2.13 hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Triggering Event"</I></FONT><FONT SIZE=2> has the meaning set forth in Section&nbsp;2.1(d) hereof. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2>SECTION
2<BR></FONT> <FONT SIZE=2><I>RESTRICTIONS ON CERTAIN TRANSFERS OF SHARES</I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Provisions of General Applicability</I></FONT><FONT SIZE=2>".&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this Agreement: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Pro Rata Offers to Group</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Whenever any Stockholder or Select Stockholder is required to offer shares of
Common Stock to the Company, and to the Select Stockholders and the other Stockholders, as a group pursuant to this Agreement, such offer shall be deemed to be made first to the Company. The Select
Stockholders and the other Stockholders shall have the right to purchase offered shares if such shares are not purchased by the Company, either pro rata in accordance with their respective holdings at
the time of the offer of shares of Common Stock or in such other proportions as they may agree upon among themselves. Except as may otherwise be agreed, each member of the group to whom such shares
are so offered, other than the Company, shall have the right to purchase that proportion of the number of such offered shares that the number of shares of Common Stock owned by such member bears to
the total number of shares of Common Stock owned by the members of the group electing to accept the offer, other than the Company. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Determinations by Company</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Whenever any shares of Common Stock are offered to the Company pursuant to this
Agreement, the determination of the Company to accept or reject such offer and the determination of ability of the Company to lawfully purchase such shares of Common Stock offered to the Company shall
be made by the Board of Directors of the Company. Any member of the Board of Directors of the Company who is the offering Stockholder shall be disqualified from voting on any such determination. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Copies of Notices to Stockholders</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;At the time of delivery of each Offering Notice and each Reply Notice
delivered pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11 or 2.12</I></FONT><FONT SIZE=2>, a copy thereof shall be delivered to each person to whom the shares of
Common Stock covered thereby may thereafter be required to be offered pursuant to such section. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Deemed Notice</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If at any time any event occurs that requires a Stockholder or Select Stockholder to provide
an Offering Notice to the Company under any provision of this Agreement (a "Triggering Event"), an Offering Notice shall be deemed to have been delivered and the Company shall be deemed to have
received such Offering Notice, pursuant to the terms of this Agreement upon the first to occur of (i)&nbsp;actual receipt by the Company of the Offering Notice, or (ii)&nbsp;any action (including
the delivery of a Reply Notice) taken by the Company with regard to the Triggering Event, taken at least 30&nbsp;days after the occurrence of the Triggering Event, and the provisions of </FONT> <FONT SIZE=2><I>Section&nbsp;2.5, 2.6, 2.7, 2.8, 2.9,
2.10, 2.11 or 2.12</I></FONT><FONT SIZE=2>, whichever shall be applicable, shall be deemed to be in effect upon the first to occur of
(i)&nbsp;or (ii)&nbsp;above. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;All or Nothing; Deemed Rejection</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;A Reply Notice that accepts an offer made by an Offering Notice must
accept such offer as to all shares of Common Stock offered by the Offering Notice to the recipient of the notice. If any Select Stockholder, Stockholder or the Company receives an Offering Notice and
fails to deliver a Reply Notice to the offering Stockholder within 30&nbsp;days from the receipt of the initial Offering Notice to such person, or within ten (10)&nbsp;days from the receipt of a
subsequent Offering Notice to such person (as provided for in </FONT><FONT SIZE=2><I>Sections 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11 or 2.12</I></FONT><FONT SIZE=2> hereof), the party who fails to so
deliver a Reply Notice shall be deemed conclusively to have delivered a Reply Notice stating that such party does not accept the offer made by such Offering Notice. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

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<UL>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Price; Terms of Purchase</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Any dispute concerning the calculation of the Adjusted Price or the Book Value
Price shall be resolved by the Board of Directors of the Company (excluding any member of the Board of Directors of the Company whose shares are the subject of such dispute). In connection with any
purchase and sale of shares of Common Stock pursuant to the provisions of </FONT><FONT SIZE=2><I>Section&nbsp;2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11 or 2.12</I></FONT><FONT SIZE=2>, the purchaser or
purchasers may at its or their option elect either (i)&nbsp;to pay in cash the aggregate purchase price for such shares, or (ii)&nbsp;to pay in cash one-fourth of the aggregate
purchase price for such shares and to issue one or more negotiable promissory notes in payment of the balance of the purchase price for such shares. Any promissory note given for a portion of the
purchase price shall be payable as to principal in equal annual installments over a period not to exceed three years from the date of such note, shall be secured by the shares of Common Stock sold
with respect to such note, and shall provide for interest, payable annually as it accrues and concurrently with installments of principal, at the rate of interest established from time to time by the
Bank as its </FONT><FONT SIZE=2><I>prime rate</I></FONT><FONT SIZE=2>. In the event of default in the payment of principal or interest for a period of 30&nbsp;days with regard to such promissory
note, the balance remaining to be paid under such note shall without further notice immediately become due and payable at the election of the holder. Such promissory notes shall provide that the maker
agrees to pay the reasonable expenses of collection in the event of default, including attorneys' fees. Such promissory notes also shall provide that the maker has the option of prepayment in whole or
in part at any time without penalty. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Closing Date</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each transaction of purchase and sale of shares of Common Stock pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11 or
2.12</I></FONT><FONT SIZE=2> shall be completed by delivery of the certificates representing such shares endorsed in blank
and by actual registration of the transfer of such shares on the books of the Company upon payment of the purchase price to the Selling Stockholder. Any such transaction shall be closed at such time
(within six months of the date of delivery of the first Offering Notice given in connection with such transaction) and place as shall be agreed upon by the parties thereto, or, if no such agreement is
reached, at the principal office of the Company on a day (the "Closing Date") that is on the 30th day next following the date of delivery of the last Reply Notice given in connection with such
transaction or, if such day shall not be a Business Day, on the first Business Day thereafter during normal business hours. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Purchase Limitations on Company</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding paragraph&nbsp;(e) of this </FONT> <FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2>, whenever any shares of
Common Stock are offered to the Company pursuant to this Agreement and the Company elects to purchase such
shares of Common Stock, if the Board of Directors of the Company (excluding any member of the Board of Directors of the Company whose shares of Common Stock are being offered to the Company pursuant
to this Agreement) shall determine in good faith that the Company shall not be able lawfully to purchase all of such shares of Common Stock on the Closing Date under the provisions of the General
Corporation Law of the State of Delaware, as amended, the Company shall purchase on the Closing Date so much of such shares of Common Stock as it may lawfully purchase. In the event that the Company
purchases less than all of such shares of Common Stock on the Closing Date, then the Company shall not, without the written consent of the offering Stockholder, pay dividends to any Stockholder until
the remainder of such shares of Common Stock is purchased in accordance with the terms of this Agreement. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Suspension of Company's Purchase Obligation</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If the Company is unable on the Closing Date lawfully to
purchase all of such shares of Common Stock, the obligation of the Company to buy and the obligation of the offering Stockholder to sell those shares of such Common Stock that the Company could not
lawfully purchase shall continue until such time as the Company may lawfully discharge such obligation. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

<HR NOSHADE>
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<UL>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Effect of Failure to Exercise Option</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If neither the Company, nor the Investors, nor the Select Stockholders
or other Stockholders accept an offer to purchase all of the shares of Common Stock of the offering Executive Stockholder or pursuant to the provisions of </FONT><FONT SIZE=2><I>Section&nbsp;2.6,
2.7, 2.8, 2.9, 2.10, 2.11 or 2.12</I></FONT><FONT SIZE=2>, as the case may be, the offering Executive Stockholder or Stockholder, as the case may be, shall thereafter be entitled to make a Disposition
of such remaining shares that have not been sold pursuant to the provisions of </FONT><FONT SIZE=2><I>Section&nbsp;2.6, 2.7, 2.8, 2.9, 2.10, 2.11 or 2.12</I></FONT><FONT SIZE=2>, as applicable,
subject to the requirements of </FONT><FONT SIZE=2><I>Section&nbsp;2.5</I></FONT><FONT SIZE=2> hereof and each of the other requirements of this Agreement. In the case of an offer of the Selling
Stockholder pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;2.9</I></FONT><FONT SIZE=2> hereof, if involuntary Disposition is not effected, each of the other provisions of this Agreement, including
the provisions of </FONT><FONT SIZE=2><I>Section&nbsp;2.9</I></FONT><FONT SIZE=2> hereof, shall apply to any future involuntary Disposition of such shares of Common Stock owned by the Selling
Stockholder. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Exercise of Company Stock Options</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Prior to the date of this Agreement the Company has issued options to
purchase Common Stock to certain persons including certain Executive Stockholders, Stockholders and certain other persons who are not currently Stockholders. Pursuant to such options and pursuant to
any options that may be issued in the future, the shares of Common Stock covered by such options become subject to this Agreement upon exercise of such options. Such options may be exercised for
periods of time following the events set forth in </FONT><FONT SIZE=2><I>Sections 2.6, 2.7, 2.8, 2.9, 2.10, and 2.11</I></FONT><FONT SIZE=2>. Upon the exercise of any option following an event
specified in any of such sections, the particular event set forth in such section shall be deemed to have occurred effective on the date of such exercise and the required offer and other procedures
set forth in the particular section shall be made and apply in accordance with the provisions of the particular applicable section. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Investment Representation</I></FONT><FONT SIZE=2>".&nbsp;&nbsp;&nbsp;&nbsp;Each of the Executive Stockholders and Stockholders hereby represents that as
of the dates any shares of Common Stock were acquired or are hereafter acquired by such Executive Stockholder or Stockholder, such shares were or shall be acquired for such Executive Stockholder or
Stockholder's own account, for investment and not with a view to the distribution thereof. Each of the Executive Stockholders and Stockholders understands that the shares of Common Stock that have
been acquired by such Executive Stockholder or Stockholder have not been registered under the Securities Act pursuant to an exemption from the registration provisions thereof. Each of the Executive
Stockholders and Stockholders hereby agrees that the shares of Common Stock that have been acquired by such Executive Stockholder or Stockholder and any other shares of Common Stock hereafter acquired
by such Executive Stockholder or Stockholder pursuant to an exemption from the registration provisions of the Securities Act shall not be sold, transferred, pledged or hypothecated unless the sale of
or other transaction concerning such shares is registered under the Securities Act or unless there is furnished an opinion of counsel reasonably satisfactory to the Company that registration of such
shares is not required. Each Executive Stockholder and Stockholder understands that the Company is under no obligation to register the shares of Common Stock under the Securities Act, and that
Rule&nbsp;144 under the Securities Act may not be available in connection with any resale of shares of Common Stock. The provisions of this Section&nbsp;2.2 shall remain in effect until, in the
opinion of counsel for the Company, they are no longer required. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>7</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Legend on Stock Certificates</I></FONT><FONT SIZE=2>".&nbsp;&nbsp;&nbsp;&nbsp;Each of the Select Stockholders and the Stockholders hereby agrees that the
following legends (in addition to any other legend required by applicable laws) shall be written, printed or stamped on the back of all certificates representing their shares of Common Stock: </FONT></P>

<UL>

<P><FONT SIZE=2>THESE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES OR BLUE SKY LAWS AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT (1)&nbsp;PURSUANT TO A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER THE ACT OR (2)&nbsp;PURSUANT TO AN
AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT AND (3)&nbsp;IN ACCORDANCE WITH APPLICABLE STATE SECURITIES AND BLUE SKY LAWS. </FONT></P>

<P><FONT SIZE=2>THESE
SECURITIES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS OF AN AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT, DATED AS OF JUNE 8, 1998 (THE "AGREEMENT"), INCLUDING THEREIN CERTAIN
RESTRICTIONS ON TRANSFER AND RIGHTS OF FIRST REFUSAL AND CO-SALE. A COMPLETE AND CORRECT COPY OF THIS AGREEMENT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL
BE FURNISHED UPON WRITTEN REQUEST WITHOUT CHARGE. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Such
certificates shall be endorsed on the front thereof as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"See
restrictions on transfer hereof on reverse side." </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"No Disposition of Common Stock</I></FONT><FONT SIZE=2>".&nbsp;&nbsp;&nbsp;&nbsp;Except for the repurchase of 784,262 shares of the Company's Common Stock
from the Founding Stockholders and Robert Salter as contemplated in the Stock Purchase and Stockholder's Agreement, dated as of the same date as this Agreement, among the Company, the Investors', the
Founding Stockholders and Robert Salter, and the accompanying Repurchase Agreements, no Executive Stockholder or Stockholder may make any Disposition of any shares of Common Stock owned or held by it
except (i)&nbsp;with the written consent of the holders of a majority of the total number of shares of Common Stock held by the Founding Stockholders and the Stockholders, or except as provided in
Section&nbsp;2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11, 2.12 or 3, whichever may be applicable, and (ii)&nbsp;in compliance with Section&nbsp;2.2 hereof. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Right of First Refusal Before Stockholder Voluntarily Disposes of Shares</I></FONT><FONT SIZE=2>".&nbsp;&nbsp;&nbsp;&nbsp;The Company, the Select
Stockholders and the other Stockholders shall have a right of first refusal to purchase the shares of Common Stock owned by a Stockholder. If any Stockholder desires to make a Disposition of any
shares of Common Stock owned or held by him in a transaction that is not subject to the provisions of Section&nbsp;2.6, 2.7, 2.8, 2.9, 2.10, 2.11 or 2.12, such Stockholder (the "Selling
Stockholder") shall offer such shares of Common Stock for sale at a price per share equal to (i)&nbsp;the Adjusted Price, in the case where the Selling Stockholder has received a bona fide written
offer from a Bona Fide Offeror, or (ii)&nbsp;an amount equal to the Book Value Price if the Selling Stockholder has not received a bona fide written offer from a Bona Fide Offeror, all in accordance
with the following provisions of this Section&nbsp;2.5. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>8</FONT></P>

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<BR>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Offer by Selling Stockholder to the Company</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Selling Stockholder shall deliver an Offering Notice to the
Company, and within 30&nbsp;days from the receipt of such Offering Notice, the Company shall deliver a Reply Notice to the Selling Stockholder. If by its Reply Notice the Company rejects the offer
of the Selling Stockholder, the Company shall provide to the Selling Stockholder in such Reply Notice the name, address (for purposes of </FONT> <FONT SIZE=2><I>Section&nbsp;3.3</I></FONT><FONT SIZE=2> hereof) and number of shares of Common Stock
owned by the Select Stockholders and each of the other Stockholders. If by its Reply
Notice the Company accepts the offer of the Selling Stockholder, such Reply Notice shall constitute an agreement binding upon the Selling Stockholder to sell and the Company to purchase the offered
shares at a price per share equal to (i)&nbsp;the Adjusted Price, in the case where the Selling Stockholder has received a bona fide written offer from a Bona Fide Offeror, or (ii)&nbsp;the Book
Value Price if the Selling Stockholder has not received a bona fide written offer from a Bona Fide Offeror, and, subject to paragraph&nbsp;(f) of </FONT> <FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2> hereof, upon the terms of the Offering
Notice of the Selling Stockholder to the Company. Once the Offering Notice is delivered, the
offer by the Selling Stockholder may not be withdrawn during the period within which the Company may deliver a Reply Notice to the Selling Stockholder, as provided in this </FONT> <FONT SIZE=2><I>Section&nbsp;2.5</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Offer by Selling Stockholder to the Select Stockholders and the Other Stockholders</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If the Company shall not
have accepted the offer of the Selling Stockholder pursuant to paragraph&nbsp;(a) of this </FONT><FONT SIZE=2><I>Section&nbsp;2.5</I></FONT><FONT SIZE=2>, the Selling Stockholder shall, upon
receipt of the Reply Notice from the Company or upon the expiration of the 30-day period referred to in paragraph&nbsp;(a) of this </FONT> <FONT SIZE=2><I>Section&nbsp;2.5</I></FONT><FONT SIZE=2>, as applicable, whichever shall first occur, deliver
an Offering Notice to the Select Stockholders and the other Stockholders. Within
30&nbsp;days from the receipt of such Offering Notice, the Select Stockholders and each of the other Stockholders shall deliver a Reply Notice to the Selling Stockholder. In the event that some but
not all of the Select Stockholders and the other Stockholders accept the offer of the Selling Stockholder (those persons that accept such offer are referred to in this section as the "Purchasing
Stockholders"), the Selling Stockholder shall deliver a second Offering Notice to the Purchasing Stockholders within ten days after the expiration of the 30-day period referred to in the
preceding sentence. Pursuant to the second Offering Notice, the Selling Stockholder shall offer to each Purchasing Stockholder that proportion of the number of shares offered to
non-Purchasing Stockholders that the number of shares of Common Stock owned by such Purchasing Stockholder bears to the total number of shares of Common Stock owned by all the Purchasing
Stockholders. Additional Offering Notices, as needed, shall be delivered until each Purchasing Stockholder has been offered any remaining shares of Common Stock. Within ten days from the receipt of
such Offering Notice, the Purchasing Stockholders shall deliver a second Reply Notice to the Selling Stockholder. If by a Reply Notice any of the Select Stockholders and the other Stockholders accept
the offer of the Selling Stockholder, such Reply Notice shall constitute an agreement binding upon the Selling Stockholder to sell, and each Purchasing Stockholder to purchase, the offered shares at a
price per share equal to (i)&nbsp;the Adjusted Price, in the case where the Selling Stockholder has received a bona fide written offer from a Bona Fide Offeror, or (ii)&nbsp;the Book Value Price
if the Selling Stockholder has not received a bona fide written offer from a Bona Fide Offeror, and, subject to paragraph&nbsp;(f) of </FONT> <FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2> hereof, upon the terms of the Offering Notice of
the Selling Stockholder to the Select Stockholders and the other Stockholders. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>9</FONT></P>

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<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Effect of Failure to Exercise Option</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If neither the Company nor the Select Stockholders and the other
Stockholders accept an offer to purchase all of the shares of Common Stock of the Selling Stockholder pursuant to the foregoing provisions of this </FONT> <FONT SIZE=2><I>Section&nbsp;2.5</I></FONT><FONT SIZE=2>, the Selling Stockholder shall
thereafter be entitled to sell the remaining shares that have not been sold pursuant to the provisions
of this </FONT><FONT SIZE=2><I>Section&nbsp;2.5</I></FONT><FONT SIZE=2> to the Bona Fide Offeror identified in the Offering Notice at a price per share equal to the Adjusted Price or to a purchaser
that pays a price per share equal to the Book Value Price for the offered shares of Common Stock, and upon those terms stated in the Offering Notice given by the Selling Stockholder pursuant to this </FONT> <FONT
SIZE=2><I>Section&nbsp;2.5</I></FONT><FONT SIZE=2>, but only if (i)&nbsp;such sale is completed within a period of three months from the date of delivery of the Reply Notice of the
Select Stockholders and the other Stockholders rejecting the offer, and (ii)&nbsp;the purchaser, before such sale, shall have executed an Addendum Agreement with the Company, the Select
Stockholders, and the other Stockholders. If the Selling Stockholder does not complete such sale within such three-month period, all the provisions of this Agreement, including the provisions of this </FONT> <FONT
SIZE=2><I>Section&nbsp;2.5</I></FONT><FONT SIZE=2>, shall apply to any future sale or offer for sale of the shares of Common Stock owned by the Selling Stockholder.
 </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.6</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Sale of Shares Upon Competing With the Business of the Company</I></FONT><FONT SIZE=2>."&nbsp;&nbsp;&nbsp;&nbsp;If at any time an Executive Stockholder or
a Stockholder shall for any reason begin competing with any business then conducted by the Company (in such capacity, a "Competing Stockholder"), then such Executive Stockholder or Stockholder shall
offer all shares of Common Stock then owned or held by the Executive Stockholder or Stockholder for sale at a price per share equal to the Book Value Price, all in accordance with the following
provisions of this Section&nbsp;2.6. </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Offer by Competing Stockholder to the Company</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;On or before sixty (60)&nbsp;days before the date the
Competing Stockholder begins competing with the Company, the Competing Stockholder shall deliver an Offering Notice to the Company. Within 30&nbsp;days from the receipt of such Offering Notice, the
Company shall deliver a Reply Notice to the Competing Stockholder. If by its Reply Notice the Company rejects the offer of the Competing Stockholder, the Company shall provide to the Competing
Stockholder in such Reply Notice the name, address (for purposes of </FONT><FONT SIZE=2><I>Section&nbsp;3.3</I></FONT><FONT SIZE=2> hereof) and number of shares of Common Stock owned by each of the
Investors (in the case of a Competing Stockholder who is an Executive Stockholder), Select Stockholders and the other Stockholders. If by its Reply Notice the Company accepts the offer of the
Competing Stockholder, such Reply Notice shall constitute an agreement binding upon the Competing Stockholder to sell and the Company to purchase the offered shares at the price and upon the terms of
the Offering Notice of the Competing Stockholder subject to the provisions of paragraph&nbsp;(f) of </FONT><FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2> hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Offer by Competing Stockholder to the Select Stockholders and the Other Stockholders</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If the Company shall
not have accepted the offer of the Competing Stockholder pursuant to paragraph&nbsp;(a) of this </FONT><FONT SIZE=2><I>Section&nbsp;2.6</I></FONT><FONT SIZE=2>, the Competing Stockholder shall,
upon receipt of the Reply Notice from the Company or upon the expiration of the 30-day period referred to in paragraph&nbsp;(a) of this </FONT> <FONT SIZE=2><I>Section&nbsp;2.6</I></FONT><FONT SIZE=2>, whichever shall first occur, deliver an Offering
Notice to the Investors (in the case of a Competing Stockholder who is an Executive
Stockholder), Select Stockholders and other Stockholders. Within 30&nbsp;days from the receipt of such Offering Notice, the Investors, Select Stockholders and the other Stockholders shall deliver a
Reply Notice to the Competing Stockholder. In the event that some but not all of the Investors, Select Stockholders and the other Stockholders accept the offer of the Competing Stockholder (those
persons that accept such offer are referred to in this section as the "Purchasing Stockholders"), the Competing Stockholder shall deliver a second Offering Notice to the Purchasing Stockholders within
ten days after the expiration of the 30-day period referred to in the preceding sentence. Pursuant to the second Offering Notice, the Competing Stockholder shall offer to each Purchasing
Stockholder that proportion of the number of shares offered to non-Purchasing Stockholders that the number of </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>10</FONT></P>

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<UL>
<BR>

<P><FONT SIZE=2>shares
of Common Stock owned by such Purchasing Stockholder bears to the total number of shares of Common Stock owned by all the Purchasing Stockholders. Additional Offering Notices, as needed, shall
be delivered until each Purchasing Stockholder has been offered any remaining shares of Common Stock. Within ten days from the receipt of such Offering Notice, the Purchasing Stockholders shall
deliver a second Reply Notice to the Competing Stockholder. If by a Reply Notice any of the Investors, Select Stockholders and/or the other Stockholders accept the offer of the Competing Stockholder,
such Reply Notice shall constitute an agreement binding on the Competing Stockholder to sell, and each Purchasing Stockholder to purchase, the offered shares at the price and upon the terms of the
Offering Notice of the Competing Stockholder to the Investors, Select Stockholders and the other Stockholders subject to the provisions of paragraph&nbsp;(f) of </FONT> <FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2> hereof. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.7</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Sale of Shares Upon Termination of Marriage of an Individual Stockholder</I></FONT><FONT SIZE=2>."&nbsp;&nbsp;&nbsp;&nbsp;If the marriage of an Individual
Stockholder is terminated by the death of such Individual Stockholder's spouse or by divorce, and such Individual Stockholder does not succeed to all of such Individual Stockholder's spouse's
community or other interest, if any, in the Common Stock held by such Individual Stockholder at the time of such termination, then such Individual Stockholder's former spouse or the executor,
administrator or heirs of such Individual Stockholder's spouse, as the case may be, shall, within the applicable period hereinafter provided, offer or cause to be offered all of such spouse's interest
in such Common Stock at a price per share for such interest which is equal to the Book Value Price (which price is for the entire interest in a share of the Common Stock) or, in connection with an
offer pursuant to paragraph&nbsp;(a) of this Section&nbsp;2.7, such other price as may be agreed to by the parties to the transaction, all in accordance with the following provisions of this
Section&nbsp;2.7. As used in this Section&nbsp;2.7, the term "Selling Stockholder" shall mean the former spouse of any Individual Stockholder who shall have been divorced or, in the event of the
death of the spouse of an Individual Stockholder, the executor, administrator or heirs of such spouse's estate, as the case may be, and the term "Individual Stockholder" shall mean the Individual
Stockholder who shall have been divorced or whose spouse shall have died. </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Offer by Selling Stockholder to Individual Stockholder</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Within ten days of the termination of the marriage
by divorce, or, if the Selling Stockholder is the executor or administrator of the deceased spouse's estate, within ten days of the qualification or appointment of such executor or administrator, or
if the Selling Stockholder is an heir of the deceased spouse, within 30&nbsp;days of the death of such spouse, whichever shall be applicable, the Selling Stockholder shall deliver an Offering Notice
to the Individual Stockholder. Within 30&nbsp;days from the receipt of such Offering Notice, the Individual Stockholder shall deliver a Reply Notice to the Selling Stockholder. If by the Individual
Stockholder's Reply Notice the Individual Stockholder accepts the offer of the Selling Stockholder, such Reply Notice shall constitute an agreement of the Selling Stockholder to sell and the
Individual Stockholder to purchase the offered shares at the price and upon the terms of the Offering Notice of the Selling Stockholder subject to the provisions of paragraph&nbsp;(f) of </FONT> <FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT
SIZE=2> hereof. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>11</FONT></P>

<HR NOSHADE>
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<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Offer by Selling Stockholder to the Company</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If the Individual Stockholder does not accept the offer of the
Selling Stockholder pursuant to the foregoing provisions of this </FONT><FONT SIZE=2><I>Section&nbsp;2.7</I></FONT><FONT SIZE=2>, then the Selling Stockholder shall deliver an Offering Notice to
the Company, and within 30&nbsp;days from the receipt of such Offering Notice, the Company shall deliver a Reply Notice to the Selling Stockholder. If by its Reply Notice the Company rejects the
offer of the Selling Stockholder, the Company shall provide to the Selling Stockholder in such Reply Notice the name, address (for purposes of </FONT> <FONT SIZE=2><I>Section&nbsp;3.3</I></FONT><FONT SIZE=2> hereof) and number of shares of Common
Stock owned by each of the Investors (in the case of a Selling Stockholder whose status as
such derives from an Executive Stockholder), Select Stockholders and the other Stockholders. If by its Reply Notice the Company accepts the offer of the Selling Stockholder, such Reply Notice shall
constitute an agreement binding upon the Selling Stockholder to sell and the Company to purchase the offered shares at the price and upon the terms of the Offering Notice of the Selling Stockholder
subject to the provisions of paragraph&nbsp;(f) of </FONT><FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2> hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Offer by Selling Stockholder to the Investors, Select Stockholders and the Other Stockholders</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If the
Company shall not have accepted the offer of the Selling Stockholder pursuant to paragraph&nbsp;(b) of this </FONT><FONT SIZE=2><I>Section&nbsp;2.7</I></FONT><FONT SIZE=2>, the Selling
Stockholder shall, upon receipt of the Reply Notice from the Company or upon the expiration of the 30-day period referred to in paragraph&nbsp;(b) of this </FONT> <FONT SIZE=2><I>Section&nbsp;2.7</I></FONT><FONT SIZE=2>, whichever shall first occur,
deliver an Offering Notice to the Investors (in the case of a Selling Stockholder whose status as such
derives from an Executive Stockholder), the Select Stockholders and the other Stockholders. Within 30&nbsp;days from the receipt of such Offering Notice, the Investors (in the case of a Selling
Stockholder whose status as such derives from an Executive Stockholder), the Select Stockholders and the other Stockholders shall deliver a Reply Notice to the Selling Stockholder. In the event that
some but not all of the Investors, Select Stockholders and the other Stockholders accept the offer of the Selling Stockholder (those persons that accept such offer are referred to in this section as
the "Purchasing Stockholders"), the Selling Stockholder shall deliver a second Offering Notice to the Purchasing Stockholders within ten days after the expiration of the 30-day period
referred to in the preceding sentence. Pursuant to the second Offering Notice, the Selling Stockholder shall offer to each Purchasing Stockholder that proportion of the number of shares offered to
non-Purchasing Stockholders that the number of shares of Common Stock owned by such Purchasing Stockholder bears to the total number of shares of Common Stock owned by all the Purchasing
Stockholders. Additional Offering Notices, as needed, shall be delivered until each Purchasing Stockholder has been offered any remaining shares of Common Stock. Within ten days from the receipt of
such Offering Notice, the Purchasing Stockholders shall deliver a second Reply Notice to the Selling Stockholder. If by a Reply Notice any of the Investors, Select Stockholders and the other
Stockholders accept the offer of the Selling Stockholder, such Reply Notice shall constitute an agreement binding upon the Selling Stockholder to sell, and each Purchasing Stockholder to purchase, the
offered shares at the price and upon the terms of the Offering Notice of the Selling Stockholder to the Investors, Select Stockholders and the other Stockholders subject to the provisions of
paragraph&nbsp;(f) of </FONT><FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2> hereof. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>12</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2><A
NAME="page_kt76602_1_13"> </A> </FONT> <FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.8</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Sale of Shares Upon Death of an Individual Stockholder</I></FONT><FONT SIZE=2>."&nbsp;&nbsp;&nbsp;&nbsp;Upon the death of an Individual Stockholder,
such
Individual Stockholder's spouse, such Individual Stockholder's legatees or heirs at law and such Individual Stockholder's executor or administrator, as the case may be, shall offer, or shall cause to
be offered, within the applicable period hereinafter provided, all of such Individual Stockholder's shares of Common Stock at a price per share equal to the Book Value Price, all in accordance with
the following provisions of this Section&nbsp;2.8. As used in this Section&nbsp;2.8, the term "Selling Stockholder" shall mean such Individual Stockholder's spouse, such Individual Stockholder's
legatees or heirs at law and such Individual Stockholder's executor or administrator, as the case may be. </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Offer by Selling Stockholder to the Company</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Within ten days of the qualification or appointment of such
executor or administrator, or if the Selling Stockholder is the Stockholder's spouse, his legatee or heir, within 30&nbsp;days of the death of the Individual Stockholder, whichever shall be
applicable, the Selling Stockholder shall deliver an Offering Notice to the Company. Within 30&nbsp;days from the receipt of such Offering Notice, the Company shall deliver a Reply Notice to the
Selling Stockholder. If by its Reply Notice the Company rejects the offer of the Selling Stockholder, the Company shall provide to the Selling Stockholder in such Reply Notice the name, address (for
purposes of </FONT><FONT SIZE=2><I>Section&nbsp;3.3</I></FONT><FONT SIZE=2> hereof) and number of shares of Common Stock owned by each of the Investors (in the case of a Selling Stockholder whose
status as such derives from an Executive Stockholder), Select Stockholders and the other Stockholders. If by its Reply Notice the Company accepts the offer of the Selling Stockholder, such Reply
Notice shall constitute an agreement binding upon the Selling Stockholder to sell and the Company to purchase the offered shares at the price and upon the terms of the Offering Notice of the Selling
Stockholder to the Company subject to the provisions of paragraph&nbsp;(f) of </FONT><FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2> hereof. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Application of Life Insurance Proceeds; Terms of Purchase</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In connection with any purchase and sale of
Common Stock pursuant to paragraph&nbsp;(a) of this </FONT><FONT SIZE=2><I>Section&nbsp;2.8</I></FONT><FONT SIZE=2>, if the aggregate amount of the proceeds of any insurance policies obtained on
the life of the Individual Stockholder pursuant to this Agreement that have been collected by the Company are equal to or in excess of the aggregate purchase price of such Individual Stockholder's
shares of Common Stock, then on the Closing Date such aggregate purchase price shall be paid by check to the Selling Stockholder. Any excess insurance proceeds shall be retained by the Company. If the
aggregate amount of the proceeds of any insurance policies obtained on the life of the Individual Stockholder pursuant to this Agreement that have been collected by the Company are not equal to or in
excess of the aggregate purchase price of such Individual Stockholder's shares of Common Stock, then on the Closing Date the aggregate amount of such proceeds shall be paid by check to the Selling
Stockholder and the Company shall pay the balance of the purchase price for such shares in accordance with the provisions of paragraph&nbsp;(f) of </FONT> <FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2> of this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Offer by Selling Stockholder to the Investors, Select Stockholders and the Other Stockholders</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If the
Company shall not have accepted the offer of the Selling Stockholder pursuant to paragraph&nbsp;(a) of this </FONT><FONT SIZE=2><I>Section&nbsp;2.8</I></FONT><FONT SIZE=2>, the Selling
Stockholder shall, upon receipt of the Reply Notice from the Company or upon the expiration of the 30-day period referred to in paragraph&nbsp;(a) of this </FONT> <FONT SIZE=2><I>Section&nbsp;2.8</I></FONT><FONT SIZE=2>, whichever shall first occur,
deliver an Offering Notice to the Investors (in the case of a Selling Stockholder whose status as such
derives from an Executive Stockholder), Select Stockholders and the other Stockholders. Within 30&nbsp;days from the receipt of such Offering Notice, the Investors, Select Stockholders and the other
Stockholders shall deliver a Reply Notice to the Selling Stockholder. In the event that some but not all of the Investors, Select Stockholders and the other Stockholders accept the offer of the
Selling Stockholder (those persons that accept such offer are referred to in this section as the "Purchasing Stockholders"), the Selling Stockholder shall deliver a second Offering Notice to the
Purchasing Stockholders within ten days after the expiration of the 30-day period referred to in the preceding sentence. Pursuant to the second </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>13</FONT></P>

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<BR>

<P><FONT SIZE=2>Offering
Notice, the Selling Stockholder shall offer to each Purchasing Stockholder that proportion of the number of shares offered to non-Purchasing Stockholders that the number of shares
of Common Stock owned by such Purchasing Stockholder bears to the total number of shares of Common Stock owned by all the Purchasing Stockholders. Additional Offering Notices, as needed, shall be
delivered until each Purchasing Stockholder has been offered any remaining shares of Common Stock. Within ten days from the receipt of such Offering Notice, the Purchasing Stockholders shall deliver a
second Reply Notice to the Selling Stockholder. If by a Reply Notice any of the Investors, Select Stockholders and/or the other Stockholders accept the offer of the Selling Stockholder, such Reply
Notice shall constitute an agreement binding upon the Selling Stockholder to sell, and each Purchasing Stockholder to purchase, the offered shares at the price and upon the terms of the Offering
Notice of the Selling Stockholder subject to the provisions of paragraph&nbsp;(f) of </FONT><FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2> hereof. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Mandatory Purchase by the Company and Sale by Selling Stockholder</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In the event that, upon the death of a
Stockholder, the Company, the Investors, Select Stockholders and/or the other Stockholders in the aggregate do not exercise their options hereunder to purchase all of the Stock owned by the Selling
Stockholder, the Company shall be obligated to purchase, and the Selling Stockholder shall be obligated to sell to the Company, all of the shares of the Common Stock of the deceased Stockholder not
purchased pursuant to the options. Within ten days after the termination of the Founding Stockholders and the other Stockholders option under this section, the Selling Stockholder shall deliver a
notice to the Company stating that not all of the deceased Individual Stockholder's shares of Common Stock have been purchased. Within 10&nbsp;days from the receipt of such notice, the Company shall
deliver a reply notice to the Selling Stockholder and such reply notice shall constitute an agreement binding upon the Selling Stockholder to sell and the Company to purchase the remaining shares of
the deceased Stockholder at the price and upon the terms of the original Offering Notice of the Selling Stockholder sent to the Company under paragraph&nbsp;(a) of this </FONT> <FONT SIZE=2><I>Section&nbsp;2.8</I></FONT><FONT SIZE=2>, subject to the
provisions of paragraph&nbsp;(f) of </FONT><FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2> hereof. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.9</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Involuntary Disposition of Shares</I></FONT><FONT SIZE=2>".&nbsp;&nbsp;&nbsp;&nbsp;Prior to any involuntary Disposition of a Stockholder's or Executive
Stockholder's shares of Common Stock, such Stockholder or Executive Stockholder or his representative shall send notice thereof, disclosing in full to the Company, Investors (in the case of a
prospective involuntary Disposition by an Executive Stockholder), the Select Stockholders and the other Stockholders the nature and details of such involuntary Disposition and offer such shares for
sale at a price per share equal to the Book Value Price, in accordance with the following provisions of this Section&nbsp;2.9. As used in this Section&nbsp;2.9, the term "Selling Stockholder"
shall mean such Stockholder or Executive Stockholder or such Stockholder's or Executive Stockholder's representative, as the case may be. </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Offer by Selling Stockholder to the Company</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Selling Stockholder shall deliver an Offering Notice to the
Company, and within 30&nbsp;days from the receipt of such Offering Notice, the Company shall deliver a Reply Notice to the Selling Stockholder. If by its Reply Notice the Company rejects the offer
of the Selling Stockholder, the Company shall provide to the Selling Stockholder in such Reply Notice the name, address (for purposes of </FONT> <FONT SIZE=2><I>Section&nbsp;3.3</I></FONT><FONT SIZE=2> hereof) and number of shares of Common Stock
owned by the Investors (in the case of a prospective involuntary Disposition by an
Executive Stockholder), Select Stockholders and each of the other Stockholders. If by its Reply Notice the Company accepts the offer of the Selling Stockholder, such Reply Notice shall constitute an
agreement binding upon the Selling Stockholder to sell and the Company to purchase the offered shares at the price and upon the terms of the Offering Notice of the Selling Stockholder to the Company
subject to the provisions of paragraph&nbsp;(f) of </FONT><FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2> hereof. </FONT></P>

</UL>
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<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Offer by Selling Stockholder to the Investors, Select Stockholders and the Other Stockholders</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If the
Company shall not have accepted the offer of the Selling Stockholder pursuant to paragraph&nbsp;(a) of this </FONT><FONT SIZE=2><I>Section&nbsp;2.9</I></FONT><FONT SIZE=2>, the Selling
Stockholder shall, upon receipt of the Reply Notice from the Company or upon the expiration of the 30-day period referred to in paragraph&nbsp;(a) of this </FONT> <FONT SIZE=2><I>Section&nbsp;2.9</I></FONT><FONT SIZE=2>, whichever shall first occur,
deliver an Offering Notice to the Investors (in the case of a prospective involuntary Disposition by an
Executive Stockholder), Select Stockholders and the other Stockholders. Within 30&nbsp;days from the receipt of such Offering Notice, the Investors, Select Stockholders and the other Stockholders
shall deliver a Reply Notice to the Selling Stockholder. In the event that some but not all of the Investors, Select Stockholders and the other Stockholders accept the offer of the Selling Stockholder
(those persons that accept such offer are referred to in this section as the "Purchasing Stockholders"), the Selling Stockholder shall deliver a second Offering Notice to the Purchasing Stockholders
within ten days after the expiration of the 30-day period referred to in the preceding sentence. Pursuant to the second Offering Notice, the Selling Stockholder shall offer to each
Purchasing Stockholder that proportion of the number of shares offered to non-Purchasing Stockholders that the number of shares of Common Stock owned by
such Purchasing Stockholder bears to the total number of shares of Common Stock owned by all the Purchasing Stockholders. Additional Offering Notices, as needed, shall be delivered until each
Purchasing Stockholder has been offered any remaining shares of Common Stock. Within ten days from the receipt of such Offering Notice, the Purchasing Stockholders shall deliver a second Reply Notice
to the Selling Stockholder. If by a Reply Notice any of the Investors, Select Stockholders and/or the other Stockholders accept the offer of the Selling Stockholder, such Reply Notice shall constitute
an agreement binding on the Selling Stockholder to sell, and each Purchasing Stockholder to purchase, the offered shares at the price and upon the terms of the Offering Notice of the Selling
Stockholder to the Investors, Select Stockholders and the other Stockholders subject to the provisions of paragraph&nbsp;(f) of </FONT><FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2>
hereof. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.10</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Sale of Shares Upon Termination of Employment of Employee Stockholder"</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the provisions of
Sections 2.6 and 2.11 hereof, if at any time an Employee Stockholder shall for any reason (including, but not limited to, Retirement) cease to be an officer or employee of the Company, then such
Employee Stockholder shall offer all shares of Common Stock then owned or held by the Employee Stockholder for sale at a price per share equal to the Book Value Price in accordance with the following
provisions of this Section&nbsp;2.10. </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Offer by Employee Stockholder to the Company</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Within 10&nbsp;days of the date of termination of the
Employee Stockholder's employment, the Employee Stockholder shall deliver an Offering Notice to the Company. Within 30&nbsp;days from the receipt of such Offering Notice, the Company shall deliver a
Reply Notice to the Employee Stockholder. If by its Reply Notice the Company rejects the offer of the Employee Stockholder, the Company shall provide to the Employee Stockholder in such Reply Notice
the name, address (for purposes of </FONT><FONT SIZE=2><I>Section&nbsp;3.3</I></FONT><FONT SIZE=2> hereof) and number of shares of Common Stock owned by each of the Select Stockholders and the
other Stockholders (and the Investors, in the case of an Executive Stockholder). If by its Reply Notice the Company accepts the offer of the Employee Stockholder, such Reply Notice shall constitute an
agreement binding upon the Employee Stockholder to sell and the Company to purchase the offered shares at a price per share equal to the price and upon the terms of the Offering Notice of the Employee
Stockholder subject to the provisions of paragraph&nbsp;(f) of </FONT><FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2> hereof. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>15</FONT></P>

<HR NOSHADE>
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<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Offer by Employee Stockholder to the Investors, Select Stockholders and the Other Stockholders</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If the
Company shall not have accepted the offer of the Employee Stockholder pursuant to paragraph&nbsp;(a) of this </FONT><FONT SIZE=2><I>Section&nbsp;2.10</I></FONT><FONT SIZE=2>, the Employee
Stockholder shall, upon receipt of the Reply Notice from the Company or upon the expiration of the 30-day period referred to in paragraph&nbsp;(a) of this </FONT> <FONT SIZE=2><I>Section&nbsp;2.10</I></FONT><FONT SIZE=2>, whichever shall first occur,
deliver an Offering Notice to the Select Stockholders and the other Stockholders (and the Investors,
in the case of an Executive Stockholder). Within 30&nbsp;days from the receipt of such Offering Notice, the Investors, the Founding Stockholders and the other Stockholders shall deliver a Reply
Notice to the Employee Stockholder. In the event that some but not all of the Investors, the Select Stockholders and the other Stockholders accept the offer of the Employee Stockholder (those persons
that accept such offer are referred to in this section as the "Purchasing Stockholders"), the Employee Stockholder shall deliver a second Offering Notice to the Purchasing Stockholders within ten days
after the expiration of the 30-day period
referred to in the preceding sentence. Pursuant to the second Offering Notice, the Employee Stockholder shall offer to each Purchasing Stockholder that proportion of the number of shares offered to
non-Purchasing Stockholders that the number of shares of Common Stock owned by such Purchasing Stockholder bears to the total number of shares of Common Stock owned by all the Purchasing
Stockholders. Additional Offering Notices, as needed, shall be delivered until each Purchasing Stockholder has been offered any remaining shares of Common Stock. Within ten days from the receipt of
such Offering Notice, the Purchasing Stockholders shall deliver a second Reply Notice to the Employee Stockholder. If by a Reply Notice any of the Investors, Select Stockholders and/or the other
Stockholders accept the offer of the Employee Stockholder, such Reply Notice shall constitute an agreement binding on the Employee Stockholder to sell, and each Purchasing Stockholder to purchase, the
offered shares at the price and upon the terms of the Offering Notice of the Employee Stockholder to the Investors, Founding Stockholders and the other Stockholders subject to the provisions of
paragraph&nbsp;(f) of </FONT><FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2> hereof. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.11</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Disability of Employee"</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Subject to the provisions of Section&nbsp;2.10 hereof, when an Employee
Stockholder becomes Disabled, such Employee Stockholder or the representative of such Employee Stockholder shall offer all shares of Common Stock then owned or held by such Employee Stockholder for
sale at a price per share equal to the Book Value Price, all in accordance with the following provisions of this Section&nbsp;2.11. As used in this Section&nbsp;2.11, the term "Selling
Stockholder" shall mean the Employee Stockholder or his representative, as the case may be. </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Offer by Selling Stockholder to the Company</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Selling Stockholder shall deliver an Offering Notice to the
Company, and within 30&nbsp;days from the receipt of such Offering Notice, the Company shall deliver a Reply Notice to the Selling Stockholder. If by its Reply Notice the Company rejects the offer
of the Selling Stockholder, the Company shall provide to the Selling Stockholder in such Reply Notice the name, address (for purposes of </FONT> <FONT SIZE=2><I>Section&nbsp;3.3</I></FONT><FONT SIZE=2> hereof) and number of shares of Common Stock
owned by the Founding Stockholders and each of the other Stockholders (and the
Investors, in the case of an Executive Stockholder). If by its Reply Notice the Company accepts the offer of the Selling Stockholder, such Reply Notice shall constitute an agreement binding upon the
Selling Stockholder to sell and the Company to purchase the offered shares at the price and upon the terms of the Offering Notice of the Selling Stockholder subject to the provisions of
paragraph&nbsp;(f) of </FONT><FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2> hereof. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>16</FONT></P>

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<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Application of Disability Insurance Proceeds; Terms of Purchase</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In connection with any purchase and sale of
Common Stock pursuant to paragraph&nbsp;(a) of this </FONT><FONT SIZE=2><I>Section&nbsp;2.11</I></FONT><FONT SIZE=2>, if the aggregate amount of the proceeds of any insurance policies obtained on
the disability of the Employee Stockholder for the repurchase of Common Stock pursuant to this Agreement that have been collected by the Company are equal to or in excess of the purchase price of such
Employee Stockholder's shares of Common Stock, then on the Closing Date such purchase price shall be paid by check to the Selling Stockholder. Any excess insurance proceeds shall be retained by the
Company. If the aggregate amount of the proceeds of any insurance policies obtained on the disability of the Employee Stockholder pursuant to this Agreement that have been collected by the Company are
not equal to or in excess of the aggregate purchase price of such Stockholder's shares of Common Stock, then on the Closing Date the aggregate amount of such proceeds shall be paid by check to the
Selling Stockholder and the Company shall pay the balance of the purchase price for such shares in the manner authorized by paragraph&nbsp;(f) of </FONT> <FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2> hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Offer by Selling Stockholder to the Investors, Select Stockholders and the Other Stockholders</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If the
Company shall not have accepted the offer of the Selling Stockholder pursuant to paragraph&nbsp;(a) of this </FONT><FONT SIZE=2><I>Section&nbsp;2.11</I></FONT><FONT SIZE=2>, the Selling
Stockholder shall, upon receipt of the Reply Notice from the Company or upon the expiration of the 30-day period referred to in paragraph&nbsp;(a) of this </FONT> <FONT SIZE=2><I>Section&nbsp;2.11</I></FONT><FONT SIZE=2>, whichever shall first occur,
deliver an Offering Notice to the Select Stockholders and the other Stockholders (and the Investors,
in the case of an Executive Stockholder). Within 30&nbsp;days from the receipt of such Offering Notice, the Investors, the Select Stockholders and the other Stockholders shall deliver a Reply Notice
to the Selling Stockholder. In the event that some but not all of the Investors, the Select Stockholders and the other Stockholders accept the offer of the Selling Stockholder (those persons that
accept such offer are referred to in this section as the "Purchasing Stockholders"), the Selling Stockholder shall deliver a second Offering Notice to the Purchasing Stockholders within ten days after
the expiration of the 30-day period referred to in the preceding sentence. Pursuant to the second Offering Notice, the Selling Stockholder shall offer to each Purchasing Stockholder that
proportion of the number of shares offered to non-Purchasing Stockholders that the number of shares of Common Stock owned by such Purchasing Stockholder bears to the total number of shares
of Common Stock owned by all the Purchasing Stockholders. Additional Offering Notices, as needed, shall be delivered until each Purchasing Stockholder has been offered any remaining shares of Common
Stock. Within ten days from the receipt of such Offering Notice, the Purchasing Stockholders shall deliver a second Reply Notice to the Selling Stockholder. If by a Reply Notice any of the Investors,
Select Stockholders and/or the other Stockholders accept the offer of the Selling Stockholder, such Reply Notice shall constitute an agreement binding upon the Selling Stockholder to sell, and each
Purchasing Stockholder to purchase, the offered shares at the price and upon the terms stated in the Offering Notice of the Selling Stockholder to the Investors, Select Stockholders and the other
Stockholders subject to the provisions of paragraph&nbsp;(f) of </FONT><FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2> hereof. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.12</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Sale of 50% or More of the Outstanding Voting Common Stock"</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The provisions of Sections 2.4 through 2.11
shall not apply to any contemporaneous sale of or agreement to sell (whether for cash, securities or other property) by the Founding Stockholders and/or one or more Executive Stockholders or
Stockholders of the Company an aggregate of 50% or more of the then outstanding shares of Common Stock having the right to vote for directors of the Company to a single person or a group of persons
pursuant to a single plan or related plans for the sale of such shares (such person or group being referred to in this Section&nbsp;2.12 as the "Purchasers"). In the event of any such sale or
proposed sale, the stockholders of the Company making or agreeing to make such sale, other than the Investors (the "Selling Group") shall have the option to purchase (pro rata in accordance with their
respective holdings of shares of Common Stock or in such other proportions as the members of the Selling Group may agree upon), or cause the purchase of, all (but not less than all) the shares of
Common Stock of the Executive Stockholders and Stockholders then owning shares of Common Stock who are not parties </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>17</FONT></P>

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<P><FONT SIZE=2>to
such sale or agreement of sale (the "Other Stockholders"), and each of the Other Stockholders shall have the option to require the Selling Group to purchase (pro rata in accordance with their
respective holdings of shares of Common Stock or in such other proportions as the members of the Selling Group may agree upon), or cause the purchase of, all (but not less than all) of the shares of
Common Stock then owned by such Other Stockholders, all in accordance with the following provisions of this Section&nbsp;2.12. As used in this Section&nbsp;2.12, the term "Sale" means a sale made
or agreed to by the Selling Group in the manner described in the first sentence of this Section&nbsp;2.12, and the term "Consummation Date" means the date fixed for the consummation of a Sale.
Notwithstanding anything herein to the contrary, no Investor, whether or not participating in any Sale, shall be deemed to be a member of any Selling Group or have any obligation under this </FONT> <FONT SIZE=2><I>Section&nbsp;2.12</I></FONT><FONT
SIZE=2>. </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Selling Group Option to Purchase All Shares</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Not less than 30&nbsp;days prior to the Consummation Date,
the Selling Group shall give written notice to the Other Stockholders setting forth the names of the Purchasers, the terms and conditions of the Sale and the Consummation Date. If the Selling Group
elects to exercise its option to purchase, or cause the purchase of, all of the shares of Common Stock owned by the Other Stockholders, the notice shall so state. If such option is not exercised, the
notice shall set forth an address for the giving of notice by the Other Stockholders of the exercise of the option of the Other Stockholders pursuant to paragraph&nbsp;(b) of this </FONT> <FONT SIZE=2><I>Section&nbsp;2.12</I></FONT><FONT SIZE=2>. In
the event of the exercise of the option by the Selling Group, the Other Stockholders shall, on the Consummation Date and
conditioned upon and contemporaneously with the Sale, sell the shares of Common Stock owned by them to the Selling Group, or to the Purchasers if so designated in the notice of the Selling Group, upon
terms and conditions the same as those of the Sale. If the Selling Group exercises such option and elects to purchase (rather than cause the purchase of) the shares of Common Stock owned by the Other
Stockholders, then the Selling Group must resell to the Purchasers the shares of Common Stock so purchased contemporaneously with the Sale and upon terms and conditions the same as those of the Sale.
By execution of this Agreement, each Stockholder hereby irrevocably designates and appoints the members of any Selling Group, or any one of such members, as such Stockholder's
attorney-in-fact to transfer such Stockholder's shares of Common Stock on the books of the Company in connection with any sale made or required to be made by such Stockholder
pursuant to this paragraph&nbsp;(a), and each Stockholder hereby agrees to execute and deliver such instruments of conveyance and transfer and take such other action as the Selling Group or the
Purchasers may reasonably require to carry out the terms and provisions of this paragraph&nbsp;(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Other Stockholders Option to Cause Sale of All Shares</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If the Selling Group does not elect to purchase, or
cause the purchase of, the shares of Common Stock of the Other Stockholders by the exercise of the option granted the Selling Group under the foregoing provisions of this </FONT> <FONT SIZE=2><I>Section&nbsp;2.12</I></FONT><FONT SIZE=2>, each Other
Stockholder shall have the option to require the Selling Group to purchase, or cause the purchase of, all (but not less
than all) the shares of Common Stock owned by such Other Stockholder upon the terms and conditions of the Sale as set forth in the notice furnished pursuant to paragraph&nbsp;(a) of this </FONT> <FONT SIZE=2><I>Section&nbsp;2.12</I></FONT><FONT
SIZE=2>. Such option may be exercised by any Other Stockholder by the giving of written notice by such Other Stockholder of the exercise of
such option to the Selling Group at the address set forth in the notice referred to in paragraph&nbsp;(a) of this </FONT><FONT SIZE=2><I>Section&nbsp;2.12</I></FONT><FONT SIZE=2> not less than
ten days prior to the Consummation Date. The Selling Group shall, on the Consummation Date and conditioned upon and contemporaneously </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>18</FONT></P>

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<UL>

<P><FONT SIZE=2>with
the Sale, purchase, or cause the purchase by the Purchasers of, the shares of Common Stock of each Other Stockholder giving such notice, such purchase to be upon terms and conditions the same as
those of the Sale. If any Other Stockholder exercises such Other Stockholder's option under this paragraph&nbsp;(b), and if the Selling Group has elected to purchase (rather than cause the purchase
of) the shares of Common Stock owned by such Other Stockholder, then the Selling Group must resell to the Purchasers the shares of Common Stock so purchased contemporaneously with the Sale and upon
terms and conditions the same as those of the Sale. If the Selling Group shall fail to so purchase, or cause the purchase of, the shares of Common Stock of such Other Stockholders as provided in this
paragraph&nbsp;(b), then the Selling Group may not consummate the Sale. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.13</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Attempted Breach</I></FONT><FONT SIZE=2>".&nbsp;&nbsp;&nbsp;&nbsp;Any attempted Disposition in breach of this Agreement shall constitute an offer made by
the Select Stockholder or the Stockholder, as the case may be, or the heirs, legal representatives, successors and assigns of such Select Stockholder or Stockholder, attempting or making any such
Disposition, and the provisions of </FONT><FONT SIZE=2><I>Section&nbsp;2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.11 or 2.12</I></FONT><FONT SIZE=2>, whichever shall be applicable, shall be deemed to be in
effect upon such attempted Disposition, and an Offering Notice shall be deemed to have been delivered in connection therewith; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, however, that
the date of delivery of the first Offering Notice for purposes of any such Section shall be deemed to be the date as of which the party to whom such Offering Notice is deemed to be sent has actual
knowledge of such attempted Disposition. The party to whom such Offering Notice is deemed to be sent shall, upon obtaining actual knowledge of such attempted Disposition, deliver a notice of such
attempted Disposition to the Company and the Company shall thereupon deliver a notice of such attempted Disposition to each person to whom the shares of Common Stock covered by such attempted
Disposition may thereafter be required to be offered pursuant to the Section of this Agreement governing such attempted Disposition. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>SECTION
3<BR></FONT> <FONT SIZE=2><I>SELECT STOCKHOLDER TRANSFER RESTRICTIONS</I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following provisions of this Section&nbsp;3 (other than the provision set forth in the first sentence of Section&nbsp;3.1 (a)) shall terminate immediately prior to a Qualified
Public Offering and shall not apply with respect to any Qualified Public Offering. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"General Restriction".</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Each
Select Stockholder agrees that neither he nor any of his permitted transferees as contemplated below will directly or indirectly offer, transfer, donate, sell,
assign, pledge, hypothecate or otherwise dispose of (any such action a "Transfer") all or any portion of the shares of capital stock of the Company now owned or hereafter acquired by him or them,
except (i)&nbsp;to permitted transferees as permitted by Section&nbsp;3.l(b) and (ii)&nbsp;in bona fide sales to third parties for value following compliance with this Section&nbsp;3. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>19</FONT></P>

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<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Permitted
Transfers by a Select Stockholder shall include Transfers (i)&nbsp;to the Select Stockholder's spouse or children (including adopted children), to a trust of
which he is the settlor or a trustee for the benefit of his spouse or children (including adopted children) or to charitable institutions, and (ii)&nbsp;Transfers upon a Select Stockholder's death
to his heirs, executors or administrators or to a trust under his or her will or to his or her guardian or conservator, </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that in any such case
the transferee shall have entered into an enforceable written agreement providing that all shares so Transferred shall continue to be subject to all provisions of this Agreement as if such shares were
still held by the Select Stockholder, and provided further that such permitted transferee shall not be permitted to make any further Transfers without complying with the provisions of this
Section&nbsp;3. Anything to the contrary in this Agreement notwithstanding, Transfers under this Section&nbsp;3.l(b) shall not be subject to Section&nbsp;3.2 or 3.3 and transferees permitted by
this Section&nbsp;3.1(b) shall take any shares so Transferred subject to all obligations under this Agreement as if such shares were still held by the Stockholder whether or not they so expressly
agree. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Right of First Refusal"</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If at any time on or after the date hereof a Select Stockholder (including for all
purposes of this Section&nbsp;3.2, any permitted transferee of his shares pursuant to Section&nbsp;3.1(b)) receives a bona fide offer to purchase any or all of his shares (the "Offer") from an
unaffiliated third party (the "Offeror") which such Select Stockholder wishes to accept, the Select Stockholder may Transfer such shares pursuant to and in accordance with the following provisions of
this Section&nbsp;3.2: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Such
Select Stockholder shall cause the Offer to be reduced to writing and shall notify the Company, the Investors and the other Select Stockholders in writing of his
desire to accept the Offer and otherwise comply with the provisions of this Section&nbsp;3. The Select Stockholder's notice shall constitute an irrevocable offer to sell such shares to the Company,
the Investors and the other Select Stockholders, at a purchase price equal to the price contained in, and on the same terms and conditions of, the Offer. The notice shall be accompanied by a true copy
of the Offer (which shall identify the Offeror). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;The
Company shall have the right to offer to purchase all, but not less than all of the shares covered by the Offer. To exercise such right, the Company shall, within
ten (10)&nbsp;days of receipt of such written notice (the "Company Notice Period"), communicate in writing such election to the transferring Select Stockholder (with copies to the Investors). Such
written election to purchase shall constitute a valid, legally binding and enforceable agreement for the sale and purchase of all of the shares covered by the Offer. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;In
the event the Company does not exercise its right pursuant to Section&nbsp;3.2(b), the transferring Select Stockholder shall notify the Investors and the other
Select Stockholders in writing of such fact (the "Investor Notice"). At any time within 20&nbsp;days after receipt by the Investors of the Investor Notice (the "Investor Notice Period"), one or more
of the Investors holding at least ten percent (10%) of the Securities and the other Select Stockholders may, subject to the terms hereof, choose to accept the Offer with respect to all of the shares
covered thereby by giving written notice to the Select Stockholder proposing to sell to such effect; provided that if two or more of the Investors and/or the other Select Stockholders choose, in the
aggregate, to accept such Offer with respect to an aggregate number of shares which exceeds the number of shares subject to such Offer and available for purchase, the number of shares for which the
Offer may be accepted by each such Investor and Select Stockholder shall, in each case, be reduced by the smallest number of shares as shall be necessary to reduce the aggregate number of shares for
which the Offer may be accepted by the electing Investors and Select Stockholders as </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>20</FONT></P>

<HR NOSHADE>
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<UL>
<BR>

<P><FONT SIZE=2>contemplated
herein to the number of shares for which the Offer was made and which are available for purchase by them; provided further, that the number of shares for which any Investor or Select
Stockholder may accept such Offer as contemplated herein shall in no event be reduced to less than the number of shares which bears the same proportion to the total number of shares which are
available for purchase as the number of shares of Common Stock then held by such Investor or Select Stockholder (on an as converted basis as contemplated by the Company's Certificate of Designations,
Preferences and Rights of Series&nbsp;A Convertible Redeemable Preferred Stock and Redeemable Preferred Stock (the "Certificate of Designation") bears to the total number of shares of Common Stock
then held by all Investors and Select Stockholders (on an as converted basis as contemplated by the Certificate of Designation) accepting such Offer. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;If
shares covered by any Offer are purchased pursuant to Sections 3.2(b) or (c), such purchase shall be (i)&nbsp;at the same price and on the same terms and conditions
as the Offer if the Offer is for cash and/or notes or (ii)&nbsp;if the Offer includes any consideration other than cash and notes, then at the equivalent all cash price for such other consideration.
The closing of the purchase of the shares subject to an Offer pursuant to this Section&nbsp;3.2 shall take place within 15&nbsp;days after the expiration of the Company Notice Period or Investor
Notice Period, as applicable, or upon satisfaction of any governmental approval requirements, if later, by delivery by the respective purchasers of the purchase price for shares being purchased as
provided above to the selling Select Stockholder against delivery of the certificates representing the shares so purchased, appropriately endorsed for Transfer by such Select Stockholder. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Right of Co-Sale</I></FONT><FONT SIZE=2>".&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;In
the event any Select Stockholder (including for all purposes of this Section&nbsp;3.3 any permitted transferees of a Select Stockholder as contemplated by
Section&nbsp;3.1) proposes to sell any shares or receives an Offer and any of such shares are not purchased pursuant to Section&nbsp;3.2 above, such Select Stockholder (a "Transferring
Stockholder") may transfer the shares subject thereto only following compliance with this Section&nbsp;3.3 and Section&nbsp;3.4 below. In such event, immediately following the last day of the
Investor Notice Period, the Transferring Stockholder shall give an additional notice of the proposed sale to the Investors, once again enclosing a copy of the Offer, if applicable, which shall
identify the Offeror and the number of shares proposed to be sold (the "Co-Sale Notice"). Upon the election of an Investor or Investors holding at least ten percent (10%) of the capital
stock of the Company on an as-converted to Common Stock basis, each of the Investors shall have the right, exercisable upon written notice to the Transferring Stockholder and any such
permitted transferee within 20&nbsp;days after delivery to it of the Co-Sale Notice (the "Co-Sale Notice Period"), to participate in the sale on the terms and conditions
stated in the Co-Sale Notice, except that any Investor who holds shares of the Company's Series&nbsp;A Convertible Redeemable Preferred Stock ("Convertible Preferred Stock") shall be
permitted to sell to the relevant purchaser shares of Common Stock acquired upon conversion thereof or, at its election, either (i)&nbsp;an option to acquire such Common Stock when it receives the
same upon such conversion at the election of such Investor or as otherwise provided in the Company's Certificate of Incorporation or the certificate of designations, preferences and rights related to
such Preferred Stock, in each case as amended, with the same effect as if Common Stock were being conveyed, or (ii)&nbsp;shares of Convertible Preferred Stock provided the acquiror pays the full
liquidation preference of the shares being sold plus the relevant price per share for the underlying Common Stock. Each of the Investors shall have the right to sell all or any portion of its or his
shares on the terms and conditions in the Co-Sale Notice (subject to the foregoing), with the maximum number of shares equal to the product obtained by multiplying the number of shares
proposed to be sold by the relevant Transferring Stockholder and any of its permitted transferees as described in the Co-Sale Notice by a fraction, the numerator of which is the number of
shares of Common Stock owned by such Investor on the date of the Co-Sale Notice on an as converted basis, and the denominator of </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>21</FONT></P>

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<P><FONT SIZE=2>which
is the sum of the number of shares of Common Stock owned by the Select Stockholders and their permitted transferees and the number of shares of Common Stock owned by all of the Investors
(including all assignees of the Investors) as of the date of the Co-Sale Notice on an as converted basis. To the extent one or more Investors elect not to sell the full amount of shares
which they are entitled to sell pursuant to this Section&nbsp;3.1, the other participating Investors rights to sell shares shall be increased proportionately to their relative holdings of capital
stock of the Company on an as converted to common stock basis, such that each Investor shall have the right to sell the full number of shares allocable to it in any transaction subject to this
Section&nbsp;3.1(a) even if some Investors or Select Stockholders elect not to participate. Within five days after the expiration of the Co-Sale Notice Period, the Transferring
Stockholder shall notify each participating Investor of the number of shares held by such Investor that will be included in the sale and the date on which the sale will be consummated, which shall be
no later than the later of (i)&nbsp;thirty (30)&nbsp;days after the delivery of the Co-Sale Notice and (ii)&nbsp;the satisfaction of all governmental approval requirements, if any.
Each of the Investors may effect its participation in any sale hereunder by delivery to the purchaser, or to the Transferring Stockholder for transfer to the purchaser, of one or more instruments,
certificates and/or option agreements, property endorsed for transfer, representing the shares it elects to sell therein, provided that no Investor shall be required to make any representations or
warranties or to provide any indemnities in connection therewith other than with respect to title to the stock being conveyed. At the time of consummation of the sale, the purchaser shall remit
directly to each Investor that portion of the sale proceeds to which each such Investor is entitled by reason of its participation
therein. No shares may be purchased by a purchaser from the Transferring Stockholder or any of his permitted transferees unless the purchaser simultaneously purchases from the Investors all of the
shares that they have elected to sell pursuant to this Section&nbsp;3.1(a). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Any
shares held by a Transferring Stockholder or any of his permitted transferees that the Transferring Stockholder or transferee desires to sell following compliance
with Section&nbsp;3.2, may be sold to the purchaser only during the ninety (90)-day period after the expiration of the Co-Sale Notice Period and only on terms no more
favorable to the Transferring Stockholder and such transferees than those contained in the Co-Sale Notice. Promptly after such sale, such Transferring Stockholder shall notify the
Investors of the consummation thereof and shall furnish such evidence of the completion and time of completion of such sale and of the terms thereof as may reasonably be requested by the Investors. So
long as the purchaser is neither a party, nor an affiliate or relative of a party, to this Agreement, such purchaser shall take the shares so transferred free and clear of any further restrictions of
this Agreement. If, at the end of such 90-day period, such Transferring Stockholder and any of his transferees have not completed the sale of such shares as aforesaid, all the restrictions
on Transfer contained in this Agreement shall again be in effect with respect to such shares. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Exclusion</I></FONT><FONT SIZE=2>".&nbsp;&nbsp;&nbsp;&nbsp;The foregoing provisions of Sections 3.3 shall not be applicable to any transfer among the
Select Stockholders so long as (i)&nbsp;the Founding Stockholders own and/or have voting control of at least 6,049,720 shares of Common Stock and of the class of Common Stock for all purposes, and
(ii)&nbsp;such transfers do not exceed 120,000 shares of Common Stock in the aggregate, in each case subject to adjustments for stock splits, stock dividends and the like. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>22</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Assignment</I></FONT><FONT SIZE=2>".&nbsp;&nbsp;&nbsp;&nbsp;If all Select Stockholders (and their permitted transferees, if any) propose concurrent
Disposition which are subject to Section&nbsp;3.3, then the provisions of Sections 2.5 and Section&nbsp;2.13 shall apply to each such proposed Disposition independently. Each Investor shall have
the right to assign its rights under Section&nbsp;2 in connection with any transaction or series of related transactions involving the Disposition to one or more transferees of at least 390,000
shares of capital stock of the Company (subject to adjustments for stock splits, stock dividends and the like and aggregating all contemporaneous Dispositions by two or more Investors), or to any TA
Funds or JMI Funds. Upon any such Disposition such transferee or TA Fund or JMI Fund thereupon shall be deemed an "</FONT><FONT SIZE=2><I>Investor</I></FONT><FONT SIZE=2>" for purposes of this
Section&nbsp;3. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>SECTION
4<BR></FONT> <FONT SIZE=2><I>MISCELLANEOUS</I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Insurance</I></FONT><FONT SIZE=2>."&nbsp;&nbsp;&nbsp;&nbsp;To provide a fund with which to purchase shares of the Common Stock upon the death and/or
disability of an Individual Stockholder, the Company may, at its election, apply for insurance on the life and/or disability of a Stockholder. Should the Company elect to apply for insurance on the
life and/or disability of a Stockholder, the Stockholder shall cooperate fully with the Company in connection with the making of such applications. The Company shall be the owner and beneficiary of
all insurance policies issued pursuant to such applications. The Company shall pay all premiums on such insurance policies. The Company may apply any dividends on such policies toward the payment of
premiums. However, if the Company shall obtain insurance on the life and/or disability of a Stockholder, the Company shall not diminish the aggregate amount of proceeds payable upon the death and/or
disability of the Stockholder under the policies evidencing such insurance unless and until the termination of this Agreement and the fulfillment of all obligations hereunder; except that in the event
that the Stockholder's ownership of all or substantially all of such Stockholder's shares of Common Stock shall be terminated other than by reason of the death or disability of the Stockholder, the
Company may diminish the aggregate amount of the proceeds payable upon the death and/or disability of the Stockholder to an amount not less than the principal amount of any note issued by the Company
to the Stockholder pursuant to the terms of this Agreement. Upon the death or disability, as the case may be, of the Stockholder prior to the sale of all of the Stockholder's shares of Common Stock to
the Company, the Company shall collect all proceeds of such policies, and the aggregate amount of such proceeds shall be applied by the Company to the purchase of the shares of Common Stock of the
Stockholder. If however, the aggregate amount of the proceeds of such policies exceeds the price at which such shares of Common Stock are to be purchased pursuant to this Agreement, then the Company
shall retain the excess amount. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Preemptive Rights</I></FONT><FONT SIZE=2>."&nbsp;&nbsp;&nbsp;&nbsp;No Stockholder shall have preemptive rights upon the proposal of the Company to issue,
or the issuance of, shares to any persons or entities. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>23</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Notices</I></FONT><FONT SIZE=2>."&nbsp;&nbsp;&nbsp;&nbsp;All notices (including Offering Notices and Reply Notices), requests, consents and other
communications under this Agreement shall be in writing, shall be sent to the address described below, and shall be deemed to have been delivered (a)&nbsp;on the date mailed, if sent certified mail,
postage prepaid, return receipt requested, (ii)&nbsp;on the date received, if personally delivered or (iii)&nbsp;on the date sent by telegraph, if telegraphed and confirmed: </FONT></P>

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<TABLE WIDTH="77%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2>(i)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="78%"><FONT SIZE=2>if to Company, to:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="13%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="78%"><FONT SIZE=2><BR>
PROS Strategic Solutions,&nbsp;Inc.<BR>
3223 Smith Street, Suite 100<BR>
Houston, Texas 77006<BR>
Attention: President and Chief Executive Officer</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="13%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2><BR>
(ii)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="78%"><FONT SIZE=2><BR>
if to the Investors, to:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="13%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="78%"><FONT SIZE=2><BR>
TA Associates,&nbsp;Inc.<BR>
70 Willow Road, Suite 100<BR>
Menlo Park, California 94025<BR>
Attention: Kurt Jaggers</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="13%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2><BR>
(iii)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="78%"><FONT SIZE=2><BR>
if to the Founding Stockholders, to:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="13%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="78%"><FONT SIZE=2><BR>
Ronald F. Woestemeyer and<BR>
Mariette Melchior Woestemeyer<BR>
3980 Inverness Drive<BR>
Houston, Texas 77019</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="13%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%" ALIGN="RIGHT"><FONT SIZE=2><BR>
(iv)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="78%"><FONT SIZE=2><BR>
if to any Stockholder, to the address of such Stockholder as it appears on </FONT><FONT SIZE=2><I>Exhibit&nbsp;A</I></FONT><FONT SIZE=2> of this Agreement.</FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>Any
party hereto may designate a different address by notice to the other parties sent as provided under this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Governing Law</I></FONT><FONT SIZE=2>."&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall be subject to and governed by the laws of the State of Delaware. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Successors and Assigns</I></FONT><FONT SIZE=2>."&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall be binding upon the Company, the Investors, the Founding
Stockholders, the Stockholders and their successors and assigns. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Amendment; Waiver</I></FONT><FONT SIZE=2>."&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be amended from time to time by an instrument in writing signed by
the Company and the holders of a majority of the total number of shares of Common Stock held by the Investors, the Founding Stockholders and the Stockholders; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT
SIZE=2><I>however</I></FONT><FONT SIZE=2>, that no amendment shall impose any additional material obligation on the Investors,
the Founding Stockholders or any Stockholder without that party's written consent to such amendment. No failure or delay on the part of any party in exercising any power or right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. No modification or waiver of any provision of this Agreement nor consent to any departure by any party therefrom shall in any
event be effective unless the same shall be in writing, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>24</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Calculation of Issued and Outstanding Stock</I></FONT><FONT SIZE=2>."&nbsp;&nbsp;&nbsp;&nbsp;In connection with any calculation required to be made under
this Agreement based upon the number of shares of Common Stock issued and outstanding at the time of such calculation, any shares of Common Stock (i)&nbsp;then owned or held by the Company or any
consolidated subsidiary shall not be deemed to be issued and outstanding for purposes of such calculation, and (ii)&nbsp;subject to an option, or into which any security of the Company may be
converted or exchanged, shall be deemed to be issued and outstanding for purposes of such calculation. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Gender; Number</I></FONT><FONT SIZE=2>."&nbsp;&nbsp;&nbsp;&nbsp;Whenever the context requires, the gender of all words used herein shall include the
masculine, feminine and neuter, and the number of all words shall include the singular and the plural. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Termination</I></FONT><FONT SIZE=2>."&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall terminate automatically upon (i)&nbsp;the bankruptcy (whether by a
court of competent jurisdiction or voluntarily) or dissolution of the Company, (ii)&nbsp;the occurrence of any event that reduces the number of stockholders of the Company to one, (iii)&nbsp;the
merger or consolidation of the Company with another corporation (provided the Company is not the surviving corporation of such a merger or consolidation and provided further that the surviving
corporation is not owned or controlled, directly or indirectly, by the stockholders of the Company), (iv)&nbsp;a Sale effected pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;2.12</I></FONT><FONT SIZE=2> hereof, (v)&nbsp;a Qualified Public Offering
or (vi)&nbsp;the written agreement of the Investors and of the holders of
two-thirds of the Common Stock that is subject to this Agreement at the time of such termination; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that the provisions of </FONT><FONT
SIZE=2><I>Sections 2.2 and 3.10</I></FONT><FONT SIZE=2> shall survive the termination of this Agreement
under the foregoing provisions of this sentence and shall thereafter continue in effect as provided in such Sections. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Market Stand-Off Agreement</I></FONT><FONT SIZE=2>."&nbsp;&nbsp;&nbsp;&nbsp;In connection with any underwritten public offering after the
effective date of this Agreement pursuant to an effective registration statement under the Securities Act covering the offering and sale of shares of Common Stock, or of any equity security that as a
part of a unit includes Common Stock, for the account of the Company, each of the Founding Stockholders and each of the Stockholders, if and to the extent requested in good faith by the Company and
the managing underwriter of securities of the Company, shall agree not to sell or otherwise transfer or dispose of any shares of Common Stock held by him or her (except shares of Common Stock included
in the registration statement relating to such underwritten public offering) at any time during a period following the effective date of the registration statement relating to such underwritten public
offering; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that in no event shall such period exceed 180&nbsp;days. In order to
enforce the foregoing covenant, subject to the foregoing exceptions, the Company may impose stop-transfer instructions with respect to the shares of Common Stock of each of the Founding
Stockholders and each of the Stockholders (and the securities of every other person subject to such restriction) until the end of such period. The provisions of this Section&nbsp;3.10 shall survive
the termination of this Agreement until the earlier to occur of (i)&nbsp;five (5)&nbsp;years following the effective date of the first Qualified Public Offering, or (ii)&nbsp;such time as the
Founding Stockholders and each of the Stockholders can sell all remaining shares of Common Stock held by him or her within a ninety (90)&nbsp;day period pursuant to Rule&nbsp;144 or 145 under the
Securities Act. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.11</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Severability</I></FONT><FONT SIZE=2>."&nbsp;&nbsp;&nbsp;&nbsp;If any term or provision contained in this Agreement is or is hereafter found to be
inconsistent with, contrary to or invalid or unenforceable under any law or official rule, regulation or order, this Agreement shall be deemed to be modified accordingly and the remaining terms and
provisions of this Agreement shall not be affected thereby and shall continue in full force and effect. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>25</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.12</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Powers of Attorney</I></FONT><FONT SIZE=2>."&nbsp;&nbsp;&nbsp;&nbsp;For the purpose of executing an Addendum Agreement attached hereto as </FONT> <FONT SIZE=2><I>Exhibit&nbsp;C</I></FONT><FONT SIZE=2> (the "Addendum
Agreement"), the Investors, the Founding Stockholders and the Stockholders hereby appoint the Company (this
"Appointment") as agent and attorney of the Investors, the Founding Stockholders and the Stockholders solely to execute such Addendum Agreement on their behalf and expressly bind themselves to the
Addendum Agreement by the Company's execution of that Addendum Agreement without further action on their part. This Appointment shall in no way limit or impair the rights or ability of the Investors,
the Founding Stockholders, or the Stockholders to bring a cause of action against or otherwise seek redress from any party, including, without limitation, the Company, to the Addendum Agreement or
this Agreement for such party's failure to perform its obligations under the Addendum Agreement or this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.13</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Execution of Instruments</I></FONT><FONT SIZE=2>."&nbsp;&nbsp;&nbsp;&nbsp;The parties to this Agreement or their duly authorized representatives shall
make, execute and deliver any documents necessary to carry out the provisions of this Agreement. This Agreement shall be binding upon the Company, the Investors, the Founding Stockholders, the
Stockholders, their heirs, legal representatives, successors and assigns. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.14</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Counterparts</I></FONT><FONT SIZE=2>."&nbsp;&nbsp;&nbsp;&nbsp;For the convenience of the parties hereto, this Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same document. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.15</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;"Section and Paragraph Headings</I></FONT><FONT SIZE=2>."&nbsp;&nbsp;&nbsp;&nbsp;The sections and paragraph headings in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of this Agreement. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>SECTION
5<BR></FONT> <FONT SIZE=2><I>SPOUSAL ACKNOWLEDGMENT</I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
spouse of each Stockholder is fully aware of, understands and fully consents and agrees to the provisions of this Agreement and its binding effect upon any community property
interest such spouse may now or hereafter own. Any obligation on the part of a Founding Stockholder or a Stockholder to sell or offer to sell his or her Common Stock shall include an obligation on the
part of his or her spouse, if any, to sell or offer to sell, as the case may be, the spouse's community property interest, if any, in such Common Stock at the same time, in the same manner and for no
additional consideration. The spouse of each Stockholder agrees that the termination of such spouse's marital relationship with the Stockholder for any reason shall not have the effect of removing any
of the shares of Common Stock otherwise subject to this Agreement from the coverage hereof and that such spouse's awareness, understanding, consent and agreement to all of the provisions hereof is
evidenced by such spouse's execution and delivery of this Agreement. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>26</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=14,SEQ=26,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="8",CHK=503924,FOLIO='26',FILE='DISK130:[07ZBA2.07ZBA76602]KT76602B.;4',USER='BSKELLE',CD=';2-APR-2007;18:34' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->

<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties hereto have executed this Agreement in multiple counterparts, each of which shall be deemed an original, as of the Effective Date. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><B>COMPANY:</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
PROS STRATEGIC SOLUTIONS,&nbsp;INC.,<BR>
a Delaware corporation</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>DAVID SAMUEL COATS</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> David Samuel Coats<BR>
President and Chief Executive Officer</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><BR><FONT SIZE=2><B>INVESTORS:</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
TA/ADVENT VIII L.P.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
TA Associates VIII LLC, its General Partner</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2>TA Associates,&nbsp;Inc., its Manager</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>KURT R. JAGGERS</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Kurt R. Jaggers<BR>
Attorney-in-Fact</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
ADVENT ATLANTIC AND PACIFIC III, L.P.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
TA Associates AAP III Partners,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;its General Partner</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2>TA Associates,&nbsp;Inc.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>KURT R. JAGGERS</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Kurt R. Jaggers<BR>
Attorney-in-Fact</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
GLENYS A. WOLF AND W. HOWARD WOLF<BR>
as husband and wife</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>GLENYS A. WOLF</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Glenys A. Wolf</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>W. HOWARD WOLF</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> W. Howard Wolf</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- insert table folio -->
<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=27,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="8",CHK=415755,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]KU76602A.;6',USER='BSKELLE',CD=';2-APR-2007;18:34' -->

<!-- end of table folio -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
TA VENTURE INVESTORS L.P.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>KURT R. JAGGERS</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Kurt R. Jaggers<BR>
Attorney-in-Fact</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
TA EXECUTIVES FUND LLC</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
TA Associates VIII LLC, its General Partner</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2>TA Associates,&nbsp;Inc., its Manager</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>KURT R. JAGGERS</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Kurt R. Jaggers<BR>
Attorney-in-Fact</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
JMI EQUITY FUND III, L.P.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
JMI Associates III, LLC, its General Partner</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>CHARLES E. NOELL</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Charles E. Noell<BR>
Managing Member</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><BR><FONT SIZE=2><B>FOUNDING STOCKHOLDERS:</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>RONALD F. WOESTEMEYER</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Ronald F. Woestemeyer</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>MARIETTE MELCHIOR WOESTEMEYER</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Mariette Melchior Woestemeyer</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- insert table folio -->
<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=28,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="8",CHK=838437,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]KU76602A.;6',USER='BSKELLE',CD=';2-APR-2007;18:34' -->

<!-- end of table folio -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><BR><FONT SIZE=2><B>STOCKHOLDERS:</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>DAVID SAMUEL COATS</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> David Samuel Coats</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>ROBERT SALTER</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Robert Salter</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Benson B. Yuen</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> E. Andrew Boyd</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Richard A. Savage</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Peter Kiernan</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Suranand Adyanthaya</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Graham E. Parker</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Mathew S. Johnson</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Jeffrey A. Key</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> William E. Salter</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- insert table folio -->
<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=29,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="8",CHK=897961,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]KU76602A.;6',USER='BSKELLE',CD=';2-APR-2007;18:34' -->
<!-- end of table folio -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Rudolfo Elizondo</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> James Earl Longmire III</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Richard A. Henderson</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Perinkulam R. Narayanan</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> William A. Hinke</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Raghu N. Debbad</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><BR><FONT SIZE=2><B>SPOUSES:</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Judy Coats</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Carolyn Salter</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Sarah Fishman Boyd</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Christine Savage</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Stacy Janelle Parker</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Kathleen Johnson</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Renee Elizabeth Key</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Ethel Marie Salter</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Martha Hinke</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Prashanthi Debbad</FONT></TD>
</TR>
</TABLE>
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<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=30,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="8",CHK=491280,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]KU76602A.;6',USER='BSKELLE',CD=';2-APR-2007;18:34' -->
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kv76602_exhibit_a_investors"> </A>
<A NAME="toc_kv76602_1"> </A>
<BR></FONT><FONT SIZE=2><I>EXHIBIT A    <BR>    <BR>    INVESTORS    <BR>    </I></FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="65%" ALIGN="LEFT"><FONT SIZE=1><B>INVESTORS<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="CENTER"><FONT SIZE=1><B>SHARES</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>COST</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="65%" VALIGN="TOP"><FONT SIZE=2><B>TA/Advent VIII, L.P.</B></FONT><FONT SIZE=2><BR>
70 Willow Road, Suite 100<BR>
Menlo Park, California 94025</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>2,411,228</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>15,372,579.58</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="65%" VALIGN="TOP"><BR><FONT SIZE=2><B>Advent Atlantic and Pacific III, L.P.</B></FONT><FONT SIZE=2><BR>
70 Willow Road, Suite 100<BR>
Menlo Park, California 94025</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
452,559</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
2,885,251.84</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="65%" VALIGN="TOP"><BR><FONT SIZE=2><B>TA Executives Fund LLC</B></FONT><FONT SIZE=2><BR>
70 Willow Road, Suite 100<BR>
Menlo Park, California 94025</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
44,345</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
282,720.00</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="65%" VALIGN="TOP"><BR><FONT SIZE=2><B>TA Venture Investors, L.P.</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
48,224</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
307,448.58</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="65%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="65%" VALIGN="TOP"><FONT SIZE=2>70 Willow Road, Suite 100<BR>
Menlo Park, California 94025</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="65%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
Subtotal (TA Funds)</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
2,956,356</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
18,848,000.00</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="65%" VALIGN="TOP"><BR><FONT SIZE=2><B>JMI Equity Fund III, L.P.</B></FONT><FONT SIZE=2><BR>
12680 High Bluff Drive, 2nd Floor<BR>
San Diego, California 92130</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
933,586</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
5,952,000.00</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="65%" VALIGN="TOP"><BR><FONT SIZE=2><B>Glenys A. Wolf and William H. Wolf,</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
31,370</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><BR>
200,000.00</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="65%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD WIDTH="65%" VALIGN="TOP"><FONT SIZE=2>as husband and wife<BR>
1404 North Boulevard<BR>
Houston, Texas 77006</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD WIDTH="65%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2><B>TOTAL</B></FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>3,921,312</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%" VALIGN="TOP"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>25,000,000.00</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="65%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%" ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
</TR>
</TABLE>
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<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=31,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="8",CHK=580724,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]KV76602A.;5',USER='BSKELLE',CD=';2-APR-2007;18:34' -->
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<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kw76602_exhibit_b_list_of_stockholders"> </A>
<A NAME="toc_kw76602_1"> </A>
<BR></FONT><FONT SIZE=2><B><I>Exhibit&nbsp;B    <BR>    <BR>    List of Stockholders    <BR>    </I></B></FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="33%" ALIGN="LEFT"><FONT SIZE=1><B>STOCKHOLDER:<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="8%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="60%" ALIGN="CENTER"><FONT SIZE=1><B>ADDRESS:</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="33%"><FONT SIZE=2>David Samuel Coats<BR>
Spouse: Judy Coats</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2>7 Marilane<BR>
Houston, Texas 77007</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="33%"><FONT SIZE=2><BR>
Robert Salter<BR>
Spouse: Carolyn Salter</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
21 Shorelake<BR>
Kingwood, Texas 77338</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="33%"><FONT SIZE=2><BR>
Benson B. Yuen</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
4618 Natural Bridge Drive<BR>
Kingwood, Texas 77345</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="33%"><FONT SIZE=2><BR>
E. Andrew Boyd<BR>
Spouse: Sarah Fishman Boyd</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
4104 Amherst Street<BR>
Houston, Texas 77005</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="33%"><FONT SIZE=2><BR>
Richard A. Savage<BR>
Spouse: Christine Savage</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
4021 St. Christopher Lane<BR>
Dallas, Texas 75287</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="33%"><FONT SIZE=2><BR>
Peter Kiernan</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
8787 Woodway Drive<BR>
Houston, Texas 77063</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="33%"><FONT SIZE=2><BR>
Suranand Adyanthaya</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
13026 Wickersham Drive<BR>
Houston, Texas 77077</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="33%"><FONT SIZE=2><BR>
Graham E. Parker<BR>
Spouse: Stacy Janelle Parker</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
7979 Westheimer #01702<BR>
Houston, Texas 77063</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="33%"><FONT SIZE=2><BR>
Mathew S. Johnson<BR>
Spouse: Kathleen Johnson</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
931 Harvard<BR>
Houston, Texas 77005</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="33%"><FONT SIZE=2><BR>
Jeffrey A. Key<BR>
Spouse: Renee Elizabeth Key</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
847 Shadwell<BR>
Houston, Texas 77062</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="33%"><FONT SIZE=2><BR>
William E. Salter<BR>
Spouse: Ethel Marie Salter</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
4202 Forest Holly<BR>
Kingwood, Texas 77345</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="33%"><FONT SIZE=2><BR>
Rudolfo Elizondo</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
4729 1-2 Merwin<BR>
Houston, Texas 77027</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="33%"><FONT SIZE=2><BR>
James Earl Longmire III</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
823 Helms<BR>
Houston, Texas 77088</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="33%"><FONT SIZE=2><BR>
Richard A. Henderson</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
7315 Tara Road<BR>
Richmond, Texas 77469</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="33%"><FONT SIZE=2><BR>
Perinkulam R. Narayanan</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
6601 Harbor Town Drive #1315<BR>
Houston, Texas 77036</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="33%"><FONT SIZE=2><BR>
William A. Hinke<BR>
Spouse: Martha Hinke</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
17811 Vintage Wood Lane<BR>
Spring, Texas 77379</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="33%"><FONT SIZE=2><BR>
Raghu N. Debbad<BR>
Spouse: Prashanthi Debbad</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="60%"><FONT SIZE=2><BR>
2634 Yorktown #374<BR>
Houston, Texas 77056</FONT></TD>
</TR>
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<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=32,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="8",CHK=826391,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]KW76602A.;4',USER='BSKELLE',CD=';2-APR-2007;18:34' -->
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_kx76602_1_1"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kx76602_exhibit_c_addendum_agreement"> </A>
<A NAME="toc_kx76602_1"> </A>
<BR></FONT><FONT SIZE=2><B><I>Exhibit&nbsp;C    <BR>    <BR>    </I></B></FONT><FONT SIZE=2><I>ADDENDUM AGREEMENT    <BR>    </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Addendum Agreement made this&nbsp;&nbsp;&nbsp;&nbsp;day of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, by and between&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(the "New Stockholder"), PROS Strategic
Solutions,&nbsp;Inc., a Delaware corporation (the "Company"), and such investors, founding stockholders, and stockholders (the "Stockholders") of the Company who are parties to that certain
Stockholders' Agreement dated&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 19&nbsp;&nbsp;&nbsp;&nbsp;(the "Agreement"), between the Company and the Stockholders. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="kx76602_w_i_t_n_e_s_s_e_t_h_"> </A>
<A NAME="toc_kx76602_2"> </A>
<BR></FONT><FONT SIZE=2>W I T N E S S E T H:    <BR></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Company and the Stockholders entered into the Agreement to impose certain restrictions and obligations upon the Stockholders and the shares of common stock of the Company
owned by such Stockholders (the "Common Stock"); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the New Stockholder is desirous of becoming a stockholder of the Company; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Company and the Stockholders have required in the Agreement that all persons being offered shares of the Common Stock must enter into an Addendum Agreement binding the New
Stockholder to the Agreement to the same extent as if it were an original party thereto, so as to promote the mutual interests of the Company, the Stockholders and the New Stockholder by imposing the
same restrictions and obligations on the New Stockholder and the shares of the Common Stock to be acquired by the New Stockholder as were imposed upon the Stockholders under the Agreement. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW,
THEREFORE, in consideration of the mutual promises of the parties, and as a condition of the purchase of the shares of the Common Stock, the New Stockholder acknowledges that the
New Stockholder has read the Agreement. The New Stockholder shall be bound by, and shall have the benefit of, all the terms and conditions set out in the Agreement to the same extent as if the New
Stockholder were a "Stockholder" as defined in the Agreement. This Addendum Agreement shall be attached to and become a part of the Agreement. </FONT></P>

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<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%"><FONT SIZE=2>Printed Name:</FONT></TD>
<TD WIDTH="35%"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
</TABLE>
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<P ALIGN="RIGHT"><FONT SIZE=2>Address
for notices under<BR>
Section&nbsp;3.3 of the Agreement: </FONT></P>

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<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
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<P><FONT SIZE=2>[To
be completed if applicable:] </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
spouse of the New Stockholder acknowledges that such spouse has read the Agreement. Such spouse is fully aware of, understands and fully consents and agrees to Section&nbsp;4 of
the Agreement and that such spouse's awareness, understanding, consent and agreement is evidenced by such spouse's execution and delivery of this Addendum Agreement. </FONT></P>

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<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%"><FONT SIZE=2>Printed Name:</FONT></TD>
<TD WIDTH="35%"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>C-1</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=33,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="8",CHK=732267,FOLIO='C-1',FILE='DISK130:[07ZBA2.07ZBA76602]KX76602A.;4',USER='BSKELLE',CD=';2-APR-2007;18:34' -->
<A NAME="page_kx76602_1_2"> </A>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Agreed
to on behalf of the Investors, the Founding Stockholders, the Stockholders and the Company pursuant to Section&nbsp;3.12 of the Agreement. </FONT></P>

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<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2>PROS STRATEGIC SOLUTIONS,&nbsp;INC.,<BR>
a Delaware corporation</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
ATTEST:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> David Samuel Coats<BR>
President and Chief Executive Officer</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="47%" VALIGN="TOP"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Secretary</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="45%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>C-2</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<BR>
<P><br><A NAME="07ZBA76601_8">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ks76602_1">PROS STRATEGIC SOLUTIONS, INC. AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_kv76602_1">EXHIBIT A INVESTORS</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_kw76602_1">Exhibit B List of Stockholders</A></FONT><BR>

<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_kx76602_1">Exhibit C ADDENDUM AGREEMENT</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_kx76602_2">W I T N E S S E T H</A></FONT><BR>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5.1
<SEQUENCE>9
<FILENAME>a2176970zex-10_51.htm
<DESCRIPTION>EXHIBIT 10.5.1
<TEXT>
<HTML>
<HEAD>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
<BR>
<FONT SIZE=3 ><A HREF="#07ZBA76601_9">QuickLinks</A></FONT>
<font size=3> -- Click here to rapidly navigate through this document</font>
<P ALIGN="RIGHT"><FONT SIZE=2><A
NAME="page_ky76602_1_1"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit 10.5.1  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ky76602_first_amendment_to_amended_and__fir02535"> </A>
<A NAME="toc_ky76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>FIRST AMENDMENT<BR>  TO<BR>  AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS FIRST AMENDMENT TO AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT (this "Amendment") is made and entered into effective April&nbsp;8, 1999, by and among PROS
Strategic Solutions,&nbsp;Inc., a Delaware corporation (the "Company"), and the undersigned holders of a majority of the total number of shares of Common Stock held by the Investors, the Founding
Stockholders and the Stockholders. Capitalized terms used and not defined herein have the same meaning ascribed to them in the Agreement (as hereinafter defined). </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ky76602_w_i_t_n_e_s_s_e_t_h_"> </A>
<A NAME="toc_ky76602_2"> </A>
<BR></FONT><FONT SIZE=2><I>W I T N E S S E T H:    <BR>    </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Company, the Investors, the Founding Stockholders, and the Stockholders entered into that certain Amended and Restated Stockholders' Agreement dated
effective June&nbsp;8, 1998 (the "Agreement"); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
Section&nbsp;4.6 of the Agreement provides that the Agreement may be amended from time to time by an instrument in writing signed by the Company and the holders of a majority
of the total number of shares of Common Stock held by the Investors, the Founding Stockholders, and the Stockholders, provided, however, that no amendment shall impose any additional material
obligation on the Investors, the Founding Stockholders or any Stockholder without that party's written consent to such amendment; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the parties to this Amendment (other than the Company) are the holders of a majority of the total number of shares of Common Stock held by the Investors, the Founding
Stockholders, and the Stockholders; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the parties to this Amendment wish to amend the Agreement as hereinafter provided; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW,
THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Agreement is hereby amended to add a new Section&nbsp;4.16 which reads in its entirety as follows: </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"4.16&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Termination of Employee Stockholder's Rights and Obligations</I></FONT><FONT SIZE=2>."&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything contained in this
Agreement to the contrary, if an Employee Stockholder shall for any reason cease to be an officer or employee of the Company, the rights and obligations of the parties hereto under this Agreement with
respect to such Employee Stockholder and the shares of Common Stock owned or acquired by such Employee Stockholder may (but shall not be required to) be terminated, in whole or in part, by an
instrument in writing signed by the Company, such Employee Stockholder and the holders of a majority of the total number of shares of Common Stock held by the Investors, the Founding Stockholders and
the Stockholders." </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
references to "this Agreement" contained in the Agreement shall be deemed to be a reference to the Agreement, as amended by this Amendment. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Amendment shall be subject to and governed by the laws of the State of Delaware. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as amended by this Amendment, the Agreement shall remain in full force and effect. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>1</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_ky76602_1_2"> </A>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Amendment may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to
be an original but all of which shall constitute one and the same agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed effective as of the date first above written. </FONT></P>

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<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><B>PROS STRATEGIC SOLUTIONS, INC.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>CHARLES H. MURPHY</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Charles H. Murphy<BR>
Chief Financial Officer</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><BR><FONT SIZE=2><B>FOUNDING STOCKHOLDERS:</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>RONALD F. WOESTEMEYER</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Ronald F. Woestemeyer</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>MARIETTE MELCHIOR WOESTEMEYER</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Mariette Melchior Woestemeyer</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><B>INVESTORS:</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><BR><FONT SIZE=2><B>TA/Advent VIII L.P.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
TA Associates VIII LLC, its General Partner</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2>TA Associates, Inc., its Manager</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>KURT R. JAGGERS</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Kurt R. Jaggers<BR>
Attorney-in-Fact</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>[SIGNATURES CONTINUED ON NEXT PAGE]</B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_ky76602_1_4"> </A>

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<TABLE WIDTH="78%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><B>ADVENT ATLANTIC AND PACIFIC III, L.P.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
TA Associates AAP III Partners, Its General Partner</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2>TA Associates, Inc.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>KURT R. JAGGERS</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Kurt R. Jaggers<BR>
Attorney-in-Fact</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><BR><FONT SIZE=2><B>TA VENTURE INVESTORS, L.P.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>KURT R. JAGGERS</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Kurt R. Jaggers<BR>
Attorney-in-Fact</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><BR><FONT SIZE=2><B>TA EXECUTIVE FUND LLC</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
TA Associates VIII LLC, its General Partner</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2>TA Associates, Inc., its Manager</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>KURT R. JAGGERS</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Kurt R. Jaggers<BR>
Attorney-in-Fact</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><BR><FONT SIZE=2><B>JMI EQUITY FUND III, L.P.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
JMI Associates III, LLC, its General Partner</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>HARRY S. GRUNER</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Harry S. Gruner<BR>
Managing Member</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>WILLIAM H. WOLF</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> William H. Wolf</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ky76602_consent"> </A>
<A NAME="toc_ky76602_3"> </A>
<BR></FONT><FONT SIZE=2><B>CONSENT    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We, David Samuel Coats and wife, Judy Coats, hereby affirm and attest by our signatures to this Consent that we have read that certain First Amendment to Amended
and Restated Stockholders' Agreement dated as of April&nbsp;8, 1999 (the "Amendment"), a copy of which is attached hereto as </FONT><FONT SIZE=2><I>Exhibit&nbsp;A</I></FONT><FONT SIZE=2>, and
that we are fully aware of, understand, and fully consent and agree to the terms and provisions of the Amendment. </FONT></P>

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<TABLE WIDTH="77%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="6%"><FONT SIZE=2>Date:</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="26%"><FONT SIZE=2>&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="26%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="37%"><FONT SIZE=2>&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> David Samuel Coats</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="6%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="26%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="26%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="1%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="37%"><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Judy Coats</FONT></TD>
</TR>
</TABLE>
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<HR NOSHADE>
<P style='page-break-before:always'></p>
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<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<BR>
<P><br><A NAME="07ZBA76601_9">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ky76602_1">FIRST AMENDMENT TO AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ky76602_2">W I T N E S S E T H</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ky76602_3">CONSENT</A></FONT><BR>

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</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>10
<FILENAME>a2176970zex-10_6.htm
<DESCRIPTION>EXHIBIT 10.6
<TEXT>
<HTML>
<HEAD>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
<BR>
<FONT SIZE=3 ><A HREF="#07ZBA76601_10">QuickLinks</A></FONT>
<font size=3> -- Click here to rapidly navigate through this document</font>
<P ALIGN="RIGHT"><FONT SIZE=2><A
NAME="page_lc76602_1_1"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit 10.6  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lc76602_registration_rights_agreement"> </A>
<A NAME="toc_lc76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>REGISTRATION RIGHTS AGREEMENT    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Registration Rights Agreement (this "Agreement") is entered into effective the 25<SUP>th</SUP> day of May&nbsp;1999, by and between PROS Strategic
Solutions,&nbsp;Inc., a Delaware corporation (the "Company"), and David Samuel Coats (the "Stockholder"). </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>W
I T N E S S E T H: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Company and the Stockholder have entered into that certain Separation Agreement of even date herewith (the "Separation Agreement"); and </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
pursuant to the Separation Agreement, the Stockholder will retain 325,000 shares (the "Retained Shares") of the common stock, $.001 par value per share ("Common Stock"), of the
Company; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Separation Agreement contemplates the execution of this Agreement to provide to the Stockholder certain registration rights in respect of the Retained Shares; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW,
THEREFORE, in consideration of the premises and the mutual covenants and conditions herein contained, the parties do hereby agree as follows: </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Registration Rights</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The parties covenant and agree as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Definitions</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;As used in this Agreement, the terms defined in the preamble and recitals hereto and otherwise
herein shall have the respective meanings set forth therein and herein, and the following terms shall have the following meanings: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Act"
means the Securities Act of 1933, as amended. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"Register",
"registered" and "registration" refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Act and
applicable rules and regulations thereunder, and the declaration or ordering of effectiveness by the SEC of such registration statement or document. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"SEC"
means the Securities and Exchange Commission. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Company Registration</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If (but without any obligation to do so) at any time or from time to time after the
date hereof and on or before the earlier of (a)&nbsp;the Stockholder's holding of less than 200,000 shares of Common Stock, and (b)&nbsp;such date when the Stockholder can transfer the balance of
his shares pursuant to Rule&nbsp;144 under the Act and a public market exists for such securities, the Company proposes to register for its own account any of its Common Stock (other than an initial
public offering or a registration relating either solely to the sale of securities to participants in a Company stock option, stock purchase or similar plan or solely to an SEC Rule&nbsp;145 or
similar transaction), the Company shall, at such time, promptly give to the Stockholder written notice thereof. Upon the written request of the Stockholder given within 20&nbsp;days after the
receipt of such notice given by the Company, the Company shall, subject to the provisions of Section&nbsp;1.6, cause to be included in such registration (and any related qualification under Blue Sky
laws or other compliance thereunder), and in any underwriting involved therein, all of the Retained Shares that the Stockholder has requested to be registered. The written request made by the
Stockholder as referred to in this Section&nbsp;1.2 may specify that only a part of the Retained Shares be included in the Company's registration. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>1</FONT></P>

<HR NOSHADE>
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<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Obligations of the Company</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Whenever required under this Section&nbsp;1 to effect the registration of any
Retained Shares, the Company shall, as expeditiously as reasonably practicable: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Prepare
and file with the SEC a registration statement with respect to such Retained Shares and use its reasonable efforts to cause such registration statement to become
effective and keep such registration statement effective for up to 90&nbsp;days. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Prepare
and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as
may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered by such registration statement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Furnish
to the Stockholder a prospectus, including a preliminary prospectus, in conformity with the requirements of the Act, and such other documents as he may
reasonably request in order to facilitate the disposition of Retained Shares owned by him. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;Use
its reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the Stockholder, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to
file&nbsp;a general consent to service of process in any such states or jurisdictions. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;In
the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the
underwriter of such offering, it being understood and agreed in such regard that the Stockholder also shall enter into and perform his obligations under such an agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;At
any time when a prospectus relating thereto is required to be delivered under the Act, notify the Stockholder of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances then existing. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Furnish Information</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Stockholder shall furnish to the Company such information regarding himself, the
Retained Shares held by him and the intended method of disposition of such Retained Shares as shall be reasonably required to effect the registration of such Retained Shares. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Expenses</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Company shall bear and pay all expenses incurred by the Company in connection with any
registration, filing or qualification of Retained Shares with respect to registrations pursuant to Section&nbsp;1.2 for the Stockholder, including all registration, filing and qualification fees,
printers and accounting fees, and fees and disbursements of counsel to the Company, relating or apportionable thereto, but excluding underwriting discounts and commissions relating to Retained Shares
and any fees and disbursements of counsel to the Stockholder. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.6</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Underwriting Requirements</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In connection with any offering involving an underwriting of shares being issued
by the Company, the Company shall not be required under Section&nbsp;1.2 to include any of the Retained Shares in such underwriting unless the Stockholder accepts the terms of the underwriting as
agreed upon between the Company and the underwriter selected by it. If the underwriter or the Company determines that marketing factors require a limitation on the number of shares to be offered, the
underwriter or the Company may exclude from such registration and underwriting some or all of the Retained Shares which would otherwise be registered. If the number of shares to be registered is
reduced, then the number of shares that may be included in the registration on behalf of any persons or entities asserting registration rights shall be allocated first among the holders of registrable
securities obtained upon the conversion of a </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

<HR NOSHADE>
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<UL>
<BR>

<P><FONT SIZE=2>security
of the Company with rights, preferences or privileges senior to those of the Common Stock and then among the remaining holders of Common Stock. If the Stockholder has requested registration
under Section&nbsp;1.2, the Company shall advise the Stockholder as promptly as practicable of such exclusion. If the Stockholder disapproves of the terms of any such underwriting, he may elect to
withdraw therefrom by written notice to the Company and the underwriter. Any Retained Shares excluded or withdrawn from such underwriting shall be withdrawn from such registration. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.7</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Lockup Agreement</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In consideration for the Company's agreement to its obligations under this Agreement, the
Stockholder agrees in connection with any registration of the Company's securities that, upon the request of the Company or the underwriters managing any underwritten offering of the Company's
securities, not to sell, make any short sale of, loan, grant any option for the purchase of or otherwise dispose of any of the Retained Shares (other than those shares included in the registration)
without the prior written consent of the Company or such underwriters, as the case may be, for such period of time (not to exceed 180&nbsp;days) from the effective date of such registration as the
Company or the underwriters may specify. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.8</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Delay of Registration</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Stockholder shall not have any right to obtain or seek an injunction restraining
or otherwise delaying any such registration as the result of any controversy or dispute that arises with respect to the interpretation or implementation of this Section&nbsp;1. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.9</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Indemnification</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In the event any Retained Shares are included in a registration statement under this
Section&nbsp;1: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;To
the extent permitted by law, the Company will indemnify and hold harmless the Stockholder from and against any losses, claims, damages, expenses or liabilities to
which he may become subject under the Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"), or other federal or state law, insofar as such losses, claims, damages, expenses or
liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a "Violation"); (i)&nbsp;any untrue statement or
alleged untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, or any other documents prepared by the Company and incident
thereto, (ii)&nbsp;the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading or (iii)&nbsp;any
violation or alleged violation by the Company of the Act, the 1934 Act, any state securities law or any rule or regulation promulgated under the Act, the 1934 Act or any state securities law; and the
Company will pay as incurred to the Stockholder any legal or other expenses reasonably incurred by him in connection with investigating or defending any such loss, claim, damage, expense, liability or
action; provided, however, that the indemnity agreement contained in this Section&nbsp;1.9(a) shall not apply to amounts paid or fees or expenses incurred in settlement of any such loss, claim,
damage, liability, expense or action if such settlement is effected without the written consent of the Company, nor shall the Company be liable to the Stockholder in any such case for any such loss,
claim, damage, expense, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon information furnished for use in connection with such
registration by the Stockholder, provided further that in no event shall any indemnity obligation under this Section&nbsp;1.9(a) exceed the net proceeds from the offering received by the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;To
the extent permitted by law, the Stockholder will indemnify and hold harmless the Company and each other selling stockholder and their respective directors, officers,
stockholders, members, partners, affiliates, successors and assigns who have signed the registration statement, each person, if any, who controls the Company within the meaning of </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

<HR NOSHADE>
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<A NAME="page_lc76602_1_4"> </A>
<UL>
<UL>
<BR>

<P><FONT SIZE=2>the
Act, any underwriter, and each of its officers, directors and partners and any controlling person of any such underwriter, from and against any losses, claims, damages, or liabilities to which any
of the foregoing persons may become subject under the Act, the 1934 Act or other federal or state law, insofar as such losses, claims, damages, expenses or liabilities (or actions in respect thereto)
arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon information furnished to the Company by the Stockholder or
his agents or representatives for use in connection with such registration; and the Stockholder will pay, as incurred, any legal or other expenses reasonably incurred by any person intended to be
indemnified pursuant to this Section&nbsp;1.9(b), in connection with investigating or defending any such loss, claim, damage, expense, liability or action; provided, however, that the indemnity
agreement contained in this Section&nbsp;1.9(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, expense, liability or action if such settlement is effected without the
consent of the Stockholder, which consent will not be unreasonably withheld or delayed. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Promptly
after receipt by an indemnified party under this Section&nbsp;1.9 of notice of the commencement of any action (including any governmental action), such
indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section&nbsp;1.9, deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the reasonable fees and
expenses of such counsel to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if, and only if,
seriously prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section&nbsp;1.9, but the omission so to
deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section&nbsp;1.9. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;If
the obligations of the Company and/or the Stockholder under this Section&nbsp;1.9 should conflict with the obligations of the parties as provided in any
underwriting agreement, then the obligations of the parties as provided in such underwriting agreement shall control. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Notices</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;All notices, requests, consents, and other communications under this Agreement shall be in writing
and shall be delivered by hand, or mailed by first class certified or registered mail, return receipt requested, postage prepaid, to the Company and the Stockholder at their respective addresses set
forth below: </FONT></P>

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<TD WIDTH="22%"><FONT SIZE=2><BR>
If to the Company:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="75%"><FONT SIZE=2><BR>
PROS Strategic Solutions,&nbsp;inc.<BR>
3223 Smith Street, Suite 100<BR>
Houston, Texas 77006<BR>
Attention: President</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="22%"><FONT SIZE=2><BR>
If to the Stockholder:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="75%"><FONT SIZE=2><BR>
Mr.&nbsp;David Samuel Coats<BR>
7 Marilane<BR>
Houston, Texas 77007</FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>Any party may change its address for purposes hereof by notice to the other party in the manner provided above. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

<HR NOSHADE>
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<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Amendments and Waivers</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Except as otherwise provided in this Agreement, the terms and provisions of this
Agreement may not be modified or amended except in a writing executed by the Company and the Stockholder. No waivers of or exceptions to any term, condition or provision of this Agreement, in any
one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Entire Agreement</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;With respect to the subject matter hereof, this Agreement embodies the entire agreement and
understanding between the Stockholder and the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Counterparts</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be executed in several counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Headings</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The headings of the sections, subsections and paragraphs of this Agreement have been added for
convenience only and shall not be deemed to be a part of this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Severability</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Any provision of this Agreement which is invalid or unenforceable in any jurisdiction shall be
ineffective to the extent of such invalidity or unenforceability without invalidating or rendering unenforceable the remaining provisions of this Agreement, and, to the extent permitted by law, any
determination of invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Assignment</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Neither this Agreement nor any of the rights or obligations of the Stockholder or the Company
provided herein may be assigned, sold, pledged, hypothecated or otherwise transferred by the Stockholder without the prior written consent of the Company. This Agreement shall inure to the benefit of
and be binding upon the respective heirs, personal representatives, successors and permitted assigns of the parties. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Governing Law</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall be governed by and construed in accordance with the laws of the State of
Texas without reference to its principles of conflicts of law. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the undersigned have hereunto set their hands as of the day and year first above written. </FONT></P>

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&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
"</FONT><FONT SIZE=2><I>Company</I></FONT><FONT SIZE=2>"</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
PROS STRATEGIC SOLUTIONS, INC.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2><BR>
/s/ Charles H. Murphy</FONT><HR NOSHADE><FONT SIZE=2> Charles H. Murphy<BR>
CFO</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
"</FONT><FONT SIZE=2><I>Stockholder</I></FONT><FONT SIZE=2>"</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
/s/ David Samuel Coats</FONT><HR NOSHADE><FONT SIZE=2> David Samuel Coats</FONT></TD>
</TR>
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<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

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<P><br><A NAME="07ZBA76601_10">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_lc76602_1">REGISTRATION RIGHTS AGREEMENT</A></FONT><BR>
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<TYPE>EX-10.7
<SEQUENCE>11
<FILENAME>a2176970zex-10_7.htm
<DESCRIPTION>EXHIBIT 10.7
<TEXT>
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<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit&nbsp;10.7  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="le76602_registration_rights_agreement"> </A>
<A NAME="toc_le76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>REGISTRATION RIGHTS AGREEMENT    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Registration Rights Agreement (this "</FONT><FONT SIZE=2><I>Agreement</I></FONT><FONT SIZE=2>") is entered into effective as of April&nbsp;13, 2000, by
and between PROS Revenue Management,&nbsp;Inc., a Delaware corporation (the "</FONT><FONT SIZE=2><I>Company</I></FONT><FONT SIZE=2>"), and Robert Salter (the
"</FONT><FONT SIZE=2><I>Stockholder</I></FONT><FONT SIZE=2>"). </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="le76602_witnesseth"> </A>
<A NAME="toc_le76602_2"> </A>
<BR></FONT><FONT SIZE=2><B>WITNESSETH    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Company and the Stockholder have entered into that certain Separation Agreement of even date herewith (the "</FONT><FONT SIZE=2><I>Separation
Agreement"</I></FONT><FONT SIZE=2>); and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
pursuant to the Separation Agreement, the Stockholder will retain 356,000 shares (the "</FONT><FONT SIZE=2><I>Retained Shares</I></FONT><FONT SIZE=2>") of the common stock, par
value $0.001 per share, of the Company ("</FONT><FONT SIZE=2><I>Common Stock</I></FONT><FONT SIZE=2>"); and </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Separation Agreement contemplates the execution of this Agreement to provide to the Stockholder certain registration rights in respect of the Retained Shares; </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="le76602_agreement"> </A>
<A NAME="toc_le76602_3"> </A>
<BR></FONT><FONT SIZE=2><B>AGREEMENT    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions herein contained, the parties do hereby agree as follows. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Registration Rights</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The parties covenant and agree as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Definitions</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;As used in this Agreement, the terms defined in the preamble and recitals hereto and otherwise
herein shall have the respective meanings set forth therein and herein, and the following terms shall have the following meanings: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Act</I></FONT><FONT SIZE=2>" means the Securities Act of 1933, as amended. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Register</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>registered</I></FONT><FONT SIZE=2>" and
"</FONT><FONT SIZE=2><I>registration</I></FONT><FONT SIZE=2>" refer to a registration effected by preparing, and filing a registration statement or similar document in compliance with the Act and
applicable rules and regulations thereunder, and the declaration or ordering of effectiveness by the SEC of such registration statement or document. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>SEC</I></FONT><FONT SIZE=2>" means the Securities and Exchange Commission. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Company Registration</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If (but without any obligation to do so) at any time or from time to time after the
date hereof and on or before the earlier of (a)&nbsp;the Stockholder's holding of less than 220,000 shares of Common Stock, and (b)&nbsp;such date when the Stockholder can transfer the balance of
his shares pursuant to Rule&nbsp;144 under the Act and a public market exists for such securities, the Company proposes to register for its own account any of its Common Stock (other than an initial
public offering or a registration relating either solely to the sale of securities to participants in a Company stock option, stock purchase or similar plan or solely to an SEC Rule&nbsp;145 or
similar transaction), the Company shall, at such time, promptly give to the Stockholder written notice thereof. Upon the written request of the Stockholder given within twenty (20)&nbsp;days after
the receipt of such notice given by the Company, the Company shall, subject to the provisions of </FONT><FONT SIZE=2><I>Section&nbsp;1.6</I></FONT><FONT SIZE=2>, cause to be included in such
registration (and any related qualification under Blue Sky laws or other compliance thereunder), and in any underwriting involved therein, all of the Retained Shares that the Stockholder has requested
to be registered. The written request made by the Stockholder as referred to in this </FONT><FONT SIZE=2><I>Section&nbsp;1.2</I></FONT><FONT SIZE=2> may specify that only a part of the Retained
Shares be included in the Company's registration. </FONT></P>

</UL>
<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=1,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="11",CHK=580219,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]LE76602A.;8',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<A NAME="page_le76602_1_2"> </A>
<UL>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Obligations of the Company</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Whenever required under this </FONT> <FONT SIZE=2><I>Section&nbsp;1</I></FONT><FONT SIZE=2> to effect the registration of any retained Shares,
 the Company shall, as expeditiously as reasonably practicable: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Prepare
and file with the SEC a registration statement with respect to such Retained Shares and use its reasonable efforts to cause such registration statement to become
effective and keep such registration statement effective for up to ninety (90)&nbsp;days. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Prepare
and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as
may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered by such registration statement. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Furnish
to the Stockholder a prospectus, including a preliminary prospectus, in conformity with the requirements of the Act, and such other documents as he may
reasonably request in order to facilitate the disposition of Retained Shares owned by him. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;Use
its reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the Stockholder, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to
file&nbsp;a general consent to service of process in any such states or jurisdictions. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;In
the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the
underwriter of such offering, it being understood and agreed in such regard that the Stockholder also shall enter into and perform his obligations under such an agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;At
any time when a prospectus relating thereto is required to be delivered under the Act, notify the Stockholder of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances then existing. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Furnish Information</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Stockholder shall furnish to the Company such information regarding himself, the
Retained Shares held by him and the intended method of disposition of such Retained Shares as shall be reasonably required to effect the registration of such Retained Shares. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Expenses</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Company shall bear and pay all expenses incurred by the Company in connection with any
registration, filing or qualification of Retained Shares with respect to registrations pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;1.2</I></FONT><FONT SIZE=2> for the Stockholder, including all
registration, filing and qualification fees, printers and accounting fees, and fees and disbursements of counsel to the Company, relating or apportionable thereto, but excluding underwriting discounts
and commissions relating to Retained Shares and any fees and disbursements of counsel to the Stockholder. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.6</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Underwriting Requirements</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In connection with any offering involving an underwriting of shares being issued
by the Company, the Company shall not be required under </FONT><FONT SIZE=2><I>Section&nbsp;1.2</I></FONT><FONT SIZE=2> to include any of the Retained Shares in such underwriting unless the
Stockholder accepts the terms of the underwriting as agreed upon between the Company and the underwriter selected by it. If the underwriter determines that marketing factors require a limitation on
the number of shares to be offered, the underwriter may exclude from such registration and underwriting some or all of the Retained Shares which would otherwise be registered. If the number of shares
to be registered is reduced, then the number of shares that may be included in the registration on behalf of any persons or entities asserting registration rights shall be allocated first among the
holders of registrable securities obtained upon the conversion of a security of the Company with rights, </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=2,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="11",CHK=378530,FOLIO='2',FILE='DISK130:[07ZBA2.07ZBA76602]LE76602A.;8',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<A NAME="page_le76602_1_3"> </A>
<UL>
<BR>

<P><FONT SIZE=2>preferences
or privileges senior to those of the Common Stock and then among the remaining holders of Common Stock. If the Stockholder has requested registration under </FONT> <FONT SIZE=2><I>Section&nbsp;1.2</I></FONT><FONT SIZE=2>, the Company shall advise the
Stockholder as promptly as practicable of such exclusion. If the Stockholder disapproves of the terms
of any such underwriting, he may elect to withdraw therefrom by written notice to the Company and the underwriter. Any Retained Shares excluded or withdrawn from such underwriting shall be withdrawn
from such registration. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.7</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Delay of Registration</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Stockholder shall not have any right to obtain or seek an injunction restraining
or otherwise delaying any such registration as the result of any controversy or dispute that arises with respect to the interpretation or implementation of this </FONT> <FONT SIZE=2><I>Section&nbsp;1</I></FONT><FONT SIZE=2>. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.8</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Indemnification.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In the event any Retained Shares are included in a registration statement under this </FONT> <FONT SIZE=2><I>Section&nbsp;1</I></FONT><FONT SIZE=2>:
</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;To
the extent permitted by law, the Company will indemnify and hold harmless the Stockholder from and against any losses, claims, damages, expenses or liabilities to
which he may become subject under the Act, the Securities Exchange Act of 1934, as amended (the "</FONT><FONT SIZE=2><I>1934 Act</I></FONT><FONT SIZE=2>"), or other federal or state law, insofar as
such losses, claims, damages, expenses or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a
"</FONT><FONT SIZE=2><I>Violation</I></FONT><FONT SIZE=2>"); (i)&nbsp;any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, or any other documents prepared by the Company and incident thereto, (ii)&nbsp;the omission or
alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii)&nbsp;any violation or
alleged violation by the Company of the Act, the 1934 Act, any state securities law or any rule or regulation promulgated under the Act, the 1934 Act or any state securities law; and the Company will
pay as incurred to the Stockholder any legal or other expenses reasonably incurred by him in connection with investigating or defending any such loss, claim, damage, expense, liability or action;
provided, however, that the indemnity agreement contained in this </FONT><FONT SIZE=2><I>Section&nbsp;1.8(a)</I></FONT><FONT SIZE=2> shall not apply to amounts paid or fees or expenses incurred in
settlement of any such loss, claim, damage, liability, expense or action if such settlement is effected without the written consent of the Company, nor shall the Company be liable to the Stockholder
in any such case for any such loss, claim, damage, expanse, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon information furnished for
use in connection with such registration by the Stockholder, provided further that in no event shall any indemnity obligation under this </FONT> <FONT SIZE=2><I>Section&nbsp;1.8(a)</I></FONT><FONT SIZE=2> exceed the net proceeds from the offering
received by the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;To
the extent permitted by law, the Stockholder will indemnify and hold harmless the Company and each other selling stockholder and their respective directors, officers,
stockholders, members, partners, affiliates, successors and assigns who have signed the registration statement, each person, if any, who controls the Company within the meaning of the Act, any
underwriter, and each of its officers, directors and partners and any controlling person of any such underwriter, from and against any losses, claims, damages, or liabilities to which any of the
foregoing persons may become subject under the Act, the 1934 Act or other federal or state law, insofar as such losses, claims, damages, expenses or liabilities (or actions in respect thereto) arise
out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon information furnished to the Company by the Stockholder or his
agents or representatives for use in connection with such registration; and the Stockholder will pay, as incurred, any legal or other expenses reasonably incurred by any person intended to be
indemnified pursuant to this </FONT><FONT SIZE=2><I>Section&nbsp;1.8(b)</I></FONT><FONT SIZE=2>, in connection with investigating or defending any such loss, claim, damage, expense, liability or </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=3,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="11",CHK=416087,FOLIO='3',FILE='DISK130:[07ZBA2.07ZBA76602]LE76602A.;8',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<A NAME="page_le76602_1_4"> </A>
<UL>
<UL>
<BR>

<P><FONT SIZE=2>action;
provided, however, that the indemnity agreement contained in this </FONT><FONT SIZE=2><I>Section&nbsp;1.8(b)</I></FONT><FONT SIZE=2> shall not apply to amounts paid in settlement of any
such loss, claim, damage, expense, liability or action if such settlement is effected without the consent of the Stockholder, which consent will not be unreasonably withheld or delayed. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Promptly
after receipt by an indemnified party under this </FONT><FONT SIZE=2><I>Section&nbsp;1.8</I></FONT><FONT SIZE=2> of notice of the commencement of any action
(including any governmental action), such indemnified party will</FONT><FONT SIZE=2><I>,</I></FONT><FONT SIZE=2> if a claim in respect thereof is to be made against any indemnifying party under this </FONT> <FONT
SIZE=2><I>Section&nbsp;1.8</I></FONT><FONT SIZE=2>, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to
the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the reasonable fees and expenses of such counsel to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any
other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if, and
only if, seriously prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this </FONT> <FONT SIZE=2><I>Section&nbsp;1.8</I></FONT><FONT SIZE=2>, but the omission so to
deliver written notice to
the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this </FONT><FONT SIZE=2><I>Section&nbsp;1.8</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;If
the obligations of the Company and/or the Stockholder under this </FONT><FONT SIZE=2><I>Section&nbsp;1.8</I></FONT><FONT SIZE=2> should conflict with the
obligations of the parties as provided in any underwriting agreement, then the obligations of the parties as provided in such underwriting agreement shall control. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Notices</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;All notices, requests, consents, and other communications under this Agreement shall be in writing
and shall be delivered by hand, or mailed by first class certified or registered mail, return receipt requested, postage prepaid, to the Company and the Stockholder at their respective addresses set
forth below: </FONT></P>

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<TABLE WIDTH="76%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="9%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="22%"><FONT SIZE=2><BR>
If to the Company:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="67%"><FONT SIZE=2><BR>
PROS Revenue Management,&nbsp;Inc.<BR>
3223 Smith Street, Suite 100<BR>
Houston, Texas 77006<BR>
Attention: President</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
with a copy to (which shall not constitute notice):</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="22%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="67%"><FONT SIZE=2><BR>
Gray Cary Ware&nbsp;&amp; Freidenrich LLP<BR>
100 Congress Avenue, Suite 1440<BR>
Austin, TX 78701-4042<BR>
Attention: John J. Gilluly&nbsp;III</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="9%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="22%"><FONT SIZE=2><BR>
If to the Stockholder:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="67%"><FONT SIZE=2><BR>
Mr.&nbsp;Robert Salter<BR>
21 Shorelake Drive<BR>
Kingwood, TX 77339</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>Any
party may change its address for purposes hereof by notice to the other party in the manner provided above. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Amendments and Waivers</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Except as otherwise provided in this Agreement, the terms and provisions of this
Agreement may not be modified or amended except in a writing executed by the Company and the Stockholder. No waivers of or exceptions to any term, condition or provision of this </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>

<!-- ZEQ.=4,SEQ=4,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="11",CHK=62823,FOLIO='4',FILE='DISK130:[07ZBA2.07ZBA76602]LE76602A.;8',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<A NAME="page_le76602_1_5"> </A>
<BR>

<P><FONT SIZE=2>Agreement,
in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Entire Agreement</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;With respect to the subject matter hereof, this Agreement embodies the entire agreement and
understanding between the Stockholder and the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Counterparts</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement maybe executed in several counterparts, each of which shall be deemed in
original, but all of which together shall constitute one and the same instrument. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Headings</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The headings of the sections, subsections and paragraphs of this Agreement have been added for
convenience only and shall not bc deemed to be a part of this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Severability</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Any provision of this Agreement which is invalid or unenforceable in any jurisdiction shall be
ineffective to the extent of such invalidity or unenforceability without invalidating or rendering unenforceable the remaining provisions of this Agreement, and, to the extent permitted by law, any
determination of invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Assignment</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Neither this Agreement nor any of the rights or obligations of the Stockholder or the Company
provided herein may be assigned, sold, pledged, hypothecated or otherwise transferred by the Stockholder without the prior written consent of the Company. This Agreement shall inure to the benefit of
and be binding upon the respective heirs, personal representatives, successors and permitted assigns of the parties. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Governing Law</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall be governed by and construed in accordance with the laws of the State of
Delaware without reference to its principles of conflicts of law. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>[Remainder of Page Intentionally Left Blank]</B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=5,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="11",CHK=981956,FOLIO='5',FILE='DISK130:[07ZBA2.07ZBA76602]LE76602A.;8',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<A NAME="page_le76602_1_6"> </A>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the undersigned have hereunto set their hands as of the day and year first above written. </FONT></P>

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<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><BR><FONT SIZE=2><B>COMPANY:</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
PROS REVENUE MANAGEMENT,&nbsp;INC.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2><BR>
/s/ Charles H. Murphy</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><I>Name:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2>Charles H. Murphy</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><I>Title:</I></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="40%"><FONT SIZE=2>Senior Vice President&nbsp;&amp; CFO</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><BR><FONT SIZE=2><B>STOCKHOLDER:</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2><BR>
/s/ Robert Salter</FONT><HR NOSHADE><FONT SIZE=2> ROBERT SALTER</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2><B>[Signature Page to Salter Registration Rights Agreement]</B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

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<FONT SIZE=2><A HREF="#toc_le76602_1">REGISTRATION RIGHTS AGREEMENT</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_le76602_2">WITNESSETH</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_le76602_3">AGREEMENT</A></FONT><BR>

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<TYPE>EX-10.9
<SEQUENCE>12
<FILENAME>a2176970zex-10_9.htm
<DESCRIPTION>EXHIBIT 10.9
<TEXT>
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<FONT SIZE=3 ><A HREF="#07ZBA76601_12">QuickLinks</A></FONT>
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<P ALIGN="RIGHT"><FONT SIZE=2><A
NAME="page_na76602_1_1"> </A> </FONT></P>

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<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit&nbsp;10.9  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>PROS Holdings,&nbsp;Inc.  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="na76602_redemption_agreement"> </A>
<A NAME="toc_na76602_1"> </A></FONT> <FONT SIZE=2><B>REDEMPTION AGREEMENT    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Redemption Agreement ("</FONT><FONT SIZE=2><B><I>Agreement</I></B></FONT><FONT SIZE=2>") is entered into as of March&nbsp;26, 2007, by and among PROS
Holdings,&nbsp;Inc., a Delaware corporation ("</FONT><FONT SIZE=2><B><I>Corporation</I></B></FONT><FONT SIZE=2>"), and the holders of the Corporation's shares of redeemable preferred stock, par value
$0.001 per share (the "</FONT><FONT SIZE=2><B><I>Redeemable Preferred Stock</I></B></FONT><FONT SIZE=2>") set forth on </FONT><FONT SIZE=2><I>Exhibit&nbsp;A</I></FONT><FONT SIZE=2> hereto (individually,
a "</FONT><FONT SIZE=2><B><I>Seller</I></B></FONT><FONT SIZE=2>", and together, the "</FONT><FONT SIZE=2><B><I>Sellers</I></B></FONT><FONT SIZE=2>"). Terms used but not defined herein have such meaning as defined
in the Corporation's Certificate of Incorporation filed on August&nbsp;29, 2002 (the "</FONT><FONT SIZE=2><B><I>Certificate of Incorporation</I></B></FONT><FONT SIZE=2>"). </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="na76602_recitals"> </A>
<A NAME="toc_na76602_2"> </A>
<BR></FONT><FONT SIZE=2><I>RECITALS    <BR>    </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, each of the Sellers owns the shares of Redeemable Preferred Stock of the Corporation set forth opposite such Seller's name on </FONT> <FONT
SIZE=2><I>Exhibit&nbsp;A</I></FONT><FONT SIZE=2> hereto (the "</FONT><FONT SIZE=2><B><I>Shares</I></B></FONT><FONT SIZE=2>"); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
each of the Sellers desires to tender, and Corporation desires to redeem, all Shares set forth opposite such Seller's name on </FONT> <FONT SIZE=2><I>Exhibit&nbsp;A</I></FONT><FONT SIZE=2> (the "</FONT><FONT
SIZE=2><B><I>Redemption</I></B></FONT><FONT SIZE=2>") at a price of $6.6095 per Share (the
"</FONT><FONT SIZE=2><B><I>Redemption Price</I></B></FONT><FONT SIZE=2>"); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Redemption Price includes accrued but unpaid dividends due and payable on the Shares upon the Redemption of such Shares; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Corporation desires to increase the size of its board of directors to six (6)&nbsp;members and the Sellers desire to consent to such increase subject to the execution of a
mutually acceptable voting agreement among the Corporation, the Sellers and certain holders of the Corporation's capital stock; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
following the Redemption, the Corporation desires to declare and pay a one-time cash dividend on the shares of the Corporation's common stock, par value $0.001 per
share (the "</FONT><FONT SIZE=2><B><I>Common Stock</I></B></FONT><FONT SIZE=2>") in an aggregate amount of up to $41.6&nbsp;million (the "</FONT><FONT SIZE=2><B><I>Cash Dividend</I></B></FONT><FONT SIZE=2>"); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Corporation is prohibited from declaring any dividends on the Common Stock without the consent of the Sellers holding a two-thirds of shares of capital stock
held by all Sellers; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
subject to the terms of hereof, the Sellers desire to permit the Corporation, following consummation of the Redemption, to declare and pay the Cash Dividend. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows: </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="na76602_agreement"> </A>
<A NAME="toc_na76602_3"> </A>
<BR></FONT><FONT SIZE=2><I>AGREEMENT    <BR>    </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Recitals</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The above recitals are hereby incorporated into this Agreement in their entirety. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Redemption Date</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Redemption Date shall be March&nbsp;27, 2007 (the "</FONT><FONT SIZE=2><B><I>Redemption
Date</I></B></FONT><FONT SIZE=2>"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Purchase of the Shares; Surrender of Certificates</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;On the Redemption Date, the Corporation shall pay the
respective Redemption Price, by check or wire transfer, to each Seller, and each Seller shall surrender and deliver to the Corporation the stock certificates representing the Shares for cancellation.
To the extent such Shares are uncertificated, each Seller hereby authorizes the Corporation to cancel such Seller's Shares on the books of the Corporation on the Redemption Date. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Stock Power</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;For value received, each of the Sellers, severally and not jointly, hereby sells, assigns and
transfers unto the Corporation the Shares set forth opposite such Seller's name on </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>1</FONT></P>

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<A NAME="page_na76602_1_2"> </A>
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<P><FONT SIZE=2><I> Exhibit&nbsp;A</I></FONT><FONT SIZE=2> standing in such Seller's name on the books of the Corporation and does hereby irrevocably constitute and appoint the Secretary of the Corporation attorney to
cancel said stock on the books of the Corporation with full power of substitution in the premises and such shares of stock shall not be available for reissuance. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Representations and Warranties</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Seller Representations and Warranties</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each Seller, severally and not jointly, hereby represents and
warrants to Corporation as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Power and Authority</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Seller has the power and authority to execute and deliver this Agreement and to
perform such Seller's obligations hereunder and to consummate the transaction contemplated hereby. This Agreement has been duly executed and delivered by the Seller and, assuming the due
authorization, execution, and delivery by the Corporation, constitutes the legal, valid and binding obligation of the Seller enforceable against the Seller in accordance with its terms (subject to
bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights generally or by principles governing the availability of equitable remedies). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Ownership</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Seller is the owner, beneficially and of record of, and has good and marketable title to,
the Shares, free and clear of any liens, charges, options, pledges, encumbrances, conditions or claims. The Seller has not pledged, assigned or otherwise transferred the Shares. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Noncontravention</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Neither the execution and delivery of this Agreement by the Seller nor the performance
by the Seller of such Seller's or obligations contemplated by this Agreement will: (i)&nbsp;require on the part of the Seller any filing with, or any permit, authorization, consent or approval of,
any court, arbitrational tribunal, administrative agency or commission or other governmental or regulatory authority or agency or (ii)&nbsp;result in the imposition of any encumbrance upon, or
Security Interest (as defined below) on, the Shares. "</FONT><FONT SIZE=2><B><I>Security Interest</I></B></FONT><FONT SIZE=2>" means any mortgage, pledge, security interest, encumbrance, charge or other
lien (whether arising by contract or by operation of law), other than (i)&nbsp;mechanic's, materialmen's, and similar liens, (ii)&nbsp;liens arising under worker's compensation, unemployment
insurance, social security, retirement, and similar legislation, (iii)&nbsp;liens on goods in transit incurred pursuant to documentary letters of credit, and (iv)&nbsp;statutory liens with respect
to current taxes
not yet due and payable, and in each case arising in the ordinary course of business consistent with past practice, including with respect to frequency and amount. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Brokers</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Seller has not dealt with a broker or finder in connection with the transaction contemplated
in this Agreement and no broker or other person is entitled to any commission or finder's fee in connection with this transaction. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Information</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Seller has received from the Corporation all information that such Seller has requested
in connection with such Seller's decision to sell his interest to the Corporation. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Corporation Representations and Warranties.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Corporation represents and warrants to each Seller as
follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.1</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Organization</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Corporation is duly organized, validly existing and in good standing in the State of
Delaware. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.2</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Authority</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Corporation has the requisite legal power, authority and capacity to execute, deliver and
perform this Agreement and to consummate the transactions contemplated hereby, including the Redemption, payment of the aggregate Redemption Price. All action of the Corporation's Board of Directors
and its stockholders necessary to authorize </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2>the
transactions contemplated hereby have been duly and validly taken and all requisite consents of third parties have been obtained. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby, including the Redemption, payment of the aggregate Redemption Price and payment of the Cash Dividend, (i)&nbsp;have not and will not conflict
with or result in a breach of the provisions of its Certificate of Incorporation, as amended, or its Bylaws, as amended, (ii)&nbsp;have not resulted, and will not (with or without the lapse of time
or the giving of notice or both) result, in any default or breach or give rise to any right of termination, acceleration or cancellation under any of the terms, conditions, or provisions of any note,
deed of trust, bond, mortgage, indenture, instrument, agreement, license or permit to which it is a party or by which it or any of its assets may be bound or result in the imposition of any
encumbrance upon, or Security Interest on, any of the Corporation's assets, (iii)&nbsp;have not violated, and will not violate, any rule, regulation, judgment, decree or order by which it may be
bound; or (iv)&nbsp;have not, and will not, require on the part of the Corporation any filing with, or any permit, authorization, consent or approval of, any court, arbitrational tribunal,
administrative agency or commission or other governmental or regulatory authority or agency. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.3</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Validity</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement has been duly and validly executed and delivered by the Corporation and
constitutes a valid and binding obligation enforceable in accordance with its terms (subject to bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors'
rights generally or by principles governing the availability of equitable remedies). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.4</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Solvency</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;After giving effect to the transactions contemplated by this Agreement, including the payment of
the aggregate Redemption Price and the Cash Dividend: (i)&nbsp;the Corporation's fair value of its property will be greater than its total amount of liabilities, including, without limitation, its
contingent liabilities; (ii)&nbsp;the present fair salable value of the Corporation's assets will be greater than the amount that will be required for the Corporation to pay the probable liability
on its debts as they become absolute and matured; (iii)&nbsp;the Corporation is not engaged in business or a transaction, and will not be engaged in business or a transaction, for which the
Corporation's property would constitute an unreasonably small capital. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2.5</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Capital; Surplus</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Redemption complies with the Delaware General Corporation Laws and the Corporation's
payment of the Redemption Price shall not cause an impairment to the Corporation's capital. The Corporation has sufficient surplus (as determined in accordance with Delaware General Corporation Laws)
or net profits for 2006 and/or 2007 to pay the Cash Dividend in full. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Cash Dividend</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the provisions of Section&nbsp;B.3 of Article&nbsp;IV of the Certificate
of Incorporation, the Sellers hereby authorize and approve the one-time payment by the Corporation of the Cash Dividend and all actions of the Corporation related thereto, provided that
the declaration and payment of the Cash Dividend shall not occur prior to the Redemption and in any event shall occur within 30&nbsp;days of the date hereof, and, subject to the foregoing
conditions, the Sellers hereby waive all rights with respect to such Cash Dividend, except for such Sellers' right to receive the Cash Dividend on the Common Stock held by the Sellers. Except as
expressly provided in this Agreement, nothing contained herein shall constitute a waiver or modification of any other rights, preferences and privileges any of the Sellers may have under the
Certificate of Incorporation, the Corporation's By-laws or any agreements, contracts or arrangements to which any of them may be a party. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Board Increase</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Prior to the Redemption the Corporation desires to increase the size of its board of
directors to six (6)&nbsp;members. The Sellers hereby to consent to such increase in the size of the </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_na76602_1_4"> </A>
<BR>

<P><FONT SIZE=2>board
subject to the execution of a mutually acceptable voting agreement among the Corporation, the Sellers and certain holders of the Corporation's capital stock. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Entire Agreement</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement constitutes the entire agreement between the parties with respect to its
subject matter and may not be modified or amended, except by written agreement of the Corporation and the Sellers holding at least a majority of the Shares as of the date of this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Non-waiver</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;No delay or failure by either party to exercise any right under this Agreement, and
no partial or single exercise of that right, shall constitute a waiver of that or any other right, unless otherwise expressly provided herein. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Headings</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Headings in this Agreement are for convenience only and shall not be used to interpret or construe
its provisions. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Governing Law</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall be construed in accordance with and governed by the laws of the State of
Delaware. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Counterparts</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Binding Effect</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The provisions of this Agreement shall be binding upon and inure to the benefit of each of
the parties and their respective successors and assigns. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Facsimile Signatures</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be executed and transmitted by facsimile, which signature shall be
binding upon the parties as if they were original signatures. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="na76602_signature_page_follows."> </A>
<A NAME="toc_na76602_4"> </A>
<BR></FONT><FONT SIZE=2><B><I>Signature page follows.    <BR>    </I></B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first written above. </FONT></P>

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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="50%"><FONT SIZE=2>CORPORATION:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="50%"><BR><FONT SIZE=2><B>PROS HOLDINGS, INC.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="50%"><FONT SIZE=2><BR>
/s/ Albert E. Winemiller</FONT><HR NOSHADE><FONT SIZE=2> Albert E. Winemiller,<BR>
President and Chief Executive Officer</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="nb76602_signature_page_to_redemption_agreement"> </A>
<A NAME="toc_nb76602_1"> </A>
<BR></FONT><FONT SIZE=2><B><I>Signature page to Redemption Agreement    <BR>    </I></B></FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>SELLERS:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>TA/ADVENT VIII L.P.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
By: TA Associates VIII LLC, its General Partner<BR>
By: TA Associates, Inc., its Manager</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="46%" ALIGN="CENTER"><FONT SIZE=2><BR>
*</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>ADVENT ATLANTIC AND PACIFIC III L.P.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
By: TA Associates AAP III Partners, its General Partner<BR>
By: TA Associates, Inc.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="46%" ALIGN="CENTER"><FONT SIZE=2><BR>
*</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="47%" VALIGN="TOP"><FONT SIZE=2>*/s/ Kurt R. Jaggers</FONT><HR NOSHADE><FONT SIZE=2> Kurt R. Jaggers, Attorney-in-Fact</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="46%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>TA VENTURE INVESTORS L.P.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="46%" ALIGN="CENTER"><FONT SIZE=2><BR>
*</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>TA EXECUTIVES FUND LLC</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
By: TA Associates, Inc., its Manager</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="46%" ALIGN="CENTER"><FONT SIZE=2><BR>
*</FONT><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="nb76602_signature_page_to_redemption_agreement_1"> </A>
<A NAME="toc_nb76602_2"> </A>
<BR></FONT><FONT SIZE=2><B><I>Signature page to Redemption Agreement    <BR>    </I></B></FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=6,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="12",CHK=995798,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]NB76602A.;8',USER='BSKELLE',CD=';2-APR-2007;18:35' -->

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>SELLERS:</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=3><BR><FONT SIZE=2><B>JMI EQUITY FUND III, L.P.</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
JMI Associates III LLC, its General Partner</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>HARRY S. GRUNER</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2>Harry S. Gruner</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2>Managing Member</FONT><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="nb76602_signature_page_to_redemption_agreement_2"> </A>
<A NAME="toc_nb76602_3"> </A>
<BR></FONT><FONT SIZE=2><B><I>Signature page to Redemption Agreement    <BR>    </I></B></FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=7,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="12",CHK=156473,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]NB76602A.;8',USER='BSKELLE',CD=';2-APR-2007;18:35' -->

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="50%"><FONT SIZE=2>SELLERS:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="50%"><FONT SIZE=2><BR>
/s/ Glenys A. Wolf</FONT><HR NOSHADE><FONT SIZE=2> Glenys A. Wolf</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="50%"><FONT SIZE=2><BR>
/s/ William H. Wolf</FONT><HR NOSHADE><FONT SIZE=2> William H. Wolf</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="50%"><FONT SIZE=2><BR>
/s/ Gail W. Orr</FONT><HR NOSHADE><FONT SIZE=2> Gail W. Orr</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="50%"><FONT SIZE=2><BR>
/s/ William H. Wolf, Jr.</FONT><HR NOSHADE><FONT SIZE=2> William H. Wolf, Jr.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="50%"><FONT SIZE=2><BR>
/s/ Ian Ross Wolf</FONT><HR NOSHADE><FONT SIZE=2> Ian Ross Wolf</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="50%"><FONT SIZE=2><BR>
/s/ William H. Wolf, Jr.</FONT><HR NOSHADE><FONT SIZE=2> William H. Wolf, Jr., as Custodian under the Texas Uniform Transfers to Minors Act for Austin Everett Wolf</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="50%"><FONT SIZE=2><BR>
/s/ William H. Wolf, Jr.</FONT><HR NOSHADE><FONT SIZE=2> William H. Wolf, Jr., as Custodian under the Texas Uniform Transfers to Minors Act for Elliot Gavin Wolf</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="nb76602_signature_page_to_redemption_agreement_3"> </A>
<A NAME="toc_nb76602_4"> </A>
<BR></FONT><FONT SIZE=2><B><I>Signature page to Redemption Agreement    <BR>    </I></B></FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=8,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="12",CHK=298564,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]NB76602A.;8',USER='BSKELLE',CD=';2-APR-2007;18:35' -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="nb76602_exhibit_a"> </A>
<A NAME="toc_nb76602_5"> </A>
<BR></FONT><FONT SIZE=2><B><I>EXHIBIT A    <BR>    </I></B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="nb76602_redeemable_preferred_stock"> </A>
<A NAME="toc_nb76602_6"> </A>
<BR></FONT><FONT SIZE=2><B>REDEEMABLE PREFERRED STOCK    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="67%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="13%" ALIGN="CENTER"><FONT SIZE=1><B>Shares<BR>
Outstanding</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>Redemption<BR>
Price</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="67%"><FONT SIZE=2>TA/Advent VIII, L.P.</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>1,615,523</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>10,677,837</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="67%"><FONT SIZE=2>Advent Atlantic and Pacific III, L.P.</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>303,215</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>2,004,107</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="67%"><FONT SIZE=2>TA Executives Fund LLC</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>29,711</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>196,376</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="67%"><FONT SIZE=2>TA Investors LLC</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>32,310</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>213,554</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="67%"><FONT SIZE=2>JMI Equity Fund, III, L.P.</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>625,503</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>4,134,277</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="67%"><FONT SIZE=2>William H. Wolf</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>1,051</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>6,947</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="67%"><FONT SIZE=2>Glenys A. Wolf</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>10,510</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>69,466</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="67%"><FONT SIZE=2>Gail W. Orr</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>2,102</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>13,893</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="67%"><FONT SIZE=2>Williams H. Wolf, Jr.</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>2,102</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>13,893</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="67%"><FONT SIZE=2>Ian Ross Wolf</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>1,051</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>6,947</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="67%"><FONT SIZE=2>William H. Wolf, Jr Custodian for:Austin Everett Wolf</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>2,102</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>13,893</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="67%"><FONT SIZE=2>William H. Wolf, Jr Custodian for:Elliott Gavin Wolf</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>2,102</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>13,893</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="67%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="67%"><FONT SIZE=2><B>Total</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>2,627,282</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>17,365,082</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="67%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="67%"><BR><FONT SIZE=2><B>Total redemption per share</B></FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2><BR>
6.6095</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="67%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE SIZE=4></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=9,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="12",CHK=158242,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]NB76602A.;8',USER='BSKELLE',CD=';2-APR-2007;18:35' -->
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<BR>
<P><br><A NAME="07ZBA76601_12">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_na76602_1">REDEMPTION AGREEMENT</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_na76602_2">RECITALS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_na76602_3">AGREEMENT</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_na76602_4">Signature page follows.</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_nb76602_1">Signature page to Redemption Agreement</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_nb76602_2">Signature page to Redemption Agreement</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_nb76602_3">Signature page to Redemption Agreement</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_nb76602_4">Signature page to Redemption Agreement</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_nb76602_5">EXHIBIT A</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_nb76602_6">REDEEMABLE PREFERRED STOCK</A></FONT><BR>
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<DOCUMENT>
<TYPE>EX-10.10
<SEQUENCE>13
<FILENAME>a2176970zex-10_10.htm
<DESCRIPTION>EXHIBIT 10.10
<TEXT>
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<HEAD>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
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<FONT SIZE=3 ><A HREF="#07ZBA76601_13">QuickLinks</A></FONT>
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<P ALIGN="RIGHT"><FONT SIZE=2><A
NAME="page_lg76602_1_1"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit&nbsp;10.10  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lg76602_office_lease"> </A>
<A NAME="toc_lg76602_1"> </A>
<BR></FONT><FONT SIZE=2><B><I>OFFICE LEASE    <BR>    </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Office Lease (the "Lease") is entered into, and shall be effective, as of the </FONT><FONT SIZE=2><B>31st</B></FONT><FONT SIZE=2> day of </FONT> <FONT
SIZE=2><B>January&nbsp;2001</B></FONT><FONT SIZE=2> (the "Effective Date"), by and between </FONT><FONT SIZE=2><B>Houston Community College System, a local governmental entity
organized pursuant to the Texas Education Code</B></FONT><FONT SIZE=2> ("Landlord") and </FONT><FONT SIZE=2><B>PROS Revenue Management,&nbsp;Inc.</B></FONT><FONT SIZE=2>, ("Tenant"). </FONT></P>

<P><FONT SIZE=2><B>1.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Basic Lease Information.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The key business terms used in this Lease are defined as follows: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>"Building"</I></FONT><FONT SIZE=2> shall mean the building located at </FONT><FONT SIZE=2><B>3100 Main
Street</B></FONT><FONT SIZE=2>&nbsp;</FONT><FONT SIZE=2><B><I>(Exhibit&nbsp;A-1)</I></B></FONT><FONT SIZE=2> and commonly known as the </FONT><FONT SIZE=2><B>"ComTech
Center"</B></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>"Rentable Square Footage of the Building"</I></FONT><FONT SIZE=2> is deemed to be </FONT><FONT SIZE=2><B>531,000 square</B></FONT><FONT SIZE=2>
feet. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>"Premises"</I></FONT><FONT SIZE=2> shall mean the area shown on </FONT><FONT SIZE=2><B><I>Exhibit&nbsp;A-2</I></B></FONT><FONT SIZE=2> to
this Lease, as well as any additional areas within the Building which have been leased by Tenant pursuant to the terms of this lease. As of the date of execution of this Lease, the Premises are
located on floors&nbsp;9 and 10. The </FONT><FONT SIZE=2><I>"Rentable Square Footage of the Premises" or "RSF"</I></FONT><FONT SIZE=2> is deemed to be </FONT> <FONT SIZE=2><B>65,831</B></FONT><FONT SIZE=2> square feet with respect to the Initial
Premises and will increase to </FONT><FONT SIZE=2><B>73,200</B></FONT><FONT SIZE=2> square feet when the
Subsequent Premises is added to the Premises. RSF will increase as additional Premises are leased by Tenant. If the Premises include one or more floors in their entirety, all corridors and restroom
facilities located on such full floor(s) shall be considered part of the Premises. Landlord and Tenant stipulate and agree that the Rentable Square Footage of the Building and the Rentable Square
Footage of the Premises are correct and will not be remeasured. The Premises will be located in an area of the Building which will be part of a condominium regime to be created by a "Condominium
Declaration" to be filed by Landlord in the Official Records of Harris County, Texas after the date of execution of this Lease. Upon filing of the Condominium Declaration, the description of the
Premises area set forth in the Condominium Declaration will become the description of the Premises for the purpose of this Lease. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>"Base Rent</I></FONT><FONT SIZE=2> "will commence on the later of (i)&nbsp;the Commencement Date; or (ii)&nbsp;a date which is </FONT> <FONT SIZE=2><B>120</B></FONT><FONT SIZE=2> days after the Landlord has substantially completed the
Landlord Construction Obligation as set forth in paragraphs 1a through 1g of
Exhibit&nbsp;D for the Initial Premises and Subsequent Premises, as well as premises leased pursuant to the First Expansion Option, Second Expansion Option or any Preferential Right Area. Base Rent
will be: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="86%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="30%" ALIGN="LEFT"><FONT SIZE=1><B>BASE RENT<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="30%" ALIGN="CENTER"><FONT SIZE=1><B>RATE</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>ANNUAL</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>MONTH</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="30%"><FONT SIZE=2>Initial Premises</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2>$17.50 per RSF</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>1,152,042.50</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>96,003.54</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="30%"><FONT SIZE=2><BR>
Subsequent Premises</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2><BR>
$17.50 per RSF</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2><BR>
128,957.50</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2><BR>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2><BR>
10,746.46</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="30%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="30%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2 ALIGN="RIGHT"><HR NOSHADE></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="30%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="30%" ALIGN="RIGHT"><FONT SIZE=2>Total:</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="15%" ALIGN="RIGHT"><FONT SIZE=2>1,281,000.00</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="13%" ALIGN="RIGHT"><FONT SIZE=2>106,750.00</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lg76602_rental_abatement_initial_premises"> </A>
<A NAME="toc_lg76602_2"> </A>
<BR></FONT><FONT SIZE=2><B>RENTAL ABATEMENT    <BR>    <BR>    </B></FONT><FONT SIZE=2><B><I>Initial Premises    <BR>    </I></B></FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>Commencing
as of the Commencement Date of the Term of this Lease, the Tenant will be entitled to receive a credit as prepaid Rental of Base Rent equal to </FONT> <FONT SIZE=2><B>$0.3152</B></FONT><FONT SIZE=2> per RSF multiplied by the number of months
remaining on the Term (up to </FONT><FONT SIZE=2><B>60</B></FONT><FONT SIZE=2> months) of the
Initial Premises, to be applied monthly against Base Rent as it falls due. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>1</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_lg76602_1_2"> </A>
<UL>
<UL>
</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lg76602_subsequent_premises"> </A>
<A NAME="toc_lg76602_3"> </A>
<BR></FONT><FONT SIZE=2><B><I>Subsequent Premises    <BR>    </I></B></FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD><FONT SIZE=2>Commencing
on the Commencement Date of the Subsequent Premises, the Tenant will be entitled to receive a credit as prepaid Rental of Base Rental equal to </FONT> <FONT SIZE=2><B>$0.3152</B></FONT><FONT SIZE=2> per RSF multiplied by the number of months
remaining on the Term (up to </FONT><FONT SIZE=2><B>60</B></FONT><FONT SIZE=2> months) with respect
to the Subsequent Premises, to be applied monthly against Base Rent as it becomes due. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lg76602_first_expansion_option"> </A>
<A NAME="toc_lg76602_4"> </A>
<BR></FONT><FONT SIZE=2><B><I>First Expansion Option    <BR>    </I></B></FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD><FONT SIZE=2>Commencing
on the Commencement Date of the First Expansion space (see Rider No.&nbsp;1) the Tenant will be entitled to receive a credit as prepaid Rental of Base Rental equal to </FONT> <FONT SIZE=2><B>$0.3152</B></FONT><FONT SIZE=2> per RSF multiplied by the
number of months remaining on the Term of the First Expansion Space up to </FONT> <FONT SIZE=2><B>60</B></FONT><FONT SIZE=2> months, to be applied monthly against Base Rent as it becomes due. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lg76602_second_expansion_option"> </A>
<A NAME="toc_lg76602_5"> </A>
<BR></FONT><FONT SIZE=2><B><I>Second Expansion Option    <BR>    </I></B></FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD><FONT SIZE=2>Commencing
on the Commencement Date of the Term of the Second Expansion Space (see Rider No.&nbsp;1) the Tenant will be entitled to receive a credit as prepaid Rental of Base Rental
equal to </FONT><FONT SIZE=2><B>$0.3152</B></FONT><FONT SIZE=2> per RSF for each month remaining on the Term of the Second Expansion Space up to </FONT><FONT SIZE=2><B>60</B></FONT><FONT SIZE=2>
months, to be applied monthly against Base Rent as it becomes due. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lg76602_preferential_right_area"> </A>
<A NAME="toc_lg76602_6"> </A>
<BR></FONT><FONT SIZE=2><B><I>Preferential Right Area    <BR>    </I></B></FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(5)</FONT></DT><DD><FONT SIZE=2>Commencing
as of the Commencement Date of the Term of any Leased Space within the Preferential Rights Area (see Rider No.&nbsp;1), the Tenant will be entitled to receive a
rebatement of the Base Rental equal to </FONT><FONT SIZE=2><B>$0.3152 per</B></FONT><FONT SIZE=2> RSF multiplied by the number of months remaining on the Term (up to </FONT> <FONT SIZE=2><B>60</B></FONT><FONT SIZE=2> months) with respect to space
leased pursuant to a Preferential Right, to be applied monthly against Base Rental as it becomes due. </FONT></DD>
</DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Tenant's Pro Rata Share"</I></FONT><FONT SIZE=2> is equal to the Rentable Square Footage of the Premises divided by the Rentable Square Footage
of the Building and currently equals </FONT><FONT SIZE=2><B>12.3976%</B></FONT><FONT SIZE=2> with respect to the Initial Premises and will increase to </FONT> <FONT SIZE=2><B>13.7853%</B></FONT><FONT SIZE=2> when the Subsequent Premises is added to
the Premises. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;F.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Base Year"</I></FONT><FONT SIZE=2> for Operating Expenses: </FONT><FONT SIZE=2><B>2001</B></FONT><FONT SIZE=2>. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;G.&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Term":</I></FONT><FONT SIZE=2> The Term for the Initial Premises will be </FONT><FONT SIZE=2><B>60</B></FONT><FONT SIZE=2> months and the Term
for the Subsequent Premises will be equal to the remaining term of the Lease on the Initial Premises. Notwithstanding the above, Tenant may at any time prior to </FONT><FONT SIZE=2><B>June&nbsp;1,
2002</B></FONT><FONT SIZE=2> elect to extend the Term of the Initial Premises and Subsequent Premises so that the Term for the Initial Premises and the Subsequent Premises will equal </FONT> <FONT SIZE=2><B>60</B></FONT><FONT SIZE=2> months from the
Commencement Date of the Subsequent Premises. All other items and conditions, including Base Rent, will remain the same. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;H.&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Commencement Date":</I></FONT><FONT SIZE=2> The Lease Commencement Date will be </FONT><FONT SIZE=2><B>June&nbsp;1,
2001</B></FONT><FONT SIZE=2> subject to Force Majeure so long as the Landlord has substantially completed the Landlord Construction Obligation as set forth in paragraphs 1a through 1g of
Exhibit&nbsp;D. The Landlord will complete the Landlord Construction Obligation with respect to the Initial Premises on or before </FONT><FONT SIZE=2><B>February&nbsp;1,
2001</B></FONT><FONT SIZE=2>. The Commencement Date with respect to the Subsequent Premises will be no later than </FONT><FONT SIZE=2><B>June&nbsp;1, 2002</B></FONT><FONT SIZE=2>, so long as the
Landlord has completed the Landlord Construction Obligation at least </FONT><FONT SIZE=2><B>120</B></FONT><FONT SIZE=2> days prior to such date. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Landlord Completion Date"</I></FONT><FONT SIZE=2> will be the date the Landlord has substantially completed the Landlord Construction Obligation
as set forth in paragraphs 1a through 1g of the attached Exhibit&nbsp;D, which will be </FONT><FONT SIZE=2><B>December&nbsp;31, 2000</B></FONT><FONT SIZE=2> with respect to the Initial Premises. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;J.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>"Security Deposit": </I></FONT><FONT SIZE=2><B>$96,003.54</B></FONT><FONT SIZE=2> to be increased to </FONT> <FONT SIZE=2><B>$106,750</B></FONT><FONT SIZE=2> on or before the Commencement date of the Subsequent Premises provided that after
the expiration of </FONT> <FONT SIZE=2><B>60</B></FONT><FONT SIZE=2> months following the </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_lg76602_1_3"> </A>
<BR>

<P><FONT SIZE=2>Commencement
Date, the Security Deposit shall be refunded to Tenant, so long as no default has occurred under this Lease during such period. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;K.&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Permitted Use":</I></FONT><FONT SIZE=2> General office and related office uses. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;L.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>"Notice Addresses":</I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
or after the Commencement Date, notices shall be sent to Tenant at the Premises. Prior to the Commencement Date, notices shall be sent to Tenant at the following address: </FONT></P>

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<DIV ALIGN="CENTER"><TABLE WIDTH="76%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="64%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="34%"><FONT SIZE=2>with a copy to:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="64%"><FONT SIZE=2><BR>
PROS Revenue Management<BR>
3223 Smith Street<BR>
Houston, Texas 77006<BR>
Attention: James Brock</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="34%"><FONT SIZE=2><BR>
Oppel, Goldberg &amp; Saenz, P.L.L.C.<BR>
440 Louisiana, Suite 200<BR>
Houston, Texas 77002<BR>
Attention: Charles Goldberg</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="64%"><FONT SIZE=2><BR>
Landlord:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="34%"><FONT SIZE=2><BR>
With a copy to:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="64%"><FONT SIZE=2><BR>
Houston Community College System<BR>
3100 Main Street, 12<SUP>th</SUP> Floor<BR>
Houston, Texas 77002<BR>
Attention: Facilities Manager</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="34%"><FONT SIZE=2><BR>
J. M. Little &amp; Associates, P.C.<BR>
Attorneys at Law<BR>
5718 Westheimer, Suite 1840<BR>
Houston, Texas 77057</FONT></TD>
</TR>
</TABLE></DIV>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rent
(defined in </FONT><FONT SIZE=2><B>Section&nbsp;4.A.</B></FONT><FONT SIZE=2>) is payable to the order of Landlord, 3100 Main Street, 12th Floor, Houston, Texas 77002. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;M.&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>"Business Day(s)"</I></FONT><FONT SIZE=2> are Monday through Friday of each week, exclusive of New Year's Day, Martin Luther King Day, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day, the day after Thanksgiving Day and Christmas Day (</FONT><FONT SIZE=2><I>"Holidays")</I></FONT><FONT SIZE=2>. Landlord may designate additional
Holidays, provided that the additional Holidays are commonly recognized by other office buildings in the area where the Building is located. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;N.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>"Landlord Work"</I></FONT><FONT SIZE=2> means the work that the Landlord is obligated to perform in or to the Premises pursuant to </FONT> <FONT SIZE=2><B><I>Exhibit&nbsp;D</I></B></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;O.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>"Law(s)"</I></FONT><FONT SIZE=2> means all applicable statutes, codes, ordinances, orders, rules and regulations of any municipal or governmental
entity, now or hereafter adopted, including but not limited to the Americans with Disabilities Act (</FONT><FONT SIZE=2><I>"ADA"</I></FONT><FONT SIZE=2>) and all laws pertaining to the environment,
including but not limited to the Comprehensive Environmental Response, Compensation and Liability Act, as amended, 42&nbsp;U.S.C. &sect;960 </FONT><FONT SIZE=2><I>et.
seq.</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>"CERCLA"</I></FONT><FONT SIZE=2>). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;P.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>"Normal Business Hours"</I></FONT><FONT SIZE=2> for the Building are </FONT><FONT SIZE=2><B>7:00 A.M</B></FONT><FONT SIZE=2>. to </FONT> <FONT SIZE=2><B>6:00 P.M</B></FONT><FONT SIZE=2>. on Business Days and </FONT><FONT
SIZE=2><B>8:00&nbsp;A.M.</B></FONT><FONT SIZE=2> to </FONT><FONT SIZE=2><B>12:00
P.M</B></FONT><FONT SIZE=2>. on Saturdays. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Q.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>"Property"</I></FONT><FONT SIZE=2> means the Building and the parcel(s) of land on which it is located as more fully described on </FONT> <FONT SIZE=2><B>Exhibit&nbsp;A-1</B></FONT><FONT SIZE=2> together with all other buildings and
improvements located thereon; and the Parking Facilities and other improvements
serving the Building, if any, and the parcel(s) of land on which they are located. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;R.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>"Default"</I></FONT><FONT SIZE=2> means a default which has not been cured. </FONT></P>

<P><FONT SIZE=2><B>2.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Lease Grant.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Landlord leases the Premises to Tenant and Tenant leases the Premises from Landlord,
together with the right in common with others to use any portions of the Property that are designated by Landlord for the common use of tenants and others, such as sidewalks, common corridors,
elevator foyers, restrooms, vending areas and lobby areas (the </FONT><FONT SIZE=2><I>"Common Areas"</I></FONT><FONT SIZE=2>), but specifically excluding any portion of any "common areas" on any full
floor leased by Landlord to third parties or any full floor utilized by Landlord. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_lg76602_1_4"> </A>
<BR>

<P><FONT SIZE=2><B>3.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Term; Adjustment of Commencement Date; Possession.</I></B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>A.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Term.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>The Term of this Lease will commence on the Commencement Date and, unless
terminated early in accordance with this Lease, continue through the last day of the Term specified in </FONT><FONT SIZE=2><B>Section&nbsp;1.G.</B></FONT><FONT SIZE=2> (the </FONT> <FONT SIZE=2><I>"Expiration Date"</I></FONT><FONT SIZE=2>). If
Landlord is delayed in delivering possession of the Premises or any other space due to any reason, including Landlord's failure
to Substantially Complete the Landlord Construction Obligation by the Landlord Completion Date, such delay will be a default by Landlord and at Tenant's option, the Tenant may, upon </FONT> <FONT SIZE=2><B>60</B></FONT><FONT SIZE=2> days prior
written notice cancel this Lease, unless within such period Landlord has cured such default. If Landlord is so delayed, the Commencement
Date shall be postponed until the date Landlord delivers possession of the Initial Premises to Tenant and the Expiration Date shall be postponed by an equal number of days. Promptly after the
determination of the Commencement Date, Landlord and Tenant will enter into a commencement letter agreement in the form attached as </FONT><FONT SIZE=2><B><I>Exhibit&nbsp;C</I></B></FONT><FONT SIZE=2>. If
Tenant fails to execute such commencement letter agreement, the Commencement Date shall be deemed to be the date certified as the Commencement Date by the Landlord. Notwithstanding any other provision
of this Lease to the contrary, if the Expiration Date would occur on a date other than the last day of a calendar month, then the Expiration Date shall be automatically extended to the last day of
such calendar month. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>B.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Substantial Completion.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>The Landlord Work shall be deemed to be </FONT> <FONT SIZE=2><I>"Substantially Complete"</I></FONT><FONT
SIZE=2> on the date that all Landlord Work has been performed, other than any details of construction, mechanical adjustment or other
similar matter, the noncompletion of which does not materially interfere with Tenant's ability to proceed with any Tenant Improvements approved by Landlord. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>C.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Acceptance of Premises.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>Subject to Landlord's obligation to perform the Landlord Work
and Landlord's repair obligations under </FONT><FONT SIZE=2><B>Section&nbsp;10.B,</B></FONT><FONT SIZE=2> the Premises are accepted by Tenant in </FONT><FONT SIZE=2><B>"AS IS WHERE
IS"</B></FONT><FONT SIZE=2> condition and configuration. By taking possession of the Premises, Tenant agrees that the Premises are in good order and satisfactory condition, and that no representations
or warranties have been made by the Landlord regarding the condition of the Premises or the Building except as may be specifically set forth in this Lease. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>D.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Possession of Premises Prior to Commencement Date.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>If Tenant takes possession of the
Premises or commences business activities at the Premises before the Commencement Date with Landlord's permission, such possession and occupancy will be subject to the terms and conditions of this
Lease, however, during this period Tenant will not be required to pay Rent for any days of possession before the Commencement Date. A Certificate of Occupancy must be issued to permit possession by
the Tenant for any reason other than for the purpose of constructing Tenant Improvements pursuant to Landlord approved Construction Documents, installing furniture, equipment or other personal
property. </FONT></P>

<P><FONT SIZE=2><B>4.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Rent.</I></B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>A.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Payments.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>As consideration for this Lease, commencing on the dates specified in
paragraph&nbsp;1D with respect to the applicable premises therein specified, Tenant will pay Landlord, without any setoff or deduction, unless a setoff is specifically permitted by an express
provision of this Lease, the total amount of Base Rent and Additional Rent due and payable for the Term in the manner set forth in this Lease. </FONT><FONT SIZE=2><I>"Additional
Rent"</I></FONT><FONT SIZE=2> means all sums (exclusive of Base Rent) that Tenant is required to pay Landlord, subject to the prepaid rental credit specified in paragraph&nbsp;1d. Additional Rent
and Base Rent are sometimes collectively referred to as </FONT><FONT SIZE=2><I>"Rent"</I></FONT><FONT SIZE=2>. Tenant will pay and be liable for all rental, sales and use taxes (but excluding income
taxes), if any, imposed upon or measured by Rent under applicable Law. Base Rent and recurring monthly charges of Additional Rent shall be due and payable in advance on the first day of each calendar
month without notice or demand. All other items of Rent will be due and payable by Tenant on or before </FONT><FONT SIZE=2><B>30</B></FONT><FONT SIZE=2> days after billing by Landlord. All payments
of Rent will be by good and sufficient check acceptable to Landlord. If the Term commences on a day other than the first day of a calendar month, the monthly Base Rent and Tenant's Pro Rata Share of </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

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<P><FONT SIZE=2>any
Excess Operating Expenses (defined in </FONT><FONT SIZE=2><B>Section&nbsp;4.B.</B></FONT><FONT SIZE=2>) for the month will be prorated on a daily basis based on a </FONT> <FONT SIZE=2><B>360</B></FONT><FONT SIZE=2> day calendar year. Landlord's
acceptance of less than the correct amount of Rent will be considered a payment on account of the earliest Rent due.
No endorsement or statement on a check or letter accompanying a check or payment shall be considered an accord and satisfaction, and either party may accept such check or payment without such
acceptance being considered a waiver of any rights such party may have under this Lease or applicable Law, unless a setoff is specifically permitted by an express provision of this Lease. Tenant's
covenant to pay Rent is independent of every other covenant in this Lease. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>B.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Excess Operating Expenses.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>Tenant will pay Tenant's Pro Rata Share of the amount, if
any, by which Operating Expenses (defined in </FONT><FONT SIZE=2><B>Section&nbsp;4.D.</B></FONT><FONT SIZE=2>) for each calendar year during the Term exceed Operating Expenses for the Base Year
(the </FONT><FONT SIZE=2><I>"Excess Operating Expenses"</I></FONT><FONT SIZE=2>). In no event will Base Rent be reduced if Operating Expenses for any calendar year are less than Operating Expenses
for the Base Year No later than January&nbsp;1 of each calendar year, Landlord will provide Tenant with a good faith estimate of the Excess Operating Expenses for such calendar year during the Term.
On or before the first day of each month, Tenant will pay to Landlord a monthly installment equal to one-twelfth of Tenant's Pro Rata Share of Landlord's estimate of the Excess Operating
Expenses. If Landlord determines that its good faith estimate of the Excess Operating Expenses was incorrect, Landlord will within a reasonable period of time provide Tenant with a revised estimate.
If Landlord does not provide Tenant with an estimate of the Excess Operating Expenses by January&nbsp;1 of a calendar year, Tenant will continue to pay monthly installments based on the most recent
estimate(s) until Landlord provides Tenant with the new estimate. Upon delivery of the new estimate, an adjustment will be made for any month for which Tenant paid monthly installments based on the
previous year's estimate(s). Tenant will pay Landlord the amount of any underpayment within 30&nbsp;days after receipt of the new estimate. Any overpayment will be refunded to Tenant within
30&nbsp;days or credited against the next due future installment(s) of Additional Rent, at Tenant's option. The obligation of Tenant to pay for Excess Operating Expenses as provided herein will
survive the expiration or earlier termination of this Lease. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>C.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Reconciliation of Operating Expenses.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>Within </FONT> <FONT SIZE=2><B>120</B></FONT><FONT SIZE=2> days after the end of each calendar
year or as soon thereafter as is practicable, Landlord shall furnish Tenant with a statement of the actual
Operating Expenses and Excess Operating Expenses for such calendar year. If the estimated Excess Operating Expenses paid by Tenant for such calendar year are more than the actual Excess Operating
Expenses for such calendar year, Landlord shall apply any overpayment by Tenant against Rent due or next becoming due; provided, if the Term expires before the determination of the overpayment,
Landlord shall refund any overpayment to Tenant after first deducting the amount of Rent due. If the estimated Excess Operating Expenses paid by Tenant for the prior calendar year are less than the
actual Excess Operating Expenses for such year, Tenant shall pay Landlord, within </FONT><FONT SIZE=2><B>30</B></FONT><FONT SIZE=2> days after its receipt of the statement of Operating Expenses, any
underpayment for the prior calendar year. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>D.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Operating Expenses Defined.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2><I>"Operating Expenses"</I></FONT><FONT SIZE=2> means all
costs and expenses incurred or accrued in each calendar year in connection with the ownership, operation, maintenance, management, repair and protection of the Property which are directly attributable
to and reasonably allocable to the Building or Property, including Landlord's personal property used in connection with the Property and including, but not limited, to all reasonable costs and
expenditures relating to the following: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>Operation,
maintenance, repair and replacements of any part of the Property, including the mechanical, electrical, plumbing, HVAC, vertical transportation, fire prevention and warning
and security systems; materials and supplies (such as light bulbs and ballast); equipment and tools; floor, wall and window coverings; personal property; required or beneficial easements; and related
service agreements and rental expenses.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD><FONT SIZE=2>Administrative
and management fees, including accounting, information and professional services (except for negotiations and disputes with specific tenants not affecting other
parties); </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

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<UL>

<P><FONT SIZE=2>management
office(s); and wages, salaries, benefits, reimbursable expenses and taxes (or allocations thereof) for full and part time personnel involved in operation, maintenance and management. </FONT></P>

</UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD><FONT SIZE=2>Janitorial
service; window cleaning; waste disposal; gas, water and sewer and other utility charges (including add-ons); and landscaping, including all applicable tools
and supplies.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD><FONT SIZE=2>Property,
liability and other insurance coverages carried by Landlord, including deductibles and risk retention programs and an allocation of a portion of the cost of blanket
insurance policies maintained by Landlord and/or its affiliates.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(5)</FONT></DT><DD><FONT SIZE=2>Real
estate taxes, assessments, business taxes, excises, association dues directly related to the Property, fees, levies, charges and other taxes of every kind and nature whatsoever,
general and special, extraordinary and ordinary, foreseen and unforeseen, including interest on installment payments, which may be levied or assessed against or arise in connection with ownership,
use, occupancy, rental, operation or possession of the Property (including, without limitation, personal property taxes for property that is owned by Landlord and used in connection with the
operation, maintenance and repair of the Property), or substituted, in whole or in part, for a tax previously in existence by any taxing authority, or assessed in lieu of a tax increase, or paid as
rent under any ground lease. Real estate taxes do not include Landlord's income, franchise or estate taxes (except to the extent such excluded taxes are assessed in lieu of taxes included above). The
Tenant's share of real estate taxes for the Building will be based upon that portion of the Building which is assessed for taxation by the Harris County Appraisal District ("HCAD"). The Tenant's share
of such real estate taxes will be a fraction, the denominator of which will be that portion of the Building which is assessed for taxation by HCAD and the numerator of which will be the Premises. Real
estate taxes for the Parking Facility, if any, will be based upon Tenant's Prorata Share.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(6)</FONT></DT><DD><FONT SIZE=2>Compliance
with Laws, including license, permit and inspection fees; and all expenses and fees, including attorneys' fees and court costs, incurred in negotiating or contesting real
estate taxes or the validity and/or applicability of any governmental enactments which may affect Operating Expenses; provided Landlord shall credit against Operating Expenses any refunds received
from such negotiations or contests to the extent originally included in Operating Expenses (less Landlord's reasonable costs).
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(7)</FONT></DT><DD><FONT SIZE=2>Security
services, to the extent provided or contracted for by Landlord.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(8)</FONT></DT><DD><FONT SIZE=2>Goods
and services purchased from landlord's subsidiaries and affiliates to the extent the cost of same is generally consistent with rates charged by unaffiliated third parties for
similar goods and services and under similar circumstances (except no such limitation shall apply in emergencies).
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(9)</FONT></DT><DD><FONT SIZE=2>Depreciation
(or amortization) of capital expenditures incurred: (A)&nbsp;to conform with Laws; (B)&nbsp;to provide or maintain building standards (other than building standard
tenant improvements); or (C)&nbsp;with the intention of promoting safety or reducing or controlling increases in Operating Expenses, such as lighting, retrofit and installation of energy management
systems. Such expenditures shall be depreciated or amortized uniformly over a reasonable period of time determined by Landlord, together with interest on the undepreciated or unamortized balance at
the Prime Rate (hereinafter defined) (as of the date incurred) plus </FONT><FONT SIZE=2><B>2%.</B></FONT><FONT SIZE=2>
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(10)</FONT></DT><DD><FONT SIZE=2>Utilities
used in the operation, maintenance and use of the Property (including all premises occupied by tenants); sales, use, excise and other taxes assessed by governmental
authorities on electrical services supplied to the Property, and other costs of providing utility services to the Property. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>E.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Exclusions from Operating Expenses.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>Operating Expenses exclude the following
expenditures: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>Leasing
commissions, attorneys' fees and other expenses related to leasing tenant space and constructing improvements for the sole benefit of an individual tenant.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD><FONT SIZE=2>Goods
and services furnished to an individual tenant of the Building above building standard which are separately reimbursable directly to Landlord in addition to Excess Operating
Expenses.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD><FONT SIZE=2>Repairs
required because of casualty or condemnation damage to the extent of insurance or condemnation proceeds actually received by Landlord.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD><FONT SIZE=2>Except
as provided in </FONT><FONT SIZE=2><B>Section&nbsp;4.D(9)</B></FONT><FONT SIZE=2>, depreciation, amortization, interest payments on any encumbrances on the Building and the
cost of capital improvements or additions and replacements. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>F.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Proration of Operating Expenses; Adjustments.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>If Landlord incurs Operating Expenses
for the Property together with one or more other buildings or properties, whether pursuant to a reciprocal easement agreement, common area agreement or otherwise, the shared costs and expenses shall
be equitably prorated and apportioned by Landlord between the Property and the other buildings or properties. If the Building is not </FONT><FONT SIZE=2><B>100%</B></FONT><FONT SIZE=2> occupied
during any calendar year or if Landlord is not supplying services to </FONT><FONT SIZE=2><B>100%</B></FONT><FONT SIZE=2> of the total Rental Square Footage of the Building at any time during a
calendar year, Operating Expenses shall be determined as if the Building had been </FONT><FONT SIZE=2><B>100%</B></FONT><FONT SIZE=2> occupied and Landlord had been supplying services to </FONT> <FONT SIZE=2><B>100%</B></FONT><FONT SIZE=2> of the
Rentable Square Footage of the Building during that calendar year. If Tenant pays for its Pro Rata Share of Operating Expenses based on
increases over a </FONT><FONT SIZE=2><I>"Base Year"</I></FONT><FONT SIZE=2> and Operating Expenses for a calendar year are determined as provided in the prior sentence, Operating Expenses for the
Base Year shall also be determined as if the Building had been </FONT><FONT SIZE=2><B>100%</B></FONT><FONT SIZE=2> occupied and Landlord had been supplying services to </FONT> <FONT SIZE=2><B>100%</B></FONT><FONT SIZE=2> of the Rental Square Footage
of the Building. The extrapolation of Operating Expenses under this Section shall be performed by Landlord by
adjusting the cost of those components of Operating Expenses that are impacted by changes in the occupancy of the Building. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>G.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Audit Rights.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>Within </FONT><FONT SIZE=2><B>60</B></FONT><FONT SIZE=2> days (the </FONT> <FONT SIZE=2><I>"Audit Election
Period"</I></FONT><FONT SIZE=2>) after Landlord furnishes its statement of actual Operating Expenses for any calendar year (including the Base Year), Tenant
may, at its expense during Landlord's normal business hours, elect to audit Landlord's Operating Expenses for such calendar year only, subject to the following conditions: (1)&nbsp;there is no
uncured event of default under this Lease; (2)&nbsp;the audit shall be prepared by an independent certified public accounting firm of recognized national standing; (3)&nbsp;in no event shall any
audit be performed by a firm retained on a "contingency fee" basis; (4)&nbsp;the audit shall commence within </FONT><FONT SIZE=2><B>30</B></FONT><FONT SIZE=2> days after Landlord makes Landlord's
books and records available to Tenant's auditor and shall conclude </FONT><FONT SIZE=2><B>90</B></FONT><FONT SIZE=2> days after commencement; (5)&nbsp;the audit shall be conducted where Landlord
maintains its books and records and shall not unreasonably interfere with the conduct of Landlord's business; (6)&nbsp;Tenant and its accounting firm shall treat any audit in a confidential manner
and shall each execute Landlord's confidentiality agreement for Landlord's benefit prior to commencing the audit; and (7)&nbsp;the accounting firm's audit report shall, at a no charge to Landlord,
be submitted in draft form for Landlord's review and comment before the final audit report is delivered to Landlord, and any reasonable comments by Landlord shall be incorporated into the final audit
report. This paragraph shall not be construed to limit, suspend, or abate Tenant's obligation to pay Rent when due, including estimated Excess Operating Expenses. Landlord shall credit any overpayment
determined by the approved audit against the next sums due and owing by Tenant or, if such credit shall equal an amount greater than one months' Rent, or if no further Rent is due, refund such
overpayment or the amount thereof in excess of one month's Rent directly to Tenant. Likewise, Tenant shall pay Landlord any underpayment determined by the approved audit within </FONT> <FONT SIZE=2><B>30</B></FONT><FONT SIZE=2> days of determination.
The foregoing obligations shall survive the Expiration Date. If Tenant does not give written notice of its election to audit
Landlord's Operating Expenses during the </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>7</FONT></P>

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<P><FONT SIZE=2>Audit
Election Period, Landlord's Operating Expenses for the applicable calendar year shall be deemed approved for all purposes, and Tenant shall have no further right to review or contest the same.
If Tenant's audit should reveal that Tenant has been overcharged for excess operating expense by a sum greater than </FONT><FONT SIZE=2><B>10%</B></FONT><FONT SIZE=2> and such overcharge is confirmed
by Landlord's own audit conducted by an independent certified public accounting firm, then in such case Landlord will reimburse the Tenant the reasonable cost incurred by Tenant's auditors. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>H.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Parking Permits/Charges.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Tenant will be entitled to parking permits for use in
the Parking Facility based upon a ratio of </FONT><FONT SIZE=2><B>4</B></FONT><FONT SIZE=2> permits per </FONT><FONT SIZE=2><B>1,000</B></FONT><FONT SIZE=2> RSF NRF on the first </FONT> <FONT SIZE=2><B>73,200</B></FONT><FONT SIZE=2> sq. feet leased
by Tenant. Thereafter the ratio will be </FONT><FONT SIZE=2><B>3</B></FONT><FONT SIZE=2> permits per </FONT> <FONT SIZE=2><B>1,000</B></FONT><FONT SIZE=2> RSF. The Tenant will be obligated to take and pay for </FONT><FONT
SIZE=2><B>230</B></FONT><FONT SIZE=2> parking permits on the Lease
Commencement Date. The Tenant will be obligated to take and pay for an additional </FONT><FONT SIZE=2><B>63</B></FONT><FONT SIZE=2> parking permits on the Commencement Date of the Subsequent
Premises. Landlord will use reasonable efforts to make any excess unused permits available to Tenant on a month-to-month basis. The current market rate for unreserved space
permits&#151;subject to change during the term of this Lease&#151;is </FONT><FONT SIZE=2><B>$45</B></FONT><FONT SIZE=2> plus tax per month. If the rate should change, Tenant will not
pay a rate in excess of the market rate for such permits. </FONT></P>

<P><FONT SIZE=2><B>5.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Compliance with Laws; Use.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>The Premises will be used only for the Permitted Use and for no other
use whatsoever. Tenant will not use or permit the use of the Premises for any purpose which is illegal, creates obnoxious odors (including but not limited to tobacco smoke), noises or vibrations, is
dangerous to persons or property, could increase Landlord's insurance costs, or which, in Landlord's reasonable opinion, unreasonably disturbs any other tenants of the Building or interferes with the
operation of the Building. Except as provided below, the following uses are expressly prohibited in the Premises; government offices or agencies; personnel agencies; collection agencies; credit
unions; telemarketing or reservation centers; medical treatment and health care; restaurants and other retail; customer service offices of a public utility company; or any other purpose which would,
in Landlord's reasonable opinion, impair the reputation or quality of the Building, overburden any of the Building systems, Common Areas or parking, impair Landlord's efforts to lease space or
otherwise interfere with the operation of the Property. Notwithstanding the foregoing, the following ancillary uses are permitted in the Premises only so long as they do not, in the aggregate, occupy
more than 10% of the Rental Square Footage of the Premises or any single full floor (whichever is less): (A)&nbsp;the following services provided by Tenant exclusively to its employees: schools,
training and other educational services; credit unions; and similar employee services; and (B)&nbsp;the following services directly and exclusively supporting Tenant's business; telemarketing;
reservations; storage; debt collection; and similar support services. Subject to completion of Landlord's Construction Obligation, Tenant shall comply with all Laws, including the ADA as well as any
law, rule or regulation which must be complied with to obtain a Certificate of Occupancy, regarding the operation of Tenant's business and the use, condition, configuration and occupancy of the
Premises. Tenant, within 10&nbsp;days after receipt, shall provide Landlord with copies of any notices Tenant receives regarding a violation of alleged violation of any Laws. Tenant shall comply
with the rules and regulations of the Building attached as </FONT><FONT SIZE=2><B><I>Exhibit&nbsp;B</I></B></FONT><FONT SIZE=2> and such other reasonable rules and regulations (or modifications thereto)
adopted by Landlord from time to time. Tenant shall also cause its agents, contractors, subcontractors, employees, customers, and subtenants to comply with all rules and regulations. Whenever a
conflict shall arise between the language of this Lease and the rules and regulations, the terms of this Lease shall prevail. </FONT></P>

<P><FONT SIZE=2><B>6.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Security Deposit.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>The Security Deposit will be delivered to Landlord 30&nbsp;days prior to the
point in time when the Base Rent Credit specified in paragraph&nbsp;1D(1) has been exhausted and shall be held by Landlord without liability for interest (unless required by Law) as security for the
performance of Tenant's obligations. The Security Deposit is not an advance payment of Rent or a measure of Tenant's liability for damages. Landlord may, from time to time, without prejudice to any
other remedy, use all or a portion of the Security Deposit to satisfy past due Rent or to cure any uncured default by Tenant after any applicable cure period. If Landlord uses the Security Deposit,
Tenant shall on demand restore </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>8</FONT></P>

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<P><FONT SIZE=2>the
Security Deposit to its original amount. Landlord shall return any unapplied portion of the Security Deposit to Tenant within 30&nbsp;days after the later to occur of: (A)&nbsp;the
determination of Tenant's Pro Rata Share of any Excess Operating Expenses for the final year of the Term; (B)&nbsp;the date Tenant surrenders possession of the Premises to Landlord in accordance
with this Lease; or (C)&nbsp;the Expiration Date. If Landlord transfers its interest in the Premises, Landlord may assign the Security Deposit to the transferee and, following the assignment,
Landlord shall have no further liability for the return of the Security Deposit. Landlord shall not be required to keep the Security Deposit separate from its other accounts. </FONT></P>

<P><FONT SIZE=2><B>7.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Services to be Furnished by Landlord.</I></B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>A.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Standard Services.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>Landlord agrees to furnish Tenant with the following services
during the Term: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>Water
service for use in the lavatories on each floor on which the Premises are located&#151;24&nbsp;hours a day 7&nbsp;days a week.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD><FONT SIZE=2>Heating,
ventilation and air condition service ("HVAC") as appropriate for the season will be provided during the hours, and at the temperature levels set forth below or as may be
established by applicable governmental guidelines. In the absence of governmental guidelines HVAC service will be provided during normal business hours </FONT><FONT SIZE=2><B>7:00&nbsp;A.M. to
6:00&nbsp;P.M. Monday through Friday</B></FONT><FONT SIZE=2> and </FONT><FONT SIZE=2><B>8:00&nbsp;A.M. to 12:00 noon on Saturday</B></FONT><FONT SIZE=2> in a temperature range between </FONT> <FONT SIZE=2><B>68&deg;</B></FONT><FONT SIZE=2> to
</FONT><FONT SIZE=2><B>72&deg;. The temperature range after hours and Holiday service will be between
66&deg;</B></FONT><FONT SIZE=2> to </FONT><FONT SIZE=2><B>78&deg;.</B></FONT><FONT SIZE=2> After hour and Holiday service within the specified temperature range will be provided at no
additional cost. Tenant, after giving such advance notice as is reasonably required by Landlord, and subject to the capacity of the Building systems, may request HVAC service in "excess" of the above.
Tenant will pay Landlord the standard charge for the additional service which will be </FONT><FONT SIZE=2><B>$40</B></FONT><FONT SIZE=2> per hour per floor during the initial 60&nbsp;months of this
Lease and thereafter at a rate established by Landlord for the Building.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD><FONT SIZE=2>Maintenance
and repair of the Property as described in </FONT><FONT SIZE=2><B>Section&nbsp;10.B</B></FONT><FONT SIZE=2>, including replacement of building standard fluorescent
bulbs and ballasts.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD><FONT SIZE=2>Janitor
service five days per week (excluding Holidays), as determined by Landlord. If Tenant's use, floor covering or other improvements require special services in excess of the
standard services for the Building, Tenant shall pay the additional cost attributable to the special services. Janitor service will be generally in conformity with the Janitorial Schedule attached as
Rider No.&nbsp;2.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(5)</FONT></DT><DD><FONT SIZE=2>Elevator
service during normal business hours will be provided. After hours, elevator service is also available, but with a reduced number of cabs. Freight elevator service is
available, subject to proper authorization and Landlord's policies and procedures for use of the freight elevator(s) in the Building. Subject to the approval of the Landlord, the Tenant at its expense
may install a security access system to limit elevator access by third parties at Tenant's Premises. Any security system installed by Tenant must be approved by Landlord and must be in compliance with
Landlord's systems.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(6)</FONT></DT><DD><FONT SIZE=2>Exterior
window washing at such intervals as determined by Landlord, but in no event less than </FONT><FONT SIZE=2><B>2</B></FONT><FONT SIZE=2> times per year.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(7)</FONT></DT><DD><FONT SIZE=2>Electricity
to the Premises (during normal business and after hours) for general office use, in accordance with and subject to the terms and conditions in </FONT> <FONT SIZE=2><B>Article&nbsp;8</B></FONT><FONT SIZE=2>.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(8)</FONT></DT><DD><FONT SIZE=2>On-site
security personnel and equipment for the Building and Parking Facility will include, at a minimum 2 guards on a twenty-four hour basis and camera
monitoring of all entrances/exits of the Building and Parking Facility; provided however, the Tenant agrees that Landlord will </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>9</FONT></P>

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<P><FONT SIZE=2>not
be responsible for the adequacy or effectiveness of such security provided that (i)&nbsp;Landlord has exercised reasonable care in the selection of the security contractor and equipment; and
(ii)&nbsp;the scope and extent of the security services contracted or implemented by Landlord are generally in keeping with the standards of other comparable office buildings in the Midtown Area of
Houston Texas." </FONT></P>

</UL>
</UL>
<UL>
<UL>

<P><FONT SIZE=2><B>Notwithstanding the above, Landlord will have the right to provide the above security service through its own police department and/or personnel without further guaranteeing
the adequacy or effectiveness of such service</B></FONT><FONT SIZE=2>. </FONT></P>

</UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(9)</FONT></DT><DD><FONT SIZE=2>Signage.&nbsp;&nbsp;&nbsp;&nbsp;Tenant
will have the right to signage on the granite walls at the corner of Travis and Elgin and Main and Elgin. Landlord will provide an area for identification
signage for Tenant directing its visitors to the parking garage. Tenant's directional signage regarding visitors parking in the garage shall be placed in a mutually acceptable location. All exterior
signage (including Building and parking garage signage) shall be at Tenant's sole cost and expense and its design and appearance will be subject to written approval by Landlord at its sole discretion.
Such approval by Landlord will not be unreasonably withheld, delayed or denied.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(10)</FONT></DT><DD><FONT SIZE=2>Landlord
will provide up to 25 tons of chilled water for the sole purpose of operating Tenant's supplemental air conditioning equipment in its computer room and its UPS backup
system. Tenant will pay for (i)&nbsp;the actual usage of chilled water on a 24-hour basis pursuant to Landlord's established BTU rate to be charged to Tenant and other tenants of the
Building for such chilled water usage; (ii)&nbsp;all electrical costs associated with the operation of connecting Tenant's supplemental AC equipment (pursuant to Article&nbsp;8 of the Lease); an
(iii)&nbsp;any and all costs associated with connecting Tenant's supplemental AC equipment to the Building's chilled water unit (including but not limited to all costs associated with riser pipe,
electrical conduits and electrical connections). The installation of any supplemental AC equipment will be installed in accordance with Article&nbsp;10 of the Lease. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>B.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Service Interruptions.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Landlord's failure to furnish, or any interruption or
termination of, services due to the application of Laws, the failure of any equipment (not attributable to Landlord's gross negligence), the performance of repairs, improvements or alterations, or the
occurrence of any other event or cause whether or not within the reasonable control of Landlord (a </FONT><FONT SIZE=2><I>"Service Failure"</I></FONT><FONT SIZE=2>) shall not render Landlord liable
to Tenant, constitute a constructive eviction of Tenant, give rise to an abatement of Rent, nor relieve Tenant from the obligation to fulfill any covenant or agreement</FONT><FONT SIZE=2><B>. In no
event shall Landlord be liable to Tenant for any loss or damage, including the theft of Tenant's Property (defined in Paragraph&nbsp;15), arising out of or in connection with the failure of any
security services, personnel or equipment (not attributable to Landlord's gross negligence or willful misconduct). Provided, however, if there is a cessation of HVAC service, electrical service, water
service or elevator service which renders the Premises untenable for a period of 5 business days, Rental will abate until such services has been reasonably re-established. If such
essential services have not been reasonably re-established within a 45-day period after their initial termination, Tenant, upon 30&nbsp;days prior written notice, may cancel
this Lease unless within such notice period essential services are re-established.</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>C.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Third Party Services.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If Tenant desires any service which Landlord has not
specifically agreed to provide in this Lease, such as private security systems or telecommunications services serving the Premises, Tenant shall procure such service directly from a reputable third
party service provider (</FONT><FONT SIZE=2><I>"Provider"</I></FONT><FONT SIZE=2>) for Tenant's own account. Tenant shall require each Provider to comply with the Building's rules and regulations,
all Laws, and Landlord's reasonable policies and practices for the Building. Tenant acknowledges Landlord's current policy that requires all Providers utilizing any area of the Building outside the
Premises to be approved by Landlord and to enter into a written agreement </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>10</FONT></P>

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<P><FONT SIZE=2>acceptable
to Landlord prior to gaining access to, or making any installations in or through, such area. Accordingly, Tenant shall give Landlord advance written notice sufficient for such purposes. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>D.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Technology&nbsp;&amp; Communications.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>Tenant shall have the right, at no cost during
the initial term to (i)&nbsp;utilize Landlord's designated riser space in the building for Tenant's cabling between the Premises and to connect to Tenant's telecommunications service providers;
(ii)&nbsp;Landlord designated area on the rooftop for Tenant's installation of a microwave tower, antenna, and up 3 satellite dishes (which microwave tower, antenna, and satellite dishes shall be
for use only by Tenant and its permitted assigns or subtenant); and (iii)&nbsp;a pad (if required) in the Parking Facility, or other mutually acceptable location, for an emergency generator and
diesel fuel tank (which generator and fuel tank shall be for use only by Tenant and its permitted assignees or subtenants), and the right to install and maintain cabling and wiring between the Lease
Area and such generator through any trays, chases and risers in the Parking Facility and the Building. The type of equipment discussed in this section, as well as the manner of installation and
location of installation of such equipment, shall be subject to Landlord's prior written approval such approval not to be unreasonably withheld, delayed, or denied. Landlord will charge Tenant is
actual cost in order to supervise any engineering or construction related to this technology and communications section. Notwithstanding the above, should any modifications or improvements to any
existing riser or chase space in the Building and Parking Facility be necessary to provide adequate riser or chase capacity for Tenant's purposes, any such modification or improvement shall be at
Tenant's sole cost and expense. </FONT></P>

<P><FONT SIZE=2><B>8.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Use of Electrical Services by Tenant.</I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>A.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Landlord's Electrical Service.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Landlord will furnish building standard electrical
service to the Premises sufficient to operate customary lighting, office machines and other equipment of similar low electrical consumption, provided, however, the foregoing will consist of a </FONT> <FONT SIZE=2><B>2</B></FONT><FONT SIZE=2> watts
per RSF for high voltage and at </FONT><FONT SIZE=2><B>4</B></FONT><FONT SIZE=2> watts per RSF for low voltage ("Tenant's Electrical
Allowance"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>B.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Selection of Electrical Service Provider.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>Landlord reserves the right to select the
provider of electrical services to the Building and/or the Property ("Electrical Provider"). To the fullest extent permitted by Law, Landlord shall have the continuing right, upon 30&nbsp;days
written notice, to change such utility provider and install such components as may be necessary in order to deliver electricity to the Premises. All charges and expenses incurred by Landlord due to
any such changes in electrical services, including maintenance, repairs, installation and related costs, shall be included in the electrical services costs referenced in </FONT> <FONT SIZE=2><B>Section&nbsp;4.D(10).</B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>C.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Excess Electrical Service.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2><B>Tenant's use of electrical service is for normal office
use and Tenant's consumption of electricity will not exceed, either in voltage, rated capacity or overall load beyond the Tenant Electrical Allowance set out in this Lease. If Tenant requests
permission to consume excess electrical service, Landlord will consent to such excess service so long as Tenant complies with conditions reasonably required by Landlord (including, without limitation,
the installation of utility service upgrades, meters, submeters, air handlers or cooling units). The costs of any approved additional consumption (to the extent permitted by Law), installation and
maintenance and usage (via submetering) will be paid by Tenant.</B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>D.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Submetering.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>In the event any electrical equipment in the Premises is separately
submetered for the purposes of monitoring Tenant electrical consumption in excess of the Tenant Electrical Allowance, Tenant will pay for Tenant's actual excess electrical consumption monthly in
arrears at the same rate as that charged to Landlord, or separately billed to Tenant by the Electrical Provider. Tenant will remain obligated to pay Tenant's Pro Rata Share of the cost of electrical
services as provided in </FONT><FONT SIZE=2><B>Section&nbsp;4.D (10).</B></FONT></P>

<P><FONT SIZE=2><B>9.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Tenant Improvements.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;All improvements to the Premises installed by Landlord or Tenant
(collectively, </FONT><FONT SIZE=2><I>"Tenant Improvements"</I></FONT><FONT SIZE=2>) will be owned by Landlord and will remain upon the Premises </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>11</FONT></P>

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<P><FONT SIZE=2>without
compensation to Tenant. However, Tenant, by written notice to Landlord, may remove, at Tenant's expense, any or all of the following on or before the Expiration Date (or earlier termination):
(1)&nbsp;any Tenant Improvements that were installed by the Tenant that are in excess of the costs associated with standard office improvements; and (2)&nbsp;Tenant's personal property
(collectively, </FONT><FONT SIZE=2><I>"Tenant's Removable Property"</I></FONT><FONT SIZE=2>). Tenant will be required to remove any batteries, generators, fuel tanks and security systems (not
including interior wiring) installed by Tenant. The Tenant will replace all Removed "Tenant Improvements" which were in "excess of standard" with leasehold improvements which would be considered
STANDARD, in order to leave the Premises in a reasonably leaseable/useable condition by an office tenant. Tenant's Removable Property shall be removed by Tenant before the Expiration Date or date of
termination of this Lease, if earlier than the Expiration Date, provided that upon Landlord's prior written consent, which shall not be unreasonably withheld, Tenant may remain in the Premises for up
to five days after the Expiration Date for the sole purpose of removing Tenant's Removable Property. Tenant's possession of the Premises for such purpose shall be subject to all terms and conditions
of this Lease, including the obligation to pay Rent on a per diem basis at the rate in effect for the last month of the Term. Tenant shall repair damage caused by the installation or removal of
Tenant's Removable Property. If Tenant fails to remove any of Tenant's Removable Property, Landlord may, to the fullest extent permitted by Law: (1)&nbsp;treat such Tenant's Removable Property as
abandoned by Tenant with full rights of ownership in Landlord; (2)&nbsp;remove and store any of Tenant's personal property at Tenant's expense with reimbursement by Tenant to Landlord upon demand;
and/or (3)&nbsp;sell or dispose of such Tenant's Removable Property without delivering any proceeds to Tenant. To the fullest extent permitted by applicable Law, any unused portion of Tenant's
Security Deposit may be applied to offset Landlord's costs set forth in the preceding sentence. Notwithstanding the foregoing, Tenant, at the time it requests approval for a proposed Alteration
(defined in </FONT><FONT SIZE=2><B>Section&nbsp;10.C.</B></FONT><FONT SIZE=2>), may request in writing that Landlord advise Tenant whether the Alteration or any portion of the Alteration will be
designated as Tenant's Removable Property. </FONT></P>

<P><FONT SIZE=2><B>10.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Repairs and Alterations.</I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>A.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Tenant's Repair Obligations.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>Tenant will, at its sole cost and expense, promptly
perform all maintenance and repairs to the Premises that are not Landlord's express responsibility under this Lease, and shall keep the Premises in good condition and repair, ordinary wear and tear
excepted. Tenant's repair obligations include, without limitation, repairs to: (1)&nbsp;floor covering and/or raised flooring; (2)&nbsp;interior partitions; (3)&nbsp;doors; (4)&nbsp;the
interior side of demising walls; (5)&nbsp;electronic, phone and data cabling and related equipment (collectively, </FONT><FONT SIZE=2><I>"Cable"</I></FONT><FONT SIZE=2>) that is installed by or for
the benefit of Tenant and located in the Premises or other portions of the Building; (6)&nbsp;supplemental air conditioning units, private showers and kitchens, including hot water heaters,
plumbing, dishwashers, ice machines and similar facilities serving Tenant exclusively; (7)&nbsp;phone rooms used exclusively by Tenant; (8)&nbsp;Alterations performed by contractors retained by
Tenant, including related HVAC balancing; and (9)&nbsp;all of Tenant's furnishings, trade fixtures, equipment and inventory. All work shall be performed in accordance with the rules and procedures
described in </FONT><FONT SIZE=2><B>Section&nbsp;10.C.</B></FONT><FONT SIZE=2> below. If Tenant fails to make any repairs to the Premises for more than </FONT> <FONT SIZE=2><B>15</B></FONT><FONT SIZE=2> days after notice from Landlord (although
notice shall not be required if there is an emergency and any notice of default given pursuant to </FONT> <FONT SIZE=2><B>Section&nbsp;19.B.</B></FONT><FONT SIZE=2> describing such failure shall be deemed to constitute such notice), Landlord may make
the repairs, and Tenant shall pay the
reasonable cost of the repairs to Landlord within 30&nbsp;days after receipt of an invoice, together with an administrative charge in an amount equal to </FONT> <FONT SIZE=2><B>7.5%</B></FONT><FONT SIZE=2> of the cost of the repairs. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>B.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Landlord's Repair Obligations.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Landlord will keep and maintain in good repair and
working order and make repairs to and perform maintenance upon: (1)&nbsp;structural elements of the Building; (2)&nbsp;standard mechanical (including HVAC), electrical, plumbing and fire/life
safety systems serving the Building generally; (3)&nbsp;Common Areas; (4)&nbsp;the roof of the Building; (5)&nbsp;exterior windows of the Building; and (6)&nbsp;elevators serving the Building.
Landlord shall promptly make repairs (considering the nature and urgency of the repair) for which Landlord is responsible. If any of the foregoing </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>12</FONT></P>

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<P><FONT SIZE=2>maintenance
or repair is necessitated due to the acts or omissions of any Tenant Party, Tenant shall pay the costs of such repairs or maintenance to Landlord within </FONT> <FONT SIZE=2><B>30</B></FONT><FONT SIZE=2> days after receipt of an invoice, together
with an administrative charge in an amount equal to </FONT><FONT SIZE=2><B>7.5%</B></FONT><FONT SIZE=2>
of the cost of the repairs. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>C.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Alterations.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Tenant shall not make alterations, additions or improvements to the
Premises or install any Cable in the Premises or other portions of the Building including its initial tenant buildout (collectively, </FONT><FONT SIZE=2><I>"Alterations"</I></FONT><FONT SIZE=2>)
without first obtaining the written consent of Landlord in each instance, which consent shall not be unreasonably withheld, conditioned, or delayed so long as (i)&nbsp;the buildout is in conformity
with the general guidelines and operating criteria of the Building and (ii)&nbsp;will provide for the complete buildout of the Premises to at least a "Building Standard" level buildout. However,
Landlord's consent shall not be required for any Alteration that satisfies </FONT><FONT SIZE=2><I>all</I></FONT><FONT SIZE=2> of the following criteria (a </FONT><FONT SIZE=2><I>"Minor
Alteration"</I></FONT><FONT SIZE=2>): (1)&nbsp;is of a cosmetic nature such as painting, wallpapering, hanging pictures and installing carpeting; (2)&nbsp;is not visible from outside the Premises
or Building; (3)&nbsp;will not affect the systems or structure of the Building; and (4)&nbsp;does not require work to be performed inside the walls or above the ceiling of the Premises. However,
even though consent is not required, the performance of Minor Alterations shall be subject to all the other provisions of this </FONT><FONT SIZE=2><B>Section&nbsp;10.C</B></FONT><FONT SIZE=2>.
Prior to the commencement of any construction, Tenant will submit to the Landlord a complete set of architectural and construction drawings and plans and specifications showing the build out, the
modification to any MEP systems, as well as all other improvements to be constructed, altered or modified by the Tenant in the Premises ("Construction Documents"). Within </FONT> <FONT SIZE=2><B>10</B></FONT><FONT SIZE=2> days after submission of
such Construction Documents, the Landlord will (i)&nbsp;approve and return the Construction Documents to the Tenant; or
(ii)&nbsp;provide the Tenant with Landlord's written changes to the Construction Documents in order to reasonably accommodate Landlord's requested modifications. In the event the Landlord fails to
respond or comment on the Construction Documents within such </FONT><FONT SIZE=2><B>10</B></FONT><FONT SIZE=2> day period, same will be deemed approved. The Tenant must also deliver to Landlord the
names of all contractors who must be reasonably acceptable to Landlord (provided that Landlord may designate specific contractors with respect to Building systems); copies of contracts; necessary
permits and approvals; evidence of contractor's and subcontractor's insurance in amounts reasonably required by Landlord; and any security for performance that is reasonably required by Landlord.
Changes to the plans and specifications must also be submitted to Landlord for its approval. All Alterations or Minor Alterations must be constructed in a good and workmanlike manner using materials
of a quality that is at least equal to the quality designated by Landlord in its reasonable discretion as the minimum standard for the Building. Landlord may designate reasonable rules, regulations
and procedures for the performance of work in the Building and, to the extent reasonably necessary to avoid disruption to the occupants of the Building, shall have the right to designate the time when
Alterations may be performed. Tenant will reimburse Landlord within </FONT><FONT SIZE=2><B>30</B></FONT><FONT SIZE=2> days after receipt of an invoice for all reasonable sums paid by Landlord for
third party examination of Tenant's plans for Alterations. The Landlord will be entitled to supervise and monitor all construction in order to verify compliance with Landlord approved Construction
Documents, however, Landlord's supervision will be without cost to Tenant and will not be deemed to modify, amend, or alter in any manner the terms of this Lease or the Landlord approved Construction
Documents. The Landlord will have the right to stop construction in the event it determines that construction is not substantially in accordance with the Landlord approved Construction Documents. Upon
completion, Tenant shall furnish "as-built" plans (except for Minor Alterations), completion affidavits, full and final waivers of lien and receipts bills covering all labor and materials.
Tenants shall assure that the Alterations comply with all insurance requirements and Laws. Landlord's approval of any Alteration shall not be a representation by Landlord that the Alteration complies
with applicable Laws or will be adequate for Tenant's use. Tenant acknowledges that Landlord is not an architect or engineer, and that the Alterations will be designed and/or constructed using
independent architects, engineers and contractors reasonably approved by Landlord. Accordingly, Landlord does not guarantee or warrant that the applicable construction documents will comply with Laws
or be free from errors or omissions, nor that the Alterations will be free from defects, and Landlord will have no liability </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>13</FONT></P>

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<P><FONT SIZE=2>therefor.
Approved Landlord Construction Documents will not be interpreted to have modified the terms and conditions of the Lease, and to the extent any Construction Document or Landlord
approved Construction Document does not comply with the terms and conditions of the Lease, then same is expressly disapproved. Modification of the Lease may only occur through written lease
modifications, signed by both the Landlord and the Tenant and not through any "deemed approval" process or through the process of obtaining approved Construction Documents. Construction Documents must
comply with Landlord policies concerning (i)&nbsp;communications and fire alarm services; (ii)&nbsp;electrical design parameters, including harmonic distortion; (iii)&nbsp;floor load capacity;
and (iv)&nbsp;HVAC requirements. </FONT></P>

<P><FONT SIZE=2><B>11.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Entry by Landlord.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Landlord, its agents, contractors and representatives may enter the Premises to
inspect or show the Premises, to clean and make repairs, alterations or additions to the Premises, and to conduct or facilitate repairs, alterations or additions to any portion of the Building,
including other tenants' premises. Except in emergencies or to provide janitorial and other Building services after Normal Business Hours, Landlord shall provide Tenant with reasonable prior notice of
entry into the Premises, which may be given orally. If </FONT><FONT SIZE=2><I>reasonably</I></FONT><FONT SIZE=2> necessary for the protection and safety of Tenant and its employees, Landlord shall
have the right to temporarily close all or a portion of the Premises to perform repairs, alterations and additions but will endeavor to do so at times which will not unduly inconvenience the Tenant.
However, except in emergencies, Landlord will not close the Premises if the work can reasonably be completed on weekends and after Normal Business Hours; provided, however, that Landlord is not
required to conduct work on weekends of after Normal Business Hours if such work can be conducted without closing the Premises. Entry by Landlord for any such purposes shall not constitute
constructive eviction or entitle Tenant to an abatement or reduction of Rent. </FONT></P>

<P><FONT SIZE=2><B>12.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Assignment and Subletting.</I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>A.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Landlord's Consent Required.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except in connection with a Permitted Transfer (defined
in </FONT><FONT SIZE=2><B>Section&nbsp;12.D</B></FONT><FONT SIZE=2>), Tenant may not assign, transfer or encumber any interest in this Lease or sublease or allow any third party to use any portion
of the Premises (collectively or individually, a </FONT><FONT SIZE=2><I>"Transfer"</I></FONT><FONT SIZE=2>) without the prior written consent of Landlord, which consent shall not be unreasonably
withheld if Landlord does not elect to exercise its termination rights under </FONT><FONT SIZE=2><B>Section&nbsp;12.B</B></FONT><FONT SIZE=2> below. Without limitation, Tenant agrees that
Landlord's consent shall not be considered unreasonably withheld if: (1)&nbsp;the proposed transferee's financial condition does not meet the criteria Landlord reasonably uses to select Building
tenants having similar leasehold obligations; (2)&nbsp;the proposed transferee is a governmental agency; (3)&nbsp;the proposed transferee is a present occupant of the Building (but only if
Landlord has available space within the Building which could accommodate the proposed transferee); (4)&nbsp;Landlord is engaged in active lease negotiations with the proposed transferee for other
premises in the Building; (5)&nbsp;an event of default exists under this Lease; (6)&nbsp;any portion of the Building or Premises would likely become subject to additional or different Laws as a
consequence of the proposed Transfer and as such would increase Landlord's or other tenants Operating Expenses; (7)&nbsp;the proposed transferee's use of the Premises conflicts with the Permitted
Use or any exclusive usage rights granted to any other tenant in the Building; (8)&nbsp;the use, nature, business, activities or reputation in the business community of the proposed transferee (or
its principals, employees or invitees) are not acceptable to Landlord;; or (9)&nbsp;the proposed transferee is currently involved in litigation with Landlord or any of its affiliates. Tenant shall
not be entitled to receive monetary damages based upon a claim that Landlord unreasonably withheld its consent to a proposed Transfer and Tenant's sole remedy shall be an action to enforce any such
provision through specific performance or declaratory judgment. Any attempted Transfer in violation of this Article is voidable at Landlord's option. Consent by Landlord to one or more Transfer(s)
shall not operate as a waiver of Landlord's rights to approve any subsequent Transfers. In no event shall any Transfer or Permitted Transfer release or relieve Tenant from any obligation under this
Lease. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>14</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>B.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Consent Procedure; Termination.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>As part of its request for Landlord's consent to a
Transfer or notification to Landlord of a Permitted Transfer, Tenant shall provide Landlord with financial statements for the proposed transferee, a complete copy of the proposed assignment, sublease
and other contractual documents and such other information as Landlord may reasonably request. Landlord shall, by written notice to Tenant within </FONT><FONT SIZE=2><B>20</B></FONT><FONT SIZE=2>
days of its receipt of the required information and documentation, either (1)&nbsp;consent to the Transfer or approve the Permitted Transfer by the execution of a consent agreement in a form
reasonably designated by Landlord or reasonably refuse to consent to the Transfer in writing; or (2)&nbsp;refuse to consent to such proposed assignment or sublease if same is not a Permitted
Transfer. The failure of the Landlord to respond will be deemed an approval by the Landlord of such proposed transfer. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>C.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Payment to Landlord.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>If the aggregate consideration paid to Tenant for a Transfer
exceeds that payable by Tenant under this Lease (prorated according to the transferred interest), Tenant shall pay Landlord </FONT><FONT SIZE=2><B>50%</B></FONT><FONT SIZE=2> of such excess (after
deducting therefrom reasonable leasing commissions and all reasonable costs associated with the Transfer). Tenant shall pay Landlord for Landlord's share of any excess within </FONT> <FONT SIZE=2><B>30</B></FONT><FONT SIZE=2> days after Tenant's
receipt of such excess consideration. If Tenant is in Monetary Default (defined in </FONT> <FONT SIZE=2><B>Section&nbsp;19.A.</B></FONT><FONT SIZE=2>), Landlord may require that all sublease payments be made directly to Landlord, in which case Tenant
shall receive a credit against
Rent in the amount of any payments received (less Landlord's share of any excess). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>D.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>No Consent Requested.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>Tenant may assign its entire interest under this Lease without
the consent of Landlord, provided that all of the following conditions are satisfied (a </FONT><FONT SIZE=2><I>"Permitted Transfer"</I></FONT><FONT SIZE=2>): (1)&nbsp;no event of default shall have
occurred under this Lease; (2)&nbsp;The Assignee shall have a net worth which is at last equal to the greater of Tenant's net worth at the date of this Lease; (3)&nbsp;no portion of the Building
or Premises would likely become subject to additional or different Laws as a consequence of the proposed Transfer; (4)&nbsp;Tenant's successor's use of the Premises shall not conflict with the
Permitted Use or any exclusive usage rights granted to any other tenant in the Building; and (5)&nbsp;Tenant shall give Landlord written notice at least </FONT> <FONT SIZE=2><B>60</B></FONT><FONT SIZE=2> days prior to the effective date of the
proposed assignment. Tenant's notice to Landlord shall include information and documentation showing that
each of the above conditions has been satisfied. If requested by Landlord, the assignee shall sign a commercially reasonable form of assumption agreement. </FONT></P>

<P><FONT SIZE=2><B>13.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Liens.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>Tenant shall not permit mechanic's or other liens to be placed upon the Property, Premises
or Tenant's leasehold interest in connection with any work or service done or purportedly done by or for the benefit of Tenant. If a lien is so placed, Tenant shall, within 10&nbsp;days of notice
from Landlord of the filing of the lien, fully discharge the lien by settling the claim which resulted in the lien or by bonding or insuring over the lien in the manner prescribed by the applicable
lien Law. If Tenant fails to discharge the lien, then, in addition to any other right or remedy of the Landlord, Landlord may bond or insure over the lien or otherwise discharge the lien. Tenant shall
reimburse Landlord for any amount paid by Landlord to bond or insure over the lien or discharge the lien, including, without limitation, reasonable attorney's fees within </FONT> <FONT SIZE=2><B>30</B></FONT><FONT SIZE=2> days after receipt of an
invoice from Landlord. </FONT></P>


<P><FONT SIZE=2><B>14.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Intentionally Omitted</I></B></FONT></P>

<P><FONT SIZE=2><B>15.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Insurance.</I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>A.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Tenant's Insurance.&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>Tenant shall carry and maintain the following insurance
(</FONT><FONT SIZE=2><I>"Tenant's Insurance"</I></FONT><FONT SIZE=2>), at its sole cost and expense: (1)&nbsp;Commercial General Liability Insurance applicable to the Premises and its appurtenances
providing, on an occurrence basis, a minimum combined single limit of </FONT><FONT SIZE=2><B>$4,000,000.l00</B></FONT><FONT SIZE=2> (coverage in excess of </FONT> <FONT SIZE=2><B>$1,000,000.00</B></FONT><FONT SIZE=2> may be provided by way of an
umbrella or excess liability policy); (2)&nbsp;All Risk Property insurance, subject to a replacement cost
valuation policy covering all of Tenant's trade fixtures, and any improvements made to the Premises by Tenant, equipment, furniture and other personal property within the Premises
(</FONT><FONT SIZE=2><I>"Tenant's Property"</I></FONT><FONT SIZE=2>); (3)&nbsp;Business Interruption insurance written on an actual loss sustained form or subject to sufficient limits to address </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>15</FONT></P>

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<P><FONT SIZE=2>reasonably
anticipated business interruption losses; (4)&nbsp;Business Automobile Liability insurance to cover all owned, hired and nonowned automobiles owned or operated by Tenant providing a
minimum combined single limit of </FONT><FONT SIZE=2><B>$1,000,000.00</B></FONT><FONT SIZE=2>; (5)&nbsp;Workers' Compensation Insurance as required by the state in which the Premises is located and
in amounts as may be required by applicable statute; and (6)&nbsp;Employers Liability Coverage of at least </FONT><FONT SIZE=2><B>$500,000.00</B></FONT><FONT SIZE=2> per occurrence. Any company
writing any of Tenant's Insurance shall have an&nbsp;A.M. Best rating of not less than A. All Commercial General Liability and Business Automobile Liability Insurance policies shall name Tenant as a
named insured and Landlord as an additional insured. If any aggregate limit is reduced because of loss paid to below </FONT><FONT SIZE=2><B>75%</B></FONT><FONT SIZE=2> of the limit required by this
Lease, Tenant will notify Landlord in writing within </FONT><FONT SIZE=2><B>10</B></FONT><FONT SIZE=2> days of the date of reduction. All policies of Tenant's Insurance shall contain endorsements
that the insurer(s) shall give Landlord and its designees at least </FONT><FONT SIZE=2><B>10</B></FONT><FONT SIZE=2> days' advance written notice of any change, cancellation, termination or lapse of
insurance. Tenant shall provide Landlord with a certificate of insurance evidencing Tenant's Insurance and Landlord's status as an Additional Insured prior to the earlier to occur of the Commencement
Date or the date Tenant is provided with possession of the Premises for any reason, and upon renewals at least </FONT><FONT SIZE=2><B>10</B></FONT><FONT SIZE=2> days prior to the expiration of the
insurance coverage. All of Tenant's Insurance policies, endorsements and certificates will be on forms and with deductibles and self-insured retention, if any, reasonably acceptable to
Landlord. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>B.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Landlord's Insurance.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Landlord, during the term of this Lease will carry and
maintain the following insurance ("Landlord's Insurance") at its sole cost and expense (i)&nbsp;commercial general liability insurance applicable to the Building, the Property and Parking Facility,
providing, on an occurrence basis, a minimum combined single limit of </FONT><FONT SIZE=2><B>$7,000,000</B></FONT><FONT SIZE=2> (coverage in excess of </FONT> <FONT SIZE=2><B>$1,000,000</B></FONT><FONT SIZE=2> may be provided by way of an umbrella or
excess liability policy). Any company writing any of Landlord's insurance will have an&nbsp;A.M.
Best rating of not less than A and may be provided by a master or blanket insurance policy. The Landlord's Insurance will name the Landlord as the named insured and Tenant as an additional insured. If
any aggregate limit is reduced because of a loss paid to below </FONT><FONT SIZE=2><B>75%</B></FONT><FONT SIZE=2> of the limit required by this Lease, Landlord will notify Tenant in writing within </FONT> <FONT SIZE=2><B>10</B></FONT><FONT SIZE=2>
days of the date of reduction. All policies of Landlord's Insurance will contain endorsements that the insurer(s) will give the Tenant at least </FONT> <FONT SIZE=2><B>10</B></FONT><FONT SIZE=2> days advance written notice of any change, cancellation,
 termination or lapse of insurance. Landlord shall provide Tenant with a certificate of
insurance evidencing Landlord's Insurance and Tenant's status as an Additional Insured prior to the earlier to occur of the Commencement Date or the date Tenant is provided with possession of the
Premises for any reason, and upon renewals at least </FONT><FONT SIZE=2><B>10</B></FONT><FONT SIZE=2> days prior to the expiration of the insurance coverage. All of Tenant's Insurance policies,
endorsements and certificates will be on forms and with deductibles and self-insurance retention, if any, reasonably acceptable to Tenant. Landlord shall maintain All Risk property
insurance on the Building and Parking Facility at replacement cost value, as reasonably estimated by Landlord. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>C.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Insurance Limits.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except as specifically provided to the contrary, the limits of
either party's insurance will not limit such party's liability under this Lease. </FONT></P>

<P><FONT SIZE=2><B>16.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Waiver of Subrogation.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything in this Lease to the contrary, Landlord and Tenant
each waive, and shall cause their respective insurance carriers to waive, any and all rights (by way of subrogation or otherwise) of recovery, claim, action or causes of action against the other and
their respective trustees, principals, beneficiaries, partners, officers, directors, agents, and employees, for any loss or damage that may occur to Landlord or Tenant or any party claiming by,
through or under Landlord or Tenant, as the case may be, with respect to Tenant's Property, the Building, the Premises, any additions or improvements to the Building or Premises, or any contents
thereof, INCLUDING ALL RIGHTS (BY WAY OF SUBROGATION OR OTHERWISE) OF RECOVERY, CLAIMS, ACTIONS OR CAUSES OF ACTION ARISING OUT OF THE NEGLIGENCE OF ANY LANDLORD PARTIES OR THE NEGLIGENCE OF ANY
TENANT PARTIES. which loss or damage is (or would have been, had the insurance required by this Lease been carried out) covered by insurance. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>16</FONT></P>

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<P><FONT SIZE=2><B>17.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Casualty Damage.</I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>A.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Repair or Termination by Landlord.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If all or any part of the Premises is damaged by
fire or other casualty, Tenant shall immediately notify Landlord in writing. During any period of time that all or a material portion of the Premises is rendered untenantable as a result of a fire or
other casualty, the Rent shall abate for the portion of the Premises that is untenantable and not used by Tenant. Landlord shall have the right to terminate this Lease if: (1)&nbsp;the Building
shall be damaged so that, in Landlord's reasonable judgment, substantial alteration or reconstruction of the Building shall be required (whether or not the Premises has been damaged);
(2)&nbsp;Landlord is not permitted by Law to rebuilding the Building in substantially the same form as existed before the fire or casualty; (3)&nbsp;the Premises have been materially damaged and
there is less than </FONT><FONT SIZE=2><B>2</B></FONT><FONT SIZE=2> years of the Term remaining on the date of the casualty; (4)&nbsp;any Mortgagee requires that the insurance proceeds be applied
to the payment of the mortgage debt; or (5)&nbsp;an uninsured loss of the Building occurs. Landlord may exercise its right to terminate this Lease by notifying Tenant in writing within </FONT> <FONT SIZE=2><B>90</B></FONT><FONT SIZE=2> days after the
date of the casualty. If Landlord does not terminate this Lease, Landlord shall commence and proceed with reasonable diligence to
repair and restore the Building and/or the Premises to substantially the same condition as existed immediately prior to the date of damage; provided, however, that Landlord shall only be required to
reconstruct building standard leasehold improvements existing in the Premises as of the date of damage, and Tenant shall be required to pay the cost for restoring any other leasehold improvements.
However, in no event shall Landlord be required to spend more than the insurance proceeds received by Landlord. Landlord shall not be liable for any loss or damage to Tenant's Property or to the
business of Tenant resulting in any way from the fire or other casualty or from the repair and restoration of the damage. Landlord and Tenant hereby waive the provisions of any Law relating to the
matters addressed in this Article, and agree that their respective rights for damage to or destruction of the Premises shall be those specifically provided in this Lease. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>B.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Timing for Repair; Termination by Either Party.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If all or any portion of the Premises
is untenantable as a result of fire or other casualty, Landlord shall, with reasonable promptness, cause an architect or general contractor selected by Landlord to provide Landlord and Tenant with a
written estimate of the amount of time required to substantially complete the repair and restoration of the Premises and make the Premises tenantable again, using standard working methods
(</FONT><FONT SIZE=2><I>"Completion Estimate"</I></FONT><FONT SIZE=2>). If the Completion Estimate indicates that the Premises cannot be made tenantable within </FONT> <FONT SIZE=2><B>180</B></FONT><FONT SIZE=2> days from the date the repair and
restoration is started, then regardless of anything in </FONT> <FONT SIZE=2><B>Section&nbsp;17.A.</B></FONT><FONT SIZE=2> above to the contrary, either party shall have the right to terminate this Lease by giving written notice to the other of such
election within </FONT><FONT SIZE=2><B>10</B></FONT><FONT SIZE=2> days after receipt of the Completion Estimate. Tenant, however, shall not have the right to terminate this Lease if the fire or
casualty was caused by the negligence or intentional misconduct of any Tenant Parties or any of Tenant's transferees, contractors or licensees. </FONT></P>

<P><FONT SIZE=2><B>18.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Condemnation.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Either party may terminate this Lease if the whole or any material part of the
Premises is taken or condemned for any public or quasi-public use under Law, by eminent domain or private purchase in lieu thereof ("</FONT><FONT SIZE=2><I>Taking"</I></FONT><FONT SIZE=2>). Landlord
shall also have the right to terminate this Lease if there is a Taking of any portion of the Building or Property which would leave the remainder of the Building unsuitable for use as an office
building in a manner comparable to the Building's use prior to the Taking. In order to exercise its right to terminate this Lease, Landlord or Tenant, as the case may be, must provide written notice
of termination to the other within </FONT><FONT SIZE=2><B>45</B></FONT><FONT SIZE=2> days after the terminating party first receives notice of the Taking. Any such termination shall be effective as
of the date the physical taking of the Premises or the portion of the Building or Property occurs. If this Lease is not terminated, the Rentable Square Footage of the Building, the Rentable Square
Footage of the Premises and Tenant's Pro Rata Share shall, if applicable, be appropriately adjusted by Landlord. In addition, Rent for any portion of the Premises taken or condemned shall be abated
during the unexpired Term effective when the physical taking of the portion of the Premises occurs. All compensation awarded for </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>17</FONT></P>

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<P><FONT SIZE=2>a
Taking, or sale proceeds, shall be the property of Landlord, any right to receive compensation awarded for a Taking, or sales proceeds, shall be the property of Landlord, any right to receive
compensation or proceeds being expressly waived by Tenant. However, Tenant may file&nbsp;a separate claim at its sole cost and expense for Tenant's Property and Tenant's reasonable relocation
expenses, provided the filing of the claim does not diminish the award which would otherwise be receivable by Landlord. </FONT></P>


<P><FONT SIZE=2><B>19.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Events of Default.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Tenant shall be considered to be in default of this Lease upon the occurrence
of any of the following events of default. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>A.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Tenant's failure to pay when due all or any portion of the Rent (</FONT><FONT SIZE=2><I>"Monetary
Default"</I></FONT><FONT SIZE=2>) within </FONT><FONT SIZE=2><B>3</B></FONT><FONT SIZE=2> business days after written notice to Tenant. Provided, however, Tenant will be entitled to notice no more
than </FONT><FONT SIZE=2><B>3</B></FONT><FONT SIZE=2> times in a calendar year and thereafter during such calendar year Tenant will be in default if Rental is not paid on the date same is due. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>B.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Tenant's failure (other than a Monetary Default) to comply with any term, provision or covenant of this Lease, if the
failure is not cured within </FONT><FONT SIZE=2><B>10</B></FONT><FONT SIZE=2> days after written notice to Tenant. However, if Tenant's failure to comply cannot reasonably be cured within </FONT> <FONT SIZE=2><B>10</B></FONT><FONT SIZE=2> days,
Tenant shall be allowed additional time (not to exceed an additional </FONT><FONT SIZE=2><B>10</B></FONT><FONT SIZE=2> days) as is reasonably
necessary to cure the failure to long as: (1)&nbsp;Tenant commences to cure the failure within </FONT><FONT SIZE=2><B>10</B></FONT><FONT SIZE=2> days, and (2)&nbsp;Tenant diligently pursues a
course of action that will cure the failure and bring Tenant back into compliance with this Lease. However, if Tenant's failure to comply creates a hazardous condition, the failure must be cured
immediately upon notice to Tenant. In addition, if Landlord provides Tenant with notice of Tenant's failure to comply with any particular term, provision or covenant of this Lease on more than two
(2)&nbsp;occasions during any </FONT><FONT SIZE=2><B>12</B></FONT><FONT SIZE=2> month period, Tenant's subsequent violation of the same term, provision or covenant shall, at Landlord's option, be
an incurable event of default by Tenant. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>C.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Tenant or any Guarantor becomes insolvent, files a petition for protection under the U.S. Bankruptcy Code (or similar law)
or a petition is filed against Tenant or any Guarantor under such laws and is not dismissed within </FONT><FONT SIZE=2><B>45</B></FONT><FONT SIZE=2> days after the date of such filing, makes a
transfer in fraud of creditors or makes an assignment for the benefit of creditors, or admits in writing its inability to pay its debts when due. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>D.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>The leasehold estate is taken by process or operation of Law, such as in a condemnation action. </FONT></P>

<P><FONT SIZE=2><B>20.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Landlord's Remedies on Default.</I></B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>A.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Upon any default, Landlord shall have the right without notice or demand (except as provided in </FONT> <FONT SIZE=2><B>Article&nbsp;19</B></FONT><FONT SIZE=2>) to pursue any of its rights
and remedies at Law or in equity, including any one or more of the following remedies: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>Terminate
this Lease, in which case Tenant shall immediately surrender the Premises to Landlord. If Tenant fails to surrender the Premises, Landlord may, in compliance with applicable
Law and without prejudice to any other right or remedy, enter upon and take possession of the Premises and expel and remove Tenant, Tenant's Property and any parties occupying all or any part of the
Premises. Tenant shall pay Landlord on demand the amount of all past due Rent and other losses and damages which Landlord may suffer as a result of Tenant's default, whether by Landlord's inability to
relet the Premises on satisfactory terms or otherwise, including, without limitation, all Costs of Reletting (defined below) and any deficiency that may arise from reletting or the failure to relet
the Premises. </FONT><FONT SIZE=2><I>"Costs of Reletting"</I></FONT><FONT SIZE=2> shall include commercially reasonable costs, losses and expenses incurred by Landlord in reletting all or any portion
of the Premises, including the cost of removing and storing Tenant's furniture, trade fixtures, equipment, inventory or other property, repairing and/or demolishing the Premises, removing and/or
replacing Tenant's signage and other fixtures, making the Premises ready for a new tenant, including the cost of advertising, </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>18</FONT></P>

<HR NOSHADE>
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<UL>

<P><FONT SIZE=2>commissions,
architectural fees, legal fees and leasehold improvements (even if amortized over a new lease term which exceeds the balance of the Term), and any allowances and/or concessions provided
by Landlord. </FONT></P>

</UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD><FONT SIZE=2>Terminate
Tenant's right to possession of the Premises and change the locks, without judicial process, and, in compliance with applicable Law, expel and remove Tenant, Tenant's
Property and any parties occupying all or any part of the Premises. If Landlord terminates Tenant's possession of the Premises under this </FONT> <FONT SIZE=2><B>Section&nbsp;20.A(2)</B></FONT><FONT SIZE=2>, Landlord shall have no obligation to post
any notice and Landlord shall have no obligation whatsoever to tender to Tenant a key
for new locks installed in the Premises. Landlord may (but shall not be obligated to) relet all or any part of the Premises, without notice to Tenant, for a term that may be greater or less than the
balance of the Term and on such conditions (which may include concessions, free rent and alterations of the Premises) and for such uses as Landlord in its absolute discretion shall determine Landlord
may collect and receive all rents and other income from the reletting. Tenant shall pay Landlord on demand all past due Rent, all Costs of Reletting and any deficiency arising from the reletting or
failure to relet the Premises. Landlord shall not be responsible or liable for the failure to relet all or any part of the Premises or for the failure to collect any Rent. The re-entry or
taking of possession of the Premises shall not be construed as an election by Landlord to terminate this Lease unless a written notice of termination is given to Tenant.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD><FONT SIZE=2>Cure
such event of default for Tenant at Tenant's expense (plus a </FONT><FONT SIZE=2><B>7.5%</B></FONT><FONT SIZE=2> administrative fee).
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD><FONT SIZE=2>Withhold
or suspend payment of sums Landlord would otherwise be obligated to pay to Tenant under this Lease or any other agreement.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>(5)</FONT></DT><DD><FONT SIZE=2>In
lieu of calculating damages under </FONT><FONT SIZE=2><B>Sections 20.A(1) or 20.A(2)</B></FONT><FONT SIZE=2> above, Landlord may elect to receive as damages the sum of
(a)&nbsp;all Rent accrued through the date of termination of this Lease or Tenant's right to possession, and (b)&nbsp;an amount equal to the total Rent that Tenant would have been required to pay
for the remainder of the Term discounted to present value at the Prime Rate (defined in </FONT><FONT SIZE=2><B>Section&nbsp;20.B</B></FONT><FONT SIZE=2>) then in effect, minus the then present fair
rental value of the Premises for the remainder of the Term, similarly discounted, after deducting all anticipated Costs of Reletting. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>B.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Tenant Not Relieved from Liabilities.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Unless expressly provided in this Lease, the
repossession or re-entering of all or any part of the Premises shall not relieve Tenant of its liabilities and obligations under this Lease. No right or remedy of Landlord shall be
exclusive of any other right or remedy. Each right and remedy shall be cumulative and in addition to any other right and remedy now or subsequently available to Landlord at Law or in equity. If
Landlord declares Tenant to be in default, Landlord shall be entitled to receive interest on any unpaid item of Rent at a rate equal to the lesser of </FONT> <FONT SIZE=2><B>18%</B></FONT><FONT SIZE=2> per annum or the highest rate permitted by Law.
In addition, if Tenant fails to pay any item or installment of Rent when due, Tenant shall pay
Landlord an administrative fee equal to </FONT><FONT SIZE=2><B>5%</B></FONT><FONT SIZE=2> of the past due Rent, provided that Tenant shall be entitled to a grace period of </FONT> <FONT SIZE=2><B>5</B></FONT><FONT SIZE=2> days for the first
</FONT><FONT SIZE=2><B>2</B></FONT><FONT SIZE=2> late payments of Rent in a given calendar year. For purposes hereof, the </FONT> <FONT SIZE=2><I>"Prime Rate"</I></FONT><FONT SIZE=2> shall be the per annum interest rate publicly announced as its
prime or base rate by a federally insured bank selected by Landlord in the
state in which the Building is located. Forbearance by Landlord to enforce one or more remedies shall not constitute a waiver of any default. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>C.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Mitigation of Damages.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Upon termination of Tenant's right to possess the Premises,
Landlord shall, to the extent required by Law (and no further), use objectively reasonable efforts to mitigate damages by reletting the Premises. Landlord shall not be deemed to have failed to do so
if Landlord refuses to lease the Premises to a prospective new tenant with respect to whom Landlord would be entitled to withhold its consent pursuant to </FONT> <FONT SIZE=2><B>Section&nbsp;12.A.</B></FONT><FONT SIZE=2>, or who (1)&nbsp;is an
affiliate, parent or subsidiary of Tenant; (2)&nbsp;is not acceptable to any Mortgagee of Landlord;
(3)&nbsp;requires improvements to the </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>19</FONT></P>

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<P><FONT SIZE=2>Premises
to be made at Landlord's expense; or (4)&nbsp;is unwilling to accept lease terms then proposed by Landlord, including: (a)&nbsp;leasing for a shorter or longer term than remains under
this Lease; (b)&nbsp;re-configuring or combining the Premises with other space; (c)&nbsp;taking all or only a part of the Premises; and/or (d)&nbsp;changing the use of the Premises.
Notwithstanding Landlord's duty to mitigate its damages as provided herein, Landlord shall not be obligated to give any priority to reletting Tenant's space in connection with its leasing of space in
the Building. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>D.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Landlord's Lien.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;To secure Tenant's obligations under this Lease, Tenant grants
Landlord a contractual security interest on all of Tenant's owned furniture, fixtures and equipment now or hereafter situated in the Premises and all proceeds therefrom, including insurance proceeds
(collective, </FONT><FONT SIZE=2><I>"Collateral"</I></FONT><FONT SIZE=2>). No Collateral shall be removed from the Premises without Landlord's prior written consent until all of Tenant's obligations
are fully satisfied (except in the ordinary course of business and then only if replaced with items of same value and quality). Upon any uncured event of default (as defined in this Lease), Landlord
may, to the fullest extent permitted by Law and in addition to any other remedies provided herein, enter upon the Premises and take possession of any Collateral without being held liable for trespass
or conversion, and sell the same at public or private sale, after giving Tenant at least </FONT><FONT SIZE=2><B>10</B></FONT><FONT SIZE=2> days written notice (or more if required by Law) of the time
and place of such sale. Such notice may be sent with or without return receipt requested. Unless prohibited by Law, any Landlord Party may purchase any Collateral at such sale. The proceeds from such
sale, less Landlord's expenses, including reasonable attorneys' fees and other expenses, shall be credited against Tenant's obligations. Any surplus shall be paid to Tenant (or as otherwise required
by Law) and any deficiency shall be paid by Tenant to Landlord upon demand. Upon request, Tenant shall execute and deliver to Landlord a financing statement sufficient to perfect the foregoing
security interest or Landlord may file&nbsp;a copy of this Lease as a financing statement, as permitted under Law. Landlord retains all statutory rights. </FONT></P>

<P><FONT SIZE=2><B>21.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>LIMITATION OF LIABILITY.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, THE
LIABILITY OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD) TO TENANT SHALL BE LIMITED TO THE INTEREST OF LANDLORD IN THE PROPERTY. TENANT SHALL LOOK SOLELY TO LANDLORD'S INTEREST IN THE PROPERTY FOR THE
RECOVERY OF ANY JUDGMENT OR AWARD AGAINST LANDLORD. NO LANDLORD PARTY SHALL BE PERSONALLY LIABLE FOR ANY JUDGMENT OR DEFICIENCY. Before filing suit for an alleged default by Landlord, Tenant shall
give Landlord and the Mortgagee (s)&nbsp;defined in </FONT><FONT SIZE=2><B>Article&nbsp;26</B></FONT><FONT SIZE=2>) whom Tenant has been notified hold mortgages (defined in </FONT> <FONT SIZE=2><B>Article&nbsp;26</B></FONT><FONT SIZE=2>) on the
Property, Building or Premise, notice and reasonable time to cure the alleged default. Tenant hereby waives all claims against
all Landlord parties for consequential, special or punitive damages allegedly suffered by any Tenant parties, including lost profits and business interruption. </FONT></P>


<P><FONT SIZE=2><B>22.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>No Waiver.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Either party's failure to declare a default immediately upon its occurrence, or delay
in taking action for a default shall not constitute a waiver of he default, nor shall it constitute an estoppel. Either party's failure to enforce its rights for a default shall not constitute a
waiver of its rights regarding any subsequent default. Receipt by Landlord of Tenant's keys to the Premises shall not constitute an acceptance or surrender of the Premises. </FONT></P>

<P><FONT SIZE=2><B>23.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Tenant's Right to Possession.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Tenant shall, and may peacefully have, hold and enjoy the Premises
without hindrance from Landlord or any person lawfully claiming through Landlord, subject to the terms of this Lease, provided Tenant pays the Rent and fully performs all of its covenants and
agreements. This covenant and all other covenants of Landlord shall be binding upon Landlord and its successors only during its or their respective periods of ownership of the Building, and shall not
be a personal covenant of any Landlord Parties. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>20</FONT></P>

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<P><FONT SIZE=2><B>24.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Self-Help.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In the event Landlord is in default of any obligation set forth in this
Lease, the Tenant must give written notice to the Landlord specifying with particularity the nature of the default and the reasonable curative action required to cure such default. If the Landlord
fails within </FONT><FONT SIZE=2><B>7</B></FONT><FONT SIZE=2> days of such notice to cure such default or to commence upon a cause of action which, if pursued with reasonable diligence will result in
such default being cured, the Tenant may after a 2<SUP>nd</SUP> notice to Landlord&#151;providing for </FONT><FONT SIZE=2><B>3</B></FONT><FONT SIZE=2> additional days
notice&#151;commence to cure such default on Landlord's behalf, if, and only if, the alleged default (i)&nbsp;materially and adversely affects Tenant's ability to conduct its business within
the Premises; or (ii)&nbsp;results in a substantial likelihood that personal injury or material damage to Tenant's personal property within the Premises and in such event, Tenant may cure such
default No notice is required with respect to "emergency" and "life threatening" situations. The Landlord will reimburse the Tenant the reasonable cost incurred by the Tenant in effectuating the
curative action, within </FONT><FONT SIZE=2><B>30</B></FONT><FONT SIZE=2> days of receipt, a detailed invoice reflecting the work done and the cost of such curative action. This sum, if not paid,
will bear interest at the legal rate of interest. </FONT></P>

<P><FONT SIZE=2><B>25.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Holding Over.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except for any permitted occupancy by Tenant under </FONT> <FONT SIZE=2><B>Article&nbsp;30,</B></FONT><FONT
SIZE=2> if Tenant or any party claiming by or through or under Tenant fails to surrender the Premises at the expiration or earlier
termination of this Lease, continued occupancy of the Premises shall be that of a tenancy at sufferance. Tenant's occupancy of the Premises during the holdover shall be subject to all the terms and
provisions of this Lease and Tenant shall pay an amount (on a pre month basis without reduction for partial months during the holdover) equal to </FONT><FONT SIZE=2><B>150%</B></FONT><FONT SIZE=2> of
the greater of the sum of the Base Rent and Additional Rent due for the period immediately preceding the holdover. No holdover by Tenant or payment by Tenant after the expiration or early termination
of this Lease shall be construed to extend the Term or prevent Landlord from immediate recovery of possession of the Premises by summary proceedings or otherwise. In addition to the payment of the
amounts provided above, if Landlord is unable to deliver possession of the Premises to a new tenant, or to perform improvements for a new tenant, as a result of Tenant's holdover and Tenant fails to
vacate the Premises within 15&nbsp;days after Landlord notifies Tenant of Landlord's inability to deliver possession, or perform improvements, Tenant shall be liable to Landlord for all damages,
including without limitation, consequential damages, that Landlord suffers
from the holdover. Tenant shall indemnify Landlord against all claims made by any tenant or prospective tenant against Landlord resulting from delay by Landlord in delivering the possession of the
Leased Premises to such other tenant or prospective tenant. </FONT></P>

<P><FONT SIZE=2><B>26A.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Subordination to Mortgages; Estoppel Certificate.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Tenant accepts this Lease subject and
subordinate to any mortgage(s), deed(s) of trust, ground lease(s) or other lien(s) now or subsequently affecting the Premises, the Building or the Property, and to renewals, modifications,
refinancings and extensions thereof (collectively, a </FONT><FONT SIZE=2><I>"Mortgage"</I></FONT><FONT SIZE=2>). the party having the benefit of a Mortgage shall be referred to as a </FONT> <FONT SIZE=2><I>"Mortgagee"</I></FONT><FONT SIZE=2>. This
clause shall be self-operative, </FONT><FONT SIZE=2><I>but upon request</I></FONT><FONT SIZE=2> from a Mortgagee, Tenant
shall execute a commercially reasonable subordination agreement in favor of the Mortgagee. In lieu of having the Mortgage be superior to this Lease, a Mortgagee shall have the right at any time to
subordinate its Mortgage to this Lease. If requested by a successor-in-interest to all or a part of Landlord's interest in this Lease, Tenant shall, without charge, attorn to
the successor-in-interest. Tenant shall, within </FONT><FONT SIZE=2><B>5</B></FONT><FONT SIZE=2> business days after receipt of a written request from landlord, execute and
deliver an estoppel certificate to those parties as are reasonably requested by Landlord (including a Mortgagee or prospective purchaser). The estoppel certificate shall include a statement certifying
that this Lease is unmodified (except as identified in the estoppel certificate) and in full force and effect, describing the dates to which Rent and other charges have been paid, representing that,
to the best of Tenant's knowledge, there is no default (or stating the nature of the alleged default) and certifying other matters with respect to this Lease that may reasonably be requested. </FONT></P>

<P><FONT SIZE=2><B>26B.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Landlord will, upon execution of the subordination, secure a commercial reasonably nondisturbance and attornment agreement for the
benefit of the Tenant from any Mortgagee. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>21</FONT></P>

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<P><FONT SIZE=2><B>27.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Attorneys' Fees.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If either party institutes a suit against the other for violation of or to
enforce any covenant or condition of this Lease, or if either party intervenes in any suit in which the other is a party to enforce or protect its interest or rights, the prevailing party shall be
entitled to all of its costs and expenses, including, without limitation, reasonable attorneys' fees. </FONT></P>

<P><FONT SIZE=2><B>28.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Notice.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If a demand, request, approval, consent or notice (collectively, a </FONT> <FONT SIZE=2><I>"Notice"</I></FONT><FONT
SIZE=2>) shall or may be given to either party by the other, the Notice shall be in writing and delivered by hand or sent by registered or certified
mail with return receipt requested, or sent by overnight or same day courier service, or sent by facsimile, at the party's respective Notice Address(es) set forth in </FONT> <FONT SIZE=2><B>Article&nbsp;1</B></FONT><FONT SIZE=2>, except that if
Tenant has vacated the Premises (or if the Notice Address for Tenant is other than the Premises, and Tenant has vacated
such address) without providing Landlord a new Notice Address, Landlord may serve notice in any manner described in this Article or in any other manner permitted by Law. Each Notice shall be deemed to
have been received or given on the earlier to occur of actual delivery (which, in the case of delivery by facsimile, shall be deemed to occur at the time of delivery indicated on the electronic
confirmation of the facsimile) or the date on which delivery is refused, or, if Tenant has vacated the Premises or the other Notice Address of Tenant without providing a new Notice
Address, </FONT><FONT SIZE=2><B>3</B></FONT><FONT SIZE=2> days after Notice is deposited in the U.S. mail or with a courier service in the manner described above. Either party may, at any time,
changes its Notice Address by giving the other part written notice of the new address in the manner described in this Article. </FONT></P>


<P><FONT SIZE=2><B>29.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Reserved Rights.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Lease does not grant any rights to light or air over or about the Building.
Subject to paragraph&nbsp;7D, Landlord excepts and reserves exclusively to itself the use of: (A)&nbsp;roofs, (B)&nbsp;telephone, electrical and janitorial closets, (C)&nbsp;equipment rooms,
Building risers or similar areas that are used by Landlord for the provision of Building services, (D)&nbsp;right to the land and improvements below the floor of the Premises, (E)&nbsp;the
improvements and air rights above the Premises, (F)&nbsp;the improvements and air rights outside the demising walls of the Premises, (G)&nbsp;the areas within the Premises used for the
installation of utility lines and other installations serving occupants of the Building, and (H)&nbsp;any other areas designated from time to time by Landlord as service areas of the Building.
Landlord has the right to change the Building's name or address. Landlord also has the right to make such other changes to the Property and Building as Landlord deems appropriate, provided the changes
do not materially affect Tenant's ability to use the Premises for the Permitted Use. Landlord shall also have the right (but not the obligation) to temporarily close the Building if Landlord
reasonably determines that there is an imminent danger of significant damage to the Building or of personal injury to Landlord's employees or the occupants of the Building. The circumstances under
which Landlord may temporarily close the Building shall include, without limitation, electrical interruptions, hurricanes and civil disturbances. A closure of the Building under such circumstances
shall not constitute a constructive eviction or entitle Tenant to an abatement or reduction of Rent. </FONT></P>


<P><FONT SIZE=2><B>30.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Surrender of Premises.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;At the expiration or earlier termination of this Lease or Tenant's right of
possession, Tenant shall remove all of tenant's property from the Premises as well as any tenant improvements which it is required to remove), and quit and surrender the Premises to Landlord, broom
clean, and in good order, condition and repair, ordinary wear and tear excepted. Tenant shall also be required to remove Tenant's Removal Property in accordance with </FONT> <FONT SIZE=2><B>Article&nbsp;9</B></FONT><FONT SIZE=2>. If Tenant fails to
remove any of Tenant's property within </FONT><FONT SIZE=2><B>5</B></FONT><FONT SIZE=2> days after the termination
of this Lease or of Tenant's right to possession, Landlord, at Tenant's sole cost and expense, shall be entitled (but not obligated) to remove and store Tenant's Property. Landlord shall not be
responsible for the value, preservation or safekeeping of Tenant's Property. Tenant shall pay Landlord, upon demand, the reasonable expenses and storage charges incurred for Tenant's Property. In
addition, if Tenant fails to remove Tenant's Property from the Premises or storage, as the case may be, within </FONT><FONT SIZE=2><B>30</B></FONT><FONT SIZE=2> days after written notice, Landlord
may deem all or any part of Tenant's Property to be abandoned, and title to Tenant's Property shall be deemed to be immediately vested in Landlord. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>22</FONT></P>

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<P><FONT SIZE=2><B>31.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Hazardous Materials.</I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>A.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>No Hazardous Material (hereafter defined) (except for </FONT><FONT SIZE=2><I>de minimis</I></FONT><FONT SIZE=2>
quantities of household cleaning products and office supplies used in the ordinary course of Tenant's business at the Premises and that are used, kept and disposed of in compliance with Laws) shall be
brought upon, used, kept or disposed of in or about the Premises or the Building by any Tenant Parties or any of Tenant's transferees, contractors or licensees without Landlord's prior written
consent, which consent may be withheld in Landlord's sole and absolute discretion. Tenant's request for such consent shall include a representation and warranty by Tenant that the Hazardous Material
in question (A)&nbsp;is necessary in the ordinary course of Tenant's business, and (B)&nbsp;shall be used, kept and disposed of in compliance with all Laws. If Contamination (hereinafter defined)
occurs as a result of an act or omission of any Tenant Party, Tenant shall, at its expense, promptly take all actions necessary to comply with Laws and to return the Premises, the Building, the
Property and/or any adjoining or affected property to its condition prior to such Contamination, subject to Landlord's prior written approval of Tenant's proposed methods, times and procedures for
remediation. Tenant shall provide Landlord reasonably satisfactory evidence that such actions shall not adversely affect any Landlord Party or contaminated property. Landlord may require that a
representative of Landlord be present during any such actions and/or that such actions be taken after business hours. If Tenant fails to take and diligently prosecute any necessary remediation actions
within </FONT><FONT SIZE=2><B>30</B></FONT><FONT SIZE=2> days after written notice from Landlord or an authorized governmental agency (or any shorter period required by any governmental agency),
Landlord may take such actions and Tenant shall reimburse Landlord therefor, plus a </FONT><FONT SIZE=2><B>7.5%</B></FONT><FONT SIZE=2> administrative fee, within </FONT> <FONT SIZE=2><B>30</B></FONT><FONT SIZE=2> days of Landlord's invoice. For
purposes of this </FONT><FONT SIZE=2><B>Article&nbsp;31</B></FONT><FONT SIZE=2>, a </FONT> <FONT SIZE=2><I>"Hazardous Material"</I></FONT><FONT SIZE=2> is any substance (Y)&nbsp;the presence of which requires, or may hereafter require, notification,
investigation or remediation
under any Laws; or (Z)&nbsp;which is now or hereafter defined, listed or regulated by any governmental authority as a "hazardous material", "extremely hazardous waste", "solid waste", "toxic
substance", "hazardous substance", "hazardous material" or "regulated substance", or otherwise regulated under any Laws. </FONT><FONT SIZE=2><I>"Contamination"</I></FONT><FONT SIZE=2> means any
release or disposal of a Hazardous Material in, on, under, at or from the Premises, the Building or the Property which may result in any liability, fine, use, restriction, cost recovery lien,
remediation requirement or other government o private party action or imposition affecting any Landlord Party. For purposes of this Lease, claims arising from Contamination shall include diminution in
value, restrictions on use, adverse impact on leasing space, and all costs of site investigation, remediation, removal and restoration work, including response costs under CERCLA and similar statutes. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>B.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Landlord hereby represents that to its actual knowledge there are no Hazardous Materials in the land, Building, or
Premises other than those normally present in similar properties (such as, for purposes of illustration only, cleaning fluids, solvents, fuels and lubricants) and except as otherwise disclosed in the
"Hazardous Materials Report" on file at Landlord's office. The Landlord will permit the Tenant upon reasonable notice to review the Hazardous Materials Report during normal business hours. As used
herein, "actual knowledge" is limited to the knowledge of the respective property manager of the Building. Tenant shall not be required to contribute (whether as an operating expense, or otherwise) to
the cost of remediating any environmental condition which existed prior to the date of Tenant's first occupancy. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>C.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Landlord shall not knowingly cause or permit any Hazardous Material to be used, stored, generated or disposed of, on or in
the Premises, Building, or Parking Facilities by Landlord, Landlord's agents, employees or contractors in violation of Laws. If Hazardous Materials have been or are in the future used, stored,
generated, disposed of by Landlord or discovered in the Premises, Building, or Parking Facilities in violation of Laws and Landlord is made aware thereof, then Landlord will as to such Hazardous
Materials that are brought into the Premises, the Building and/or the Parking Facilities by Landlord after the Effective Date and in violation of Laws, promptly and at its sole expense take </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>23</FONT></P>

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<P><FONT SIZE=2>any
and all necessary actions to return the Premises, Building, and/or Parking Facilities, as applicable, to a condition which will comply with all applicable Laws. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>D.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>The Landlord has disclosed to Tenant that certain materials previously used in the construction, completion, repair or
maintenance of the Premises and Building contain or contained asbestos. Tenant acknowledges the possible presence of asbestos-containing materials in the Premises and Building, whether such materials
are currently in the Premises and Building or were previously in the Premises and Building, and whether such materials are known or unknown (the "Existing Asbestos"). The Landlord will encapsulate or
remove and dispose of the Existing Asbestos only if required pursuant to Laws. Landlord will at its sole cost and expense, encapsulate or remove and dispose of such Existing Asbestos found to exist in
the Premises to the extent&#151;but only to the extent&#151;it is required to do so by Law. If the Tenant&#151;after completion of the initial build out of Tenant's
improvements&#151;desires to thereafter construct or install any alterations, additions or improvements to the Premises ("Subsequent Alterations") and the design and construction method
requires that the existing asbestos be disturbed or released then, provided there is no feasible alternative to the design or construction method other than one which would disturb or release Existing
Asbestos, the Landlord will be obligated to encapsulate or remove and dispose of the Existing Asbestos from the effected area at its sole cost and expense to the extent required by Laws and to the
extent needed to permit the construction of the Subsequent Alterations. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>E.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>In the event (i)&nbsp;a condition occurs that results in a release of any Existing Asbestos located in the Premises, and
(ii)&nbsp;such release requires the encapsulation or removal and disposal of such Existing Asbestos pursuant to Laws, then whether or not such condition is attributable to the acts or omissions of
Tenant, its employees, agents or contractors, Landlord will encapsulate or remove and dispose of such released Existing Asbestos in accordance with Laws, but at Tenant's expense if such release was
due to causes the fault of Tenant. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>F.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>The indemnity obligations under this Article&nbsp;31 shall survive the expiration or earlier termination of this Lease. </FONT></P>

<P><FONT SIZE=2><B>32.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Miscellaneous.</I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>A.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Governing Law; Jurisdiction and Venue; Severability; Paragraph Headings.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Lease
and the rights and obligations of the parties shall be interpreted, construed and enforced in accordance with the Laws of the State of Texas with venue in Harris County, Texas. If any term or
provision of this Lease shall to any extent be invalid or unenforceable, the remainder of this Lease shall not be affected, and each provision of this Lease shall be valid and enforced to the fullest
extent permitted by Law. The headings and title to the Articles and Sections of this Lease are for convenience only and shall have no effect on the interpretation of any part of this Lease. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>B.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Recording.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Tenant shall not record this Lease or any memorandum without Landlord's
prior written consent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>C.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Force Majeure.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Whenever a period of time is prescribed for the taking of an action by
Landlord or Tenant, the period of time for the performance of such action shall be extended by the number of days that the performance is actually delayed due to strikes, acts of God, shortages of
labor or materials, war, civil disturbances and other causes beyond the reasonable control of the performing party (</FONT><FONT SIZE=2><I>"Force Majeure"</I></FONT><FONT SIZE=2>) which such period
will not exceed 30&nbsp;days. However, events of Force Majeure shall not extend any period of time for the payment of Rent or other sums payable by either party or any period of time for the written
exercise of an option or right by either party. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>D.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Transferability; Release of Landlord.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Landlord shall have the right to transfer and
assign, in whole or in part, all of its rights and obligations under this Lease and in the Building and/or Property referred to herein, and upon such transfer Landlord shall be released from any
further obligations </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>24</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=8,SEQ=24,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="13",CHK=693201,FOLIO='24',FILE='DISK130:[07ZBA2.07ZBA76602]LI76602B.;6',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<A NAME="page_li76602_1_25"> </A>
<BR>

<P><FONT SIZE=2>hereunder,
and Tenant agrees to look solely to the successor in interest of Landlord for the performance of such obligations. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>E.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Brokers.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Tenant represents that it has dealt directly with and only with </FONT> <FONT SIZE=2><B>Trione&nbsp;&amp; Gordon,
L.L.P.</B></FONT><FONT SIZE=2> in connection with this Lease who is the Tenant's Broker. Trione&nbsp;&amp; Gordon is also the Landlord's Broker. Tenant
shall indemnify and hold the Landlord Parties harmless from all claims of any other brokers claiming to have represented Tenant in connection with this Lease. Landlord agrees to indemnify and hold the
Tenant Parties harmless from all claims of any brokers claiming to have represented Landlord in connection with this Lease. Landlord agrees to pay a commission to Broker pursuant to the terms and
provisions of that certain Commission Agreement executed by and between Landlord and Broker on or before the Effective Date, which Agreement is incorporated herein by reference for the specific
purposes set forth in Section&nbsp;62.022(b) of the Texas Property Code. The Landlord and Tenant acknowledge and consent that Trione&nbsp;&amp; Gordon, L.L.P. is representing both the Tenant and the
Landlord. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>F.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Authority; Joint and Several Liability.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each party hereto covenants, warrants and
represents that: (1)&nbsp;each individual executing, attesting and/or delivering this Lease on behalf of Tenant is authorized to do so on behalf of Tenant; (2)&nbsp;this Lease is binding upon and
enforceable against Tenant; and (3)&nbsp;Tenant is duly authorized and legally existing in the state of its organization and is qualified to do business in the state in which the Premises are
located. If there is more than one Tenant, or if Tenant is comprised of more than one party or entity, the obligations imposed upon Tenant shall be joint and several obligations of all the parties and
entities. Notices, payments and agreements given or made by, with or to any one person or entity shall be deemed to have been given or made by, with and to all of them. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>G.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Time is of the Essence; Relationship; Successors and Assigns.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Time is of the essence
with respect to Tenant's exercise of any expansion, renewal or extension rights or other options granted to Tenant. This Lease shall create only the relationship of landlord and tenant between the
parties, and not a partnership, joint venture or any other relationship. This Lease and the covenants and conditions in this Lease shall inure only to the benefit of and be binding upon only Landlord
and Tenant and their permitted successors and assigns. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>H.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Survival of Obligations.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The expiration of the Term, whether by lapse of time or
otherwise, shall not relieve either party of any obligations which accrued prior to or which may continue to accrue after the expiration or early termination of this Lease. Without limiting the scope
of the prior sentence, it is agreed that Tenant's obligations under </FONT><FONT SIZE=2><B>Sections 4.A, 4.B, 8, 14, 20, 25, 30</B></FONT><FONT SIZE=2> and </FONT> <FONT SIZE=2><B>31</B></FONT><FONT SIZE=2> shall survive the expiration or early
Termination of this Lease. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>I.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Binding Effect.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Landlord has delivered a copy of this Lease to Tenant for Tenant's
review only, and the delivery of it does not constitute an offer to Tenant or an option. This Lease shall not be effective against any party hereto until an original copy of this Lease has been signed
by such party. The term of this Lease shall commence on the Effective Date and, unless sooner terminated in accordance with the terms hereof, shall end on the Expiration Date. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>J.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Full Agreement; Amendments.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Lease contains the parties' entire agreement
regarding the subject matter hereof. All understandings, discussions, and agreements previously made between the parties, written or oral, are superseded by this Lease, and neither party is relying
upon any warranty, statement or representation not contained in this Lease. This Lease may be modified only by a written agreement signed by Landlord and Tenant. The exhibits and riders attached
hereto are incorporated herein and made a part of this Lease for all purposes. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>K.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Tax Waiver.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;TENANT WAIVES ALL RIGHTS PURSUANT TO ALL LAWS TO PROTEST APPRAISED VALUES
OR RECEIVE NOTICE OF REAPPRAISAL REGARDING THE </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>25</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<BR>

<P><FONT SIZE=2>PROPERTY
(INCLUDING LANDLORD'S PERSONALTY), IRRESPECTIVE OF WHETHER LANDLORD CONTESTS SAME. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>L.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Waiver of Consumer Rights.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;TENANT HEREBY WAIVES ALL ITS RIGHTS UNDER THE TEXAS
DECEPTIVE TRADE PRACTICES&#151;CONSUMER PROTECTION ACT, SECTION 17.41 ET. SEQ. OF THE TEXAS BUSINESS AND COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. AFTER
CONSULTATION WITH AN ATTORNEY OF TENANT'S OWN SELECTION, TENANT VOLUNTARILY CONSENTS TO THIS WAIVER. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>M.&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Tenant's Security.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Tenant shall (1)&nbsp;lock the doors to the Premises and take
other reasonable steps to secure the Premises and the personal property of all Tenant Parties and any of Tenant's transferees, contractors or licensees in the Common Areas and parking facilities of
the Building and Property, from unlawful intrusion, theft, fire and other hazards; (2)&nbsp;keep and maintain in good working order all security devices installed in the Premises by or for the
benefit of Tenant (such as locks, smoke detectors and burglar alarms), which shall be integrated with any other Building security systems; and (3)&nbsp;cooperate with Landlord and other tenants in
the Building on security matters. </FONT><FONT SIZE=2><B>TENANT ACKNOWLEDGES THAT LANDLORD IS NOT A GUARANTOR OF THE SECURITY OR SAFETY OF THE TENANT OR ANY THIRD PARTY OR OF ANY PROPERTY OWNED BY
TENANT OR OWNED BY A THIRD PARTY.</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>N.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Additional Use.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Tenant may, without the consent of the Landlord, use the Premises
for social events for its employees, invitees, customers and clients, so long as such events do not violate any applicable laws, statutes, ordinances or rules relating to such use or the consumption
of alcoholic beverages. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>O.&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Meeting Facilities.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Building will have conference meeting facilities that,
subject to availability, may be reserved by the Tenant. The meeting facility is primarily for the use of Landlord but may be reserved by the Tenant at Landlord's normal and customary charge. The
facility may also be leased by Landlord to the Tenant as well as to other tenants, public and community groups on a first-come first-served basis. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>P.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Bike Storage.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Landlord will designate an area on the ground level of the garage for a
bicycle rack. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Q.&nbsp;</B></FONT><FONT SIZE=2><B><I>Title.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;A copy of Landlord's policy of title insurance with respect to the Property
will be provided to Tenant. A copy of the Condominium Declaration to be filed by Landlord will be provided to Tenant within 30&nbsp;days of the date of its execution and recordation by Landlord.
This Lease will not be effective or binding on Landlord or Tenant until same has been executed by Tenant and approved by the Board of Trustees of the Houston Community College System. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Landlord
and Tenant have executed this Lease as of the day and year first above written. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>LANDLORD:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>TENANT:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><BR>
Houston Community College System</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
PROS Revenue Management, Inc.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2><BR>
by:</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>BRUCE LESLIE</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
by:</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>CHARLES H. MURPHY</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2>Bruce Leslie</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>Charles H. Murphy</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2>Chancellor</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>SVP &amp; CFO</FONT><HR NOSHADE></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>26</FONT></P>

<HR NOSHADE>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="li76602_exhibit_a-1_legal_desc__li702082"> </A>
<A NAME="toc_li76602_1"> </A>
<BR></FONT><FONT SIZE=2>EXHIBIT A-1    <BR>    <BR>    Legal Description of the Property/Building    <BR></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>27</FONT></P>

<HR NOSHADE>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lk76602_exhibit__a_"> </A>
<A NAME="toc_lk76602_1"> </A>
<BR></FONT><FONT SIZE=2>EXHIBIT "A"    <BR></FONT></P>

<P><FONT SIZE=2>METES
AND BOUNDS DESCRIPTION<BR>
1.4423 ACRE (62,825 SQ. FT.)<BR>
OBEDIENCE SMITH SURVEY, A-696<BR>
HARRIS COUNTY, TEXAS </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BEING
a tract or parcel containing 1.4423 acre (62,825 square feet) of land situated in the Obedience Smith Survey, Abstract Number 696, Harris County, Texas, being that same tract of
record under Harris County Clerk's File Number S889980, all of Lot 1, Lot 2, Lot 3, Lot 4, Lot 6, Lot 7, Lot 12, part of Lot 5, Lot 8 and Lot 11, Block 1, of Main Street Addition a subdivision of
record in Volume 55, Page 153, of the Harris County Deed Records, all of Lot 10 and part of Lot 5, Lot 8, Lot 9 and Lot 11, Block 55 of Fairgrounds Addition a subdivision of record in Volume 55, Page
222 of the Harris County Deed Records, Harris County, Texas, said 1.4423 acre tract being more particularly described as follows with all bearings referenced to the City Of Houston Survey Marker
Numbers 5356-1516A and 5356-1312B: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BEGINNING
at an "X" in concrete found for the intersection of the southeasterly right-of-way line of Travis Street (80 feet wide) and the southwesterly
right-of-way line of Elgin Avenue (80 feet wide), at the common north corner to said Lot 10 and the herein described tract; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THENCE,
South 57&deg;08'26" East, along said southwesterly right-of-way line, 251.30 feet to a PK nail found for the intersection of said southwesterly
right-of-way line and the northwesterly right-of-way line of Main Street (width varies) for the common east corner to said Lot 5 and the herein
described tract; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THENCE,
South 32&deg;51'34" West, along said northwesterly right-of-way line, 250.00 feet to an "X" in concrete found for the intersection of said
northwesterly right-of-way line and the northeasterly right-of-way line of Stuart Avenue (50 feet wide) for the common south corner to said Lot 1 and
the herein described tract; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THENCE,
North 57&deg;08'26" West, along said northeasterly right-of-way line, 251.30 feet to an "X" cut in concrete found for the intersection of said
northeasterly right-of-way line and the southeasterly right-of-way line of the aforementioned Travis Street, for the west corner of said Lot 6 and the
herein described tract; </FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lk76602_exhibit__a__1"> </A>
<A NAME="toc_lk76602_2"> </A>
<BR></FONT><FONT SIZE=2>EXHIBIT "A"    <BR></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THENCE,
North 32&deg;51'34" East, along said southeasterly right-of-way line, 250.00 feet to the Point Of Beginning and containing 1.4423 acre (62,825
square feet) of land. </FONT></P>

<P><FONT SIZE=2>Note:&nbsp;&nbsp;&nbsp;&nbsp;This
Metes and Bounds Description is referenced to a plat of survey prepared by Cobb, Fendley&nbsp;&amp; Associates,&nbsp;Inc. dated June&nbsp;29, 1999. </FONT></P>

<P><FONT SIZE=2>Cobb,
Fendley&nbsp;&amp; Associates,&nbsp;Inc.<BR>
5300 Hollister, suite 400<BR>
Houston, Texas 77040<BR>
Job Number 99-02-134-01,<BR>
Dated May&nbsp;29, 1999<BR>
Revised August&nbsp;11, 1999<BR>
Revised August&nbsp;18, 1999 </FONT></P>

<HR NOSHADE>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lk76602_exhibit__a__2"> </A>
<A NAME="toc_lk76602_3"> </A>
<BR></FONT><FONT SIZE=2>EXHIBIT "A"    <BR></FONT></P>

<P><FONT SIZE=2>DESCRIPTION
OF A TRACT OF LAND CONTAINING<BR>
50,260 SQUARE FEET (1.1538 ACRES) SITUATED<BR>
IN THE OBEDIENCE SMITH SURVEY, A-696,<BR>
HARRIS COUNTY, TEXAS </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Being
a tract of land containing 50,260 square feet (1.1538 acres) situated in the Obedience Smith Survey, A-696, in Harris County, Texas, and also being comprised of all of
Lots 1, 2, 5, 6, 7, 8, 9 and 10, Block 54 of Fairgrounds Addition, a subdivision recorded in Volume 55, Page 222 of the Deed Records of Harris County, Texas, and also being comprised of Lots 2, 3, 4,
5 and 18 of the Mary A. Stevens Addition, a subdivision recorded in Volume 42, Page 13 of the Deed Records of Harris County, Texas. Said 50,260-square foot tract being the same property as
that conveyed unto Southwestern Bell Telephone Company comprised of a 40,105-square foot tract and a 10,155-square foot tract recorded in Volume 3434, Page 263 and Volume 3941,
Page 163 respectively in the Deed Records of Harris Coanty, Texas. Said 50,260-square foot tract being more particularly described by metes and bounds as follows: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;COMMENCING
FOR REFERENCE at a 1" brass disk (City of Houston Reference Monument No.&nbsp;81) found at the center of the intersection of Main Street (width varies) and Elgin Avenue (80
feet wide) from which a 2" brass disk (City of Houston Reference Monument No.&nbsp;5356-1516A) bears North 32&deg; 51'34" East, a distance of 1651.31 feet; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THENCE
North 32&deg; 51' 34" East with the Main Street City of Houston reference line, a distance of 40.00 feet to a point; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THENCE
North 57&deg; 08' 26" West, a distance of 43.65 feet to a point for the south corner of said Southwestern Bell Telephone tact, the south corner of said tract herein
described and the POINT OF BEGINNING from which a PK nail found in concrete bears North 0.1 feet and West 0.2 feet, said POINT OF BEGINNING also being located at the intersection of the northwest
right-of-way line of said Main Street with the northeast right-of-way line of said Elgin Avenue; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THENCE
North 57&deg; 08' 26" West with the northeast right-of-way line of Elgin Avenue, a distance of 251.30 feet to a
1<SUP>1</SUP>/<SMALL>2</SMALL>-inch brass disk set in concrete for the west corner of said tract herein described located at the intersection of the northeast right-of-way
line of said Elgin Avenue with the southeast right-of-way line of Travis Street (80 feet wide); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THENCE
North 32&deg; 51' 34" East with the southeast right-of-way line of said Travis Street, a distance of 200.00 feet to a "+" stamped in a brass plate
found for the north corner of said tract herein described located at the intersection of the southeast right-of-way line of said Travis Street with the southwest
right-of-way line of Rosalie Avenue (50 feet wide); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THENCE
South 57&deg; 08' 26" East with the southwest right-of-way line of said Rosalie Avenue, a distance of 251.30 feet to a "+" stamped in a brass plate
found for the east corner of said tract herein described located at the intersection of the southwest right-of-way line of said Rosalie Avenue with the northwest
right-of-way line of Main Street (width varies); </FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lk76602_exhibit__a__3"> </A>
<A NAME="toc_lk76602_4"> </A>
<BR></FONT><FONT SIZE=2>EXHIBIT "A"    <BR></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THENCE
South 32&deg; 51' 34" West with the northwest right-of-way line of said Main Street, a distance of 200.00 feet to the POINT OF BEGINNING and
containing 50,260 square feet (1.1538 acres) of land, more or less. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
description has been prepared based upon the results of a field survey completed on October&nbsp;19, 1993. </FONT></P>

<P><FONT SIZE=2>Compiled
by: </FONT></P>

<P><FONT SIZE=2>COBB,
FENDLEY&nbsp;&amp; ASSOCIATES,&nbsp;INC.<BR>
5300 Hollister, Suite 400<BR>
Houston, Texas 77040 </FONT></P>

<P><FONT SIZE=2>Job
No.&nbsp;99-02-148-01 </FONT></P>

<P><FONT SIZE=2>October&nbsp;19,
1993 </FONT></P>

<P><FONT SIZE=2>REVISED:
November&nbsp;1, 1993 </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>Changed
monumentation for the west corner referenced in the fifth paragraph from a hole punched in concrete to a 1-<SUP>1</SUP>/<SMALL>2</SMALL>-inch brass disk set in concrete. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>REVISED:
August&nbsp;18, 1999 </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>Changed
the Volume Number/Page Number for the 40,105 sq.ft. tract in paragraph one from 55/222 to 3434/263, and the monumentation in the second paragraph from a 2" brass disk to a 1" brass disk. </FONT></P>

</UL>
</UL>
<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=31,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="13",CHK=585063,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]LK76602A.;4',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<UL>
<UL>
</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lk76602_exhibit_a-2_outline_an__lk702028"> </A>
<A NAME="toc_lk76602_5"> </A>
<BR></FONT><FONT SIZE=2>EXHIBIT A-2    <BR>    <BR>    Outline and Description of the Premises    <BR></FONT></P>

<P><FONT SIZE=2><B><I>Initial Premises.  </I></B></FONT></P>

<P><FONT SIZE=2>The
Initial Premises to be leased and occupied by the Tenant consists of the floor and areas specified on this Exhibit&nbsp;A-2&#151;page 21a and page 21b as the Initial Premises,
which will be </FONT><FONT SIZE=2><B>65,831 RSF</B></FONT><FONT SIZE=2> on floors </FONT><FONT SIZE=2><B>9</B></FONT><FONT SIZE=2> through </FONT><FONT SIZE=2><B>10</B></FONT><FONT SIZE=2> located
and configured on the attached floor plan. </FONT></P>

<P><FONT SIZE=2><B><I>Subsequent Premises.  </I></B></FONT></P>

<P><FONT SIZE=2>The
Subsequent Premises consist of approximately </FONT><FONT SIZE=2><B>7,369 RSF</B></FONT><FONT SIZE=2>, which is the balance of the </FONT> <FONT SIZE=2><B>9<SUP>th</SUP></B></FONT><FONT SIZE=2> floor (page 21c), which will be available for tenant
build out with the Landlord Construction Obligation substantially complete no
later than </FONT><FONT SIZE=2><B>February&nbsp;1, 2001</B></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>The
description of the Premises set forth in this Exhibit&nbsp;A-2 will be modified as necessary to conform to the Condominium Declaration to be filed by the Landlord, so long as such
modification does not increase or decrease Tenant's right or obligations under the terms of this Lease. </FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=32,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="13",CHK=863275,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]LK76602A.;4',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lk76602_exhibit_a-2_outline_and_descri__exh02663_5"> </A>
<A NAME="toc_lk76602_6"> </A>
<BR></FONT><FONT SIZE=2>EXHIBIT A-2    <BR>    <BR>    Outline and Description of the Premises    <BR>    <BR>    INITIAL PREMISES    <BR></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>[IMAGE] </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>3100 S. MAIN STREET </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>LEVEL
10&nbsp;-&nbsp;36,600 RENTABLE SQUARE FEET<BR>
(BEING THE ENTIRETY OF THE 10TH FLOOR) </FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=33,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="13",CHK=145152,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]LK76602A.;4',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lk76602_exhibit_a-2_outline_and_descri__exh02663_6"> </A>
<A NAME="toc_lk76602_7"> </A>
<BR></FONT><FONT SIZE=2>EXHIBIT A-2    <BR>    <BR>    Outline and Description of the Premises    <BR>    <BR>    INITIAL PREMISES    <BR></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>[IMAGE] </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>3100 S. MAIN STREET </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>LEVEL
09&nbsp;-&nbsp;29,231 RENTABLE SQUARE FEET<BR>
(BEING THE ENTIRETY OF THE 9TH FLOOR,<BR>
SAVE AND EXCEPT THE SUBSEQUENT PREMISES<BR>
IDENTIFIED ON PAGE 21-C) </FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=7,SEQ=34,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="13",CHK=962051,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]LK76602A.;4',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lk76602_exhibit_a-2_outline_and_descri__exh02825_5"> </A>
<A NAME="toc_lk76602_8"> </A>
<BR></FONT><FONT SIZE=2>EXHIBIT A-2    <BR>    <BR>    Outline and Description of the Premises    <BR>    <BR>    SUBSEQUENT PREMISES    <BR></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>[IMAGE] </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<BR></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>3100 S. MAIN STREET </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>LEVEL
0&#151;7,369 RENTABLE SQUARE FEET<BR>
(CROSS HATCHED AREA) </FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=8,SEQ=35,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="13",CHK=262991,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]LK76602A.;4',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<!-- TOC_END -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lm76602_exhibit_b_rules_and_regulations"> </A>
<A NAME="toc_lm76602_1"> </A>
<BR></FONT><FONT SIZE=2><B><I>EXHIBIT B    <BR>    <BR>    </I></B></FONT><FONT SIZE=2><B>Rules and Regulations    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sidewalks,
doorways, vestibules, halls, stairways and other similar areas shall not be obstructed by tenants or used by tenant for any purpose other than ingress and
egress to and from the premises and for going from one part to another part of the Building. Corridor doors, when not in use, shall be kept closed. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
signs, advertisements or notices shall be painted or affixed on or to any windows or doors or other part of the Building except of such color, size and style and in
such places as shall be first approved in writing by Landlord, nor shall any part of the Building be defaced by tenants. No curtains or other window treatments shall be placed between the glass and
the Building standard window treatment. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Landlord
will provide and maintain an alphabetical directory board for all tenants in the first floor (main lobby) of the Building and no other directory shall be
permitted unless previously consented to by Landlord in writing. Additionally, Landlord's acceptance of any name for listing on the Building directory will not be deemed, nor will it substitute it
for, Landlord's consent, as required by this lease, to any sublease, assignment or other occupancy of the demised premises, </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With
respect to work being performed by tenants in any leased premises with the approval of Landlord, all tenants will refer all contractors, contractors' representatives
and installation technicians rendering any service to them to Landlord for Landlord's supervision and approval before the performance of any contractual services. This provision shall apply to all
work performed in the Building including, but not limited to, installations of telephone, telegraph equipment, electrical devices and attachments, and any and all installations of every nature
affecting floors, walls, woodwork, trim, windows, ceilings, equipment and any other physical portion of the Building. Should a tenant require telegraphic, telephonic, enunciator or other communication
service, Landlord will direct the electrician where and how wires are to be introduced and place and none shall be introduced or placed except as Landlord shall direct. Electric current shall not be
used for power or heating without Landlord's prior written permission. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
deliveries of other than hand carried items must be made via the service entrances and service elevator. Any deliveries, removals or relocations of large, bulky or
voluminous items, such as furniture, office machinery and equipment, etc., can only be made after obtaining approval from the Landlord and at those times specified by the Landlord which, upon prior
arrangement with Landlord maybe after hours. A tenant shall notify the Building manager when safes or other heavy equipment are to be taken in or out of the Building, and the moving shall be done
under the supervision of the Building manger, after written permission from Landlord. Persons employed to move such property must be acceptable to Landlord. Landlord shall have the right to prescribe
the weight and position of safes and other heavy equipment or items, which shall in all cases, to distribute weight, stand on supporting devices approved by Landlord. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
movement referred to in Paragraph&nbsp;5 above shall be under the supervision of Landlord and in the manner agreed between the tenants and Landlord by
prearrangement before performance. Such prearrangement initiated by a tenant will include determination by Landlord, and subject to Landlord's decision, as to the time, method and routing of movement
and as to limitations for safety or other concern which may prohibit any article, equipment or any other item from being brought into the Building. The tenants are to assume all risks as to damages to
articles moved and injury to persons engaged in such movement, including without limitation equipment, property and personnel of Landlord if damaged or injured as a result of acts in connection with
carrying out this service for a tenant from the time of entering the property to completion of work; and Landlord shall not be liable for any damage or loss to any of said property or persons
resulting from, any act in connection with such service performed for a tenant. All damages done to the Building by the installation or removal of any property of a tenant, or done by a tenant's
property while in the Building, shall be repaired at the expense of such tenant. </FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
tenant shall cooperate with Landlord's employees in keeping its Leased Premises neat and clean. Tenants shall not employ any person for the purpose of such cleaning
other than the Building's cleaning and maintenance personnel. Landlord shall be in no way responsible to the tenants, their agents, employees, or invites for any loss of property from the Leased
Premises or public areas or for any damages to any property thereon form any cause whatsoever. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Plumbing,
fixtures and appliances shall be used only for the purposes of which designed, and no sweepings, rubbish, rags or other suitable material shall be thrown or
placed therein. Damage resulting to any such fixtures or appliances from misuse by a tenant of such tenant's agents, employees or invitees, shall be paid by such tenant, and Landlord shall not in any
case be responsible therefor. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
insure orderly operation of the Building, no ice, mineral or other water, towels, newspapers, etc. shall be delivered to any leased area except by person appointed or
approved by Landlord in writing. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;&nbsp;&nbsp;Tenants
shall not make or permit any improper, objectionable or unpleasant noises or odors in the Building or otherwise interfere in any way with other tenant's or
persons having business with them. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;&nbsp;&nbsp;Nothing
shall be swept or thrown into the corridors, halls, elevator shafts or stairways. Except for guide dogs, no birds or animals shall be brought into or kept in, on
or about the Building. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;&nbsp;&nbsp;No
machinery of any kind shall be operated by any tenant on its leased area without the prior written consent of the Landlord. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;&nbsp;&nbsp;No
portion of any Tenant's premises shall at any time be used or occupied as sleeping or lodging quarters or for any unlawful or immoral purposes. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;&nbsp;&nbsp;Tenant
shall not do anything, or permit anything to be done, in or about the Building, or bring or keep anything therein, including without limitation any inflammable or
explosive fluid or substance, that will in any way increase the possibility of fire or other casualty, or do anything in conflict with valid laws, rules or regulations of any governmental authority. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;&nbsp;&nbsp;Landlord
will not be responsible for lost or stolen personal property, money or jewelry from tenant's premises or public or common areas regardless of whether such loss
occurs when the area is locked against entry or not. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.&nbsp;&nbsp;&nbsp;Landlord
or its agents or employees shall have the right to enter the premises to examine the same or to make such repairs, alterations, or additions as Landlord shall
deem necessary for the safety, preservation or improvement of the Building. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.&nbsp;&nbsp;&nbsp;Landlord
shall have the following rights, exercisable without notice and without liability to tenant for damage or injury to property, persons or business and without
effecting an eviction or disturbance of tenants use or possession or giving rise to any claim for offset or abatement of rent: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
change the Building's name and street address. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
install, affix and maintain any and all signs on the exterior and interior of the Building. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
control all internal lighting that may be visible from the Building exterior and to maintain exterior building uniformity. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
retain at all times and to use in appropriate instances keys to all doors without and into the premises. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
decorate and to make repairs, alterations, additions, changes or improvements, whether structural or otherwise, in and about the Building or any part thereof, and to
enter upon the premises for such purposes, to temporarily close doors, entryways, public space, corridors, interrupt or temporarily suspend Building services and facilities, change the arrangement and
location of entrances, passageways, doors, elevators, shafts, stairs, toilets, etc. without abatement of </FONT></P>

</UL>
<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=37,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="13",CHK=139412,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]LM76602A.;3',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<UL>
<BR>

<P><FONT SIZE=2>rent
or affecting any of tenant's obligations hereunder so long as the premises are reasonably accessible. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
bear and retain a permanent title to the premises free and clear of any act of tenant purporting to burden or encumber them. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;g.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
grant to anyone the exclusive right to conduct any business or render any service in or to the Building, provided such exclusive right shall not operate to exclude
tenant from the use expressly permitted herein. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;h.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prohibit
the placing of vending machines or dispensing machines of any kind in the premises without Landlord's written permission. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
take all such reasonable measures as Landlord may deem advisable for the security of the Building and its occupants, including, without limitation, the search of the
Building and its occupants and persons entering and leaving the Building, evacuation of the Building for cause, suspected cause or drill purposes, temporary denial of access to the Building and the
closing of the Building after regular working hours. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;j.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
deny entrance to the Building or remove any person or persons (including tenants, tenants' employees, business invitees, visitors or any other persons) from the
Building in any case where the conduct of such person involves a potential hazard, nuisance, unreasonable risk, or threat of bodily injury or harm to any tenant or other party whose presence is
permitted in the Building, or to the public, or in the event of any fire or other emergency, riot, civil commotion or similar disturbance
involving a substantial risk of damage to the Building or bodily harm to the tenants or their employees, business invitees, visitors or the general public. An unreasonable risk of bodily harm is to be
determined by the Landlord in its sole discretion and shall include possessing or carrying a club, explosive, weapon, firearm, illegal knife, switchblade knife, hoax bomb, chemical dispensing device
or zip gun (as those terms are defined in Section&nbsp;46.0001 of the Texas Penal Code). Landlord shall have the right at any time and from time to time to install and utilize metal detectors or
similar security screening devices in the Building and to deny access to persons who create an unreasonable risk of bodily harm to tenants or other persons lawfully present in the Building. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.&nbsp;&nbsp;&nbsp;Landlord
reserves the right to rescind any of these rules and regulations and to make such other and further rules and regulations as in its judgment shall from time to
time be needful for the safety, protection, care and cleanliness of the Building, the operation thereof, the preservation of good order therein and the protection and comfort of the tenants and their
agents, employees and invitees, which rules and regulations when made and written notice thereof is given to a tenant, shall be binding upon it in like manner as if originally herein prescribed. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>TENANT:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>LANDLORD:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><BR>
PROS Revenue Management, Inc.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
Houston Community College System</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2><BR>
by:</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2>&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2>&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=38,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="13",CHK=873505,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]LM76602A.;3',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lm76602_exhibit_c_commencement_letter"> </A>
<A NAME="toc_lm76602_2"> </A>
<BR></FONT><FONT SIZE=2><B><I>EXHIBIT C    <BR>    <BR>    </I></B></FONT><FONT SIZE=2><B>Commencement Letter    <BR>    </B></FONT></P>

<UL>
<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>RE:</FONT></DT><DD><FONT SIZE=2>Office
Lease dated&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2001 (the </FONT><FONT SIZE=2><I>"Lease"</I></FONT><FONT SIZE=2>) between </FONT><FONT
SIZE=2><B>HCCS</B></FONT><FONT SIZE=2>
(</FONT><FONT SIZE=2><I>"Landlord"</I></FONT><FONT SIZE=2>) and </FONT><FONT SIZE=2><B>PROS Revenue Management,&nbsp;Inc.</B></FONT><FONT SIZE=2>
(</FONT><FONT SIZE=2><I>"Tenant"</I></FONT><FONT SIZE=2>) for Premises, the Rentable Square Footage of which
is&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;square feet, located on
the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;floors of the Building.
Unless otherwise specified, all capitalized terms used herein shall have the same meanings as in the Lease. </FONT></DD></DL>
</UL>
</UL>

<P><FONT SIZE=2>Landlord
and Tenant agree that: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>1.</FONT></DT><DD><FONT SIZE=2>Except
for the any "punchlist" items if any, Landlord has fully completed all Landlord Work required under the terms of the Lease. Any such "punchlist" will be in writing and signed by
both Tenant and Landlord.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>2.</FONT></DT><DD><FONT SIZE=2>The
Premises are usable by Tenant as intended; Landlord has no further obligation to perform any Landlord Work or other construction (except punchlist items), and Tenant acknowledges
that both the Building and the Premises are satisfactory in all respects.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>3.</FONT></DT><DD><FONT SIZE=2>The
Commencement Date of the Lease is&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, </FONT><FONT SIZE=2><B>2001</B></FONT><FONT SIZE=2>.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>4.</FONT></DT><DD><FONT SIZE=2>The
Expiration Date of the Lease is the last day of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, </FONT><FONT
SIZE=2><B>20&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>5.</FONT></DT><DD><FONT SIZE=2>Tenant's
Address at the Premises after the Commencement Date is: </FONT></DD></DL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>________________________________________________<BR>
________________________________________________<BR>
________________________________________________<BR>
________________________________________________ </FONT></P>

<P><FONT SIZE=2>All
other terms and conditions of the Lease are ratified and acknowledged to be unchanged. </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EXECUTED
as of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2001. </FONT></P>
</UL>
</UL>
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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>TENANT:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>LANDLORD:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><BR>
PROS Revenue Management, Inc.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
Houston Community College System</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2><BR>
by:</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
by:</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2><BR>
&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
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<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2>&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2>&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
</TABLE>
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<P style='page-break-before:always'></p>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lm76602_exhibit_d_landlord_construction_obligation"> </A>
<A NAME="toc_lm76602_3"> </A>
<BR></FONT><FONT SIZE=2><B><I>EXHIBIT D    <BR>    <BR>    Landlord Construction Obligation    <BR>    </I></B></FONT></P>

<P><FONT SIZE=2>This
Exhibit&nbsp;D is attached to an Office Lease between </FONT><FONT SIZE=2><B>Houston Community College System</B></FONT><FONT SIZE=2> as Landlord and </FONT><FONT SIZE=2><B>PROS Revenue
Management,&nbsp;Inc.</B></FONT><FONT SIZE=2> as Tenant. Capitalized and defined terms in this Exhibit&nbsp;D will have the same meaning as in the Lease unless otherwise indicated in this
Exhibit&nbsp;D. </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>I.</FONT></DT><DD><FONT SIZE=2><B><I>LANDLORD CONSTRUCTION OBLIGATION.</I></B></FONT></DD></DL>
<UL>

<P><FONT SIZE=2>The
Landlord will deliver the Premises to the Tenant on an "AS IS WHERE IS" basis, with the following modifications: </FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>a.</FONT></DT><DD><FONT SIZE=2>A
standard building sprinkler system for a normal office configuration installed on a 15' by 15' grid basis.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>b.</FONT></DT><DD><FONT SIZE=2>Refurbished
restrooms on the floors on which the Premises are situated, with new finishes and in compliance with all Laws and in compliance with all current standards for ADA
compliance, in existence as of the date of lease execution.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>c.</FONT></DT><DD><FONT SIZE=2>General
Compliance. The Landlord will be responsible for general compliance of applicable Laws including ADA standards in building common areas&#151;other than the Leased
Premises&#151;in the Parking Facility and building entrances.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>d.</FONT></DT><DD><FONT SIZE=2>A
refurbished HVAC system which will have installed the main duct work for each floor with VAV boxes and DDC controls&#151;a 32 zone system.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>e.</FONT></DT><DD><FONT SIZE=2>A
base ceiling grid will be installed on a 2' by 4' grid cross bars and 2' by 2' lay in ceiling tiles (Building Standard) to be stocked on each floor on which the Leased Premises are
situated.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>f.</FONT></DT><DD><FONT SIZE=2>New
2'&nbsp;&times;&nbsp;4' building standard parabolic lights in will be stored on each floor on which the Leased Premises are situated at a ratio equal to one unit per 75
square feet of </FONT><FONT SIZE=2><I>useable</I></FONT><FONT SIZE=2> square footage.
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>g.</FONT></DT><DD><FONT SIZE=2>Installed
building standard mini blinds. </FONT></DD></DL>

<P><FONT SIZE=2>The
Premises will be delivered to the Tenant with the above improvements substantially complete. The Tenant will be obligated at its own expense to modify any of the above to the extent modification
is necessary as a result of Tenant's occupancy requirements or to secure a Certificate of Occupancy for the Premises. </FONT></P>

</UL>
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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lm76602_exhibit_e_parking_agreement"> </A>
<A NAME="toc_lm76602_4"> </A>
<BR></FONT><FONT SIZE=2><B><I>EXHIBIT E    <BR>    <BR>    </I></B></FONT><FONT SIZE=2><B>Parking Agreement    <BR>    </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Parking Agreement (the </FONT><FONT SIZE=2><I>"Agreement"</I></FONT><FONT SIZE=2>) is attached as an Exhibit to an Office Lease (the </FONT> <FONT SIZE=2><I>"Lease"</I></FONT><FONT
SIZE=2>) between </FONT><FONT SIZE=2><B>Houston Community College System,</B></FONT><FONT SIZE=2> as Landlord, and </FONT><FONT SIZE=2><B>PROS Revenue
Management,&nbsp;Inc.,</B></FONT><FONT SIZE=2> as Tenant, for Premises, the Rentable Square Footage of which is as set forth on Exhibit&nbsp;A-2 of the Lease. Unless otherwise
specified, all capitalized terms used in this Agreement shall have the same meanings as in the Lease. In the event of any conflict between the Lease and this Agreement, the latter shall control. </FONT></P>


<P><FONT SIZE=2>1.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Unreserved Parking.&nbsp;&nbsp;&nbsp;&nbsp;</I></FONT><FONT SIZE=2>On the Commencement Date the Landlord will deliver and the Tenant will accept the number of Parking
Permits specified in paragraph&nbsp;7H of the Lease which will allow access to
unreserved spaces in parking facilities which Landlord provides for the use of tenants and occupants of the Project which such facility is located at 3220 Main Street (the </FONT> <FONT SIZE=2><I>"Parking Facilities"</I></FONT><FONT SIZE=2>). During
the Term (and, if applicable, during any renewal or extension term of this Lease), Tenant shall pay Landlord's quoted
monthly contract rate (as set from time to time) for each unreserved permit, plus any taxes thereon. The current rate is </FONT><FONT SIZE=2><B>$45</B></FONT><FONT SIZE=2> plus tax per permit per
month. Tenant's failure to pay for any of the above-referenced unreserved parking permits (as set forth in Section&nbsp;4.I) shall be an event of default under the Lease. </FONT></P>

<P><FONT SIZE=2>2.&nbsp;&nbsp;&nbsp;&nbsp;Tenant
shall at all times comply with all rules, regulations and applicable Laws respecting the use of the Parking Facilities. Landlord reserves the right to adopt, modify, and enforce
reasonable rules and regulations governing the use of the Parking Facilities from time to time including key-card, sticker, or other identification or entrance systems and hours of
operations. Landlord may refuse to permit any person who violates such rules and regulations to park in the Parking Facilities, and any violation of the rules and regulations shall subject the care to
removal from the Parking Facilities. </FONT></P>

<P><FONT SIZE=2>3.&nbsp;&nbsp;&nbsp;&nbsp;Tenant
may validate visitor parking within the Parking Facility by such method or methods as Landlord may approve, at the validation rate of </FONT> <FONT SIZE=2><B>$1.00</B></FONT><FONT SIZE=2> per car per day for Tenant's visitors during the Original
Lease Term and thereafter at the current charge which may thereafter be applicable to
visitor parking. Unless specified to the contrary above, the parking spaces for the parking permits provided hereunder shall be provided on an unreserved, "first-come, first-served" basis.
Tenant acknowledges that Landlord has arranged or may arrange for the Parking Facilities to be operated by an independent contractor, not affiliated with Landlord. In such event, Tenant acknowledges
that Landlord shall have no liability for claims arising through acts or omissions of such independent contractor. Except for intentional acts or gross negligence, Landlord shall have no liability
whatsoever for any damage to vehicles or any other items located in or about the Parking Facilities, and in all events, Tenant agrees to seek recovery from its insurance carrier and to require
Tenant's employees to seek recovery from their respective insurance carriers for payment of any losses sustained in connection with any use of the Parking Facilities. Tenant hereby waives on behalf of
its insurance carriers all rights of subrogation against Landlord or Landlord's agents. Landlord reserves the right to assign specific parking spaces, and to reserve parking spaces for visitors, small
cars, handicapped persons and for other tenants, guests of tenants or other parties, with assigned and/or reserved spaces. Such reserved spaces may be relocated as determined by Landlord from time to
time, and Tenant and persons designated by Tenant hereunder shall not park in any such assigned or reserved parking spaces. Landlord also reserves the right to close all or any portion of the Parking
Facilities, at its discretion if required by casualty, strike, condemnation, repair, alteration, acts of God, Laws, or other reason beyond Landlord's reasonable control; provided however, that except
for matters beyond Landlord's reasonable control, any such closure shall be temporary in nature. If Tenant's use of any parking permit is precluded for any reason, Tenant's sole remedy for any period
during which Tenant's use of any parking permit is precluded shall be abatement of parking charges for such precluded permits. Tenant shall not assign its rights under this Agreement except in
connection within a Permitted Transfer. </FONT></P>

<P><FONT SIZE=2>4.&nbsp;&nbsp;&nbsp;&nbsp;Except
as may be expressly set forth to the contrary in </FONT><FONT SIZE=2><B>Paragraph&nbsp;1</B></FONT><FONT SIZE=2> of this Agreement, if Tenant fails to pay any charges for
parking permits as provided herein, or otherwise defaults in its performance of an of the terms or conditions of this Agreement, such default shall constitute an event of default </FONT></P>

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<BR>

<P><FONT SIZE=2>under
the Lease, and in addition to any rights or remedies available to Landlord in the event of a default under the Lease, and in addition to any rights or remedies available to Landlord in the event
of a default under the Lease, Landlord shall have the right to cancel this Agreement and/or remove any vehicles from the Parking Facilities. In addition, any default under the Lease shall constitute a
default under this Agreement. </FONT></P>

<P><FONT SIZE=2>5.&nbsp;&nbsp;&nbsp;&nbsp;TENANT
ACKNOWLEDGES AND AGREES THAT TO THE FULLEST EXTENT PERMITTED BY LAW, LANDLORD SHALL NOT BE RESPONSIBLE FOR ANY LOSS OR DAMAGE TO TENANT OR TENANT'S PROPERTY (INCLUDING WITHOUT
LIMITATION, ANY LOSS OR DAMAGE TO TENANT'S AUTOMOBILES OR THE CONTENTS THEREFOR DUE TO THEFT, VANDALISM, OR ACCIDENT) ARISING FROM OR RELATED TO TENANT'S USE OF THE PARKING FACILITIES OR EXERCISE OF
ANY RIGHTS UNDER THIS AGREEMENT, WHETHER OR NOT SUCH LOSS OR DAMAGE RESULTS FROM LANDLORD'S ACTIVE NEGLIGENCE OR NEGLIGENT OMISSION. THE LIMITATION ON LANDLORD'S LIABILITY UNDER THE PRECEDING SENTENCE
SHALL NOT APPLY, HOWEVER, TO LOSS OR DAMAGE ARISING DIRECTLY FROM LANDLORD'S WILLFUL MISCONDUCT OR GROSS NEGLIGENCE. </FONT></P>


<P><FONT SIZE=2>6.&nbsp;&nbsp;&nbsp;&nbsp;WITHOUT
LIMITING THE PROVISIONS OF </FONT><FONT SIZE=2><B>PARAGRAPH 5</B></FONT><FONT SIZE=2> ABOVE, TENANT HEREBY VOLUNTARILY RELEASES, DISCHARGES, WAIVES, AND RELINQUISHES ANY AND
ALL ACTIONS OR CAUSES OF ACTION FOR PERSONAL INJURY OR PROPERTY DAMAGE OCCURRING TO TENANT ARISING AS A RESULT OF USING THE PARKING FACILITIES, OR ANY ACTIVITIES INCIDENTAL THERETO, WHEREVER OR
HOWEVER, THE SAME MAY OCCUR, AND FURTHER AGREES THAT TENANT WILL NOT PROSECUTE ANY CLAIM FOR PERSONAL INJURY OR PROPERTY DAMAGE AGAINST LANDLORD OR ANY OF ITS OFFICERS, AGENTS, SERVANTS, OR EMPLOYEES
FOR ANY SUCH CAUSE OF ACTION. IT IS THE INTENTION OF TENANT BY THIS INSTRUMENT, TO EXEMPT AND RELIEVE LANDLORD FROM LIABILITY FOR PERSONAL INJURY OR PROPERTY DAMAGE CAUSED BY THE NEGLIGENCE OF THE
LANDLORD. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tenant
acknowledges that it has read the provisions of </FONT><FONT SIZE=2><B>Paragraph&nbsp;6</B></FONT><FONT SIZE=2>, has been fully and completely advised of the potential dangers
of parking in the Parking Facilities, and is fully aware of the legal consequences of this instrument. </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lm76602_rider_no._1_expansion_option"> </A>
<A NAME="toc_lm76602_5"> </A>
<BR></FONT><FONT SIZE=2><B>RIDER NO. 1    <BR>    <BR>    Expansion Option    <BR>    </B></FONT></P>

<P><FONT SIZE=2><B><I>Expansion Option:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Provided the Tenant is not then in default under the terms and conditions of this Lease after any applicable cure period,
the Landlord grants to the Tenant two expansion options to expand the Leased Premises on the same terms and conditions as that set forth in this Lease on the following terms and conditions: </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lm76602_first_expansion_option"> </A>
<A NAME="toc_lm76602_6"> </A>
<BR></FONT><FONT SIZE=2><B><I>First Expansion Option    <BR>    </I></B></FONT></P>

<P><FONT SIZE=2><B><I>First Expansion Space:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Approximately 12,200 NRF of contiguous space on the </FONT> <FONT SIZE=2><B>8<SUP>th</SUP></B></FONT><FONT SIZE=2> floor of the Building. </FONT></P>

<P><FONT SIZE=2><B><I>Commencement Date:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The earlier to occur of (i)&nbsp;the date Tenant takes occupancy for its Intended Use of the First Expansion Space; or
(ii)&nbsp;the first day of the </FONT><FONT SIZE=2><B>37<SUP>th</SUP></B></FONT><FONT SIZE=2> month from the Commencement Date of the Initial Premises, so long as Landlord's Construction
Obligation is completed at least 90&nbsp;days prior to such date. Landlord will grant access to Tenant to such space for a period of </FONT><FONT SIZE=2><B>90</B></FONT><FONT SIZE=2> days prior to
the Commencement Date for the purpose of constructing its required leasehold improvements. </FONT></P>

<P><FONT SIZE=2><B><I>Option Exercise:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;To exercise this Option the Tenant must give written notice on or before </FONT> <FONT SIZE=2><B>270</B></FONT><FONT SIZE=2> days prior to the last day of the
</FONT><FONT SIZE=2><B>36<SUP>th</SUP></B></FONT><FONT SIZE=2> month of the Term. In the event the Tenant does
not so exercise this First Expansion Option by such date, the First and Second Expansion Option will be terminated. </FONT></P>

<P><FONT SIZE=2><B><I>Term:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The balance of the Term as set forth in Section&nbsp;1G. </FONT></P>

<P><FONT SIZE=2><B><I>Landlord Construction Obligation:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Landlord will deliver and the Tenant will accept the First Expansion Space AS IS WHERE IS with the
Landlord's Construction Obligation as set forth in Exhibit&nbsp;D, completed. </FONT></P>

<P><FONT SIZE=2><B><I>Rental Abatement:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;See paragraph&nbsp;1D&#151;First Expansion Option&#151;in the Main Lease Contract. </FONT></P>


<P><FONT SIZE=2><B><I>Parking:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Additional parking permits will be made available based upon </FONT><FONT SIZE=2><B>3</B></FONT><FONT SIZE=2> spaces per </FONT> <FONT SIZE=2><B>1,000</B></FONT><FONT
SIZE=2> RSF. The Tenant will be obligated to accept same at the then prevailing Rental Rate. </FONT></P>

<P><FONT SIZE=2><B><I>EXPANSION NOTICE:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Landlord will notify the Tenant ("Expansion Notice") of its opinion of the Market Rental Rate (defined later) within </FONT> <FONT
SIZE=2><B>15</B></FONT><FONT SIZE=2> days of the date that Tenant notifies the Landlord that it intends to exercise any option to expand pursuant to the First Expansion Option or the
Second Expansion Option. The Tenant will, within </FONT><FONT SIZE=2><B>15</B></FONT><FONT SIZE=2> days of receipt of the Expansion Notice (i)&nbsp;accept the rate specified by the Landlord and
irrevocably exercise the Expansion Option; or (ii)&nbsp;withdraw its notification and in such event the parties will proceed as if the Tenant had never notified the Landlord of its intent to
exercise an Expansion Option; or (iii)&nbsp;reject the rate specified by the Landlord but irrevocably exercise the Expansion Option subject to a determination of Market Rental Rate by Arbitration. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lm76602_second_expansion_option"> </A>
<A NAME="toc_lm76602_7"> </A>
<BR></FONT><FONT SIZE=2><B><I>Second Expansion Option    <BR>    </I></B></FONT></P>

<P><FONT SIZE=2><B><I>Second Expansion Space:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Provided (i)&nbsp;the Tenant has exercised the First Expansion Option; </FONT> <FONT SIZE=2><I>and</I></FONT><FONT SIZE=2> (ii)&nbsp;the Renewal Option
set forth below, approximately </FONT><FONT SIZE=2><B>12,200</B></FONT><FONT SIZE=2> RSF of contiguous space on the
</FONT><FONT SIZE=2><B>8<SUP>th</SUP></B></FONT><FONT SIZE=2> floor, the location of which will be subject to Landlord's discretion, but will be contiguous to the First Expansion Option Space. </FONT></P>

<P><FONT SIZE=2><B><I>Commencement Date:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The earlier to occur of (i)&nbsp;the date Tenant takes occupancy of the Second Expansion Space; or (ii)&nbsp;the
first day of the Renewal Term, so long as Landlord's Construction Obligation is completed at least </FONT><FONT SIZE=2><B>90</B></FONT><FONT SIZE=2> days prior to such date. The Landlord will grant
access to Tenant to such space for a period of </FONT><FONT SIZE=2><B>90</B></FONT><FONT SIZE=2> days prior to the Commencement Date for the purpose of constructing its required leasehold
improvements. </FONT></P>

<P><FONT SIZE=2><B><I>Option Exercise:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;To exercise this Option the Tenant must give written notice on or before </FONT> <FONT SIZE=2><B>270</B></FONT><FONT SIZE=2> days prior to the last day of the
Term. </FONT></P>

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<BR>

<P><FONT SIZE=2><B><I>Term:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Same as the First Expansion Option. </FONT></P>


<P><FONT SIZE=2><B><I>Landlord Construction Obligation:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Landlord will deliver and the Tenant will accept the Second Expansion Space AS IS WHERE IS with the
Landlord's Construction Obligation as set forth in Exhibit&nbsp;D, completed. </FONT></P>

<P><FONT SIZE=2><B><I>Rental Abatement:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;See paragraph&nbsp;1D&#151;Second Expansion Option&#151;in the Main Lease Contract. </FONT></P>

<P><FONT SIZE=2><B><I>Parking:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Same as the First Expansion Option. </FONT></P>


<P><FONT SIZE=2><B><I>Landlord Notice:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;See First Expansion Option. </FONT></P>

<P><FONT SIZE=2><B><I>Exercise of Option:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Same as the First Expansion Option. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lm76602_preferential_rights"> </A>
<A NAME="toc_lm76602_8"> </A>
<BR></FONT><FONT SIZE=2><B><I>PREFERENTIAL RIGHTS    <BR>    </I></B></FONT></P>

<P><FONT SIZE=2><B><I>Preferential Right Space:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Landlord grants to the Tenant a preferential leasing right to lease (i)&nbsp;the balance of any floor on
which Tenant has leased space; and (ii)&nbsp;any area which is within the Expansion Space ("Preferential Right Space") during the entire Lease Term and any renewal thereof. </FONT></P>

<P><FONT SIZE=2>"Available
Space" will mean the Available Space which is within the Preferential Right Space which (i)&nbsp;the Landlord has determined to lease; (ii)&nbsp;an existing tenant lease expires within
9&nbsp;months and such space is not otherwise subject to an existing expansion option, renewal right or preferential option to lease; (iii)&nbsp;can be "recaptured" by Landlord or will be
recaptured by Landlord as a result of a tenant default or as a result of the exercise by the Landlord of a right to terminate a Lease. </FONT></P>

<P><FONT SIZE=2><B><I>Preferential Notice:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If Landlord determines to lease space which is included within the Preferential Right Space it will give notice to the
Tenant ("Preferential Notice") which will (i)&nbsp;state the amount of space available; (ii)&nbsp;its location; (iii)&nbsp;the Landlord determination of Market Rental Rate; and (iv)&nbsp;the
date of availability. The Tenant will, within </FONT><FONT SIZE=2><B>20</B></FONT><FONT SIZE=2> days of receipt of Preferential Notice (i)&nbsp;accept the rate specified
by the Landlord and irrevocably exercise the Preferential Right; or (ii)&nbsp;withdraw its notification and in such event the parties will proceed as if the Tenant had never notified the Landlord of
its intent to exercise a Preferential Right; or (iii)&nbsp;reject the rate specified by the Landlord but irrevocably exercise the Preferential Right subject to a determination of Market Rental Rate
by Arbitration. </FONT></P>

<P><FONT SIZE=2><B><I>Rental Rate and Term:  </I></B></FONT></P>

<UL>

<P><FONT SIZE=2><B><I>Commencement Date:&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2><B>90</B></FONT><FONT SIZE=2> days after Landlord tenders possession of the Preferential Right Space with Landlord's
Construction Obligation complete. </FONT></P>

<P><FONT SIZE=2><B><I>Base Rental:&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2><B>95%</B></FONT><FONT SIZE=2> of the Market Rental Rate set forth in the Preferential Notice. </FONT></P>

<P><FONT SIZE=2><B><I>Term:&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2>A term equal to the then remaining initial lease term as set forth in paragraph&nbsp;1g. </FONT></P>


<P><FONT SIZE=2><B><I>Tenant Improvement Allowance:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;A Tenant Improvement Allowance will be paid to the Tenant based upon the Tenant Improvement Allowance to be
paid to the Tenant on the Subsequent Premises. </FONT></P>

<P><FONT SIZE=2><B><I>Parking:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Same as the First Expansion Option. </FONT></P>

</UL>

<P><FONT SIZE=2><B><I>Landlord Construction Obligation:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Landlord will deliver the Preferential Right Space AS IS WHERE IS with the Landlord's Construction
Obligation completed as set forth in Exhibit&nbsp;D, completed. </FONT></P>

<P><FONT SIZE=2><B><I>Failure of the Landlord to Lease Preferential Rights Space:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If the Tenant elects not to exercise its right to lease, the Landlord may
attempt to lease the Available Space to any third party without restriction. Notwithstanding the above, if the Landlord receives a bona fide offer to lease space within such period, the Tenant will
have a "Second Preferential Right" to lease the Available Space on the same terms as in the offer, except that the Lease Term will be the remainder of the Lease Term on the Premises, to be exercised
within </FONT><FONT SIZE=2><B>5</B></FONT><FONT SIZE=2> days of receipt of notice from the Landlord of the terms of such bona fide offer. </FONT></P>

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<BR>

<P><FONT SIZE=2>If
Tenant then declines a second time, the Landlord will have a second </FONT><FONT SIZE=2><B>120</B></FONT><FONT SIZE=2>-day period in which to lease the space for a sum equal to at
least </FONT><FONT SIZE=2><B>90%</B></FONT><FONT SIZE=2> of the rental rate set forth in the offer notice. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lm76602_renewal_option"> </A>
<A NAME="toc_lm76602_9"> </A>
<BR></FONT><FONT SIZE=2><B><I>RENEWAL OPTION    <BR>    </I></B></FONT></P>

<P><FONT SIZE=2>Provided
the Tenant is not in default under the terms of this Lease, then upon written notice from Tenant to Landlord ("Renewal Notice"), not less than </FONT> <FONT SIZE=2><B>180</B></FONT><FONT SIZE=2> days prior to the end of the Lease Term (but no more
than </FONT><FONT SIZE=2><B>270</B></FONT><FONT SIZE=2> days prior to the end of the Lease
Term), the Tenant may renew this lease for one additional </FONT><FONT SIZE=2><B>60</B></FONT><FONT SIZE=2> month term ("Renewal Term") with respect to a minimum of one full floor which is within the
Leased Premises, and the rental rate for such term will be 95% of the then prevailing Market Rental Rate provided that other than rental, all other terms and conditions of the Lease will remain in
full force and effect. The Renewal Option granted by this paragraph will terminate if during Term, Tenant subleases in excess of </FONT><FONT SIZE=2><B>50%</B></FONT><FONT SIZE=2> of the Premises or
assigns this Lease to a nonaffiliated party. Tenant may exercise the option expressed by this paragraph, but in so doing will be required to renew and extend the Lease for the entire Renewal Term for
at least 1 full floor of the Premises. </FONT></P>

<P><FONT SIZE=2><B><I>Landlord Construction Obligation:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;None </FONT></P>

<P><FONT SIZE=2><B><I>Rental Rate:&nbsp;&nbsp;&nbsp;&nbsp;</I></B></FONT><FONT SIZE=2><B>95%</B></FONT><FONT SIZE=2> of the Market Rental Rate. </FONT></P>

<P><FONT SIZE=2>Within
</FONT><FONT SIZE=2><B>15</B></FONT><FONT SIZE=2> business days receipt of the Renewal Notice, Landlord will notify Tenant ("Landlord Renewal Notice") of the Market Rental Rate for such
Renewal term. Tenant may accept the terms set forth in the Landlord Renewal Notice by written notice ("Acceptance Notice') to Landlord given within </FONT><FONT SIZE=2><B>15</B></FONT><FONT SIZE=2>
days after receipt of the Renewal Notice. Tenant will within </FONT><FONT SIZE=2><B>15</B></FONT><FONT SIZE=2>days after receipt of the Landlord's Renewal Notice: (i)&nbsp;accept the rate specified
by Landlord and irrevocably exercise the Renewal Option; or (ii)&nbsp;withdraw its Renewal Notice and in such event the parties will proceed as if the Tenant had never notified Landlord of its
intent to exercise the Renewal Option; or (iii)&nbsp;reject the rate specified by
Landlord but irrevocably exercise the Renewal Option subject to the determination of the Market Rental Rate by Arbitration. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lm76602__#151;_market_rental_rate_#151;"> </A>
<A NAME="toc_lm76602_10"> </A>
<BR></FONT><FONT SIZE=2><B>&#151;</B></FONT><FONT SIZE=2><B><I>MARKET RENTAL RATE&#151;</I></B></FONT></P>

<P><FONT SIZE=2>Market
Rental Rate ("MRR") is the effective rental rate (as of the date of lease commencement) that a willing tenant would pay and a willing landlord would accept in arm's length, bona fide
negotiations for a new lease of the space for which the MRR is being determined to be executed at the time of determination and to commence on the commencement of Tenant's lease of that space under
the Lease, based upon other lease transactions made in the Building and other class&nbsp;B office Buildings of equal size in the Midtown and Downtown Houston, Texas taking into consideration all
relevant terms and conditions of any comparable leasing transactions, including, without limitation: (i)&nbsp;location, quality and age of the building; (ii)&nbsp;use and size of the space in
question; (iii)&nbsp;location and/or floor level within the building; (iv)&nbsp;extent of leasehold improvement allowance; (v)&nbsp;the amount of any abatement of rental or other charges;
parking charges or inclusion of same in rental; (ix)&nbsp;relocation allowances; (x)&nbsp;refurbishment and repainting allowances; (xi)&nbsp;any and all other concessions or inducements;
(xii)&nbsp;extent of services provided or to be provided; (xiii)&nbsp;distinction between "gross" and "net" leases; (xiv)&nbsp;base year or dollar amount for escalation purposes (both operating
costs and ad valorem/real estate taxes); (xv)&nbsp;any other adjustments (including by way of indexes) to base rental; (xvi)&nbsp;credit standing and financial stature of the tenant; and
(xvii)&nbsp;length of term. As used herein, "effective rental rate" means the stated net base rental rate (i.e., the base rental exclusive of any "expense stop" or "base year" operating expense
amount), less the discounted present value (using a </FONT><FONT SIZE=2><B>10%</B></FONT><FONT SIZE=2> discount factor) of all allowances rental abatements and other concessions or inducements paid
or provided to the tenant by the landlord under the applicable lease. In the event of a dispute Market Rental Rate will be determined by binding Arbitration. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lm76602__#151;_arbitration_#151;"> </A>
<A NAME="toc_lm76602_11"> </A>
<BR></FONT><FONT SIZE=2><B>&#151; </B></FONT><FONT SIZE=2><B><I>ARBITRATION&#151;</I></B></FONT></P>

<P><FONT SIZE=2>Any
controversy or claim between the parties arising out of or relating to the Market Rental Rate may be submitted to arbitration upon Tenant or Tenant's written request served on Landlord. Any </FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P><FONT SIZE=2>arbitration
conducted under this section will comply with and be governed by the Texas General Arbitration Act and will be binding on both Landlord and Tenant. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>PROS Revenue Management, Inc.</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Houston Community College System</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2><BR>
by:</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>CHARLES H. MURPHY</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
by:</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>BRUCE LESLIE</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2>Charles H. Murphy</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>Bruce Leslie</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2>SVP &amp; CFO</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>Chancellor</FONT><HR NOSHADE></TD>
</TR>
</TABLE>
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<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=11,SEQ=46,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="13",CHK=714927,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]LM76602B.;6',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lm76602_rider_no._2_cleaning_specifications"> </A>
<A NAME="toc_lm76602_12"> </A>
<BR></FONT><FONT SIZE=2><B>RIDER NO. 2    <BR>    <BR>    CLEANING SPECIFICATIONS    <BR>    </B></FONT></P>

<P><FONT SIZE=2><B>GENERAL CLEANING  </B></FONT></P>

<P><FONT SIZE=2><B>NIGHTLY  </B></FONT></P>

<UL>

<P><FONT SIZE=2>General
Offices:<BR>
All hard surfaced flooring to be swept using approved dustdown preparation.<BR>
Carpet sweep all carpets moving only light furniture (desks, file cabinets, etc. not to be moved).<BR>
Hand dust and wipe clean all furniture, fixtures and window sills.<BR>
Empty all waste receptacles and remove wastepaper.<BR>
Wash clean al Building water fountains and coolers.<BR>
Sweep all private stairways. </FONT></P>

<P><FONT SIZE=2>Lavatories:<BR>
Sweep and wash all floors, using proper disinfectants.<BR>
Wash and policy all mirrors, shelves, bright work and enameled surfaces.<BR>
Wash and disinfect all basins, bowls and urinals.<BR>
Wash all toilet seats.<BR>
Hand dust and clean all partitions, tile walls, dispensers and receptacles in lavatories and restrooms.<BR>
Empty paper receptacles, fill receptacles from tenant supply and remove wastepaper.<BR>
Fill toilet tissue holders from tenant supply.<BR>
Empty and clean sanitary disposal receptacles. </FONT></P>

</UL>

<P><FONT SIZE=2><B>WEEKLY  </B></FONT></P>

<UL>

<P><FONT SIZE=2>Vacuum
all carpeting and rugs.<BR>
Dust all door louvers and other ventilating louvers within a person's normal reach.<BR>
Wipe clean all brass and other bright work. </FONT></P>

</UL>

<P><FONT SIZE=2><B>QUARTERLY  </B></FONT></P>

<UL>

<P><FONT SIZE=2>High
dust premises complete including the following:<BR>
Dust all pictures, frames, charts, graphs and similar wall hangings not reached in nightly cleaning.<BR>
Dust all vertical surfaces, such as walls, partitions, doors, doorframes and other surfaces no reached in nightly cleaning. </FONT></P>

</UL>

<P><FONT SIZE=2><B>SEMI-ANNUALLY  </B></FONT></P>

<UL>

<P><FONT SIZE=2>Wash
all windows (exterior and interior) </FONT></P>

</UL>
<HR NOSHADE>
<P style='page-break-before:always'></p>
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<BR>
<P><br><A NAME="07ZBA76601_13">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_lg76602_1">OFFICE LEASE</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lg76602_2">RENTAL ABATEMENT Initial Premises</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lg76602_3">Subsequent Premises</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lg76602_4">First Expansion Option</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lg76602_5">Second Expansion Option</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lg76602_6">Preferential Right Area</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_li76602_1">EXHIBIT A-1 Legal Description of the Property/Building</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_lk76602_1">EXHIBIT "A"</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lk76602_2">EXHIBIT "A"</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lk76602_3">EXHIBIT "A"</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lk76602_4">EXHIBIT "A"</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lk76602_5">EXHIBIT A-2 Outline and Description of the Premises</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lk76602_6">EXHIBIT A-2 Outline and Description of the Premises INITIAL PREMISES</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lk76602_7">EXHIBIT A-2 Outline and Description of the Premises INITIAL PREMISES</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lk76602_8">EXHIBIT A-2 Outline and Description of the Premises SUBSEQUENT PREMISES</A></FONT><BR>
<!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_lm76602_1">EXHIBIT B Rules and Regulations</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lm76602_2">EXHIBIT C Commencement Letter</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lm76602_3">EXHIBIT D Landlord Construction Obligation</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lm76602_4">EXHIBIT E Parking Agreement</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lm76602_5">RIDER NO. 1 Expansion Option</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lm76602_6">First Expansion Option</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lm76602_7">Second Expansion Option</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lm76602_8">PREFERENTIAL RIGHTS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lm76602_9">RENEWAL OPTION</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lm76602_10">&#151; MARKET RENTAL RATE&#151;</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lm76602_11">&#151; ARBITRATION&#151;</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lm76602_12">RIDER NO. 2 CLEANING SPECIFICATIONS</A></FONT><BR>
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</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.10.1
<SEQUENCE>14
<FILENAME>a2176970zex-10_101.htm
<DESCRIPTION>EXHIBIT 10.10.1
<TEXT>
<HTML>
<HEAD>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
<BR>
<FONT SIZE=3 ><A HREF="#07ZBA76601_14">QuickLinks</A></FONT>
<font size=3> -- Click here to rapidly navigate through this document</font>
<P ALIGN="RIGHT"><FONT SIZE=2><A
NAME="page_lo76602_1_1"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit&nbsp;10.10.1  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lo76602_first_amendment_to_office_lease"> </A>
<A NAME="toc_lo76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>FIRST AMENDMENT TO OFFICE LEASE    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This FIRST AMENDMENT TO OFFICE LEASE (this "</FONT><FONT SIZE=2><B><I>First Amendment</I></B></FONT><FONT SIZE=2>") is executed as of March&nbsp;31, 2006 (the
"</FONT><FONT SIZE=2><B><I>Effective Date</I></B></FONT><FONT SIZE=2>") by and between HOUSTON COMMUNITY COLLEGE SYSTEM, a local governmental entity organized pursuant to the Texas Education Code
("</FONT><FONT SIZE=2><B><I>Landlord</I></B></FONT><FONT SIZE=2>") and PROS REVENUE MANAGEMENT, L.P., a Texas limited partnership, formerly PROS Revenue Management, Inc,
("</FONT><FONT SIZE=2><B><I>Tenant</I></B></FONT><FONT SIZE=2>"). </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lo76602_introduction"> </A>
<A NAME="toc_lo76602_2"> </A>
<BR></FONT><FONT SIZE=2><I>Introduction    <BR>    </I></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.&nbsp;&nbsp;&nbsp;&nbsp;Landlord
and Tenant entered into that certain Office Lease dated as of January&nbsp;31, 2001 (the "</FONT><FONT SIZE=2><B><I>Original Lease</I></B></FONT><FONT SIZE=2>")
covering 73,200 square feet of RSF (as defined in the Original Lease) on floors 9 and 10 of the Building (as defined in the Original Lease) commonly known as the ComTech Center, Houston, Harris
County. Texas, and being described in the Original Lease as the "</FONT><FONT SIZE=2><B><I>Premises</I></B></FONT><FONT SIZE=2>" after including therein the Subsequent Premises (as defined in the Original
Lease). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.&nbsp;&nbsp;&nbsp;&nbsp;The
Original Lease is for a term expiring on the Expiration Date (as defined in the Original Lease) and which is currently May&nbsp;31, 2006. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C.&nbsp;&nbsp;&nbsp;&nbsp;Landlord
and Tenant desire to further amend the Original Lease subject to the specific terms and conditions of this First Amendment, but not otherwise. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW
THEREFORE, in consideration of the of the mutual covenants and agreements contained herein and for Ten and No/100 Dollars ($10.00) and other good and valuable consideration to each
party, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant, intending to be legally bound, hereby agree as follows: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Capitalized Terms</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Capitalized terms that are used herein but not defined in this First Amendment shall have
the meanings given to them in the Original Lease. The term "</FONT><FONT SIZE=2><B><I>Lease</I></B></FONT><FONT SIZE=2>" as used in this First Amendment shall mean the Original Lease as amended by this
First Amendment. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Premises</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Landlord and Tenant acknowledge and agree that the Premises is comprised of "Floor 9" and "Floor
10" of that certain Condominium Declaration for the 3100 Main Condominium recorded under Clerk's File No. W441927 of the Official Public Records of Real Property of Harris County, Texas on
February&nbsp;20, 2003 (the "</FONT><FONT SIZE=2><B><I>Condominium Declaration</I></B></FONT><FONT SIZE=2>" and that the Premises consists of 73,200 RSF. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Base Rent</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Paragraph&nbsp;1.D</I></FONT><FONT SIZE=2> of the Original Lease is
hereby amended to provide that from and after June&nbsp;1, 2006 Base Rent will be as follows and otherwise Base Rent will remain unchanged: </FONT></P>

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<DIV ALIGN="CENTER"><TABLE WIDTH="29%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="54%" ALIGN="CENTER"><FONT SIZE=1><B>DATE</B></FONT><HR NOSHADE></TH>
<TH WIDTH="7%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="39%" ALIGN="CENTER"><FONT SIZE=1><B>RATE</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="54%" ALIGN="CENTER"><FONT SIZE=2>6/1/06 to 5/31/08</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="39%" ALIGN="CENTER"><FONT SIZE=2>$14.75/RSF</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="54%" ALIGN="CENTER"><FONT SIZE=2>6/1/08 to 5/31/09</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="39%" ALIGN="CENTER"><FONT SIZE=2>$15.75/RSF</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="54%" ALIGN="CENTER"><FONT SIZE=2>6/1/09 to 7/31/11</FONT></TD>
<TD WIDTH="7%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="39%" ALIGN="CENTER"><FONT SIZE=2>$16.50/RSF</FONT></TD>
</TR>
</TABLE></DIV>
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<P ALIGN="CENTER"><FONT SIZE=2>1</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_lo76602_1_2"> </A>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Rental Abatement.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;The
portion of </FONT><FONT SIZE=2><I>Paragraph&nbsp;1.D</I></FONT><FONT SIZE=2> of the Original Lease entitled "RENTAL ABATEMENT" is hereby amended and restated in
its entirety to read as follows: </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lo76602__rental_abatement_"> </A>
<A NAME="toc_lo76602_3"> </A>
<BR></FONT><FONT SIZE=2><B>"RENTAL ABATEMENT"    <BR>    </B></FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;Commencing
on June&nbsp;1, 2006, the Tenant will be entitled to receive a credit as prepaid Base Rent equal to two (2)&nbsp;months of Base Rent (but not Taxes) based
on 65,406 RSF at the $14.75 RSF annual Base Rent rate, to be applied monthly against Base Rent as it becomes due. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;Commencing
on June&nbsp;1, 2006, Tenant will be entitled to receive a credit (the "</FONT><FONT SIZE=2><B><I>9th Floor Credit</I></B></FONT><FONT SIZE=2>") as prepaid Base
Rent equal to sixteen (16)&nbsp;months of Base Rent based on the 7,794 RSF of the Premises located on the 9th Floor which is not currently built-out and which is depicted on
Exhibit&nbsp;A to this First Amendment (the "</FONT><FONT SIZE=2><B><I>9th Floor Credit Space</I></B></FONT><FONT SIZE=2>") at the $14.75 RSF annual Base Rent rate; </FONT><FONT SIZE=2><I>provided,
however</I></FONT><FONT SIZE=2>, that at such time as Tenant occupies or uses all or any portion of the 9th Floor Credit Space in any manner (excluding Tenant's continued use of the 9th Floor Credit
Space for storage only or the build-out of the 9th Floor Credit Space, but not for any other purposes), the 9th Floor Credit shall no longer be provided to Tenant and Tenant shall
immediately begin paying Base Rent on the 9th Floor Credit Space in accordance with the terms of this Lease. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;Commencing
on June&nbsp;1, 2006, Tenant will be entitled to receive an abatement for the monthly charges for any unreserved Tenant Parking Spaces or for monthly
charges for any Tenant Parking Spaces in the Parking Nest (as defined in Paragraph&nbsp;4.H), if any. for a period of twenty (20)&nbsp;months (the "</FONT><FONT SIZE=2><B><I>Parking
Abatement</I></B></FONT><FONT SIZE=2>")." </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Tenant
acknowledges that it is not entitled to any credits against Rent or any allowances except (i)&nbsp;as expressly provided in </FONT> <FONT SIZE=2><I>Section&nbsp;4(a)</I></FONT><FONT SIZE=2> and </FONT><FONT SIZE=2><I>Section&nbsp;6(b)</I></FONT><FONT
SIZE=2> of this First Amendment and (ii)&nbsp;the Refurbishment
Allowance (as defined below in </FONT><FONT SIZE=2><I>Section&nbsp;14</I></FONT><FONT SIZE=2> of this First Amendment). </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Tenant's Pro Rata Share</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Paragraph&nbsp;1.E</I></FONT><FONT SIZE=2> of the Original
Lease is hereby amended and restated in its entirety to read as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"E.&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Tenant's Pro Rata Share</I></FONT><FONT SIZE=2>" is equal to the RSF of the Premises divided by the RSF of the Building and currently equals
13.7853%." </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Base Year</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Paragraph&nbsp;1.F</I></FONT><FONT SIZE=2> of the Original Lease is hereby amended and restated in its entirety to read as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Base Year" for Operating Expenses</I></FONT><FONT SIZE=2>: From the Commencement Date through December&nbsp;31, 2005, the "</FONT><FONT SIZE=2><I>Base
Year</I></FONT><FONT SIZE=2>" for Operating Expenses shall be 2001. Commencing on January&nbsp;1, 2006 and for the remainder of the Term, the "</FONT><FONT SIZE=2><I>Base
Year</I></FONT><FONT SIZE=2>" for Operating Expenses shall be 2006." </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Tenant
shall not be liable to Landlord for any Excess Operating Expenses for the calendar year 2006. In the event that Tenant has already paid to Landlord any such sums,
Tenant will be entitled to a credit against Base Rent equal to such Excess Operating Expenses actually paid by Tenant to Landlord from and after the January&nbsp;1, 2006 and for the calendar year
2006 (the "</FONT><FONT SIZE=2><B><I>2006 Operating Expense Overpayment</I></B></FONT><FONT SIZE=2>"). Such Base Rent credit shall continue until such time as any 2006 Operating Expense Overpayment actually
paid by Tenant to Landlord shall have been reimbursed to Tenant pursuant to such Base Rent credit. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=2,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="14",CHK=572863,FOLIO='2',FILE='DISK130:[07ZBA2.07ZBA76602]LO76602A.;7',USER='MBRADT',CD=';4-APR-2007;13:35' -->
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Term</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Paragraph&nbsp;1.G</I></FONT><FONT SIZE=2> of the Original Lease is hereby
amended and restated in its entirety to read as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"G.&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Term</I></FONT><FONT SIZE=2>" The term of this Lease for the Premises shall commence on the Commencement Date and expire on July&nbsp;31,
2011, unless extended or earlier terminated as permitted pursuant to the express terms hereof." </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Notice Addresses</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Paragraph&nbsp;1.L</I></FONT><FONT SIZE=2> of the Original Lease
is hereby amended and restated in its entirety to read as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"L.&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Notice Address</I></FONT><FONT SIZE=2>": </FONT></P>
</UL>
<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="76%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TD WIDTH="65%" VALIGN="TOP"><FONT SIZE=2>Notices to Tenant shall be sent to Tenant at the Premises</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="65%" VALIGN="TOP"><FONT SIZE=2><BR>
with a copy to Thompson&nbsp;&amp; Knight LLP<BR>
333 Clay Street, Suite 3300<BR>
Houston, Texas 77002<BR>
Attn: Susan A. Stanton</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="65%" VALIGN="TOP"><FONT SIZE=2><BR>
Notices to Landlord shall be sent to:</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
With a copy to:</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="65%"><FONT SIZE=2><BR>
Houston Community College System<BR>
3100 Main Street, 12<SUP>th</SUP> Floor<BR>
Houston, Texas 77002<BR>
Attention: Mark Lambert<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Director of Building Operations</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
Bracewell&nbsp;&amp; Giuliani LLP<BR>
711 Louisiana, Suite 2300<BR>
Houston, Texas 77002<BR>
Attention: Ron I. Erlichman"</FONT></TD>
</TR>
</TABLE></DIV>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Definition of Rent</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Paragraph&nbsp;4.A</I></FONT><FONT SIZE=2> of the Original
Lease is hereby amended as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;The
first sentence of </FONT><FONT SIZE=2><I>Paragraph&nbsp;4.A</I></FONT><FONT SIZE=2> is hereby amended and restated in its entirety to read as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"As
consideration for this Lease, commencing on the dates specified in </FONT><FONT SIZE=2><I>Paragraph&nbsp;1.D</I></FONT><FONT SIZE=2>, Tenant will pay Landlord, without setoff or
deduction, unless a setoff is specifically permitted by an express provision of this Lease, the total amount of Base Rent, Additional Rent and Premise Taxes due and payable for the Term in the manner
set forth in this Lease." </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;The
term "Rent" shall mean Additional Rent, Base Rent and Premise Taxes, collectively. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Operating Expenses Defined</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Paragraph&nbsp;4.D(5)</I></FONT><FONT SIZE=2> is hereby amended and restated in its entirety to read as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"(5)&nbsp;&nbsp;&nbsp;&nbsp;Real
estate taxes, assessments, business taxes, excises, association dues directly related to the Property, fees, levies, charges and other taxes of every kind and
nature whatsoever, general and special, extraordinary and ordinary, foreseen and unforeseen, including interest on installment payments, which may be levied or assessed against or arise in connection
with the ownership, use, occupancy, rental, operation or possession of the Property (including, without limitation, personal property taxes for property that is owned by Landlord and used in
connection with the operation, maintenance and repair of the Property), or substituted, in whole or in part, for a tax previously in existence by any taxing authority, or assessed in lieu of a tax
increase, or paid as rent under any ground lease (collectively, "</FONT><FONT SIZE=2><B><I>Taxes</I></B></FONT><FONT SIZE=2>"). Taxes do not include Landlord's income, franchise or estate taxes (except to
the extent such excluded taxes are assessed in lieu of taxes included above). Tenant's share of Taxes for purposes of this </FONT><FONT SIZE=2><I>Paragraph&nbsp;D.5</I></FONT><FONT SIZE=2> and
without limiting Tenant's obligations under </FONT><FONT SIZE=2><I>Paragraph&nbsp;4.I</I></FONT><FONT SIZE=2>, shall be based on Tenant's Pro Rata Share of Taxes assessed on, levied against or
attributable to the Property other than (i)&nbsp;the Premises, (ii)&nbsp;any portion of the leaseable </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=3,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="14",CHK=409816,FOLIO='3',FILE='DISK130:[07ZBA2.07ZBA76602]LO76602A.;7',USER='MBRADT',CD=';4-APR-2007;13:35' -->
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<UL>
<UL>

<P><FONT SIZE=2>space
in the Building or the retail/office space on the first floor of the Parking Facilities which is used, held or occupied exclusively by Landlord, (iii)&nbsp;any portion of the leaseable space
in the Building or the retail/office space on the first floor of the Parking Facilities which is either leased to a third party or being held for lease to a third party, (iv)&nbsp;the Auditorium and
(v)&nbsp;the Caf&eacute;." </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;The
following is hereby added to the Original Lease as </FONT><FONT SIZE=2><I>Paragraph&nbsp;4.E(5)</I></FONT><FONT SIZE=2> and </FONT> <FONT SIZE=2><I>Paragraph&nbsp;4.E(6)</I></FONT><FONT SIZE=2>: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"(5)&nbsp;&nbsp;&nbsp;&nbsp;The
routine operation, repair and maintenance of the "Neo Caf&eacute;" located on the first (1st) floor of the Building (the
"</FONT><FONT SIZE=2><B><I>Caf&eacute;</I></B></FONT><FONT SIZE=2>") including (i)&nbsp;any leasehold build-out, remodeling or interior upgrades to the Caf&eacute; and
(ii)&nbsp;any repair and maintenance expenses that would be the responsibility of any tenant occupying the Caf&eacute; if the tenant of the Caf&eacute; was an unaffiliated party; </FONT> <FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, that
notwithstanding the foregoing or anything herein to the contrary, Landlord shall be permitted to include in Operating Expenses
(x)&nbsp;any maintenance, repairs or capital expenditures which would be Landlord's responsibility to perform if the tenant of the Caf&eacute; was an unaffiliated party and which would
otherwise be permitted pursuant to the terms of this Lease, including, but not limited to </FONT><FONT SIZE=2><I>Paragraph&nbsp;4.D</I></FONT><FONT SIZE=2>, and (ii)&nbsp;any utilities or
services which Landlord typically provides to other tenants in the Building or to the Property generally, such as security, janitorial, electrical, gas, water, sewer, HVAC, etc (but excluding any
above building standard services furnished to the Caf&eacute;, </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that nothing herein shall require Landlord to install any submeters
within the Caf&eacute; to determine any above building standard utilities being furnished to the Caf&eacute;). In determining the repair and maintenance expenses that would be the
responsibility of a tenant or the Landlord, as applicable, the customary repair and maintenance allocation contained in lease agreements between Landlord and unaffiliated tenants of the Building shall
be controlling. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)&nbsp;&nbsp;&nbsp;The
routine operation, repair and maintenance of the Auditorium located on the second (2nd) floor of the Building (the
"</FONT><FONT SIZE=2><B><I>Auditorium</I></B></FONT><FONT SIZE=2>"), including any leasehold build-out, remodeling or interior upgrades to the Auditorium; </FONT><FONT SIZE=2><I>provided,
however</I></FONT><FONT SIZE=2>, that notwithstanding the foregoing or anything herein to the contrary, Landlord shall be permitted to include in Operating Expenses (x)&nbsp;any maintenance, repairs
or capital expenditures necessary to maintain the structural, mechanical, electrical,
plumbing, HVAC, fire, health and life safety systems and/or or other similar components of the Auditorium or which are related to the maintenance, repair or upgrade of the Building (as opposed to
day-to-day maintenance and repairs resulting from normal wear and tear of the Auditorium) and (y)&nbsp;any utilities or services which Landlord typically provides to other
tenants in the Building or to the Property generally, such as security, janitorial, electrical, gas, water, sewer, HVAC, etc. (but excluding any above building standard services furnished to the
Auditorium, </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that nothing herein shall require Landlord to install any submeters within the Auditorium to determine any above building standard
utilities being furnished to the Auditorium). </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Audit</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Paragraph&nbsp;4.G</I></FONT><FONT SIZE=2> of the Original Lease is hereby
amended to provide that the "</FONT><FONT SIZE=2><I>Audit Election Period</I></FONT><FONT SIZE=2>" shall be within ninety (90)&nbsp;days after Landlord furnishes its statement of actual Operating
Expenses for any calendar year (including the Base Year). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Parking</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Paragraph&nbsp;4.H
of the Original Lease is hereby amended and restated in its entirety as follows: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>"H.&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Parking Permits/Charges.</I></B></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;Tenant
shall be provided, and shall be required to take and pay for, not less than two (2)&nbsp;unreserved parking spaces in the Parking facilities for each 1,000 RSF
of the Premises </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=4,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="14",CHK=883056,FOLIO='4',FILE='DISK130:[07ZBA2.07ZBA76602]LO76602A.;7',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<A NAME="page_lo76602_1_5"> </A>
<UL>
<UL>

<P><FONT SIZE=2>leased
by Tenant (the "</FONT><FONT SIZE=2><B><I>Must Take Spaces</I></B></FONT><FONT SIZE=2>") with the ability to expand the ratio at any time during the Term, upon thirty (30)&nbsp;days prior written
notice to Landlord, to up to four (4)&nbsp;unreserved parking spaces per 1,000 RSF leased by Tenant (the unreserved parking spaces actually taken by Tenant in excess of the Must Take Spaces being
referred to herein as the "</FONT><FONT SIZE=2><I>May Take Spaces</I></FONT><FONT SIZE=2>" and the Must Take Spaces plus the May Take Spaces actually taken by Tenant being referred to herein
collectively as the "</FONT><FONT SIZE=2><B><I>Tenant Parking Spaces</I></B></FONT><FONT SIZE=2>"). All of the Tenant Parking Spaces (except any that are converted to reserved parking spaces as provided
below) shall be on a first come first serve basis in the Parking Facilities. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;Tenant
has been granted the one time right, which Tenant hereby exercises, to convert up to twenty percent (20%) of the Tenant Parking Spaces to reserved parking spaces
("</FONT><FONT SIZE=2><B><I>Tenant's One Time Parking Space Conversion</I></B></FONT><FONT SIZE=2>"), such conversion to be effective as of the date of this First Amendment. Notwithstanding the foregoing,
at any time during the Term, Tenant shall have the right to convert Tenant Parking Spaces from reserved parking spaces to unreserved parking spaces. In the event during the Term Tenant converts more
than five percent (5%) of the Tenant Parking Spaces from reserved to unreserved spaces (i.e. the number of reserved Tenant Parking Spaces drops below fifteen percent (15%) of the total number of
Tenant Parking Spaces after the exercise of Tenant's One Time Parking
Spaces Conversion), thereafter Tenant's right to convert unreserved parking spaces to reserved parking spaces shall be changed to a right to convert up to fifteen percent (15%) of the Tenant Parking
Spaces to reserved parking spaces; </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, that in the event that Landlord determines, in its sole and absolute discretion as operator of the
Parking Facilities, that there is existing availability in the Parking Facilities for additional reserved parking spaces at the time that Tenant requests additional reserved parking spaces, Landlord
shall make available to Tenant the right to convert additional Tenant Parking Spaces to reserved parking spaces, but in no event shall Landlord be obligated to provide Tenant with an aggregate amount
of reserved parking spaces in excess of twenty percent (20%) of the Tenant Parking Spaces. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;Tenant
has been granted the one time right, which Tenant hereby exercises, to have one half (<SUP>1</SUP>/<SMALL>2</SMALL>) of its reserved Tenant Parking Spaces be located on the
4th floor in a contiguous block of spaces and the balance of Tenant's reserved Tenant Parking Spaces to be located on the 5th floor in a similar contiguous block of spaces In the event Tenant
subsequently converts any of the Tenant Parking Spaces from reserved parking spaces to unreserved parking spaces, then at such time Tenant will only have the right to request that the reserved Tenant
Parking Spaces be arranged in accordance with the preceding sentence, but such right shall be subject to Landlord's determination, in its sole and absolute discretion as operator of the Parking
Facilities, that the ability to arrange the reserved Tenant Parking Spaces in such fashion exists and that such arrangement will not adversely affect the operation of the Parking Facilities. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;&nbsp;The
rate for the Tenant Parking Spaces during the Term shall be equal to (i)&nbsp;Forty-five and No/100 Dollars ($45.00) per month for each unreserved
Tenant Parking Space (plus applicable taxes), (ii)&nbsp;Seventy-five and No/100 Dollars ($75.00) per month for each reserved Tenant Parking Space (plus applicable taxes) and
(iii)&nbsp;Forty and No/100 Dollars ($40.00) per month (plus applicable taxes) for each Tenant Parking Space in the Parking Nest. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)&nbsp;&nbsp;&nbsp;At
any time during the Term, Tenant may opt to create a parking "nest" on the then top floor of the Parking Facilities (currently the 8th floor) (the
"</FONT><FONT SIZE=2><B><I>Parking Nest</I></B></FONT><FONT SIZE=2>"), reserving as many Available Spaces as exist on that floor at the time in question. "</FONT><FONT SIZE=2><B><I>Available
Spaces</I></B></FONT><FONT SIZE=2>" means the parking spaces on the then top floor of the Parking Facilities which are available for parking automobiles and which are not otherwise reserved. In the event
that Tenant shall elect to exercise its right to create the Parking Nest, the aggregate number of Tenant Parking Spaces on all of the floors in the Parking Facilities below the floor on which the
Parking Nest </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<UL>
<UL>
<BR>

<P><FONT SIZE=2>is
located (currently floors 1-7)(the "</FONT><FONT SIZE=2><B><I>Covered Floors</I></B></FONT><FONT SIZE=2>") shall be reduced by the aggregate number of Tenant Parking Spaces within the Parking
Nest with such reduction applying first to any reserved Tenant Parking Spaces located within the Covered Floors and then, after eliminating all reserved Tenant Parking Spaces within the Covered
Floors, next to the unreserved Tenant Parking Spaces located within the Covered Floors. Tenant acknowledges that subject to Landlord's repair and maintenance requirements under this Lease, Tenant
accepts the floor of the Parking Facilities on which the Parking Nest is located in its then "as-is, where-is" condition and that Landlord shall not be required to make any
modifications to such floor of the Parking Facilities to accommodate the Parking Nest, including, but not limited to, creating elevator access. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)&nbsp;&nbsp;&nbsp;Without
limiting </FONT><FONT SIZE=2><I>Paragraph&nbsp;4</I></FONT><FONT SIZE=2> of the Parking Agreement (Exhibit&nbsp;E) and in the event the Parking Nest is
created, if at any time Tenant, its employees, invitees, guests or anyone utilizing the Tenant Parking Spaces at Tenant's direction shall use more than the number of Tenant Parking Spaces permitted in
the Covered Floors, then Landlord shall be entitled to exercise all rights permitted under the Lease as well as the rules and regulations of the Parking Facilities, including, but not limited to,
removing vehicles from the Parking Facilities. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7)&nbsp;&nbsp;&nbsp;Subject
to the terms and conditions of this </FONT><FONT SIZE=2><I>Paragraph&nbsp;4.H</I></FONT><FONT SIZE=2>, Tenant may convert any reserved Tenant Parking Space
into an unreserved Tenant Parking Space and relinquish any May Take Spaces upon at least thirty (30)&nbsp;days advance written notice to Lessor." </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;As
of the Effective Date of this First Amendment, Tenant has elected to exercise its right to take all of the May Take Spaces for a total of Two Hundred Ninety-Three
(293)&nbsp;Tenant Parking Spaces. Of these Tenant Parking Spaces, Two Hundred Thirty-Four (234)&nbsp;Tenant Parking Spaces are unreserved and Fifty-Nine (59)&nbsp;Tenant
Parking Spaces are reserved. With respect to the reserved Tenant Parking Spaces, Landlord shall designate such reserved Tenant Parking Spaces (in accordance with the provisions of </FONT> <FONT SIZE=2><I>Paragraph&nbsp;4.H</I></FONT><FONT SIZE=2> of
the Lease) as soon as reasonably practicable after the Effective Date, </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>
that Tenant shall pay, subject to the Parking Abatement, the unreserved parking rate until the reserved Tenant Parking Spaces are made available to Tenant. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Taxes Attributable to the Premises</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;The
following is hereby added to the Original Lease as </FONT><FONT SIZE=2><I>Paragraph&nbsp;4.I</I></FONT><FONT SIZE=2>: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><B>I.&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Taxes.</I></B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;Notwithstanding
anything in this Lease to the contrary, in addition to Base Rent and Additional Rent, Tenant shall be responsible for paying the entire amount of all
Taxes assessed on, levied against or attributable to all or any portion of the Premises, Tenant's personal property and improvements and Tenant's leasehold interest in this Lease (the
"</FONT><FONT SIZE=2><B><I>Premise Taxes</I></B></FONT><FONT SIZE=2>"). Notwithstanding </FONT><FONT SIZE=2><I>Paragraph&nbsp;4.A</I></FONT><FONT SIZE=2> of this Lease to the contrary, Landlord shall
bill Tenant for the portion of the Premise Taxes that constitutes real estate ad valorem taxes, assessments or charges, any Taxes in lieu thereof and any other Premise Taxes assessed against
Landlord's fee interest in the Premises (collectively, "</FONT><FONT SIZE=2><B><I>Real Estate Premise Taxes</I></B></FONT><FONT SIZE=2>") in equal monthly installments based on Landlord's estimate of the
Real Estate Premise Taxes. In the event that during any calendar year Tenant shall pay more or less than the actual payment due by Landlord to the applicable taxing authorities for such Real Estate
Premise Taxes, including any overpayment in Real Estate Premise Taxes resulting from a successful protest with the applicable taxing authorities as to the assessed valuation for the Premises, then
(i)&nbsp;in the event of an overpayment, Landlord shall apply the overpayment by Tenant against the Real Estate Premise Taxes due or next become due; </FONT><FONT SIZE=2><I>provided,
however</I></FONT><FONT SIZE=2>, that if the Term expires before the determination of the overpayment, Landlord shall refund any overpayment to Tenant after first deducting the amount of Rent due and
(ii)&nbsp;in the event of any underpayment, Tenant </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=6,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="14",CHK=113480,FOLIO='6',FILE='DISK130:[07ZBA2.07ZBA76602]LO76602B.;7',USER='MBRADT',CD=';4-APR-2007;13:35' -->
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<UL>
<UL>
<BR>

<P><FONT SIZE=2>shall
pay Landlord, within thirty (30)&nbsp;days after Tenant's receipt of an invoice from Landlord, any underpayment of Real Estate Premise Taxes. All other Premise Taxes shall be paid by Tenant
directly to the applicable taxing authority fifteen (15)&nbsp;days prior to such Premise Taxes becoming due and payable. In the event, and only in the event, that Tenant has timely paid to Landlord
all Real Estate Premise Taxes due for a calendar year required to be paid to Landlord in accordance with the above, Tenant shall not be responsible for the payment of any penalties or interest
assessed by the applicable taxing authority as a result of Landlord's failure to timely pay such taxing authority the Real Estate Premise Taxes which Tenant paid to Landlord for such calendar year in
question. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;Landlord
has assigned to Tenant, on a revocable basis, the right to protest with the applicable taxing authorities the assessed valuation related to the Premises (but
not any other portion of the Building or the Parking Facilities) and used for purposes of calculating the Premise Taxes; </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, that
(i)&nbsp;Tenant shall undertake any such protests at its sole cost and expense, (ii)&nbsp;if Landlord's participation is required in order for Tenant to undertake such protest, Landlord will
cooperate with Tenant in connection with such protest as reasonably required by Tenant, but at no cost, expense or inconvenience to Landlord, (iii)&nbsp;Tenant shall not be permitted to bind
Landlord in connection with such protest in any manner without Landlord's consent, such consent to be within Landlord's sole and absolute discretion, except that Landlord shall be reasonable with
respect to any request to consent to the reduction in the assessed valuation of the Premises and (iv)&nbsp;Tenant's right to undertake such protests shall be revocable by Landlord upon the earlier
of any default or breach by Tenant of this Lease and the Expiration Date, except that with respect to the expiration of the Term only (as opposed to the earlier termination of this Lease), to the
extent that such expiration occurs prior to Tenant having had an opportunity to protest the Premise Taxes for the calendar in which the expiration occurs and provided that Landlord has not elected to
undertake the protest of the Premise Taxes for such calendar year, Tenant's rights under this </FONT><FONT SIZE=2><I>Paragraph&nbsp;4.I(2)</I></FONT><FONT SIZE=2> shall continue beyond the
expiration of the Term and until the later of the deadline for filing a protest with the applicable taxing authority for the Premise Taxes in question and, in the event Tenant has timely filed a
protest, the conclusion of the protest process." </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Tenant
has previously paid to Landlord certain outstanding penalties related to the non-payment of certain Real Estate Premise Taxes assessed on the Premises
for the calendar years 2003 and 2004 (the "</FONT><FONT SIZE=2><B><I>Tax Penalties</I></B></FONT><FONT SIZE=2>"). Tenant and Landlord agree to work together to attempt to mitigate the Tax Penalties, but
without either party committing to expend any out-of-pocket funds in connection with such effort and provided that Tenant acknowledges that in the event that the Tax Penalties
are not reduced or mitigated in any manner, Tenant shall not be entitled to any credit, rebate or compensation of any kind from Landlord for the Tax Penalties. In the event of any reduction by the
applicable taxing authorities to the aggregate amount of the Tax Penalties, Landlord shall pay to Tenant or apply to the payment of future Premise Taxes, at Landlord's sole discretion, an amount equal
to the adjustment received by Landlord, </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Refurbishment Allowance</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The following is hereby added as </FONT> <FONT SIZE=2><I>Paragraph&nbsp;4.J</I></FONT><FONT SIZE=2> to the Original Lease: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><B>I.&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Refurbishment Allowance.</I></B></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;Commencing
on June&nbsp;1, 2006, Tenant shall be entitled to receive a refurbishment allowance of Five and No/100 Dollars ($5.00) per RSF (the
"</FONT><FONT SIZE=2><B><I>Refurbishment Allowance</I></B></FONT><FONT SIZE=2>") for the reimbursement of Tenant's past and future costs in refurbishing the Premises, </FONT><FONT SIZE=2><I>provided,
however</I></FONT><FONT SIZE=2>, that in order to be entitled to the Refurbishment Allowance, the costs related to refurbishing the Premises must (i)&nbsp;have been incurred between
August&nbsp;15, 2004 and March&nbsp;31, </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>7</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_lo76602_1_8"> </A>
<UL>
<UL>

<P><FONT SIZE=2>2008,
(ii)&nbsp;the expenses must be in the nature of permanent leasehold improvements to the Premises, i.e. carpet, paint, leasehold build-out, HVAC, etc. as opposed to items such as
furniture, technology, moving costs, non-permanent fixtures (e.g. cubicles and trade fixtures), office supplies, design fee, other soft costs, etc.
("</FONT><FONT SIZE=2><B><I>Build-out</I></B></FONT><FONT SIZE=2>"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;The
Refurbishment Allowance will be due to Tenant within thirty (30)&nbsp;days after Landlord's receipt of adequate documentation, as reasonably determined by
Landlord, evidencing Tenant's actual, out-of-pocket expenditures for the Build-out in accordance with the requirements of </FONT> <FONT SIZE=2><I>Paragraph&nbsp;4.J(1)</I></FONT><FONT SIZE=2> of this Lease; </FONT><FONT SIZE=2><I>provided,
however</I></FONT><FONT SIZE=2>, that (i)&nbsp;at Landlord's option, the
Refurbishment Allowance may be extended to Tenant in the form of a credit against Base Rent commencing at the time the payment is due and continuing until Tenant has received a credit against Base
Rent due or coming due equal to the sum Tenant would have been otherwise been paid by Landlord pursuant to this </FONT><FONT SIZE=2><I>Paragraph&nbsp;4.J</I></FONT><FONT SIZE=2> and
(ii)&nbsp;Tenant shall not submit invoices for the Refurbishment Allowance to Landlord on more than one (1)&nbsp;occasion per month. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Building Management</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The following is hereby added to the Original Lease as </FONT> <FONT SIZE=2><I>Paragraph&nbsp;7.E</I></FONT><FONT SIZE=2>: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><B>E.&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Building Management.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Landlord agrees to manage and maintain the Building in a manner
consistent with other comparable office buildings of a similar class and age in Houston, Harris County, Texas (the "</FONT><FONT SIZE=2><B><I>Management Standard</I></B></FONT><FONT SIZE=2>"); </FONT> <FONT SIZE=2><I>provided, however</I></FONT><FONT
SIZE=2>, that (i)&nbsp;the foregoing shall not obligate Landlord to hire a third party manager to manage the Building, (ii)&nbsp;Tenant
shall not be entitled to terminate this Lease in the event that Tenant believes Landlord has breached this obligation and (iii)&nbsp;Tenant's sole and exclusive remedy for such failure by Landlord
shall be a suit for specific performance. Notwithstanding the foregoing, prior to Tenant exercising its remedy of specific performance for Landlord failing to adhere to the Management Standard, Tenant
shall be required to give Landlord written notice, specifying in reasonably sufficient detail, the basis upon which Tenant believes that Landlord has not complied with the Management Standard and the
manner in which Tenant proposes that Landlord remedy same. Landlord shall have until the date which is sixty (60)&nbsp;days after Landlord's receipt of such notice to either (i)&nbsp;respond to
Tenant that it disagrees with Tenant's belief that Landlord has not complied with the Management Standard or (ii)&nbsp;commence to remedy such failure (but without having any obligation to remedy in
the manner suggested by Tenant in its notice). If Landlord commences to remedy such failure within such sixty (60)&nbsp;day period, Tenant shall not be entitled to exercise its remedy of specific
performance for so long as Landlord is diligently prosecuting such cure, subject to any cessation of the prosecution of such cure resulting from force majeure or other factors outside of Landlord's
control. If, however, Landlord either (i)&nbsp;notifies Tenant prior to the expiration of such sixty (60)&nbsp;day period that it disagrees with Tenant's determination that Landlord has failed to
comply with the Management Standard or (ii)&nbsp;Landlord commences within such sixty (60)&nbsp;day period to remedy such failure and diligently prosecutes same, but then subsequently ceases
before the cure is achieved and without any basis for such cessation, e.g. force majeure, then Landlord and Tenant shall meet in an effort to resolve such dispute. If after ninety (90)&nbsp;days
from and after the first day that Landlord and Tenant met in an effort to resolve such dispute, Landlord and Tenant are still unable to resolve such dispute, then Tenant shall be entitled to pursue,
as its sole and exclusive remedy, a suit for specific performance to require Landlord to adhere to the Management Standard." </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Tax Waiver</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Paragraph&nbsp;32.K</I></FONT><FONT SIZE=2> of the Original Lease is
hereby amended and restated in its entirety as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><B>K.&nbsp;&nbsp;</B></FONT><FONT SIZE=2><B><I>Tax Waiver.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;SUBJECT TO </FONT><FONT SIZE=2><I>PARAGRAPH
4.I(2)</I></FONT><FONT SIZE=2>, TENANT WAIVES ALL RIGHTS PURSUANT TO ALL LAWS TO PROTEST APPRAISED VALUES OR RECEIVE NOTICE OF REAPPRAISAL REGARDING THE PROPERTY (INCLUDING LANDLORD'S PERSONALTY),
IRRESPECTIVE OF WHETHER LANDLORD CONTESTS SAME." </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>8</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_lo76602_1_9"> </A>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Renewal Option: Right of First Offer</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Rider 1</I></FONT><FONT SIZE=2> of the
Original Lease is hereby amended (but not restated) as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Any
Expansion Options (including, but not limited to, the First Expansion Option and the Second Expansion Option) are deleted in their entirety and Tenant acknowledges
that the Lease does not contain any expansion options. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;The
preferential right to lease is hereby deleted in its entirety and Tenant acknowledges that the Lease, as hereby amended, does not contain any preferential rights to
lease in favor of Tenant other than the Renewal Option, as contained in the Original Lease and modified by this First Amendment, and the Right of First Offer, as contained in this First Amendment. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;The
renewal option (the "</FONT><FONT SIZE=2><B><I>Renewal Option</I></B></FONT><FONT SIZE=2>") as contained in the Original Lease shall remain in effect in accordance with
its current terms except that the following is hereby added to the end of the first full paragraph under the Renewal Option in </FONT><FONT SIZE=2><I>Rider 1</I></FONT><FONT SIZE=2>: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"In
the event that Tenant elects to renew as to a partial floor as permitted pursuant to the terms of the renewal option described above, then Tenant shall pay for the cost to demise the
Premises. Notwithstanding anything herein to the contrary, this renewal option shall not be exercised by Tenant in the event that (i)&nbsp;Landlord elects to not lease all or any portion of the
Premises and instead opts to leave the Premises, or any portion, vacant or (ii)&nbsp;Landlord elects to lease all or any portion of the Premises to any Affiliate of Landlord or (iii)&nbsp;Landlord
elects to use all or any portion of the Premises for its own use; </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, that if Landlord only elects to cause a portion of the Premises to
be left vacant, leased to an Affiliate or used by Landlord, Landlord will offer Tenant the right to renew the Lease as to the portion of the Premises not being left vacant, leased to an Affiliate or
used by Landlord pursuant to the terms and conditions of this renewal option except that Landlord shall be required to pay for the cost to demise the Premises if it will include a partial floor. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tenant's
renewal option as provided above is not subordinate to any tenant of the Building or any third party, other than Landlord and its Affiliates as expressly provided above." </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;The
following is hereby inserted into Rider 1 as the Right of First Offer: </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lo76602___right_of_first_offer"> </A>
<A NAME="toc_lo76602_4"> </A>
<BR></FONT><FONT SIZE=2><B>"</B></FONT><FONT SIZE=2><B><I>RIGHT OF FIRST OFFER    <BR>    </I></B></FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Right of First Offer:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Tenant shall have an ongoing right of first offer (the "</FONT><FONT SIZE=2><B><I>Right of First
Offer</I></B></FONT><FONT SIZE=2>") on all Available Space. Such right will be subordinate to all other rights in favor of any third party, e.g. preferential rights to lease, expansion options, renewal
rights, right of first offer, etc., and in existence as of February&nbsp;15, 2006. Anytime Landlord has Available Space, Landlord shall notify Tenant in writing (the "</FONT><FONT SIZE=2><B><I>Offer
Notice</I></B></FONT><FONT SIZE=2>"), which Offer Notice shall include (i)&nbsp;the Market Rental Rate for the Available Space (the "</FONT><FONT SIZE=2><B><I>Right of First Offer
Space</I></B></FONT><FONT SIZE=2>"), (ii)&nbsp;the amount of RSF in the Right of First Offer Space, (iii)&nbsp;how the Right of First Offer Space is divisible and (iv)&nbsp;the amount of
reserved/unreserved parking spaces allocated to the Right of First Offer Space. Tenant shall have a period of twenty (20)&nbsp;Business
Days to notify Landlord in writing whether it will (x)&nbsp;lease all or, to the extent permitted pursuant to the Offer Notice, a portion of the Right of First Offer Space pursuant to the terms
contained in the Offer Notice, (y)&nbsp;lease all or, to the extent permitted pursuant to the Offer Notice, a portion of the Right of First Offer Space but request arbitration of the Market Rental
Rate pursuant to the arbitration provision contained in this Rider 1 below or (iii)&nbsp;pass on the option to lease the Right of First Offer Space. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Renewal of Right of First Offer:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In the event that Tenant shall fail to respond to the Offer Notice in writing within such
twenty (20)&nbsp;Business Day period, Tenant shall be deemed to </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>9</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<UL>
<UL>
<BR>

<P><FONT SIZE=2>have
elected to pass on the option to lease the Right of First Offer Space. If Tenant passes on the option to lease the Right of First Offer Space (or is deemed to have passed), Landlord shall be free
to market the Right of First Offer Space without having to provide Tenant with any notice or opportunity to lease the Right of First Offer Space until the date which is one hundred twenty
(120)&nbsp;days after Tenant delivered its notice to Landlord that it was electing to not lease the Right of First Offer Space (or the date that Tenant was deemed to have elected same, if
applicable) (the "</FONT><FONT SIZE=2><B><I>First Offer Refusal Date</I></B></FONT><FONT SIZE=2>") and as provided below, except that if during such one hundred twenty (120)&nbsp;period Landlord shall
offer third parties the right to lease less than all of the Right of First Offer Space in a manner that is materially different than the manner in which Landlord advised Tenant that the Right of First
Offer Space was divisible pursuant to the Offer Notice, Landlord shall provide Tenant with a new Offer Notice identifying such divisibility of the Right of First Offer Space and Tenant shall have five
(5)&nbsp;Business Days after its receipt of such new Offer Notice from Landlord to elect to (x)&nbsp;lease a portion, but not all, of the Right of First Offer Space pursuant to the terms contained
in the new Offer Notice, (y)&nbsp;lease a portion, but not all, of the Right of First Offer Space but request arbitration of the Market Rental Rate pursuant to the arbitration provision contained in
this Rider 1 below or (iii)&nbsp;pass again on the option to lease the Right of First Offer Space. After the First Offer Refusal Date, so long as (i)&nbsp;Landlord has </FONT> <FONT SIZE=2><I>not</I></FONT><FONT SIZE=2> entered into a lease for the
Right of First Offer Space, (ii)&nbsp;Landlord is </FONT><FONT SIZE=2><I>not</I></FONT><FONT SIZE=2> in active lease
negotiations with a prospective tenant for the Right of First Offer Space and (iii)&nbsp;Landlord is still offering the Right of First Offer Space for lease to third parties (other than Affiliates),
then, in such event only, Tenant may give Landlord notice that Tenant will lease the Right of First Offer Space pursuant to the then current Market Rental Rate and the other terms and conditions upon
which Landlord is currently offering the Right of First Offer Space for lease. Otherwise, the Right of First Offer as to the Right of First Offer Space will only arise once the Right of First Offer
Space has become Available Space after not being available because of a lease to another tenant or Landlord withdrawing the space from the market. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B><I>Terms of Lease of Right of First Offer Space:</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If Tenant elects to lease the Right of First Offer Space, (i)&nbsp;the term
for such Right of First Offer Space shall be coterminous with the Term of this Lease, (ii)&nbsp;the Base Rent rate for the Right of First Offer Space shall be equal to the Market Rental Rate,
(iii)&nbsp;the Right of First Offer Space shall be provided to Tenant on an "As-Is" "Where-Is" basis, with all faults." </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;The
Arbitration portion of Rider 1 shall be amended and restated in its entirety with the following: </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2><B>"</B></FONT><FONT SIZE=2><B><I>ARBITRATION  </I></B></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
controversy or claim between the parties arising out of or relating to the Market Rental Rate, and only such matter (the "</FONT><FONT SIZE=2><B><I>Market Rate
Dispute</I></B></FONT><FONT SIZE=2>") may be submitted to arbitration upon either party's written request (provided that Tenant's request must be made within the time periods provided for in the Renewal
Option and Right of First Offer sections of this Rider 1 above). Any arbitration conducted under this section will comply with the following, and any determination as a result thereof shall be binding
upon the parties: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Appointment of Arbitrators</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Landlord and Tenant shall use all reasonable efforts to agree, within ten
(10)&nbsp;Business Days following one party's delivery to the other of a written notice requesting the submittal of a Market Rate Dispute to arbitration, upon the appointment of one
(1)&nbsp;arbitrator to resolve the Market Rate Dispute. If an agreement on a single arbitrator cannot be reached within such ten (10)&nbsp;Business Day period, Landlord and Tenant shall each
appoint an arbitrator within seven (7)&nbsp;Business Days following the expiration of the ten (10)&nbsp;Business Day period and shall specify the name and address of their </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>10</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<UL>
<UL>

<P><FONT SIZE=2>respective
arbitrator to the other party prior to the expiration of such seven (7)&nbsp;Business Day period; </FONT><FONT SIZE=2><I>provided. however</I></FONT><FONT SIZE=2>, that if one party
fails to specify the name and address of its selected arbitrator within such seven (7)&nbsp;Business Day period the other party shall give such failing party written notice and if within five
(5)&nbsp;Business Days after such written notice the failing party still has not specified an arbitrator, the arbitrator selected by the other party shall act as the single arbitrator as if both
parties had agreed to the appointment of such arbitrator as provided above. The selected arbitrators shall then meet and if such arbitrators are unable to agree upon the resolution to the Market Rate
Dispute, they shall appoint a third arbitrator within twenty (20)&nbsp;days following their appointment. If the two (2)&nbsp;arbitrators are unable to agree upon a third arbitrator within such
twenty (20)&nbsp;day period, the third arbitrator shall be appointed as soon as reasonably possible thereafter by the American Arbitration Association (or any successor organization, or if no
successor organization shall then exist, by a court of competent jurisdiction residing in Harris County, Texas), subject to the qualification requirements set forth below. In the event of the failure,
refusal or inability of any arbitrator to act, a new arbitrator shall be appointed in his/her stead, which appointment shall be made in the same manner as set forth above for the appointment of such
resigning arbitrator. Immediately following the selection of the final arbitrator, the arbitrator(s) shall meet and, within thirty (30)&nbsp;days following the complete selection of the
arbitrator(s), endeavor to resolve the matter; such thirty (30)&nbsp;day period may be extended only to the extent of delay caused by force majeure or if resolution within such thirty
(30)&nbsp;day period is not reasonable under the circumstances. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Arbitration Proceeding; Decisions of Arbitrators</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Within five (5)&nbsp;Business Days following the
selection of all arbitrators, each party shall submit to such arbitrators such party's proposed resolution to the Market Rent Dispute in the form of an annual Base Rent per RSF in accordance with the
definition of
Market Rental Rate as provided in this Rider 1, together with reasonable evidence supporting such proposed resolution. The arbitrator(s) shall select either the proposed resolution of the Market Rate
Dispute submitted by Landlord or the proposed resolution of the Market Rate Dispute submitted by Tenant, whichever proposal such arbitrator(s) deem to be the most correct according to the definitions,
terms and requirements set forth in this Lease, with no compromise. The power of the arbitrators shall be exercised by the concurrence of at least two (2)&nbsp;arbitrators, except that if only one
arbitrator is required, the decision of such arbitrator shall govern. The arbitrator(s) shall have the authority to request additional facts or evidence from each of the parties and, if such
arbitrators so require, a hearing to present the same. In the event of such a hearing, rules of evidence applicable to judicial proceedings in Houston, Texas civil district courts shall govern; </FONT> <FONT SIZE=2><I>provided, however,
</I></FONT><FONT SIZE=2> that evidence will be admitted or excluded in the sole discretion of the arbitrator(s). The arbitrator(s) shall resolve the Market
Rate Dispute and shall execute and acknowledge their decision, together with a brief statement describing the rationale for such decision, in writing and deliver a copy thereof to each of the parties
personally or by registered or certified mail, return receipt requested. If the arbitrators fail to reach an agreement during such thirty (30)&nbsp;day period (as extended as aforesaid), they shall
be discharged, and new arbitration proceedings shall commence, which appointments shall be made in the same manner as set forth above. By agreement in writing, Landlord and Tenant may extend the time
to reach agreement either before or after the expiration thereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Costs</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each party shall bear their own costs and expenses in connection with the arbitration except that the
cost of a single arbitrator or the third arbitrator, as applicable, shall be split equally. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Qualifications</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each arbitrator shall (i)&nbsp;be a real estate broker licensed under the laws of the
State of Texas having actively and continuously engaged in leasing transactions </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>11</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_lo76602_1_12"> </A>
<UL>
<UL>
<BR>

<P><FONT SIZE=2>involving
in the aggregate more than 2,000,000 square feet of rentable area of office space in Houston, Texas for the immediately preceding ten (10)&nbsp;year period. In addition to all of the
foregoing, the third arbitrator shall be an independent broker not having any prior relationship representing either Landlord or Tenant. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Binding</I></FONT><FONT SIZE=2>; </FONT><FONT SIZE=2><I>Complete Defense</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The decision of the arbitrator(s)
shall be final and non-appealable, shall be binding on both Landlord and Tenant, and may be enforced in any court of competent jurisdiction. The parties to the arbitration agree that
compliance by a party with the provisions of this arbitration provision shall be a complete defense to any suit, action or proceeding instituted in any federal or state court, or before any
administrative tribunal by any of the other parties with respect to any Market Rate Dispute, other than a suit or action alleging non-compliance with a final and binding arbitration award
rendered hereunder. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;The
following is hereby inserted into Rider 1 at the end of </FONT><FONT SIZE=2><I>Rider&nbsp;1</I></FONT><FONT SIZE=2>: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><B><I>Definitions:</I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
used herein, "Available Space" means rentable space within the Building which none of Landlord, St. Luke's Episcopal Health Care System or any of their Affiliates desires to lease,
use or, with respect to Landlord or its Affiliates, leave such space vacant and which (i)&nbsp;Landlord has determined to lease to third parties, (ii)&nbsp;an existing tenant lease expires within
nine (9)&nbsp;months and such space is not otherwise subject to an existing expansion option, renewal right or preferential option to lease or (iii)&nbsp;can be "recaptured" by Landlord and
Landlord actually recaptures such space. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
used herein, "Affiliate" means any person or entity of any kind directly or indirectly controlling, directly or indirectly controlled by or under direct or indirect common control
with such person or entity. The term "control", "controlling" or "controlled by" shall mean the possession, directly or indirectly, of the power either to (a)&nbsp;vote fifty percent (50%) or more
of the securities or interests having ordinary voting power for the election of directors (or other comparable controlling body) of such person or entity or (b)&nbsp;direct or cause the direction of
management or policies of such person or entity, whether through the ownership of voting securities or interests, by contract or otherwise or (c)&nbsp;any person or entity with whom exists a joint
venture of any kind, </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
used herein, the exchange of a letter of intent, execution of a letter of intent, lease draft negotiations and the receipt of a proposal to lease shall all constitute "active lease
negotiations"." </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Existing Claims</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Tenant hereby waives any claims, damages, suits, liabilities costs or expenses
("</FONT><FONT SIZE=2><B><I>Claims</I></B></FONT><FONT SIZE=2>") it may have against Landlord with respect to the Lease or all or any part of the Property to the extent such Claims are related to the
payment of Taxes, the Tax Penalties and/or the operation or management of the Property and which arose prior to the Effective Date, but not any such Claims arising from and after the Effective Date. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Brokers</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Tenant represents that it has dealt only with Cushman&nbsp;&amp; Wakefield of Texas,&nbsp;Inc.
("</FONT><FONT SIZE=2><B><I>Tenant's Broker</I></B></FONT><FONT SIZE=2>") in connection with this First Amendment. Tenant agrees to indemnify, defend, protect and hold Landlord harmless from all claims of
any broker, agent or similar person or entity (other than Tenant's Broker) arising by, through or under Tenant and in connection with the Property or this First Amendment. Landlord shall pay a real
estate commission to Tenant's Broker equal to four percent (4%) times the Base Rent (and not including Additional Rent, Taxes or Excess Operating Expenses) due by Tenant during the portion of the Term
commencing on June&nbsp;1, 2006 and ending on July&nbsp;31, 2011, less the abatements provided for in </FONT><FONT SIZE=2><I>Section&nbsp;4</I></FONT><FONT SIZE=2> of this First Amendment
(other than the Parking Abatement). </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>12</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=12,SEQ=12,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="14",CHK=572941,FOLIO='12',FILE='DISK130:[07ZBA2.07ZBA76602]LO76602B.;7',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<A NAME="page_lo76602_1_13"> </A>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Successors and Assigns</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The obligations in this First Amendment shall be binding upon and inure to the
benefit of the successors and assigns of Landlord, and shall be binding upon and inure to the benefit of the permitted successors and assigns of Tenant. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Original Lease In Full Force and Effect</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Original Lease remains in full force and effect and is
unchanged except specifically modified by the provisions of this First Amendment. In the event of any conflicts between the terms of the Original Lease and this First Amendment, the terms of this
First Amendment shall control. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Entire Agreement</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This First Amendment and the Original Lease contain all the agreements of the parties
regarding the matters discussed in this First Amendment, and no prior agreement, understanding or representation about any such matter is effective for any purpose. The terms and conditions of this
First Amendment may not be amended or otherwise affected except by instrument in writing executed by each party to be bound by the instrument. All references in the Original Lease to the "Lease" shall
mean and refer to the Original Lease as amended by this First Amendment. </FONT></P>

<P><FONT SIZE=2>EXECUTED
to be effective for all purposes as of the Effective Date. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>TENANT:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>LANDLORD:</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=5 VALIGN="TOP"><FONT SIZE=2><BR>
PROS Revenue Management, L.P. (formerly Houston Community College System PROS Revenue Management,&nbsp;Inc.)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2><BR>
/s/ Charles H. Murphy&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2><BR>
/s/ Bruce Leslie&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2>Charles H. Murphy</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>Bruce Leslie</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="38%"><FONT SIZE=2>EVP &amp; CFO</FONT><HR NOSHADE></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="44%"><FONT SIZE=2>Chancellor</FONT><HR NOSHADE></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2>13</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=13,SEQ=13,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="14",CHK=703558,FOLIO='13',FILE='DISK130:[07ZBA2.07ZBA76602]LO76602B.;7',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<A NAME="page_lo76602_1_14"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lo76602_exhibit__a__9th_floor_credit_space"> </A>
<A NAME="toc_lo76602_5"> </A>
<BR></FONT><FONT SIZE=2><B>Exhibit "A"    <BR>    <BR>    </B></FONT><FONT SIZE=2>9<SUP>th</SUP> Floor Credit Space    <BR></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>[GRAPHIC OF FLOORPLAN]  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>14</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=14,SEQ=14,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="14",CHK=947845,FOLIO='14',FILE='DISK130:[07ZBA2.07ZBA76602]LO76602B.;7',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<BR>
<P><br><A NAME="07ZBA76601_14">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_lo76602_1">FIRST AMENDMENT TO OFFICE LEASE</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lo76602_2">Introduction</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lo76602_3">"RENTAL ABATEMENT"</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lo76602_4">" RIGHT OF FIRST OFFER</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lo76602_5">Exhibit "A" 9<SUP>th</SUP> Floor Credit Space</A></FONT><BR>
<!-- SEQ=,FILE='QUICKLINK',USER=MTRAN,SEQ=,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="14" -->
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</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.11
<SEQUENCE>15
<FILENAME>a2176970zex-10_11.htm
<DESCRIPTION>EXHIBIT 10.11
<TEXT>
<HTML>
<HEAD>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
<BR>
<FONT SIZE=3 ><A HREF="#07ZBA76601_15">QuickLinks</A></FONT>
<font size=3> -- Click here to rapidly navigate through this document</font>
<!-- TOC_END -->
<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit&nbsp;10.11  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lq76602_employment_agreement"> </A>
<A NAME="toc_lq76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>EMPLOYMENT AGREEMENT    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2>THIS EMPLOYMENT AGREEMENT</FONT><FONT SIZE=2> (this "</FONT><FONT SIZE=2><B><I>Agreement</I></B></FONT><FONT SIZE=2>") is made and entered into as of
September&nbsp;30, 2005 (the "</FONT><FONT SIZE=2><B><I>Effective Date</I></B></FONT><FONT SIZE=2>") by and between PROS Revenue Management, L.P., a Delaware limited partnership (the
"</FONT><FONT SIZE=2><B><I>Company</I></B></FONT><FONT SIZE=2>"), and Albert Winemiller (the "</FONT><FONT SIZE=2><B><I>Employee</I></B></FONT><FONT SIZE=2>"). The Company and the Employee are sometimes
collectively referred to herein as the "</FONT><FONT SIZE=2><B><I>Parties</I></B></FONT><FONT SIZE=2>" and individually referred to herein as a "</FONT><FONT SIZE=2><B><I>Party</I></B></FONT><FONT SIZE=2>." </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lq76602_recitals"> </A>
<A NAME="toc_lq76602_2"> </A>
<BR></FONT><FONT SIZE=2><B>RECITALS    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Employee and the Company desire to enter into an employment agreement containing the material terms and conditions set forth herein. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Parties intend that this Agreement memorialize all of the rights, duties and obligations of the Parties with respect to the employment of Employee with the Company. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lq76602_agreement"> </A>
<A NAME="toc_lq76602_3"> </A>
<BR></FONT><FONT SIZE=2><B>AGREEMENT    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and adequacy of which is acknowledged, the Parties
hereby agree as follows: </FONT></P>

<P><FONT SIZE=2>1.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Position and Duties</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee shall be employed by the Company as Chief Executive Officer and President and will have such
corresponding duties and responsibilities as determined by the Board of
Directors of the Company (the "</FONT><FONT SIZE=2><B><I>Board</I></B></FONT><FONT SIZE=2>"). Employee agrees to devote his full time, energy and skill to his responsibilities and duties to the Company. </FONT></P>

<P><FONT SIZE=2>2.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Term of Agreement</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The term of Employee's employment shall commence on the Effective Date and shall continue for a period
of twenty-four (24)&nbsp;months thereafter (the "</FONT><FONT SIZE=2><B><I>Employment Term</I></B></FONT><FONT SIZE=2>"), unless earlier terminated as provided in this Agreement. The
Employment Term will be automatically extended unless the Company decides, in its sole discretion, not to so extend and provides notice thereof to Employee (each such extension being a
"</FONT><FONT SIZE=2><B><I>Renewal Term</I></B></FONT><FONT SIZE=2>"); provided, however, that no single Renewal Term may be less than twelve (12)&nbsp;months unless consented to in writing by each Party
or earlier terminated as provided in this Agreement. </FONT></P>

<P><FONT SIZE=2>3.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Compensation</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee shall be compensated by the Company for the performance of his duties and obligations hereunder as
follows: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Salary</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee shall be paid a salary of $22,916.67 per month, less applicable withholdings and
deductions, in accordance with the Company's normal payroll procedures (the "</FONT><FONT SIZE=2><B><I>Salary</I></B></FONT><FONT SIZE=2>"). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Benefits</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee shall be eligible, on the same basis as other employees of the Company, to participate in
and to receive the benefits of the Company's employee benefit plans and vacation, holiday and business expense reimbursement policies, each as in effect from time to time. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Review</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee will review the Salary of Employee provided hereunder on a periodic basis
consistent with its review of other management generally and may adjust upward in its discretion such Salary. </FONT></P>


<P><FONT SIZE=2>4.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Termination</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee agrees that his employment is on an at-will basis and may be terminated at any time by
the Company or the Employee, with or without cause. Upon the termination (voluntarily or otherwise) of Employee's employment with the Company, neither Party shall have any continuing obligations or
liabilities with respect to compensation, benefits, or severance except as set forth in this </FONT><FONT SIZE=2><I>Section&nbsp;4</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Voluntary Termination; Termination for Cause</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If Employee's employment is voluntarily terminated by Employee
other than for Good Reason (a "</FONT><FONT SIZE=2><B><I>Voluntary Termination</I></B></FONT><FONT SIZE=2>") or is terminated by the Company for Cause (as defined below), Employee shall be entitled to no
compensation or benefits </FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=1,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="15",CHK=875091,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]LQ76602A.;8',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<BR>

<P><FONT SIZE=2>from
the Company other than accrued and unpaid compensation and benefits through the date of termination. For purposes of this </FONT><FONT SIZE=2><I>Section&nbsp;4</I></FONT><FONT SIZE=2>, a
termination of Employee's employment as a result of his death or Disability (as defined below) shall constitute a Voluntary Termination. </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><B><I>Cause</I></B></FONT><FONT SIZE=2>" shall mean (a)&nbsp;the unauthorized use or disclosure of the confidential information or trade secrets of the
Company, which use or disclosure causes material harm to the Company; (b)&nbsp;conviction of, or a plea of "guilty" or "no contest" to, a felony under the laws of the United States or any thereof;
(c)&nbsp;any intentional wrongdoing by Employee, whether by omission or commission, which adversely affects the business or affairs of the Company (or any parent or subsidiary); or
(d)&nbsp;continued failure to perform assigned duties after receiving written notification from the CEO or the Board and following a reasonable cure period. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><B><I>Disability</I></B></FONT><FONT SIZE=2>" shall mean the good-faith determination by the Board after consultation with medical personnel
that the Employee has ceased to be able to materially perform his duties and obligations, with or without reasonable accommodation, due to a mental or physical illness or incapacity that is reasonably
expected to materially prevent Employee from performing his duties and obligations for a period of not less than ninety (90)&nbsp;days. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;"</FONT><FONT
SIZE=2><B><I>Good Reason</I></B></FONT><FONT SIZE=2>" shall mean any one or more of the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)&nbsp;&nbsp;the
assignment to the Employee of any duties, or any material limitation of the Employee's responsibilities, substantially inconsistent with the Employee's duties and
status with the Company as contemplated on the date of this Agreement; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;&nbsp;the
relocation of the principal place of the Employee's service to a location that is more than fifty (50)&nbsp;miles from the Employee's principal place of service as
of the date of this Agreement; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)&nbsp;&nbsp;any
material reduction by the Company of the Employee's Salary (unless reductions comparable in amount and duration are concurrently made for all other senior executives
of the Company with responsibilities and organizational level comparable to the Employee's); or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)&nbsp;&nbsp;any
failure by the Company to continue to provide the Employee with the opportunity to participate, on terms no less favorable than those in effect for the benefit of
any employee holding a comparable position within the Company, in any benefit or compensation plans and programs. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Termination Without Cause or for Good Reason; Non-Renewal</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In the event Employee's employment is
terminated by the Company without Cause or by voluntarily by Employee for Good Reason or the Company elects not to renew the Employment Term or any Renewal Term, Employee shall be entitled only to the
following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;accrued
and unpaid compensation through the date of termination; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;continued
health benefits as made generally available to employees for twelve (12)&nbsp;months following the date of such termination; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;the
then-current base monthly salary of Employee, less applicable withholdings and deductions, for twelve (12)&nbsp;months following the date of such
termination, payable on normal payroll cycles; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;the
acceleration of vesting of stock options and other equity awards with respect to shares that would have vested in the twelve (12)&nbsp;months following such date
of termination (collectively, the "</FONT><FONT SIZE=2><B><I>Severance</I></B></FONT><FONT SIZE=2>"). </FONT></P>

</UL>

<P><FONT SIZE=2>5.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Confidential Information</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee acknowledges and agrees that the Company considers to be confidential the information,
observations and data obtained by him while employed by the Company concerning the actual or anticipated business or affairs of the Company, its subsidiaries or affiliates (collectively,
"</FONT><FONT SIZE=2><B><I>Confidential Information</I></B></FONT><FONT SIZE=2>") and that such Confidential Information is the property of the Company and/or the respective subsidiary or affiliate.
Therefore, Employee agrees that he shall not </FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=2,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="15",CHK=578827,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]LQ76602A.;8',USER='MBRADT',CD=';4-APR-2007;13:35' -->

<P><FONT SIZE=2>disclose
to any unauthorized person or use for his own purposes any Confidential Information without the prior written consent of the Board, unless and to the extent that the aforementioned matters
become generally known to and available for use by the public or persons knowledgeable in the Company's industry other than as a result of Employee's acts or omissions which constitute a breach
hereof. Employee shall deliver to the Company at the termination (whether voluntary or otherwise) of Employee's employment, or at any other time the Company may request, all memoranda, notes, plans,
records, reports, computer tapes, printouts and software and other documents and data (and copies thereof) relating to the Confidential Information, Work Product (as defined below) or the business or
anticipated business of the Company, its subsidiaries or affiliates (including, without limitation, trade secrets, business or marketing plans, reports, projections, diskettes, intangible information
stored on diskettes, software programs and data compiled with the use of those programs, tangible copies of trade secrets and confidential information, memoranda, credit cards, telephone charge cards,
manuals, building keys and passes, cell phones, computers, names and addresses of the Company's or its subsidiaries' or affiliates' customers and potential customers, customer lists, customer
contracts, sales information and any and all other similar information or property) which he may then possess or have under his control. Employee further agrees that in the event he discovers any
other materials of the Company, its subsidiaries or affiliates in his possession or control after the date of termination, he will immediately return such property to the Company. </FONT></P>

<P><FONT SIZE=2>6.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Inventions and Patents</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee acknowledges that all inventions, innovations, improvements, developments, methods,
designs, analyses, drawings, reports and all similar or related information (whether or not patentable) which (i)&nbsp;relate to the Company's or its subsidiaries' actual or anticipated business,
research and development or existing or future products or services or (ii)&nbsp;result from any work performed by Employee for the Company or its subsidiaries, and which are conceived, developed or
made by the Employee during the Noncompete Period ("</FONT><FONT SIZE=2><B><I>Work Product</I></B></FONT><FONT SIZE=2>") belong to the Company or such subsidiary; provided, however, that this </FONT> <FONT SIZE=2><I>Section&nbsp;6</I></FONT><FONT
SIZE=2> does not apply to any invention for which no equipment, supplies, materials, facilities, trade secrets, or other proprietary
information of the Company or its subsidiaries was used and which was developed entirely on Employee's own time, unless (i)&nbsp;the invention relates to the actual or anticipated business of the
Company or its subsidiaries or to the Company's or any of its subsidiaries' actual or anticipated research or development, or existing or future products or services or (ii)&nbsp;the invention
results from any work performed by Employee for the Company or its subsidiaries. Employee shall promptly disclose such Work Product to the Board and perform all actions requested by the Board (whether
during or after the Employment Period) to establish and confirm such ownership (including, without limitation, assignments, consents, powers of attorney and other instruments). The Parties acknowledge
and agree that Work Product is subject to this </FONT><FONT SIZE=2><I>Section&nbsp;6</I></FONT><FONT SIZE=2> and is Confidential Information unless and to the extent that such Work Product
(i)&nbsp;becomes generally known to and available for use by the public or persons knowledgeable in the Company's industry other than as a result of Employee's acts or omissions which constitute a
breach of this Agreement or (ii)&nbsp;the Employee discloses such Work Product to the Board and the Board by vote or written consent waives its rights under this Agreement with respect thereto. </FONT></P>

<P><FONT SIZE=2>7.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Non-Compete, Non-Solicitation</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;In
further consideration of the compensation to be paid to Employee hereunder, including the Severance, if any, the Company shall, upon execution of this Agreement,
disclose to Employee the Company's trade secrets and other Confidential Information concerning the Company, its subsidiaries and affiliates. Employee acknowledges that his services have been and shall
be of special, unique, and extraordinary value to the Company. Therefore, Employee agrees that, during the Employment Term, each Renewal Term, if any, and for one (1)&nbsp;year following the
termination of his employment with the Company for any reason (collectively, the "</FONT><FONT SIZE=2><B><I>Noncompete Period</I></B></FONT><FONT SIZE=2>"), he shall not, directly or indirectly, own any
interest in, manage, control, participate in, consult with, render services for, or in any manner engage in any business competing with the actual or anticipated businesses of the Company, its
subsidiaries or affiliates, on the date of the termination of Employee's employment, within any geographical area in which the Company, its subsidiaries or affiliates engage or plan to engage in such
businesses. A termination of this Agreement pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;4</I></FONT><FONT SIZE=2> or otherwise shall constitute a </FONT></P>

<HR NOSHADE>
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<BR>

<P><FONT SIZE=2>termination
of the Employment Term or Renewal Term, as applicable. Nothing herein shall prohibit Employee from being a passive owner of not more than two percent (2%) of the outstanding capital stock
of any class of a corporation which is publicly traded, so long as Employee has no active participation in the business of such corporation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;During
the Noncompete Period, Employee shall not directly himself or indirectly through another person or entity (i)&nbsp;induce or attempt to induce any employee of
the Company, its subsidiaries or affiliates to leave the employ thereof, or in any way interfere with the relationship between the Company, its subsidiaries and affiliates and any employee thereof,
(ii)&nbsp;hire any person who was an employee or contractor of the Company, its subsidiaries or affiliates or (iii)&nbsp;induce or attempt to induce any customer, supplier, licensee, licensor,
franchisee, contractor or other business relation of the Company, its subsidiaries or affiliates, or in any way interfere with the relationship between any such customer, supplier, licensee,
franchisee, contractor or other business relation and the Company, its subsidiaries or affiliates (including, without limitation, making any negative statements or communications about the Company,
its subsidiaries, or affiliates). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;If,
at the time of enforcement of this </FONT><FONT SIZE=2><I>Section&nbsp;7</I></FONT><FONT SIZE=2>, a court shall hold that the duration, scope or area restrictions
stated herein are unreasonable under circumstances then existing, the Parties agree that the maximum duration, scope or area reasonable under such circumstances shall be substituted for the stated
duration, scope or area and that the court shall be allowed to revise the restrictions contained herein to cover the maximum duration, scope and area permitted by law. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;Employee
acknowledges and agrees that the restrictions contained in this </FONT><FONT SIZE=2><I>Section&nbsp;7</I></FONT><FONT SIZE=2> are enforceable and reasonable.
Accordingly, should Employee assert in any context that the restrictions contained in this </FONT><FONT SIZE=2><I>Section&nbsp;7</I></FONT><FONT SIZE=2> are unenforceable or unreasonable, Employee
agrees that as of the date of such assertion the Company shall have no further obligation to provide him with Severance. </FONT></P>


<P><FONT SIZE=2>8.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Non-Disparagement</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each of the Parties represents and agrees that such Party will not, directly or indirectly,
engage during the Noncompete Period in any defamatory, disparaging or critical communication with any other person or entity concerning the business, operations, services, marketing strategies,
pricing policies, management, business practices, officers, directors, employees, attorneys, representatives, affiliates, agents affairs and/or financial condition of the other Party, its subsidiaries
or affiliates. </FONT></P>

<P><FONT SIZE=2>9.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Injunctive Relief and Additional Remedy</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee acknowledges and agrees that any breach or threatened breach by Employee
of any of the provisions of </FONT><FONT SIZE=2><I>Sections 5</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>6</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>7</I></FONT><FONT SIZE=2>, or </FONT> <FONT SIZE=2><I>8</I></FONT><FONT SIZE=2> would
result in irreparable injury and damage to the Company and/or its subsidiaries and affiliates for which the Company and/or its subsidiaries and
affiliates would have no adequate remedy at law. The Employee therefore also acknowledges and agrees that in the event of such breach or threatened breach the Company, in addition and supplementary to
other rights and remedies existing in its favor, may apply to any court of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce or prevent any
violations of the provisions thereof (without posting a bond or other security). The terms of this </FONT><FONT SIZE=2><I>Section&nbsp;9</I></FONT><FONT SIZE=2> shall not prevent the Company from
pursuing any other available remedies for any breach or threatened breach thereof including, without limitation, the recovery of damages from Employee. In addition, in the event of an alleged breach
or violation by Employee of any of the provisions of </FONT><FONT SIZE=2><I>Sections 5</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>6</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>7</I></FONT><FONT SIZE=2>, or </FONT><FONT
SIZE=2><I>8</I></FONT><FONT SIZE=2>, the Noncompete Period shall be tolled with respect to such provision until such breach or
violation has been duly cured. </FONT></P>

<P><FONT SIZE=2>10.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Dispute Resolution</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In the event of any dispute or claim relating to or arising out of this Agreement (including, without
limitation, any claims of breach of contract, wrongful termination or age, sex, race or other discrimination), Employee and the Company agree that all such disputes shall be fully and finally resolved
by binding arbitration conducted by the American Arbitration Association in Austin, Texas in accordance with its National Employment Dispute Resolution rules, as those rules are currently in effect
(and not as they may be modified in the future). Employee acknowledges that by accepting this arbitration provision he is waiving any right to a jury trial in the event of such dispute; provided,
however, that this arbitration provision shall not apply to any disputes or claims relating to or arising out of </FONT><FONT SIZE=2><I>Sections 5</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>6</I></FONT><FONT SIZE=2>,,</FONT><FONT
SIZE=2><I>7</I></FONT><FONT SIZE=2>, or </FONT><FONT SIZE=2><I>8</I></FONT><FONT SIZE=2> or any misuse or misappropriation of
Confidential Information, </FONT></P>

<HR NOSHADE>
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<BR>

<P><FONT SIZE=2>Work
Product or other trade secrets or proprietary information of the Company, its subsidiaries or affiliates. </FONT></P>

<P><FONT SIZE=2>11.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Attorneys' Fees</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The prevailing Party in any dispute or claim relating to or arising out of this Agreement shall be
entitled to recover from the losing Party all fees and expenses of any nature or kind (including, without limitation, attorney's fees and expenses) incurred in any such dispute or claim. </FONT></P>


<P><FONT SIZE=2>12.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Interpretation</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Company and Employee agree that this Agreement shall be interpreted in accordance with and governed by
the laws of the State of Texas, without giving effect to conflicts of law principles. </FONT></P>

<P><FONT SIZE=2>13.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Successors and Assigns</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall inure to the benefit of and be binding upon Employee and its successors and
assigns. In view of the personal nature of the services to be performed under this Agreement by Employee, Employee shall not have the right to sell, assign, pledge, hypothecate, donate or otherwise
transfer any of his rights, obligations or benefits hereunder. </FONT></P>

<P><FONT SIZE=2>14.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Entire Agreement</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement constitutes the entire employment agreement between the Company and Employee regarding
the terms and conditions of his employment, with the exception of that certain Employee Inventions and Proprietary Rights Assignment Agreement, dated January&nbsp;5, 1999, between the Company and
Employee (the "</FONT><FONT SIZE=2><B><I>Assignment Agreement</I></B></FONT><FONT SIZE=2>"); provided, however, that the provisions of this Agreement shall control if there exists any conflicting provisions
in the Option Agreement or the Assignment Agreement. This Agreement, together with the Option Agreement and the Assignment Agreement, supersede all prior negotiations, representations or agreements
between the Company and Employee, whether written or oral, regarding Employee's employment by the Company. </FONT></P>

<P><FONT SIZE=2>15.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Severability</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If any one or more of the provisions (or any part thereof) of this Agreement shall be held invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions (or any part thereof) shall not in any way be affected or impaired thereby. </FONT></P>


<P><FONT SIZE=2>16.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>No Representations</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee acknowledges that he is not relying, and has not relied, on any promise, representation or
statement made by or on behalf of the Company which is not set forth in this Agreement. </FONT></P>

<P><FONT SIZE=2>17.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Notices</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;All notices requests, reports and other communications pursuant hereto shall be in writing, either by letter
(delivered by hand or commercial delivery service or sent by certified mail, return receipt requested) or facsimile, addressed as follows: </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>If
to the Company: </FONT></P>

<UL>

<P><FONT SIZE=2>PROS
Holdings,&nbsp;Inc.<BR>
3100 Main Street, Suite 900<BR>
Houston, Texas 77006<BR>
Attention: Chief Executive Officer<BR>
Facsimile: (713)&nbsp;529-7037 </FONT></P>

</UL>

<P><FONT SIZE=2>with
a copy to (which shall not constitute notice): </FONT></P>

<UL>

<P><FONT SIZE=2>DLA
Piper Rudnick Gray Cary US LLP<BR>
1221 S. Mopac Expressway, Suite 400<BR>
Austin, Texas 78746<BR>
Attention: John J. Gilluly<BR>
Facsimile: (512)&nbsp;457-7001 </FONT></P>

</UL>

<P><FONT SIZE=2>If
to the Employee: </FONT></P>

<UL>

<P><FONT SIZE=2>Albert
Winemiller </FONT></P>

<P><FONT SIZE=2>____________________________ </FONT></P>

<P><FONT SIZE=2>____________________________ </FONT></P>

<P><FONT SIZE=2>Facsimile:
___________________ </FONT></P>

</UL>
</UL>
</UL>
<HR NOSHADE>
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<UL>
<UL>
</UL>
</UL>

<P><FONT SIZE=2>Any
notice, request or communication hereunder shall be deemed to have been given on the day on which it is delivered by hand to such party at its address specified above, or, if sent by certified
mail, return receipt requested, postage prepaid, on the third business day following the date it was deposited in the mail, or in the case of facsimile notice, when transmitted addressed as aforesaid,
confirmation received, if the notice is also delivered by hand or mail in the manner described above. Any party may change the person or address to whom or which notices are to be given hereunder, by
notice duly given hereunder; provided, however, that any such notice shall be deemed to have been given hereunder only when actually received by the party to which it is addressed. </FONT></P>

<P><FONT SIZE=2>18.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Counterparts</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be executed in any number of counterparts, provided, however, that each of such
counterparts when taken together shall constitute one and the same agreement. </FONT></P>

<P><FONT SIZE=2>19.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Amendments</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be modified or amended only by a supplemental written agreement signed by both the Employee
and the Company and approved by unanimous vote or written consent of the Compensation Committee. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lq76602_signature_page_follows."> </A>
<A NAME="toc_lq76602_4"> </A>
<BR></FONT><FONT SIZE=2><B><I>Signature Page Follows.    <BR>    </I></B></FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the Parties hereto have entered into this Agreement as of the Effective Date. </FONT></P>

<!-- User-specified TAGGED TABLE -->
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<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><B>COMPANY:</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2>PROS REVENUE MANAGEMENT, L.P.,</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="43%"><FONT SIZE=2><BR>
/s/ Kurt R. Jaggers</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><I>Name:</I></FONT></TD>
<TD WIDTH="43%"><FONT SIZE=2>Kurt R. Jaggers</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><I>Title:</I></FONT></TD>
<TD WIDTH="43%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>EMPLOYEE:</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
/s/ Albert Winemiller</FONT><HR NOSHADE><FONT SIZE=2>ALBERT WINEMILLER</FONT></TD>
</TR>
</TABLE>
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<P><br><A NAME="07ZBA76601_15">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_lq76602_1">EMPLOYMENT AGREEMENT</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lq76602_2">RECITALS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lq76602_3">AGREEMENT</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lq76602_4">Signature Page Follows.</A></FONT><BR>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.12
<SEQUENCE>16
<FILENAME>a2176970zex-10_12.htm
<DESCRIPTION>EXHIBIT 10.12
<TEXT>
<HTML>
<HEAD>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
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<FONT SIZE=3 ><A HREF="#07ZBA76601_16">QuickLinks</A></FONT>
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<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit&nbsp;10.12  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ls76602_employment_agreement"> </A>
<A NAME="toc_ls76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>EMPLOYMENT AGREEMENT    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2>THIS EMPLOYMENT AGREEMENT</FONT><FONT SIZE=2> (this "</FONT><FONT SIZE=2><B><I>Agreement</I></B></FONT><FONT SIZE=2>") is made and entered into as of
September&nbsp;30, 2005 (the "</FONT><FONT SIZE=2><B><I>Effective Date</I></B></FONT><FONT SIZE=2>") by and between PROS Revenue Management, L.P., a Delaware limited partnership (the
"</FONT><FONT SIZE=2><B><I>Company</I></B></FONT><FONT SIZE=2>"), and Charles Murphy (the "</FONT><FONT SIZE=2><B><I>Employee</I></B></FONT><FONT SIZE=2>"). The Company and the Employee are sometimes collectively
referred to herein as the "</FONT><FONT SIZE=2><B><I>Parties</I></B></FONT><FONT SIZE=2>" and individually referred to herein as a "</FONT><FONT SIZE=2><B><I>Party</I></B></FONT><FONT SIZE=2>." </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ls76602_recitals"> </A>
<A NAME="toc_ls76602_2"> </A>
<BR></FONT><FONT SIZE=2><B>RECITALS    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Employee and the Company desire to enter into an employment agreement containing the material terms and conditions set forth herein. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Parties intend that this Agreement memorialize all of the rights, duties and obligations of the Parties with respect to the employment of Employee with the Company. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ls76602_agreement"> </A>
<A NAME="toc_ls76602_3"> </A>
<BR></FONT><FONT SIZE=2><B>AGREEMENT    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and adequacy of which is acknowledged, the Parties
hereby agree as follows: </FONT></P>


<P><FONT SIZE=2>1.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Position and Duties</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee shall be employed by the Company as Executive Vice President and Chief Financial Officer and
will have such corresponding duties and responsibilities as determined by
the Chief Executive Officer of the Company (the "</FONT><FONT SIZE=2><B><I>CEO</I></B></FONT><FONT SIZE=2>"), or, during any period(s) when a CEO is not appointed, as determined by the Board of Directors of
the Company (the "</FONT><FONT SIZE=2><B><I>Board</I></B></FONT><FONT SIZE=2>"). Employee agrees to devote his full time, energy and skill to his responsibilities and duties to the Company. </FONT></P>

<P><FONT SIZE=2>2.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Term of Agreement</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The term of Employee's employment shall commence on the Effective Date and shall continue for a period
of twenty-four (24)&nbsp;months thereafter (the "</FONT><FONT SIZE=2><B><I>Employment Term</I></B></FONT><FONT SIZE=2>"), unless earlier terminated as provided in this Agreement. The
Employment Term will be automatically extended unless the Company decides, in its sole discretion, not to so extend and provides notice thereof to Employee (each such extension being a
"</FONT><FONT SIZE=2><B><I>Renewal Term</I></B></FONT><FONT SIZE=2>"); provided, however, that no single Renewal Term may be less than twelve (12)&nbsp;months unless consented to in writing by each Party
or earlier terminated as provided in this Agreement. </FONT></P>

<P><FONT SIZE=2>3.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Compensation</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee shall be compensated by the Company for the performance of his duties and obligations hereunder as
follows: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Salary</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee shall be paid a salary of $20,416.68 per month, less applicable withholdings and
deductions, in accordance with the Company's normal payroll procedures (the "</FONT><FONT SIZE=2><B><I>Salary</I></B></FONT><FONT SIZE=2>"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Benefits</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee shall be eligible, on the same basis as other employees of the Company, to participate in
and to receive the benefits of the Company's employee benefit plans and vacation, holiday and business expense reimbursement policies, each as in effect from time to time. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Review</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee will review the Salary of Employee provided hereunder on a periodic basis
consistent with its review of other management generally and may adjust upward in its discretion such Salary. </FONT></P>

<P><FONT SIZE=2>4.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Termination</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee agrees that his employment is on an at-will basis and may be terminated at any time by
the Company or the Employee, with or without cause. Upon the termination (voluntarily or otherwise) of Employee's employment with the Company, neither Party shall have any continuing obligations or
liabilities with respect to compensation, benefits, or severance except as set forth in this </FONT><FONT SIZE=2><I>Section&nbsp;4</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Voluntary Termination; Termination for Cause</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If Employee's employment is voluntarily terminated by Employee
other than for Good Reason (a "</FONT><FONT SIZE=2><B><I>Voluntary Termination</I></B></FONT><FONT SIZE=2>") or is terminated by </FONT></P>

<HR NOSHADE>
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<BR>

<P><FONT SIZE=2>the
Company for Cause (as defined below), Employee shall be entitled to no compensation or benefits from the Company other than accrued and unpaid compensation and benefits through the date of
termination. For purposes of this </FONT><FONT SIZE=2><I>Section&nbsp;4</I></FONT><FONT SIZE=2>, a termination of Employee's employment as a result of his death or Disability (as defined below)
shall constitute a Voluntary Termination. </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><B><I>Cause</I></B></FONT><FONT SIZE=2>" shall mean (a)&nbsp;the unauthorized use or disclosure of the confidential information or trade secrets of the
Company, which use or disclosure causes material harm to the Company; (b)&nbsp;conviction of, or a plea of "guilty" or "no contest" to, a felony under the laws of the United States or any thereof;
(c)&nbsp;any intentional wrongdoing by Employee, whether by omission or commission, which adversely affects the business or affairs of the Company (or any parent or subsidiary); or
(d)&nbsp;continued failure to perform assigned duties after receiving written notification from the CEO or the Board and following a reasonable cure period. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><B><I>Disability</I></B></FONT><FONT SIZE=2>" shall mean the good-faith determination by the Board after consultation with medical personnel
that the Employee has ceased to be able to materially perform his duties and obligations, with or without reasonable accommodation, due to a mental or physical illness or incapacity that is reasonably
expected to materially prevent Employee from performing his duties and obligations for a period of not less than ninety (90)&nbsp;days. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;"</FONT><FONT
SIZE=2><B><I>Good Reason</I></B></FONT><FONT SIZE=2>" shall mean any one or more of the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)&nbsp;&nbsp;the
assignment to the Employee of any duties, or any material limitation of the Employee's responsibilities, substantially inconsistent with the Employee's duties and
status with the Company as contemplated on the date of this Agreement; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)&nbsp;&nbsp;the
relocation of the principal place of the Employee's service to a location that is more than fifty (50)&nbsp;miles from the Employee's principal place of service as
of the date of this Agreement; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)&nbsp;&nbsp;any
material reduction by the Company of the Employee's Salary (unless reductions comparable in amount and duration are concurrently made for all other senior executives
of the Company with responsibilities and organizational level comparable to the Employee's); or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)&nbsp;&nbsp;any
failure by the Company to continue to provide the Employee with the opportunity to participate, on terms no less favorable than those in effect for the benefit of
any employee holding a comparable position within the Company, in any benefit or compensation plans and programs. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Termination Without Cause or for Good Reason; Non-Renewal</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In the event Employee's employment is
terminated by the Company without Cause or by voluntarily by Employee for Good Reason or the Company elects not to renew the Employment Term or any Renewal Term, Employee shall be entitled only to the
following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;accrued
and unpaid compensation through the date of termination; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;continued
health benefits as made generally available to employees for twelve (12)&nbsp;months following the date of such termination; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;the
then-monthly base salary of Employee, less applicable withholdings and deductions, for twelve (12)&nbsp;months following the date of such
termination, payable on normal payroll cycles; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;the
acceleration of vesting of stock options and other equity awards with respect to shares that would have vested in the twelve (12)&nbsp;months following such date
of termination (collectively, the "</FONT><FONT SIZE=2><B><I>Severance</I></B></FONT><FONT SIZE=2>"). </FONT></P>

</UL>

<P><FONT SIZE=2>5.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Confidential Information</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee acknowledges and agrees that the Company considers to be confidential the information,
observations and data obtained by him while employed by the Company concerning the actual or anticipated business or affairs of the Company, its subsidiaries or affiliates (collectively,
"</FONT><FONT SIZE=2><B><I>Confidential Information</I></B></FONT><FONT SIZE=2>") and that such Confidential Information is the property of the </FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2>Company
and/or the respective subsidiary or affiliate. Therefore, Employee agrees that he shall not disclose to any unauthorized person or use for his own purposes any Confidential Information without
the prior written consent of the Board, unless and to the extent that the aforementioned matters become generally known to and available for use by the public or persons knowledgeable in the Company's
industry other than as a result of Employee's acts or omissions which constitute a breach hereof. Employee shall deliver to the Company at the termination (whether voluntary or otherwise) of
Employee's employment, or at any other time the Company may request, all memoranda, notes, plans, records, reports, computer tapes, printouts and software and other documents and data (and copies
thereof) relating to the Confidential Information, Work Product (as defined below) or the business or anticipated business of the Company, its subsidiaries or affiliates (including, without
limitation, trade secrets, business or marketing plans, reports, projections, diskettes, intangible information stored on diskettes, software programs and data compiled with the use of those programs,
tangible copies of trade secrets and confidential information, memoranda, credit cards, telephone charge cards, manuals, building keys and passes, cell phones, computers, names and addresses of the
Company's or its subsidiaries' or affiliates' customers and potential customers, customer lists, customer contracts, sales information and any and all other similar information or property) which he
may then possess or have under his control. Employee further agrees that in the event he discovers any other materials of the Company, its subsidiaries or affiliates in his possession or control after
the date of termination, he will immediately return such property to the Company. </FONT></P>

<P><FONT SIZE=2>6.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Inventions and Patents</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee acknowledges that all inventions, innovations, improvements, developments, methods,
designs, analyses, drawings, reports and all similar or related information (whether or not patentable) which (i)&nbsp;relate to the Company's or its subsidiaries' actual or anticipated business,
research and development or existing or future products or services or (ii)&nbsp;result from any work performed by Employee for the Company or its subsidiaries, and which are conceived, developed or
made by the Employee during the Noncompete Period ("</FONT><FONT SIZE=2><B><I>Work Product</I></B></FONT><FONT SIZE=2>") belong to the Company or such subsidiary; provided, however, that this </FONT> <FONT SIZE=2><I>Section&nbsp;6</I></FONT><FONT
SIZE=2> does not apply to any invention for which no equipment, supplies, materials, facilities, trade secrets, or other proprietary
information of the Company or its subsidiaries was used and which was developed entirely on Employee's own time, unless (i)&nbsp;the invention relates to the actual or anticipated business of the
Company or its subsidiaries or to the Company's or any of its subsidiaries' actual or anticipated research or development, or existing or future products or services or (ii)&nbsp;the invention
results from any work performed by Employee for the Company or its subsidiaries. Employee shall promptly disclose such Work Product to the Board and perform all actions requested by the Board (whether
during or after the Employment Period) to establish and confirm such ownership (including, without limitation, assignments, consents, powers of attorney and other instruments). The Parties acknowledge
and agree that Work Product is subject to this </FONT><FONT SIZE=2><I>Section&nbsp;6</I></FONT><FONT SIZE=2> and is Confidential Information unless and to the extent that such Work Product
(i)&nbsp;becomes generally known to and available for use by the public or persons knowledgeable in the Company's industry other than as a result of Employee's acts or omissions which constitute a
breach of this Agreement or (ii)&nbsp;the Employee discloses such Work Product to the Board and the Board by vote or written consent waives its rights under this Agreement with respect thereto. </FONT></P>

<P><FONT SIZE=2>7.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Non-Compete, Non-Solicitation</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;In
further consideration of the compensation to be paid to Employee hereunder, including the Severance, if any, the Company shall, upon execution of this Agreement,
disclose to Employee the Company's trade secrets and other Confidential Information concerning the Company, its subsidiaries and affiliates. Employee acknowledges that his services have been and shall
be of special, unique, and extraordinary value to the Company. Therefore, Employee agrees that, during the Employment Term, each Renewal Term, if any, and for one (1)&nbsp;year following the
termination of his employment with the Company for any reason (collectively, the "</FONT><FONT SIZE=2><B><I>Noncompete Period</I></B></FONT><FONT SIZE=2>"), he shall not, directly or indirectly, own any
interest in, manage, control, participate in, consult with, render services for, or in any manner engage in any business competing with the actual or anticipated businesses of the Company, its
subsidiaries or affiliates, on the date of the termination of Employee's employment, within any geographical area in which the Company, its subsidiaries or affiliates engage or plan to engage in such </FONT></P>

<HR NOSHADE>
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<BR>

<P><FONT SIZE=2>businesses.
A termination of this Agreement pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;4</I></FONT><FONT SIZE=2> or otherwise shall constitute a termination of the Employment Term or Renewal
Term, as applicable. Nothing herein shall prohibit Employee from being a passive owner of not more than two percent (2%) of the outstanding capital stock of any class of a corporation which is
publicly traded, so long as Employee has no active participation in the business of such corporation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;During
the Noncompete Period, Employee shall not directly himself or indirectly through another person or entity (i)&nbsp;induce or attempt to induce any employee of
the Company, its subsidiaries or affiliates to leave the employ thereof, or in any way interfere with the relationship between the Company, its subsidiaries and affiliates and any employee thereof,
(ii)&nbsp;hire any person who was an employee or contractor of the Company, its subsidiaries or affiliates or (iii)&nbsp;induce or attempt to induce any customer, supplier, licensee, licensor,
franchisee, contractor or other business relation of the Company, its subsidiaries or affiliates, or in any way interfere with the relationship between any such customer, supplier, licensee,
franchisee, contractor or other business relation and the Company, its subsidiaries or affiliates (including, without limitation, making any negative statements or communications about the Company,
its subsidiaries, or affiliates). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;If,
at the time of enforcement of this </FONT><FONT SIZE=2><I>Section&nbsp;7</I></FONT><FONT SIZE=2>, a court shall hold that the duration, scope or area restrictions
stated herein are unreasonable under circumstances then existing, the Parties agree that the maximum duration, scope or area reasonable under such circumstances shall be substituted for the stated
duration, scope or area and that the court shall be allowed to revise the restrictions contained herein to cover the maximum duration, scope and area permitted by law. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;Employee
acknowledges and agrees that the restrictions contained in this </FONT><FONT SIZE=2><I>Section&nbsp;7</I></FONT><FONT SIZE=2> are enforceable and reasonable.
Accordingly, should Employee assert in any context that the restrictions contained in this </FONT><FONT SIZE=2><I>Section&nbsp;7</I></FONT><FONT SIZE=2> are unenforceable or unreasonable, Employee
agrees that as of the date of such assertion the Company shall have no further obligation to provide him with Severance. </FONT></P>

<P><FONT SIZE=2>8.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Non-Disparagement</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each of the Parties represents and agrees that such Party will not, directly or indirectly,
engage during the Noncompete Period in any defamatory, disparaging or critical communication with any other person or entity concerning the business, operations, services, marketing strategies,
pricing policies, management, business practices, officers, directors, employees, attorneys, representatives, affiliates, agents affairs and/or financial condition of the other Party, its subsidiaries
or affiliates. </FONT></P>

<P><FONT SIZE=2>9.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Injunctive Relief and Additional Remedy</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee acknowledges and agrees that any breach or threatened breach by Employee
of any of the provisions of </FONT><FONT SIZE=2><I>Sections 5</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>6</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>7</I></FONT><FONT SIZE=2>, or </FONT> <FONT SIZE=2><I>8</I></FONT><FONT SIZE=2> would
result in irreparable injury and damage to the Company and/or its subsidiaries and affiliates for which the Company and/or its subsidiaries and
affiliates would have no adequate remedy at law. The Employee therefore also acknowledges and agrees that in the event of such breach or threatened breach the Company, in addition and supplementary to
other rights and remedies existing in its favor, may apply to any court of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce or prevent any
violations of the provisions thereof (without posting a bond or other security). The terms of this </FONT><FONT SIZE=2><I>Section&nbsp;9</I></FONT><FONT SIZE=2> shall not prevent the Company from
pursuing any other available remedies for any breach or threatened breach thereof including, without limitation, the recovery of damages from Employee. In addition, in the event of an alleged breach
or violation by Employee of any of the provisions of </FONT><FONT SIZE=2><I>Sections 5</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>6</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>7</I></FONT><FONT SIZE=2>, or </FONT><FONT
SIZE=2><I>8</I></FONT><FONT SIZE=2>, the Noncompete Period shall be tolled with respect to such provision until such breach or
violation has been duly cured. </FONT></P>

<P><FONT SIZE=2>10.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Dispute Resolution</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In the event of any dispute or claim relating to or arising out of this Agreement (including, without
limitation, any claims of breach of contract, wrongful termination or age, sex, race or other discrimination), Employee and the Company agree that all such disputes shall be fully and finally resolved
by binding arbitration conducted by the American Arbitration Association in Austin, Texas in accordance with its National Employment Dispute Resolution rules, as those rules are currently in effect
(and not as they may be modified in the future). Employee acknowledges that by accepting this arbitration provision he is waiving any right to a jury trial in the event of such dispute; provided,
however, that this arbitration provision shall not apply to any disputes or claims relating to or </FONT></P>

<HR NOSHADE>
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<BR>

<P><FONT SIZE=2>arising
out of </FONT><FONT SIZE=2><I>Sections 5</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>6</I></FONT><FONT SIZE=2>,,</FONT><FONT SIZE=2><I>7</I></FONT><FONT SIZE=2>, or </FONT> <FONT SIZE=2><I>8</I></FONT><FONT SIZE=2> or any misuse or
misappropriation of Confidential Information, Work Product or other trade secrets or proprietary information of the Company, its
subsidiaries or affiliates. </FONT></P>

<P><FONT SIZE=2>11.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Attorneys' Fees</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The prevailing Party in any dispute or claim relating to or arising out of this Agreement shall be
entitled to recover from the losing Party all fees and expenses of any nature or kind (including, without limitation, attorney's fees and expenses) incurred in any such dispute or claim. </FONT></P>

<P><FONT SIZE=2>12.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Interpretation</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Company and Employee agree that this Agreement shall be interpreted in accordance with and governed by
the laws of the State of Texas, without giving effect to conflicts of law principles. </FONT></P>

<P><FONT SIZE=2>13.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Successors and Assigns</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall inure to the benefit of and be binding upon Employee and its successors and
assigns. In view of the personal nature of the services to be performed under this Agreement by Employee, Employee shall not have the right to sell, assign, pledge, hypothecate, donate or otherwise
transfer any of his rights, obligations or benefits hereunder. </FONT></P>

<P><FONT SIZE=2>14.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Entire Agreement</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement constitutes the entire employment agreement between the Company and Employee regarding
the terms and conditions of his employment, with the exception of that certain Stock Option Agreements (the "</FONT><FONT SIZE=2><B><I>Option Agreement</I></B></FONT><FONT SIZE=2>") previously entered into
between Employee and the Company and that certain Employee Inventions and Proprietary Rights Assignment Agreement, dated January&nbsp;11, 1999, between the Company and Employee (the
"</FONT><FONT SIZE=2><B><I>Assignment Agreement</I></B></FONT><FONT SIZE=2>"); provided, however, that the provisions of this Agreement shall control if there exists any conflicting provisions in the Option
Agreement or the Assignment Agreement. This Agreement, together with the Option Agreement and the Assignment Agreement, supersede all prior negotiations, representations or agreements between the
Company and Employee, whether written or oral, regarding Employee's employment by the Company. </FONT></P>

<P><FONT SIZE=2>15.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Severability</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If any one or more of the provisions (or any part thereof) of this Agreement shall be held invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions (or any part thereof) shall not in any way be affected or impaired thereby. </FONT></P>


<P><FONT SIZE=2>16.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>No Representations</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee acknowledges that he is not relying, and has not relied, on any promise, representation or
statement made by or on behalf of the Company which is not set forth in this Agreement. </FONT></P>

<P><FONT SIZE=2>17.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Notices</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;All notices requests, reports and other communications pursuant hereto shall be in writing, either by letter
(delivered by hand or commercial delivery service or sent by certified mail, return receipt requested) or facsimile, addressed as follows: </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>If
to the Company: </FONT></P>

<UL>

<P><FONT SIZE=2>PROS
Holdings,&nbsp;Inc.<BR>
3100 Main Street, Suite 900<BR>
Houston, Texas 77006<BR>
Attention: Chief Executive Officer<BR>
Facsimile: (713)&nbsp;529-7037 </FONT></P>

</UL>

<P><FONT SIZE=2>with
a copy to (which shall not constitute notice): </FONT></P>

<UL>

<P><FONT SIZE=2>DLA
Piper Rudnick Gray Cary US LLP<BR>
1221 S. Mopac Expressway, Suite 400<BR>
Austin, Texas 78746<BR>
Attention: John J. Gilluly<BR>
Facsimile: (512)&nbsp;457-7001 </FONT></P>

</UL>

<P><FONT SIZE=2>If
to the Employee: </FONT></P>

<UL>

<P><FONT SIZE=2>Charles
Murphy<BR>
1000 South Point Drive, #507<BR>
Miami Beach, Florida 33139<BR>
Facsimile: (305)&nbsp;672-3138 </FONT></P>

</UL>
</UL>
</UL>
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<UL>
<UL>
</UL>
</UL>

<P><FONT SIZE=2>Any
notice, request or communication hereunder shall be deemed to have been given on the day on which it is delivered by hand to such party at its address specified above, or, if sent by certified
mail, return receipt requested, postage prepaid, on the third business day following the date it was deposited in the mail, or in the case of facsimile notice, when transmitted addressed as aforesaid,
confirmation received, if the notice is also delivered by hand or mail in the manner described above. Any party may change the person or address to whom or which notices are to be given hereunder, by
notice duly given hereunder; provided, however, that any such notice shall be deemed to have been given hereunder only when actually received by the party to which it is addressed. </FONT></P>

<P><FONT SIZE=2>18.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Counterparts</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be executed in any number of counterparts, provided, however, that each of such
counterparts when taken together shall constitute one and the same agreement. </FONT></P>

<P><FONT SIZE=2>19.&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Amendments</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be modified or amended only by a supplemental written agreement signed by both the Employee
and the Company and approved by unanimous vote or written consent of the Compensation Committee. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ls76602_signature_page_follows."> </A>
<A NAME="toc_ls76602_4"> </A>
<BR></FONT><FONT SIZE=2><B><I>Signature Page Follows.    <BR>    </I></B></FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the Parties hereto have entered into this Agreement as of the Effective Date. </FONT></P>

<!-- User-specified TAGGED TABLE -->
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<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><B>COMPANY:</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2>PROS REVENUE MANAGEMENT, L.P.,</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="43%"><FONT SIZE=2><BR>
/s/ Kurt R. Jaggers</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><I>Name:</I></FONT></TD>
<TD WIDTH="43%"><FONT SIZE=2>Kurt R. Jaggers</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><I>Title:</I></FONT></TD>
<TD WIDTH="43%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>EMPLOYEE:</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
/s/ Charles Murphy</FONT><HR NOSHADE><FONT SIZE=2>CHARLES MURPHY</FONT></TD>
</TR>
</TABLE>
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<P><br><A NAME="07ZBA76601_16">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ls76602_1">EMPLOYMENT AGREEMENT</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ls76602_2">RECITALS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ls76602_3">AGREEMENT</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_ls76602_4">Signature Page Follows.</A></FONT><BR>

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<DOCUMENT>
<TYPE>EX-10.12.1
<SEQUENCE>17
<FILENAME>a2176970zex-10_121.htm
<DESCRIPTION>EXHIBIT 10.12.1
<TEXT>
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<HEAD>
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<P ALIGN="RIGHT"><FONT SIZE=2><A
NAME="page_lt76602_1_1"> </A> </FONT></P>

<!-- TOC_END -->
<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit&nbsp;10.12.1  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lt76602_pros_holdings,_inc._1999_equit__pro03751"> </A>
<A NAME="toc_lt76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>PROS HOLDINGS,&nbsp;INC.<BR>  1999 EQUITY INCENTIVE PLAN<BR>  IMMEDIATELY EXERCISABLE INCENTIVE STOCK OPTION GRANT    <BR>    </B></FONT></P>

<P><FONT SIZE=2>Charles
Murphy, Optionee: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pros
Holdings,&nbsp;Inc., a Delaware corporation (the "</FONT><FONT SIZE=2><B><I>Company</I></B></FONT><FONT SIZE=2>"), pursuant to its 1999 Equity Incentive Plan (the
"</FONT><FONT SIZE=2><B><I>Plan</I></B></FONT><FONT SIZE=2>"), has granted to you, the Optionee named above, an immediately exercisable option to purchase shares of the common stock of the Company
("</FONT><FONT SIZE=2><B><I>Common Stock</I></B></FONT><FONT SIZE=2>"). This option is intended to qualify as an "incentive stock option" within the meaning of Section&nbsp;422 of the Internal Revenue
Code of 1986, as amended (the "</FONT><FONT SIZE=2><B><I>Code</I></B></FONT><FONT SIZE=2>"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
grant hereunder is in connection with and in furtherance of the Company's compensatory benefit plan for participation of the Company's employees (including officers) directors or
consultants and is intended to comply with the provisions of Rule&nbsp;701 promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended (the
"</FONT><FONT SIZE=2><B><I>Act</I></B></FONT><FONT SIZE=2>"). Defined terms not explicitly defined in this agreement but defined in the Plan shall have the same definitions as in the Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
details of your option are as follows: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Number of Shares Subject to this Option.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The total number of shares of Common Stock subject to this
option is one hundred thousand (100,000) shares. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vesting.</B></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;&nbsp;Standard Vesting.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subject to the limitations contained herein and except as described below,
twenty-five percent (25%) of the shares will vest December&nbsp;31, 2005, and 2.0833% of the shares will then vest each month thereafter until either (i)&nbsp;the termination of
Optionee's Continuous Status as an Employee, Director or Consultant with the Company or an Affiliate of the Company for any reason, or (ii)&nbsp;this option becomes fully vested. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;&nbsp;Termination After Change in Control.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In the event of a termination of Optionee's Continuous Status as an
Employee, Director or Consultant as a result of a Termination After Change in Control (as defined below), the Option, to the extent unvested on the date such termination, shall become immediately
vested in full. "</FONT><FONT SIZE=2><B><I>Termination After Change in Control</I></B></FONT><FONT SIZE=2>" shall mean either of the following events occurring within twelve (12)&nbsp;months after a
Change in Control: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>termination by the surviving company of the Optionee's Continuous Status as an Employee, Director or Consultant for any
reason other than for Cause (as defined in that certain Employment Agreement, dated September&nbsp;30, 2005 between the Company and Optionee (the "</FONT><FONT SIZE=2><B><I>Employment
Agreement</I></B></FONT><FONT SIZE=2>"); or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(ii)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>the Optionee's resignation for Good Reason (as defined in the Employment Agreement) from all capacities in which the
Optionee is then rendering to the surviving company within a reasonable period of time following the event constituting Good Reason. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>Notwithstanding
any provision herein to the contrary, Termination After Change in Control shall not include any termination of the Optionee's Continuous Status as an Employee, Director or Consultant
with the surviving company which (1)&nbsp;is for Cause (as defined below); (2)&nbsp;is a result of the Optionee's death or disability; (3)&nbsp;is a result of the Optionee's voluntary
resignation other than for Good Reason; or (4)&nbsp;occurs prior to the effectiveness of a Change in Control. </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)&nbsp;&nbsp;&nbsp;Termination Without Cause or for Good Reason.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything in this Agreement to the contrary,
upon the involuntary termination without Cause (as defined in the </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>1</FONT></P>

<HR NOSHADE>
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<UL>

<P><FONT SIZE=2>Employment
Agreement) or Optionee's voluntary termination for Good Reason (within a reasonable period following the event constituting Good Reason) of Optionee's Continuous Status as an Employee,
Director or Consultant, the Option, to the extent unvested on the date on such termination, shall become immediately vested with respect to shares that would have vested in the twelve
(12)&nbsp;months following such date of termination. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(d)&nbsp;&nbsp;&nbsp;Termination For Cause.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything in this Agreement to the contrary, upon the termination for
Cause (as defined in the Employment Agreement) of the Optionee's Continuous Status as an Employee, Director or Consultant, the Option shall terminate and cease to be exercisable on the date of such
termination. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exercise Price And Method Of Payment.</B></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;&nbsp;Exercise Price.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The exercise price of this option is Forty-Three Cents ($0.43) per share, being not less
than the fair market value of the Common Stock on the date of grant of this option. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;&nbsp;Method of Payment.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Payment of the exercise price per share is due and payable upon exercise of the Option.
You may elect, to the extent permitted by applicable statutes and regulations, to make payment of the exercise price under one of the following alternatives: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Payment of the exercise price per share in cash (including check) at the time of exercise; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(ii)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Payment pursuant to a program developed under Regulation&nbsp;T as promulgated by the Federal Reserve Board which,
prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company
from the sales proceeds; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(iii)&nbsp;</B></FONT><FONT SIZE=2>Provided that at the time of exercise the Company's Common Stock is publicly traded and quoted regularly in the Wall
Street Journal, payment by delivery of already-owned shares of Common Stock, held for the period required to avoid a charge to the Company's reported earnings, and owned free and clear of any liens,
claims, encumbrances or security interests, which Common Stock shall be valued at its fair market value on the date of exercise; or </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(iv)&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Payment by a combination of the methods of payment permitted by subparagraph 3(b)(i)&nbsp;through
3(b)(iii)&nbsp;above. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Whole Shares.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This option may not be exercised for any number of shares which would require the issuance of
anything other than whole shares. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities Law Compliance.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary contained herein, this option may not be
exercised unless the shares issuable upon exercise of this option are then registered under the Act or, if such shares are not then so registered, the Company has determined that such exercise and
issuance would be exempt from the registration requirements of the Act. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Term.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The term of this option commences on September&nbsp;30, 2005, the date of grant, and expires on
September&nbsp;29, 2015 (the "</FONT><FONT SIZE=2><B><I>Expiration Date</I></B></FONT><FONT SIZE=2>," which date shall be no more than ten (10)&nbsp;years from the date this option is granted), unless
this option expires sooner as set forth below or in the Plan. In no event may this option be exercised on or after the Expiration Date. This option shall terminate prior to the Expiration Date as
follows: three (3)&nbsp;months after the termination of your Continuous Status as an Employee, Director or Consultant with the Company or an Affiliate of the Company unless one of the following
circumstances exists: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Your termination of Continuous Status as an Employee, Director or Consultant is due to your disability (within the
meaning of Section&nbsp;422(c)(6) of the Code. This option will then expire </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

<HR NOSHADE>
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<UL>

<P><FONT SIZE=2>on
the earlier of the Expiration Date set forth above or twelve (12)&nbsp;months following such termination of Continuous Status as an Employee, Director or Consultant. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Your termination of Continuous Status as an Employee, Director or Consultant is due to your death or your death occurs
within three (3)&nbsp;months following your termination of Continuous Status as an Employee, Director or Consultant for any other reason. This option will then expire on the earlier of the
Expiration Date set forth above or six (6)&nbsp;months after your death. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>If during any part of such three (3)&nbsp;months period you may not exercise your option solely because of the
condition set forth in paragraph&nbsp;5 above, then your option will not expire until the earlier of the Expiration Date set forth above or until this option shall have been exercisable for an
aggregate period of three (3)&nbsp;months after your termination of the Continuous Status as an Employee, Director or Consultant. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(d)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>If your exercise of the option within three (3)&nbsp;months after termination of your Continuous Status as an Employee,
Director or Consultant with the Company or with an Affiliate of the Company would result in liability under section&nbsp;16(b) of the Securities Exchange Act of 1934, then your option will expire on
the earlier of (i)&nbsp;the Expiration Date set forth above, (ii)&nbsp;the tenth (10th) day after the last date upon which exercise would result in such liability or (iii)&nbsp;six
(6)&nbsp;months and ten (10)&nbsp;days after the termination of your Continuous Status as an Employee, Director or Consultant with the Company or an Affiliate of the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(e)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Your termination of Continuous Status as an Employee, Director or Consultant is for Cause. This option will then expire
on the date of such termination. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
the extent this Option may be exercised following termination of Continuous Status as an Employee, Director or Consultant, this Option may only be exercisable as to that number of
shares as to which it was vested on the date of termination of Continuous Status as an Employee, Director or Consultant under the provisions of paragraph&nbsp;2 of this option. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
order to obtain the federal income tax advantages associated with an "incentive stock option," the Code requires that at all times beginning on the date of grant of the option and
ending on the day three (3)&nbsp;months before the date of the option's exercise, you must be an employee of the Company or an Affiliate of the Company, except in the event of your death or
permanent and total disability. The Company has provided for continued vesting or extended exercisability of your option under certain circumstances for your benefit, but cannot guarantee that your
option will necessarily be treated as an "incentive stock option" if you provide services to the Company or an Affiliate of the Company as a consultant or exercise your option more than three
(3)&nbsp;months after the date your Continuous Status as an Employee with the Company and all Affiliates of the Company terminates. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exercise.</B></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>This option may be exercised by delivering a notice of exercise (in a form designated by the Company) together with the
exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then
require pursuant to subsection 12(e) of the Plan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>If the Optionee exercises this option to purchase shares that are both nontransferable and subject to a substantial risk
of forfeiture, the Optionee understands that the Optionee should consult with the Optionee's tax advisor regarding the advisability of filing with the Internal Revenue Service an election under
Section&nbsp;83(b) of the Code, which must be filed no later than thirty (30)&nbsp;days after the date on which the Optionee exercises the option. Shares acquired upon exercise of the Option are
nontransferable and subject to a substantial risk of forfeiture if, for example, (a)&nbsp;they are unvested and are subject to a right of the Company to repurchase such shares at the Optionee's
original purchase price if the Optionee's Continuous Status as an </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

<HR NOSHADE>
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<A NAME="page_lt76602_1_4"> </A>
<UL>
<BR>

<P><FONT SIZE=2>Employee,
Director or Consultant with the Company or an Affiliate of the Company terminates, or (b)&nbsp;the Optionee is an Insider and, under certain circumstances, exercises the Option within six
(6)&nbsp;months of the date of option grant (if a class of equity security of the Company is registered under </FONT><FONT SIZE=2><I>Section&nbsp;12</I></FONT><FONT SIZE=2> of the Exchange Act).
Failure to file an election under Section&nbsp;83(b), if appropriate, may result in adverse tax consequences to the Optionee. The Optionee acknowledges that the Optionee has been advised to consult
with a tax advisor prior to the exercise of the Option regarding the tax consequences to the Optionee of the exercise of the Option. </FONT></P>

</UL>

<P><FONT SIZE=2><I>AN ELECTION UNDER SECTION 83(b) MUST BE FILED WITHIN 30 DAYS AFTER THE DATE ON WHICH THE OPTIONEE PURCHASES SHARES. THIS TIME PERIOD CANNOT BE EXTENDED. THE OPTIONEE
ACKNOWLEDGES THAT TIMELY FILING OF A SECTION 83(b) ELECTION IS THE OPTIONEE'S SOLE RESPONSIBILITY, EVEN IF THE OPTIONEE REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO FILE SUCH ELECTION ON HIS OR HER
BEHALF.</I></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Notwithstanding anything in this agreement or the Plan to the contrary, and except as provided in </FONT> <FONT SIZE=2><I>Section&nbsp;4.1(c)</I></FONT><FONT SIZE=2>, the aggregate fair market
value of the shares with respect to which the Optionee may exercise this option for the first time
during any calendar year, when added to the aggregate fair market value of the shares subject to any other options designated as incentive stock options granted to the Optionee under all stock option
plans of the Company prior to the date of option grant with respect to which such options are exercisable for the first time during the same calendar year, shall not exceed One Hundred Thousand
Dollars ($100,000. For purposes of the preceding sentence, options designated as Incentive Stock Options shall be taken into account in the order in which they were granted, and the fair market value
of shares shall be determined as of the time the option with respect to such shares is granted. Such limitation on exercise shall be referred to in this Option Agreement as the
"</FONT><FONT SIZE=2><B><I>ISO Exercise Limitation</I></B></FONT><FONT SIZE=2>." If Section&nbsp;422 of the Code is amended to provide for a different limitation from that set forth in this section, the
ISO Exercise Limitation shall be deemed amended effective as of the date required or permitted by such amendment to the Code. The ISO Exercise Limitation shall terminate upon the earlier of
(i)&nbsp;the termination of Optionee's Continuous Status as an Employee, Director or Consultant with the Company or an Affiliate of the Company, (ii)&nbsp;the day immediately prior to the
effective date of a Change in Control in which the Option is not assumed or substituted for by the acquiring corporation, or (iii)&nbsp;the day ten (10)&nbsp;days prior to the option Expiration
Date. Upon such termination of the ISO Exercise Limitation, the Option shall be deemed a nonstatutory stock option to the extent of the number of shares subject to the Option which would otherwise
exceed the ISO Exercise Limitation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(d)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Notwithstanding any other provision of this option agreement, if compliance with the ISO Exercise Limitation will result
in the exercisability of any vested shares being delayed more than thirty (30)&nbsp;days beyond the date such shares become vested shares (the "</FONT><FONT SIZE=2><B><I>Vesting
Date</I></B></FONT><FONT SIZE=2>"), the Option shall be deemed to be two (2)&nbsp;options. The first option shall be for the maximum portion of the number of shares that can comply with the ISO Exercise
Limitation without causing the Option to be unexercisable in the aggregate as to vested shares on the Vesting Date for such shares. The second option, which shall not be treated as an Incentive Stock
Option as described in Section&nbsp;422(b) of the Code, shall be for the balance of the number of Option Shares; that is, those such shares which, on the respective Vesting Date for such shares,
would be unexercisable if included in the first option and thereby made subject to the ISO Exercise Limitation. Shares treated as subject to the second option shall be exercisable on the same terms
and at the same time as set forth in this Option Agreement; provided, however, that (i)&nbsp;subsection (c)&nbsp;shall not apply to the second option and (ii)&nbsp;each such share shall become a
vested share on the Vesting Date such share must first be allocated to the second option pursuant to the preceding sentence. Unless the Optionee specifically elects to the contrary in the Optionee's
written notice of exercise, </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

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<UL>

<P><FONT SIZE=2>the
first option shall be deemed to be exercised first to the maximum possible extent and then the second option shall be deemed to be exercised. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(e)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>By exercising this option you agree that </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>as a precondition to the completion of any exercise of this option, the Company may require you to enter an arrangement
providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (1)&nbsp;the exercise of this option; (2)&nbsp;the lapse of any substantial
risk of forfeiture to which the shares are subject at the time of exercise; or (3)&nbsp;the disposition of shares acquired upon such exercise; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(ii)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>you will notify the Company in writing within fifteen (15)&nbsp;days after the date of any disposition of any of the
shares of the Common Stock issued upon exercise of this option that occurs within two (2)&nbsp;years after the date of this option grant or within one (1)&nbsp;year after such shares of Common
Stock are transferred upon exercise of this option; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(iii)&nbsp;</B></FONT><FONT SIZE=2>the Company (or a representative of the underwriters) may, in connection with the first underwritten registration of
the offering of any securities of the Company under the Act, require that you not sell or otherwise transfer or dispose of any shares of Common Stock or other securities of the Company during such
period (not to exceed one hundred eighty (180)&nbsp;days) following the effective date (the "</FONT><FONT SIZE=2><B><I>Effective Date</I></B></FONT><FONT SIZE=2>") of the registration statement of the
Company filed under the Act as may be requested by the Company or the representative of the underwriters. You further agree that the Company may impose stop-transfer instructions with
respect to securities subject to the foregoing restrictions until the end of such period. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Right of Repurchase; Right of First Refusal.</B></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>The Company may elect, prior to the Listing Date, to repurchase all or any part of the vested shares exercised pursuant
to the Option; </FONT><FONT SIZE=2><I>provided, however</I></FONT><FONT SIZE=2>, that (i)&nbsp;such repurchase right shall be exercisable only within (A)&nbsp;the one hundred and twenty
(120)&nbsp;day period following the termination Optionee's Continuous Status as an Employee, Director or Consultant with the Company or an Affiliate of the Company or (B)&nbsp;such longer period
as may be agreed to by the Company and the Optionee (for example, for purposes of satisfying the requirements of Section&nbsp;1202(c)(3) of the Code (regarding "qualified small business stock")),
(ii)&nbsp;such repurchase right shall be exercisable for less than all of the vested shares only with the Optionee's consent, and (iii)&nbsp;such right shall be exercisable only for cash or
cancellation of purchase money indebtedness for the shares at a repurchase price equal to the greater of (A)&nbsp;the stock's Fair Market Value at the time of such termination or (B)&nbsp;the
original purchase price paid for such shares by the Optionee. Such right of repurchase may be assigned by the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>If the Company does not elect to exercise its right of repurchase under Section&nbsp;8(a) above, and at any time
thereafter but prior to the Listing Date the Optionee (including any permitted transferee of the Optionee's shares under Section&nbsp;8(c)) receives a bona fide offer to purchase all or any of the
vested shares exercised pursuant to the Option (the "</FONT><FONT SIZE=2><B><I>Offer</I></B></FONT><FONT SIZE=2>") from a third party other than a permitted transferee of his shares under
Section&nbsp;8(c) (the "</FONT><FONT SIZE=2><B><I>Offeror</I></B></FONT><FONT SIZE=2>") which the Optionee wishes to accept, the Optionee may transfer such shares pursuant to and in accordance with the
following provisions </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(i)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>the Optionee shall cause the Offer to be reduced to writing and shall notify the Company in writing of his or her desire
to accept the Offer and otherwise comply with the provisions of this Section&nbsp;8(b). The Optionee's notice shall constitute an irrevocable offer to sell such shares to the Company at a price
equal to the price contained in, and on the same terms and conditions of, the Offer. The notice shall be accompanied by a true copy of the Offer (which shall identify the Offeror). </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

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<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(ii)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>the Company shall have the right to offer to purchase all, but not less than all, of the shares covered by the Offer. To
exercise such right, the Company shall, within fifteen (15)&nbsp;days of receipt of such written notice, communicate in writing such election to the Optionee. Such written election to purchase shall
constitute a valid, legally binding and enforceable agreement for the sale and purchase of all of the shares covered by the Offer. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Permitted transfers by an Optionee are (i)&nbsp;transfers to the Optionee's spouse or children, to a trust of which the
Optionee is the settlor or a trustee for the benefit of his spouse or children, and (ii)&nbsp;transfers upon an Optionee's death to his heirs, executors or administrators or to a trust under his or
her will or to his or her guardian or conservator, provided that in any such case the transferee shall have entered into an enforceable written agreement providing that all shares so transferred shall
continue to be subject to the provisions of Section&nbsp;8(b) and (c)&nbsp;as if such shares were still held by the Optionee, and provided further that such permitted transferee shall not be
permitted to make any further transfers without complying with the provisions of Section&nbsp;8(b) and (c). Anything to the contrary herein notwithstanding, transferees permitted by this
Section&nbsp;8(c) shall take any shares so transferred subject to all obligations under Section&nbsp;8(b) and (c)&nbsp;as if such shares were still held by the Optionee whether or not such
transferees so expressly agree. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unvested Share Repurchase Option.</B></FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>In the event the Optionee's Continuous Status as an Employee, Director or Consultant with the Company or an Affiliate of
the Company is terminated for any reason or no reason, with or without cause, or if the Optionee or the Optionee's legal representative attempts to sell, exchange, transfer, pledge or otherwise
dispose of ("</FONT><FONT SIZE=2><B><I>Transfer</I></B></FONT><FONT SIZE=2>") any Unvested Shares (as defined below) other than to a Permitted Transferee (as defined below), the Company shall have the right
to reacquire the Unvested Shares under the terms and subject to the conditions set forth in this </FONT><FONT SIZE=2><I>Section&nbsp;9</I></FONT><FONT SIZE=2> (the "</FONT><FONT SIZE=2><B><I>Unvested
Share Repurchase Option</I></B></FONT><FONT SIZE=2>") </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>"</FONT><FONT SIZE=2><B><I>Unvested Shares</I></B></FONT><FONT SIZE=2>" shall mean, on any given date, the number of shares of
stock acquired upon exercise of the Option which exceed the number of vested shares determined as of such date. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(c)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>The Company must notify in writing the Optionee or the Optionee's legal representative the Company's election to
repurchase the Unvested Shares within sixty (60)&nbsp;days after termination of Optionee's Continuous Status as an Employee, Director or Consultant with the Company or an Affiliate of the Company or
after the Company has received notice of the attempted Transfer. Payment by the Company to the Optionee or the Optionee's legal representative shall be made in cash within sixty (60)&nbsp;days after
the date of the mailing of the written notice of exercise of the Unvested Share Repurchase Option. For purposes of the foregoing, cancellation of any indebtedness of the Optionee to the Company shall
be treated as payment to the Optionee in cash to the extent of the unpaid principal and any accrued interest canceled. The purchase price per share for the shares being repurchased by the Company
shall be an amount equal to the exercise price paid for such shares. Contemporaneous with receipt of such payment by the Company, the Optionee or the Optionee's legal representative shall give the
shares which the Company has purchased to the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(d)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>The Optionee may not Transfer any Unvested Shares still subject to the Unvested Share Repurchase Option except to the
Optionee's spouse, siblings, ancestors, descendants or to a trustee for their benefit or the benefit of the Optionee (a "</FONT><FONT SIZE=2><B><I>Permitted Transferee</I></B></FONT><FONT SIZE=2>"),
provided that such Permitted Transferee shall agree in writing (in a form satisfactory to the Company) to receive and hold the shares subject to all the terms, conditions and restrictions contained in
this Agreement and, provided further that such Transfer does not cause the option to not be treated as an "incentive stock option" within the meaning of Section&nbsp;422 of the Code or otherwise
violate applicable law. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=6,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="17",CHK=612039,FOLIO='6',FILE='DISK130:[07ZBA2.07ZBA76602]LT76602A.;5',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<A NAME="page_lt76602_1_7"> </A>
<UL>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(e)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>The Company shall have the right to assign the Unvested Share Repurchase Option at any time, whether or not such option
is then exercisable, to one or more persons as may be selected by the Company. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(f)&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Upon the occurrence of a Change in Control, any and all new, substituted or additional securities or other property to
which the Optionee is entitled by reason of the Optionee's ownership of Unvested Shares shall be immediately subject to the Unvested Share Repurchase Option and included in the term
"</FONT><FONT SIZE=2><B><I>Unvested Shares</I></B></FONT><FONT SIZE=2>" for all purposes of the Unvested Share Repurchase Option with the same force and effect as the Unvested Shares immediately prior to
the Change in Control. While the aggregate repurchase price shall remain the same after such Change in Control, the repurchase price per Unvested Share upon exercise of the Unvested Share Repurchase
Option following such Change in Control shall be adjusted as appropriate. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(g)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>All certificates representing any shares subject to the Unvested Share Repurchase Option shall have endorsed thereon the
following legends (together with any legend required by applicable law): </FONT></P>

<P><FONT SIZE=2>"THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A REPURCHASE OPTION, A RIGHT OF FIRST REFUSAL IN FAVOR OF THE COMPANY OR ITS ASSIGNEE, AND OTHER RESTRICTIONS ON TRANSFER SET FORTH IN AN
AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THIS COMPANY." </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>10.&nbsp;&nbsp;&nbsp;Transferability.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This option is not transferable, except by will or by the laws of descent and distribution,
and is exercisable during your life only by you. Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you may designate a third party who,
in the event of your death, shall thereafter be entitled to exercise this option. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>11.&nbsp;&nbsp;&nbsp;Option Not a Service Contract.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This option is not an employment contract and nothing in this option shall be
deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company, or of the Company to continue your employment with the Company. In addition, nothing in
this option shall obligate the Company or any Affiliate of the Company, or their respective stockholders, Board of Directors, officers or employees to continue any relationship which you might have as
a Director or Consultant for the Company or Affiliate of the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>12.&nbsp;&nbsp;&nbsp;Notices.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Any notices provided for in this option or the Plan shall be given in writing and shall be deemed
effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5)&nbsp;days after deposit in the United States mail, postage prepaid, addressed to you at the
address specified below or at such other address as you hereafter designate by written notice to the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>13.&nbsp;&nbsp;&nbsp;Independent Counsel.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each of the parties hereto acknowledges and agrees that DLA Piper Rudnick Gray Cary US,
LLP is counsel to the Company and not to the Optinoee individually, and Optionee has had reasonable opportunity to consult with separate counsel with respect to the matters contained herein and is not
relying on any representations of any party with respect to the terms of this Agreement not otherwise contained herein. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>14.&nbsp;&nbsp;&nbsp;Governing Plan Document.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This option is subject to all the provisions of the Plan, a copy of which is
attached hereto and its provisions are hereby made a part of this option, including without limitation the provisions of Section&nbsp;6 of the Plan relating to option provisions, and is further
subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of
this option and those of the Plan, the provisions of the Plan shall control. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>7</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=7,SEQ=7,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="17",CHK=626848,FOLIO='7',FILE='DISK130:[07ZBA2.07ZBA76602]LT76602A.;5',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<A NAME="page_lt76602_1_8"> </A>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dated
the 30th day of September, 2005. </FONT></P>

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<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Very truly yours,</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>KURT R. JAGGERS</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
Duly authorized on behalf of the Board of Directors</FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2><B>Attachments:  </B></FONT></P>

<UL>

<P><FONT SIZE=2>Pros
Holdings,&nbsp;Inc. 1999 Equity Incentive Plan<BR>
Notice of Exercise </FONT></P>

</UL>

<P><FONT SIZE=2>The
undersigned: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(a)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Acknowledges receipt of the foregoing option and the attachments referenced therein and understands that all rights and
liabilities with respect to this option are set forth in the option and the Plan; and </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>(b)&nbsp;&nbsp;&nbsp;</B></FONT><FONT SIZE=2>Acknowledges that as of the date of grant of this option, it sets forth the entire understanding between the undersigned
Optionee and the Company and its Affiliates regarding the acquisition of stock in the Company and supersedes all prior oral and written agreements on that subject with the exception of (i)&nbsp;the
options previously granted and delivered to the undersigned under stock option plans of the Company, and (ii)&nbsp;the following agreements only: </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>NONE</B></FONT></P>

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<TD WIDTH="26%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2><B>/s/ CHM</B></FONT><HR NOSHADE><FONT SIZE=2> (Initial)</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>OTHER</B></FONT></P>

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<TD WIDTH="25%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
<TD WIDTH="45%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="25%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="17%"><FONT SIZE=2><BR>
Signature:</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>CHARLES H. MURPHY</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="25%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%"><FONT SIZE=2><I>Printed Name:</I></FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2>/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>CHARLES H. MURPHY</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="25%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="17%"><FONT SIZE=2><BR>
Address:</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2><BR>
1000 S. Point Dr. #507</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="25%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="10%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="45%"><FONT SIZE=2>Miami Beach, FL 33139</FONT><HR NOSHADE></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>8</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=8,SEQ=8,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="17",CHK=900357,FOLIO='8',FILE='DISK130:[07ZBA2.07ZBA76602]LT76602A.;5',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<A NAME="page_lt76602_1_9"> </A>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lt76602_notice_of_exercise"> </A>
<A NAME="toc_lt76602_2"> </A>
<BR></FONT><FONT SIZE=2><B>NOTICE OF EXERCISE    <BR>    </B></FONT></P>

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<TD WIDTH="27%" VALIGN="TOP"><FONT SIZE=2><B>PROS HOLDING,&nbsp;INC.</B></FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="65%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="27%" VALIGN="TOP"><FONT SIZE=2>3100 Main Street, Suite 900</FONT></TD>
<TD WIDTH="8%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="65%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="27%"><FONT SIZE=2>Houston, Texas 77002</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="65%" ALIGN="RIGHT"><FONT SIZE=2>Date of Exercise:&nbsp;&nbsp;_______________________________</FONT></TD>
</TR>
</TABLE>
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<P><FONT SIZE=2>Ladies
and Gentlemen: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
constitutes notice under my stock option that I elect to purchase the number of shares for the price set forth below. </FONT></P>

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<TR VALIGN="BOTTOM">
<TD WIDTH="30%"><FONT SIZE=2>Type of option (check one):</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="33%" ALIGN="CENTER"><FONT SIZE=2>Incentive&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="32%" ALIGN="CENTER"><FONT SIZE=2>Nonstatutory&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="30%"><FONT SIZE=2><BR>
Stock option dated:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="33%"><FONT SIZE=2><BR>
&nbsp;&nbsp;________________________</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="30%"><FONT SIZE=2><BR>
Number of shares as to which option is exercised:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="33%"><FONT SIZE=2><BR>
&nbsp;&nbsp;________________________</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="30%"><FONT SIZE=2><BR>
Certificates to be issued in name of:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="33%"><FONT SIZE=2><BR>
&nbsp;&nbsp;________________________</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="30%"><FONT SIZE=2><BR>
Total exercise price:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="33%"><FONT SIZE=2><BR>
$&nbsp;________________________</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="30%"><FONT SIZE=2><BR>
Cash payment delivered here with:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="33%"><FONT SIZE=2><BR>
$&nbsp;________________________</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="30%"><FONT SIZE=2><BR>
Value of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of PROS HOLDINGS, INC.:</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="33%"><FONT SIZE=2><BR>
$&nbsp;________________________</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="32%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By
this exercise, I agree (i)&nbsp;to provide such additional documents as you may require pursuant to the terms of the 1999 Equity Incentive Plan, (ii)&nbsp;to provide for the
payment by me to you (in the manner designated by you) of your withholding obligation, if any, relating to the exercise of this option, and (iii)&nbsp;if this exercise relates to an incentive stock
option, to notify you in writing within fifteen (15)&nbsp;days after the date of any disposition of any of the shares of Common Stock issued upon exercise of this option that occurs within two
(2)&nbsp;years after the date of grant of this option or within one (1)&nbsp;year after such shares of Common Stock are issued upon exercise of this option. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I
hereby make the following certifications and representations with respect to the number of shares of Common Stock of the Company listed above (the "Shares"), which are being acquired
by me for my own account upon exercise of the Option as set forth above: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I
acknowledge that the Shares have not been registered under the Securities Act of 1933, as amended (the "Act"), and are deemed to constitute "restricted securities" under
Rule&nbsp;701 and "control securities" under Rule&nbsp;144 promulgated under the Act. I warrant and represent to the Company that I have no present intention of distributing or selling said
Shares, except as permitted under the Act and any applicable state securities laws. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I
further acknowledge that I will not be able to resell the Shares for at least ninety days after the stock of the Company becomes publicly traded (i.e., subject to the reporting
requirements of Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934) under Rule&nbsp;701 and that more restrictive conditions apply to affiliates of the Company under Rule&nbsp;144. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I
further acknowledge and agree that under the provisions of the Option, the Company may elect, prior to the first date upon which any security of the Company is listed (or approved for
listing) upon notice of issuance on any securities exchange, or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system (the
"Listing Date"), to repurchase all or any part of the Shares on the terms and conditions provided in the Option and that </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>9</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=9,SEQ=9,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="17",CHK=89105,FOLIO='9',FILE='DISK130:[07ZBA2.07ZBA76602]LT76602A.;5',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<A NAME="page_lt76602_1_10"> </A>
<BR>

<P><FONT SIZE=2>such
right of repurchase may be assigned by the Company. I further acknowledge and agree that if the Company does not elect to exercise such right of repurchase, and at any time thereafter but prior
to the Listing Date, I (including any permitted transferee of the Shares under the provisions of the Option) receive a bona fide offer to purchase all or any of the Shares from a third party (other
than such a permitted transferee) which I wish to accept, I may only transfer such Shares pursuant to and in accordance with the provisions of the Option which provide the Company with a right of
first refusal. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I
further acknowledge that all certificates representing any of the Shares subject to the provisions of the Option shall have endorsed thereon appropriate legends reflecting the
foregoing limitations, as well as any legends reflecting restrictions pursuant to the Company's Articles of Incorporation, Bylaws and/or applicable securities laws. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I
further agree that, if required by the Company (or a representative of the underwriters) in connection with the first underwritten registration of the offering of any securities of the
Company under the Act, I will not sell or otherwise transfer or dispose of any shares of Common Stock or other securities of the Company during such period (not to exceed one hundred eighty
(180)&nbsp;days) following the effective date of the registration statement of the Company filed under the Act (the "Effective Date") as may be requested by the Company or the representative of the
underwriters. I further agree that the Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such period. </FONT></P>

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<TD WIDTH="47%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2>Very truly yours,</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Printed Name</FONT></TD>
</TR>
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<FONT SIZE=2><A HREF="#toc_lt76602_1">PROS HOLDINGS, INC. 1999 EQUITY INCENTIVE PLAN IMMEDIATELY EXERCISABLE INCENTIVE STOCK OPTION GRANT</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lt76602_2">NOTICE OF EXERCISE</A></FONT><BR>
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<DOCUMENT>
<TYPE>EX-10.13
<SEQUENCE>18
<FILENAME>a2176970zex-10_13.htm
<DESCRIPTION>EXHIBIT 10.13
<TEXT>
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<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit&nbsp;10.13  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lu76602_employment_agreement"> </A>
<A NAME="toc_lu76602_1"> </A>
<BR></FONT><FONT SIZE=2><B><I>EMPLOYMENT AGREEMENT    <BR>    </I></B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS EMPLOYMENT AGREEMENT (this "</FONT><FONT SIZE=2><I>Agreement</I></FONT><FONT SIZE=2>") is made and entered into as of January&nbsp;15, 1999 (the
"</FONT><FONT SIZE=2><I>Effective Date</I></FONT><FONT SIZE=2>") by and between PROS Strategic Solutions,&nbsp;Inc., a Delaware corporation (the
"</FONT><FONT SIZE=2><I>Company</I></FONT><FONT SIZE=2>"), and Ronald F. Woestemeyer (the "</FONT><FONT SIZE=2><I>Employee</I></FONT><FONT SIZE=2>"). The Company and the Employee are sometimes
collectively referred to herein as the "</FONT><FONT SIZE=2><I>Parties</I></FONT><FONT SIZE=2>" and individually referred to herein as a "</FONT><FONT SIZE=2><I>Party</I></FONT><FONT SIZE=2>." </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lu76602_recitals"> </A>
<A NAME="toc_lu76602_2"> </A>
<BR></FONT><FONT SIZE=2><B>RECITALS    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Parties, together with other holders of capital stock of the Company, entered into that certain Mutual Release and Settlement Agreement, dated
December&nbsp;31, 1998 (the "</FONT><FONT SIZE=2><I>MRSA</I></FONT><FONT SIZE=2>"), pursuant to which and as a condition to the obligations of the Investors (as defined therein), the Employee and
the Company agreed to enter into an employment agreement containing the material terms and conditions set forth in </FONT><FONT SIZE=2><I>Exhibit&nbsp;E</I></FONT><FONT SIZE=2> attached thereto. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
the Parties intend that this Agreement memorialize all of the rights, duties and obligations of the Parties with respect to the employment of Employee with the Company. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lu76602_agreement"> </A>
<A NAME="toc_lu76602_3"> </A>
<BR></FONT><FONT SIZE=2><B>AGREEMENT    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and adequacy of which is acknowledged, the Parties
hereby agree as follows: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Position and Duties</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee shall be employed on an at-will basis by the Company and will have
such duties and responsibilities as determined by the Chief Executive Officer of the Company (the "</FONT><FONT SIZE=2><I>CEO</I></FONT><FONT SIZE=2>"), or, during any period(s) when a CEO is not
appointed, as determined by the
Board of Directors of the Company (the "</FONT><FONT SIZE=2><I>Board</I></FONT><FONT SIZE=2>"). Employee agrees to devote his full time, energy and skill to his responsibilities and duties to the
Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Term of Agreement</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The term of Employee's employment shall commence on the Effective Date and shall continue
for a period of twenty-four (24)&nbsp;months thereafter (the "</FONT><FONT SIZE=2><I>Employment Term</I></FONT><FONT SIZE=2>"), unless earlier terminated as provided in this Agreement.
The Employment Term will be automatically extended unless the Company decides, in its sole discretion, not to to so extend and provides notice thereof to Employee (each such extension being a
"</FONT><FONT SIZE=2><I>Renewal Term</I></FONT><FONT SIZE=2>"); provided, however, that no single Renewal Term may be less than twenty-four (24)&nbsp;months unless consented to in
writing by each Party or earlier terminated as provided in this Agreement. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Compensation</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee shall be compensated by the Company for the performance of his duties and obligations
hereunder as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Salary</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee shall be paid a salary of $19,479.17 per month, less applicable withholdings and
deductions, in accordance with the Company's normal payroll procedures (the "</FONT><FONT SIZE=2><I>Salary</I></FONT><FONT SIZE=2>"). At such time as the Compensation Committee of the Board (the
"</FONT><FONT SIZE=2><I>Compensation Committee</I></FONT><FONT SIZE=2>") approves an increase in salaries for the management team as a whole (other than normal cost-of-living
adjustments), then the Salary shall increase to $22,916.67 per month thereafter. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Benefits</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee shall have the right, on the same basis as other employees of the Company, to participate
in and to receive the benefits of the Company's employee benefit plans and vacation, holiday and business expense reimbursement policies, each as in effect from time to time. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Review</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee will review the Salary of Employee provided hereunder on a periodic basis
consistent with its review of other management generally and may adjust upward in its discretion such Salary. </FONT></P>

</UL>
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<UL>
<BR>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Termination</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee agrees that his employment is on an at-will basis and may be terminated at
any time by the Company or the Employee, with or without cause. Upon the termination (voluntarily or otherwise) of Employee's employment with the Company, neither Party shall have any continuing
obligations or liabilities with respect to compensation, benefits, or severance except as set forth in this </FONT><FONT SIZE=2><I>Section&nbsp;4</I></FONT><FONT SIZE=2>. </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Voluntary Termination; Termination for Cause</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If Employee's employment is voluntarily terminated by Employee
(a "</FONT><FONT SIZE=2><I>Voluntary Termination</I></FONT><FONT SIZE=2>") or is terminated by the Company for Cause (as defined below), Employee shall be entitled to no compensation or benefits from
the Company other than accrued and unpaid compensation and benefits through the date of termination. For purposes of this </FONT><FONT SIZE=2><I>Section&nbsp;4</I></FONT><FONT SIZE=2>, a
termination of Employee's employment as a result of his death or Disability (as defined below) shall constitute a Voluntary Termination. </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Cause</I></FONT><FONT SIZE=2>" shall mean (a)&nbsp;the unauthorized use or disclosure of the confidential information or trade secrets of the
Company, which use or disclosure causes material harm to the Company; (b)&nbsp;conviction of, or a plea of "guilty" or "no contest" to, a felony under the laws of the United States or any thereof;
or (c)&nbsp;continued failure to perform assigned duties after receiving written notification from the CEO or the Board and following a reasonable cure period. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Disability</I></FONT><FONT SIZE=2>" shall mean the good-faith determination by the Board after consultation with medical personnel
that the Employee has ceased to be able to materially perform his duties and obligations, without reasonable accommodation, due to a mental or physical illness or incapacity that is reasonably
expected to materially prevent Employee from performing his duties and obligations for a period of not less than ninety (90)&nbsp;days. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Termination Without Cause</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In the event Employee's employment is terminated by the Company without Cause,
Employee shall be entitled only to the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;accrued
and unpaid compensation and benefits through the date of termination; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;$22,916.67
per month, less applicable withholdings and deductions, for twelve (12)&nbsp;months following the date of such termination, payable on normal payroll
cycles (the "</FONT><FONT SIZE=2><I>Minimum Severance</I></FONT><FONT SIZE=2>"). </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
the foregoing, if the Employee's employment is terminated without Cause any time during the first twelve (12)&nbsp;months of the Employment Term, the Employee will
receive $22,916.67 per month for the remainder of the first twelve (12)&nbsp;months of service under this Agreement following the Effective Date, payable on normal payroll cycles (the
"</FONT><FONT SIZE=2><I>Additional Severance</I></FONT><FONT SIZE=2>"), and then receive the Minimum Severance over the following twelve (12)&nbsp;months. If the Employee's employment is terminated
without Cause during any Renewal Term, the Employee shall only be eligible to receive the Minimum Severance following the date of such termination. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Non-Renewal</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In the event the Company decides not to renew the Employment Term or any Renewal
Term, Employee shall be entitled to severance benefits as follows: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;if
the Company provides Employee with at least sixty (60)&nbsp;days notice of its decision not to renew, then Employee shall be entitled to $22,916.67 per month, less
applicable withholdings and deductions, for ten (10)&nbsp;months following the end of such Employment Term or Renewal Term, payable on normal payroll cycles; or </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;if
the Company does not provide Employee with at least sixty (60)&nbsp;days notice of its decision not to renew, then Employee shall be entitled to $22,916.67 per
month, less applicable withholdings and deductions, for twelve (12)&nbsp;months following the end of such Employment Term or Renewal Term, payable on normal payroll cycles (amounts payable under
(i)&nbsp;or (ii)&nbsp;being "</FONT><FONT SIZE=2><I>Non-Renewal Severance</I></FONT><FONT SIZE=2>"). </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
period of time during which the Employee is eligible to receive any Non-Renewal Severance, Additional Severance and/or Minimum Severance shall be the
"</FONT><FONT SIZE=2><I>Severance Period</I></FONT><FONT SIZE=2>." </FONT></P>

</UL>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Confidential Information</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee acknowledges and agrees that the Company considers to be confidential the
information, observations and data obtained by him while employed by the Company concerning the actual or anticipated business or affairs of the Company, its subsidiaries or affiliates (collectively,
"</FONT><FONT SIZE=2><I>Confidential Information</I></FONT><FONT SIZE=2>") and that such Confidential Information is the property of the Company and/or the respective subsidiary or affiliate.
Therefore, Employee agrees that he shall not disclose to any unauthorized person or use for his own purposes any Confidential Information without the prior written consent of the Board, unless and to
the extent that the aforementioned matters become generally known to and available for use by the public or persons knowledgeable in the Company's industry other than as a result of Employee's acts or
omissions which constitute a breach hereof. Employee shall deliver to the Company at the termination (whether voluntary or otherwise) of Employee's employment, or at any other time the Company may
request, all memoranda, notes, plans, records, reports, computer tapes, printouts and software and other documents and data (and copies thereof) relating to the Confidential Information, Work Product
(as defined below) or the business or anticipated business of the Company, its subsidiaries or affiliates (including, without limitation, trade secrets, business or marketing plans, reports,
projections, diskettes, intangible information stored on diskettes, software programs and data compiled with the use of those programs, tangible copies of trade secrets and confidential information,
memoranda, credit cards, telephone charge cards, manuals, building keys and passes, cell phones, computers, names and addresses of the Company's or its subsidiaries' or affiliates' customers and
potential customers, customer lists, customer contracts, sales information and any and all other similar information or property) which he may then possess or have under his control. Employee further
agrees that in the event he discovers any other materials of the Company, its subsidiaries or affiliates in his possession or control after the date of termination, he will immediately return such
property to the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Inventions and Patents</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee acknowledges that all inventions, innovations, improvements, developments,
methods, designs, analyses, drawings, reports and all similar or related information (whether or not patentable) which (i)&nbsp;relate to the Company's or its subsidiaries' actual or anticipated
business, research and development or existing or future products or services or (ii)&nbsp;result from any work performed by Employee for the Company or its subsidiaries, and which are conceived,
developed or made by the Employee during the Noncompete Period ("</FONT><FONT SIZE=2><I>Work Product</I></FONT><FONT SIZE=2>") belong to the Company or such subsidiary; provided, however, that this </FONT> <FONT
SIZE=2><I>Section&nbsp;6</I></FONT><FONT SIZE=2> does not apply to any invention for which no equipment, supplies, materials, facilities, trade secrets, or other proprietary
information of the Company or its subsidiaries was used and which was developed entirely on Employee's own time, unless (i)&nbsp;the invention relates to the actual or anticipated business of the
Company or its subsidiaries or to the Company's or any of its subsidiaries' actual or anticipated research or development, or existing or future products or services or (ii)&nbsp;the invention
results from any work performed by Employee for the Company or its subsidiaries. Employee shall promptly disclose such Work Product to the Board and perform all actions requested by the Board (whether
during or after the Employment Period) to establish and confirm such ownership (including, without limitation, assignments, consents, powers of attorney and other instruments). The Parties acknowledge
and agree that Work Product is subject to this </FONT><FONT SIZE=2><I>Section&nbsp;6</I></FONT><FONT SIZE=2> and is Confidential Information unless and to the extent that such Work Product
(i)&nbsp;becomes generally known to and available for use by the public or persons knowledgeable in the Company's industry other than as a result of Employee's acts or omissions which constitute a
breach of this Agreement or (ii)&nbsp;the Employee discloses such Work Product to the Board and the Board by vote or written consent waives its rights under this Agreement with respect thereto. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Non-Compete, Non-Solicitation</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;In
further consideration of the compensation to be paid to Employee hereunder, Employee acknowledges that in the course of his employment with the Company, he shall
become familiar with the Company's trade secrets and with other Confidential Information concerning the Company, its subsidiaries and affiliates and that his services have been and shall be of
special, unique, and extraordinary value. Therefore, Employee agrees that, during the Employment Term, each Renewal Term, if any, and the Severance Period, if any (collectively, the
"</FONT><FONT SIZE=2><I>Noncompete Period</I></FONT><FONT SIZE=2>"), he shall not, directly or indirectly, own any interest in, manage, control, participate in, </FONT></P>

</UL>
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<UL>

<P><FONT SIZE=2>consult
with, render services for, or in any manner engage in any business competing with the actual or anticipated businesses of the Company, its subsidiaries or affiliates, on the date of the
termination of Employee's employment, within any geographical area in which the Company, its subsidiaries or affiliates engage or plan to engage in such businesses. A termination of this Agreement
pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;4</I></FONT><FONT SIZE=2> or otherwise shall constitute a termination of the Employment Term or Renewal Term, as applicable. Nothing herein shall
prohibit Employee from being a passive owner of not more than two percent (2%) of the outstanding capital stock of any class of a corporation which is publicly traded, so long as Employee has no
active participation in the business of such corporation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;During
the Noncompete Period, Employee shall not directly himself or indirectly through another person or entity (i)&nbsp;induce or attempt to induce any employee of
the Company, its subsidiaries or affiliates to leave the employ thereof, or in any way interfere with the relationship between the Company, its subsidiaries and affiliates and any employee thereof,
(ii)&nbsp;hire any person who was an employee or contractor of the Company, its subsidiaries or affiliates or (iii)&nbsp;induce or attempt to induce any customer, supplier, licensee, licensor,
franchisee, contractor or other business relation of the
Company, its subsidiaries or affiliates, or in any way interfere with the relationship between any such customer, supplier, licensee, franchisee, contractor or other business relation and the Company,
its subsidiaries or affiliates (including, without limitation, making any negative statements or communications about the Company, its subsidiaries, or affiliates). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;If,
at the time of enforcement of this </FONT><FONT SIZE=2><I>Section&nbsp;7</I></FONT><FONT SIZE=2>, a court shall hold that the duration, scope or area restrictions
stated herein are unreasonable under circumstances then existing, the Parties agree that the maximum duration, scope or area reasonable under such circumstances shall be substituted for the stated
duration, scope or area and that the court shall be allowed to revise the restrictions contained herein to cover the maximum duration, scope and area permitted by law. Employee agrees that the
restrictions contained in this </FONT><FONT SIZE=2><I>Section&nbsp;7</I></FONT><FONT SIZE=2> are reasonable. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Non-Disparagement</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each of the Parties represents and agrees that such Party will not, directly
or indirectly, engage during the Noncompete Period in any defamatory, disparaging or critical communication with any other person or entity concerning the business, operations, services, marketing
strategies, pricing policies, management, business practices, officers, directors, employees, attorneys, representatives, affiliates, agents affairs and/or financial condition of the other Party, its
subsidiaries or affiliates. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Injunctive Relief and Additional Remedy</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee acknowledges and agrees that any breach or threatened
breach by Employee of any of the provisions of </FONT><FONT SIZE=2><I>Sections 5</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>6</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>7</I></FONT><FONT SIZE=2>, or </FONT><FONT SIZE=2><I>8</I></FONT><FONT
SIZE=2> would result in irreparable injury and damage to the Company and/or its subsidiaries and
affiliates for which the Company and/or its subsidiaries and affiliates would have no adequate remedy at law. The Employee therefore also acknowledges and agrees that in the event of such breach or
threatened breach the Company, in addition and supplementary to other rights and remedies existing in its favor, may apply to any court of competent jurisdiction for specific performance and/or
injunctive or other relief in order to enforce or prevent any violations of the provisions thereof (without posting a bond or other security). The terms of this </FONT> <FONT SIZE=2><I>Section&nbsp;9</I></FONT><FONT SIZE=2> shall not prevent the
Company from pursuing any other available remedies for any breach or threatened breach thereof including, without
limitation, the recovery of damages from Employee. In addition, in the event of an alleged breach or violation by Employee of any of the provisions of </FONT><FONT SIZE=2><I>Sections
5</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>6</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>7</I></FONT><FONT SIZE=2>, or </FONT><FONT SIZE=2><I>8</I></FONT><FONT SIZE=2>, the Noncompete
Period shall be tolled with respect to such provision until such breach or violation has been duly cured. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Dispute Resolution</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In the event of any dispute or claim relating to or arising out of this Agreement
(including, without limitation, any claims of breach of contract, wrongful termination or age, sex, race or other discrimination), Employee and the Company agree that all such disputes shall be fully
and finally resolved by binding arbitration conducted by the American Arbitration Association in Austin, Texas in accordance with its National Employment Dispute Resolution rules, as those rules are
currently in effect (and not as they may be modified in the future). Employee acknowledges that by accepting this arbitration provision he is waiving any right to a jury trial in the event of such
dispute; </FONT></P>

<HR NOSHADE>
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<BR>

<P><FONT SIZE=2>provided,
however, that this arbitration provision shall not apply to any disputes or claims relating to or arising out of </FONT><FONT SIZE=2><I>Sections 5</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>6</I></FONT><FONT SIZE=2>,,</FONT><FONT
SIZE=2><I>7</I></FONT><FONT SIZE=2>, or </FONT><FONT SIZE=2><I>8</I></FONT><FONT SIZE=2> or any misuse or misappropriation of
Confidential Information, Work Product or other trade secrets or proprietary information of the Company, its subsidiaries or affiliates. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Attorneys' Fees</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The prevailing Party in any dispute or claim relating to or arising out of this Agreement
shall be entitled to recover from the losing Party all fees and expenses of any nature or kind (including, without limitation, attorney's fees and expenses) incurred in any such dispute or claim. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Interpretation</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Company and Employee agree that this Agreement shall be interpreted in accordance with
and governed by the laws of the State of Texas, without giving effect to conflicts of law principles. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Successors and Assigns</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall inure to the benefit of and be binding upon Employee and its
successors and assigns. In view of the personal nature of the services to be performed under this Agreement by Employee, Employee shall not have the right to sell, assign, pledge, hypothecate, donate
or otherwise transfer any of his rights, obligations or benefits hereunder. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Entire Agreement</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement constitutes the entire employment agreement between the Company and
Employee regarding the terms and conditions of his employment, with the exception of that certain Employee Inventions and Proprietary Rights Assignment Agreement, dated June&nbsp;4, 1998, between
the Company and Employee attached hereto as </FONT><FONT SIZE=2><I>Exhibit&nbsp;A</I></FONT><FONT SIZE=2> (the "</FONT><FONT SIZE=2><I>Assignment Agreement</I></FONT><FONT SIZE=2>"); provided,
however, that the provisions of this Agreement shall control if there exists any conflicting provisions in the Assignment Agreement. This Agreement, together with the Assignment Agreement, supersede
all prior negotiations, representations or agreements between the Company and Employee, whether written or oral, regarding Employee's employment by the Company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Severability</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;If any one or more of the provisions (or any part thereof) of this Agreement shall be held
invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions (or any part thereof) shall not in any way be affected or impaired thereby. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;No Representations</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Employee acknowledges that he is not relying, and has not relied, on any promise,
representation or statement made by or on behalf of the Company which is not set forth in this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Notices</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;All notices requests, reports and other communications pursuant hereto shall be in writing, either
by letter (delivered by hand or commercial delivery service or sent by certified mail, return receipt requested) or facsimile, addressed as follows: </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>If
to the Company: </FONT></P>

<UL>

<P><FONT SIZE=2>PROS
Strategic Solutions,&nbsp;Inc.<BR>
3223 Smith Street, Suite 100<BR>
Houston, Texas 77006<BR>
Attention: Chief Executive Officer<BR>
Facsimile: (713)&nbsp;525-8144 </FONT></P>

</UL>

<P><FONT SIZE=2>with
a copy to (which shall not constitute notice): </FONT></P>

<UL>

<P><FONT SIZE=2>Gray
Cary Ware&nbsp;&amp; Freidenrich LLP<BR>
100 Congress Avenue, Suite 1440<BR>
Austin, Texas 78701<BR>
Attention: Paul E. Hurdlow<BR>
Facsimile: (512)&nbsp;457-7070 </FONT></P>

</UL>

<P><FONT SIZE=2>If
to the Employee: </FONT></P>

<UL>

<P><FONT SIZE=2>Ronald
F. Woestemeyer<BR>
3980 Inverness Drive<BR>
Houston, Texas 77019<BR>
Facsimile: (713)&nbsp;960-1332 </FONT></P>

</UL>
</UL>
</UL>
<HR NOSHADE>
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<UL>
<UL>
</UL>
</UL>

<P><FONT SIZE=2>Any
notice, request or communication hereunder shall be deemed to have been given on the day on which it is delivered by hand to such party at its address specified above, or, if sent by certified
mail, return receipt requested, postage prepaid, on the third business day following the date it was deposited in the mail, or in the case of facsimile notice, when transmitted addressed as aforesaid,
confirmation received, if the notice is also delivered by hand or mail in the manner described above. Any party may change the person or address to whom or which notices are to be given hereunder, by
notice duly given hereunder; provided, however, that any such notice shall be deemed to have been given hereunder only when actually received by the party to which it is addressed. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Counterparts</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be executed in any number of counterparts, provided, however, that each of
such counterparts when taken together shall constitute one and the same agreement. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Amendments</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be modified or amended only by a supplemental written agreement signed by
both the Employee and the Company and approved by unanimous vote or written consent of the Compensation Committee. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>(The remainder of this page is intentionally left blank.) </FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the Parties hereto have entered into this Agreement as of the Effective Date. </FONT></P>

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<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><B>COMPANY:</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
PROS Strategic Solutions, Inc.,<BR>
a Delaware corporation</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="43%"><FONT SIZE=2><BR>
/s/ Charles H. Murphy</FONT><HR NOSHADE></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><I>Name:</I></FONT></TD>
<TD WIDTH="43%"><FONT SIZE=2>Charles H. Murphy</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2><I>Title:</I></FONT></TD>
<TD WIDTH="43%"><FONT SIZE=2>Senior Vice President &amp; CFO</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>EMPLOYEE:</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
/s/ Ronald F. Woestemeyer</FONT><HR NOSHADE><FONT SIZE=2> Ronald F. Woestemeyer</FONT></TD>
</TR>
</TABLE>
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<BR>
<P><br><A NAME="07ZBA76601_18">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_lu76602_1">EMPLOYMENT AGREEMENT</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lu76602_2">RECITALS</A></FONT><BR>
<FONT SIZE=2><A HREF="#toc_lu76602_3">AGREEMENT</A></FONT><BR>

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<DOCUMENT>
<TYPE>EX-10.13.1
<SEQUENCE>19
<FILENAME>a2176970zex-10_131.htm
<DESCRIPTION>EXHIBIT 10.13.1
<TEXT>
<HTML>
<HEAD>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
<BR>
<FONT SIZE=3 ><A HREF="#07ZBA76601_19">QuickLinks</A></FONT>
<font size=3> -- Click here to rapidly navigate through this document</font>
<!-- TOC_END -->
<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit&nbsp;10.13.1  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="lw76602_amendment_no._1_to_the_employm__ame06923"> </A>
<A NAME="toc_lw76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>AMENDMENT NO. 1<BR>  To the Employment Agreement Dated January&nbsp;15, 1999<BR>  By and Between Ronald F. Woestemeyer&nbsp;&amp;<BR>  PROS Revenue Management, L.P. (Successor in Interest to PROS Strategic Solutions,
&nbsp;Inc.)    <BR>    </B></FONT></P>

<P><FONT SIZE=2>This
is Amendment No.&nbsp;1 (the "Amendment") to the above referenced Employment Agreement, and shall be effective this 2nd day of February, 2004. </FONT></P>

<P><FONT SIZE=2>1.0&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Amendment to Section&nbsp;3(a) of Employment Agreement.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The second sentence of paragraph&nbsp;3(a) shall be amended
and the revised section&nbsp;3(a) shall now read as follows: </FONT></P>

<UL>

<P><FONT SIZE=2><I>Salary.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Employee shall be paid a salary of $19,479.17 per month, less applicable withholdings and deductions, in accordance with the
Company's normal payroll procedures (the "Salary"). Any increase in the Salary shall be at the discretion of the Compensation Committee of the Board of Managers. </FONT></P>

</UL>

<P><FONT SIZE=2>2.0&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Effect on the Employment Agreement</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Except as specifically amended hereby, the Employment Agreement and all other
documents executed in connection therewith, shall remain in full force and effect and are hereby ratified and confirmed. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EXECUTED
in Houston, Texas, this 2nd day of February&nbsp;2004. </FONT></P>

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<TD COLSPAN=2><FONT SIZE=2><B>Employee</B></FONT></TD>
</TR>
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<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
/s/ Ronald F. Woestemeyer</FONT><HR NOSHADE><FONT SIZE=2> Ronald F. Woestemeyer</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>PROS Revenue Management, L.P.</B></FONT><FONT SIZE=2><BR>
(Successor in Interest to PROS Strategic Solutions,&nbsp;Inc.)</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
/s/ Charlie Murphy</FONT><HR NOSHADE><FONT SIZE=2> Charlie Murphy<BR>
Executive Vice President&nbsp;&amp; C.F.O.</FONT></TD>
</TR>
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<BR>
<P><br><A NAME="07ZBA76601_19">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_lw76602_1">AMENDMENT NO. 1 To the Employment Agreement Dated January 15, 1999 By and Between Ronald F. Woestemeyer &amp; PROS Revenue Management, L.P. (Successor in Interest to PROS Strategic Solutions, Inc.)</A></FONT><BR>
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<DOCUMENT>
<TYPE>EX-10.14
<SEQUENCE>20
<FILENAME>a2176970zex-10_14.htm
<DESCRIPTION>EXHIBIT 10.14
<TEXT>
<HTML>
<HEAD>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
<BR>
<FONT SIZE=3 ><A HREF="#07ZBA76601_20">QuickLinks</A></FONT>
<font size=3> -- Click here to rapidly navigate through this document</font>
<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit&nbsp;10.14  </B></FONT></P>

<P><FONT SIZE=2><hr
noshade width=100% align=left size=4>
<hr noshade width=100% align=left size=1> </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=3>$28,000,000 </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=3>REVOLVING
CREDIT<BR>
AND TERM LOAN AGREEMENT </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=3>Dated
as of March&nbsp;23, 2007 </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=3>among </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=3>PROS
REVENUE MANAGEMENT, L.P.,<BR>
as Borrower </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=3>PROS
HOLDINGS,&nbsp;INC.,<BR>
PROS REVENUE I, LLC, and<BR>
PROS REVENUE II, LLC,<BR>
as Guarantors </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=3>THE
LENDERS AND L/C ISSUERS PARTY HERETO </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=3>and
</FONT></P>

<P ALIGN="CENTER"><FONT SIZE=3><B>CHURCHILL FINANCIAL LLC</B></FONT><FONT SIZE=3>,<BR>
as Administrative Agent and Lead Arranger </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=3>and </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=3><B>FREEPORT FINANCIAL LLC</B></FONT><FONT SIZE=3>,<BR>
as Syndication Agent </FONT></P>

<P><FONT SIZE=3><hr
noshade width=100% align=left size=1>
<hr noshade width=100% align=left size=4> </FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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NAME="page_oc76602_1_1"> </A> </FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="oc76602_table_of_contents"> </A>
<A NAME="toc_oc76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>TABLE OF CONTENTS    <BR>    </B></FONT></P>

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<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="73%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="5%" ALIGN="CENTER"><FONT SIZE=1><B>Page</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2>ARTICLE I&nbsp;&nbsp;&nbsp;&nbsp;DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>1</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><BR><FONT SIZE=2> Section&nbsp;1.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2><BR>
Defined Terms</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
1</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;1.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>UCC Terms</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>23</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;1.3</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Accounting Terms and Principles</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>23</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;1.4</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Payments</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>24</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;1.5</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Interpretation</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>24</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2><BR>
ARTICLE II&nbsp;&nbsp;&nbsp;&nbsp;THE FACILITIES</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
25</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><BR><FONT SIZE=2> Section&nbsp;2.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2><BR>
The Commitments</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
25</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;2.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Borrowing Procedures</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>25</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;2.3</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Swing Loans</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>26</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;2.4</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Letters of Credit</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>27</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;2.5</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Reduction and Termination of the Commitments</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>30</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;2.6</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Repayment of Loans</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>30</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;2.7</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Optional Prepayments</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>30</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;2.8</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Mandatory Prepayments</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>30</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;2.9</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Interest</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>31</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;2.10</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Conversion and Continuation Options</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>32</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;2.11</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Fees</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>32</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;2.12</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Application of Payments</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>33</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;2.13</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Payments and Computations</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>34</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;2.14</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Evidence of Debt</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>35</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;2.15</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Suspension of Eurodollar Rate Option</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>36</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;2.16</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Breakage Costs; Increased Costs; Capital Requirements</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>37</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;2.17</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Taxes</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>38</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;2.18</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Substitution of Lenders</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>40</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=4 VALIGN="TOP"><FONT SIZE=2><BR>
ARTICLE III&nbsp;&nbsp;&nbsp;&nbsp;CONDITIONS TO LOANS AND LETTERS OF CREDIT</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
41</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><BR><FONT SIZE=2> Section&nbsp;3.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2><BR>
Conditions Precedent to Initial Loans and Letters of Credit</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
41</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;3.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Conditions Precedent to Each Loan and Letter of Credit</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>43</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;3.3</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Determinations of Initial Borrowing Conditions</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>44</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2><BR>
ARTICLE IV&nbsp;&nbsp;&nbsp;&nbsp;REPRESENTATIONS AND WARRANTIES</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
44</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><BR><FONT SIZE=2> Section&nbsp;4.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2><BR>
Corporate Existence; Compliance with Law</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
44</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;4.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Loan and Related Documents</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>44</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;4.3</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Ownership of Group Members</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>45</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;4.4</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Financial Statements</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>45</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;4.5</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Material Adverse Effect</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>46</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;4.6</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Solvency</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>46</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;4.7</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Litigation</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>46</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;4.8</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Taxes</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>46</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;4.9</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Margin Regulations</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>46</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;4.10</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>No Burdensome Obligations; No Defaults</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>46</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;4.11</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Investment Company Act; Public Utility Holding Company Act</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>47</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;4.12</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Labor Matters</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>47</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;4.13</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>ERISA</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>47</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;4.14</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Environmental Matters</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>47</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>i</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=2,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="20",CHK=963200,FOLIO='i',FILE='DISK130:[07ZBA2.07ZBA76602]OC76602A.;8',USER='BSKELLE',CD=';2-APR-2007;18:35' -->
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<TABLE WIDTH="78%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;4.15</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Intellectual Property</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>48</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;4.16</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Title; Real Property</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>48</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;4.17</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Full Disclosure</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>48</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2><BR>
ARTICLE V&nbsp;&nbsp;&nbsp;&nbsp;FINANCIAL COVENANTS</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
49</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><BR><FONT SIZE=2> Section&nbsp;5.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2><BR>
Maximum Consolidated Leverage Ratio</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
49</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;5.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Minimum Consolidated Fixed Charge Coverage Ratio</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>49</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;5.3</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Minimum Consolidated EBITDA</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>50</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;5.4</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Capital Expenditures</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>50</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2><BR>
ARTICLE VI&nbsp;&nbsp;&nbsp;&nbsp;REPORTING COVENANTS</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
51</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><BR><FONT SIZE=2> Section&nbsp;6.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2><BR>
Financial Statements</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
51</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;6.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Other Events</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>52</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;6.3</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Copies of Notices and Reports</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>53</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;6.4</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Taxes</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>53</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;6.5</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Labor Matters</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>53</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;6.6</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>ERISA Matters</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>53</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;6.7</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Environmental Matters</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>53</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;6.8</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Other Information</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>54</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2><BR>
ARTICLE VII&nbsp;&nbsp;&nbsp;&nbsp;AFFIRMATIVE COVENANTS</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
54</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><BR><FONT SIZE=2> Section&nbsp;7.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2><BR>
Maintenance of Corporate Existence</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
54</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;7.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Compliance with Laws, Etc</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>54</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;7.3</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Payment of Obligations</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>54</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;7.4</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Maintenance of Property</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>55</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;7.5</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Maintenance of Insurance</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>55</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;7.6</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Keeping of Books</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>55</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;7.7</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Access to Books and Property</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>55</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;7.8</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Environmental</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>56</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;7.9</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Use of Proceeds</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>56</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;7.10</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Additional Collateral and Guaranties</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>56</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;7.11</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Deposit Accounts; Securities Accounts and Cash Collateral Accounts</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>57</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;7.12</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Payment of Taxes</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>57</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2><BR>
ARTICLE VIII&nbsp;&nbsp;&nbsp;&nbsp;NEGATIVE COVENANTS</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
58</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><BR><FONT SIZE=2> Section&nbsp;8.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2><BR>
Indebtedness</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
58</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;8.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Liens</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>59</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;8.3</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Investments</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>60</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;8.4</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Asset Sales</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>60</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;8.5</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Restricted Payments</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>61</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;8.6</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Prepayment of Indebtedness</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>61</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;8.7</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Fundamental Changes</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>62</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;8.8</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Change in Nature of Business</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>62</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;8.9</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Transactions with Affiliates</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>62</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;8.10</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Third-Party Restrictions on Indebtedness, Liens, Investments or Restricted Payments</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT" VALIGN="BOTTOM"><FONT SIZE=2>63</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;8.11</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Modification of Certain Documents</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>63</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;8.12</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Accounting Changes; Fiscal Year</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>63</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;8.13</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Margin Regulations</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>63</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;8.14</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Compliance with ERISA</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>63</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>ii</FONT></P>

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<TABLE WIDTH="78%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;8.15</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Hazardous Materials</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>64</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2><BR>
ARTICLE IX&nbsp;&nbsp;&nbsp;&nbsp;EVENTS OF DEFAULT</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
64</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><BR><FONT SIZE=2> Section&nbsp;9.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2><BR>
Definition</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
64</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;9.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Remedies</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>65</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;9.3</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Actions in Respect of Letters of Credit</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>66</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2><BR>
ARTICLE X&nbsp;&nbsp;&nbsp;&nbsp;INTENTIONALLY OMITTED</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
66</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2><BR>
ARTICLE XI&nbsp;&nbsp;&nbsp;&nbsp;THE ADMINISTRATIVE AGENT</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
66</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><BR><FONT SIZE=2> Section&nbsp;11.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2><BR>
Appointment and Duties</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
66</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;11.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Binding Effect</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>67</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;11.3</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Use of Discretion</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>67</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;11.4</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Delegation of Rights and Duties</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>68</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;11.5</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Reliance and Liability</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>68</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;11.6</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Administrative Agent Individually</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>69</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;11.7</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Lender Credit Decision</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>69</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;11.8</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Expenses; Indemnities</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>69</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;11.9</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Resignation of Administrative Agent or L/C Issuer</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>70</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;11.10</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Release of Collateral or Guarantors</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>70</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;11.11</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Additional Secured Parties</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>71</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=4><FONT SIZE=2><BR>
ARTICLE XII&nbsp;&nbsp;&nbsp;&nbsp;MISCELLANEOUS</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
71</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><BR><FONT SIZE=2> Section&nbsp;12.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2><BR>
Amendments, Waivers, Etc</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
71</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;12.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Assignments and Participations; Binding Effect</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>73</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;12.3</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Costs and Expenses</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>75</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;12.4</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Indemnities</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>75</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;12.5</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Survival</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>76</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;12.6</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Limitation of Liability for Certain Damages</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>76</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;12.7</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Lender-Creditor Relationship</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>76</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;12.8</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Right of Setoff</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>76</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;12.9</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Sharing of Payments, Etc</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>77</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;12.10</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Marshaling; Payments Set Aside</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>77</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;12.11</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Notices</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>77</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;12.12</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Electronic Transmissions</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>78</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;12.13</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Governing Law</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>79</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;12.14</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Jurisdiction</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>79</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;12.15</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Waiver Of Jury Trial</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>80</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;12.16</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Severability</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>80</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;12.17</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Execution in Counterparts</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>80</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;12.18</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Entire Agreement</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>80</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;12.19</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Use of Name</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>80</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;12.20</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Non-Public Information; Confidentiality</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>81</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>Section&nbsp;12.21</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="73%"><FONT SIZE=2>Patriot Act Notice</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>81</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>iii</FONT></P>

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<P style='page-break-before:always'></p>
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<A NAME="page_oc76602_1_4"> </A>
<P ALIGN="CENTER"><FONT SIZE=2>SCHEDULES </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="80%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="17%"><FONT SIZE=2>Schedule I</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="75%"><FONT SIZE=2>Commitments</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="17%"><FONT SIZE=2>Schedule II</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="75%"><FONT SIZE=2>Addresses for Notices</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="17%"><FONT SIZE=2>Schedule 4.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="75%"><FONT SIZE=2>Consents</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="17%"><FONT SIZE=2>Schedule 4.3</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="75%"><FONT SIZE=2>Ownership of Borrower and Subsidiaries</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="17%"><FONT SIZE=2>Schedule 4.7</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="75%"><FONT SIZE=2>Litigation</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="17%"><FONT SIZE=2>Schedule&nbsp;4.12</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="75%"><FONT SIZE=2>Labor Matters</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="17%"><FONT SIZE=2>Schedule 4.13</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="75%"><FONT SIZE=2>List of Plans</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="17%"><FONT SIZE=2>Schedule 4.14</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="75%"><FONT SIZE=2>Environmental Matters</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="17%"><FONT SIZE=2>Schedule 4.16</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="75%"><FONT SIZE=2>Real Property</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="17%"><FONT SIZE=2>Schedule 8.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="75%"><FONT SIZE=2>Existing Indebtedness</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="17%"><FONT SIZE=2>Schedule 8.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="75%"><FONT SIZE=2>Existing Liens</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="17%"><FONT SIZE=2>Schedule 8.3</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="75%"><FONT SIZE=2>Existing Investments</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>EXHIBITS </FONT></P>

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<TABLE WIDTH="77%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="14%"><FONT SIZE=2>Exhibit A</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="78%"><FONT SIZE=2>Form of Assignment</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="14%"><FONT SIZE=2>Exhibit B</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="78%"><FONT SIZE=2>Form of Note</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="14%"><FONT SIZE=2>Exhibit C</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="78%"><FONT SIZE=2>Form of Notice of Borrowing</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="14%"><FONT SIZE=2>Exhibit D</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="78%"><FONT SIZE=2>Form of Swingline Request</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="14%"><FONT SIZE=2>Exhibit E</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="78%"><FONT SIZE=2>Form of L/C Request</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="14%"><FONT SIZE=2>Exhibit F</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="78%"><FONT SIZE=2>Form of Notice of Conversion or Continuation</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="14%"><FONT SIZE=2>Exhibit G</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="78%"><FONT SIZE=2>Form of Compliance Certificate</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="14%"><FONT SIZE=2>Exhibit H</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="78%"><FONT SIZE=2>Form of Guaranty, Pledge and Security Agreement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="14%"><FONT SIZE=2>Exhibit I</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT"><FONT SIZE=2>&#151;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="78%"><FONT SIZE=2>Closing Checklist</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>iv</FONT></P>

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<P><FONT SIZE=2><A
NAME="page_oe76602_1_1"> </A> </FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This CREDIT AGREEMENT, dated as of March&nbsp;23, 2007, is entered into among PROS Revenue Management, L.P., a Delaware limited partnership
("</FONT><FONT SIZE=2><I>Borrower</I></FONT><FONT SIZE=2>"), PROS Holdings,&nbsp;Inc., a Delaware corporation ("</FONT><FONT SIZE=2><I>Holdings</I></FONT><FONT SIZE=2>"), PROS Revenue I, LLC, a
Delaware limited liability company ("</FONT><FONT SIZE=2><I>General Partner</I></FONT><FONT SIZE=2>"), PROS Revenue II, LLC, a Delaware limited liability company ("</FONT><FONT SIZE=2><I>Limited
Partner</I></FONT><FONT SIZE=2>") (Holdings, General Partner and Limited Partner, each a "</FONT><FONT SIZE=2><I>Guarantor</I></FONT><FONT SIZE=2>" and collectively the
"</FONT><FONT SIZE=2><I>Parent Guarantors</I></FONT><FONT SIZE=2>"), the Lenders (as defined below), the L/C Issuers (as defined below) and Churchill Financial LLC
("</FONT><FONT SIZE=2><I>Churchill</I></FONT><FONT SIZE=2>"), as administrative agent and lead arranger for the Lenders and the L/C Issuers (in such capacity, and together with its successors and
permitted assigns, the "</FONT><FONT SIZE=2><I>Administrative Agent</I></FONT><FONT SIZE=2>"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
parties hereto agree as follows: </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="oe76602_article_i_definitions,__oe702374"> </A>
<A NAME="toc_oe76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE I    <BR>    <BR>    DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;1.1&nbsp;&nbsp;&nbsp;&nbsp;Defined Terms.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;As used in this Agreement, the following terms have the following meanings: </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Acquisition Pro Forma</I></FONT><FONT SIZE=2>" means, with respect to a Proposed Acquisition, a pro forma Consolidated balance sheet, income statement and cash
flow statement of Borrower, based on recent Financial Statements, which shall be complete and shall fairly present in all material respects the assets, liabilities, financial condition and results of
operations of Borrower and its Subsidiaries in accordance with GAAP, but taking into account such Proposed Acquisition and the funding of all Loans in connection therewith, and which shall reflect
that (x)&nbsp;the average daily Revolver Availability for the six month period preceding the consummation of such Proposed Acquisition would have exceeded $2,000,000 on a pro forma basis (after
giving effect to such Proposed Acquisition and all Loans funded in connection therewith as if made on the first day of such period) and the Acquisition Projections shall reflect that such Revolver
Availability of $2,000,000 shall continue for at least six months after the consummation of such Proposed Acquisition, and (y)&nbsp;Borrower would have been in compliance with the financial
covenants set forth in </FONT><FONT SIZE=2><I>Article&nbsp;V</I></FONT><FONT SIZE=2> on a Pro Forma Basis as of the last day of the last Fiscal Quarter for which Financial Statements have been
delivered hereunder (after giving effect to such
Proposed Acquisition and all Loans funded in connection therewith as if made on the first day of such period). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Acquisition Projections</I></FONT><FONT SIZE=2>" means, with respect to a Proposed Acquisition, updated versions of the most recently delivered Projections
covering the 3-year period commencing on the date of such Proposed Acquisition and otherwise prepared in accordance with the Projections, and based upon historical financial data of a
recent date reasonably satisfactory to the Administrative Agent, taking into account such Proposed Acquisition. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Adjusted EBITDA</I></FONT><FONT SIZE=2>" means the Consolidated EBITDA of Borrower, adjusted to reflect such additions and subtractions as shall be reasonably
acceptable to the Required Lenders and the Borrower. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Affected Lender</I></FONT><FONT SIZE=2>" has the meaning specified in </FONT><FONT SIZE=2><I>Section&nbsp;2.18</I></FONT><FONT SIZE=2>. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Affiliate</I></FONT><FONT SIZE=2>" means, with respect to any Person, each officer, director, general partner or joint-venturer of such Person and any other
Person that directly or indirectly controls, is controlled by, or is under common control with, such Person; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that no Secured Party shall
be an Affiliate of Borrower. For purpose of this definition,
"</FONT><FONT SIZE=2><I>control</I></FONT><FONT SIZE=2>" means the possession of either (a)&nbsp;the power to vote, or the beneficial ownership of, 10% or more of the Voting Stock of such Person or
(b)&nbsp;the power to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Agreement</I></FONT><FONT SIZE=2>" means this Credit Agreement. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>1</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Applicable Margin</I></FONT><FONT SIZE=2>" means (a)&nbsp;with respect to Revolving Loans and Swing Line Loans (i)&nbsp;in the case of Base Rate Loans, 1.50%
and (ii)&nbsp;in the case of Eurodollar Rate Loans, 2.75% and (b)&nbsp;with respect to the Term Loan (i)&nbsp;in the case of Base Rate Loans, 1.50% and (ii)&nbsp;in the case of Eurodollar Rate
Loans, 2.75%. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Approved Fund</I></FONT><FONT SIZE=2>" means any Person (other than a natural Person) that (a)&nbsp;is or will be engaged in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business and (b)&nbsp;is advised or managed by (i)&nbsp;a Lender, (ii)&nbsp;any Affiliate
of a Lender or (iii)&nbsp;any Person (other than an individual) or any Affiliate of any Person (other than an individual) that administers or manages a Lender. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Assignment</I></FONT><FONT SIZE=2>" means an assignment agreement entered into by a Lender, as assignor, and any prospective assignee thereof and accepted by the
Administrative Agent, in substantially the form of </FONT><FONT SIZE=2><I>Exhibit&nbsp;A</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Base Rate</I></FONT><FONT SIZE=2>" means, at any time, a rate per annum equal to the higher of (a)&nbsp;the rate last quoted by </FONT><FONT SIZE=2><I>The
Wall Street Journal</I></FONT><FONT SIZE=2> in its "Money Rates" section as the "base rate on corporate loans posted by at least 75% of the nation's largest banks" in the United States or, if </FONT> <FONT SIZE=2><I>The Wall Street
Journal</I></FONT><FONT SIZE=2> ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve
Statistical Release H.15 (519)&nbsp;(Selected Interest Rates) as the "bank prime loan" rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as reasonably determined by
the Administrative Agent) or any similar release by the Federal Reserve Board (as reasonably determined by the Administrative Agent) and (b)&nbsp;the sum of 0.5% per annum and the Federal Funds
Rate. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Base Rate Loan</I></FONT><FONT SIZE=2>" means any Loan that bears interest based on the Base Rate. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Benefit Plan</I></FONT><FONT SIZE=2>" means any employee benefit plan as defined in Section&nbsp;3(3) of ERISA (whether governed by the laws of the United
States or otherwise) to which any Group Member incurs or otherwise has any obligation or liability, contingent or otherwise. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Borrower</I></FONT><FONT SIZE=2>" has the meaning specified in the preamble to this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Borrowing</I></FONT><FONT SIZE=2>" means a borrowing consisting of Loans (other than Swing Loans and Loans deemed made pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;2.3</I></FONT><FONT SIZE=2> or </FONT><FONT
SIZE=2><I>2.4</I></FONT><FONT SIZE=2>) made in one Facility on the same day by the Lenders according to their
respective Commitments under such Facility. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Business Day</I></FONT><FONT SIZE=2>" means any day of the year that is not a Saturday, Sunday or a day on which banks are required or authorized to close in New
York City and, when determined in connection with notices and determinations in respect of any Eurodollar Rate or Eurodollar Rate Loan or any funding, conversion, continuation, Interest Period or
payment of any Eurodollar Rate Loan, that is also a day on which dealings in Dollar deposits are carried on in the London interbank market. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Capital Expenditures</I></FONT><FONT SIZE=2>" means, for any Person for any period, the aggregate of all expenditures, whether or not made through the incurrence
of Indebtedness, by such Person and its Subsidiaries during such period for the acquisition, leasing (pursuant to a Capital Lease), construction, replacement, repair, substitution or improvement of
fixed or capital assets or additions to equipment, in each case required to be capitalized under GAAP on a Consolidated balance sheet of such Person, excluding (a)&nbsp;interest capitalized during
construction and (b)&nbsp;any expenditure to the extent, for purpose of the definition of Permitted Acquisition, such expenditure is part of the aggregate amounts payable in connection with, or
other consideration for, any Permitted Acquisition consummated during or prior to such period. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Capital Lease</I></FONT><FONT SIZE=2>" means, with respect to any Person, any lease of, or other arrangement conveying the right to use, any property (whether
real, personal or mixed) by such Person as lessee that has been or should be accounted for as a capital lease on a balance sheet of such Person prepared in accordance with GAAP. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Capitalized Lease Obligations</I></FONT><FONT SIZE=2>" means, at any time, with respect to any Capital Lease, any lease entered into as part of any synthetic
lease, the amount of all obligations of such Person that is (or that would be, if such synthetic lease or other lease were accounted for as a Capital Lease) capitalized on a balance sheet of such
Person prepared in accordance with GAAP. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Cash Collateral Account</I></FONT><FONT SIZE=2>" means a deposit account or securities account in the name of Borrower and under the sole control (as defined in
the applicable UCC) of the Administrative Agent and (a)&nbsp;in the case of a deposit account, from which Borrower may not make withdrawals except as permitted by the Administrative Agent and
(b)&nbsp;in the case of a securities account, with respect to which the Administrative Agent shall be the entitlement holder and the only Person authorized to give entitlement orders with respect
thereto. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Cash Equivalents</I></FONT><FONT SIZE=2>" means (a)&nbsp;any readily-marketable securities (i)&nbsp;issued by, or directly, unconditionally and fully
guaranteed or insured by the United States federal government or (ii)&nbsp;issued by any agency of the United States federal government the obligations of which are fully backed by the full faith
and credit of the United States federal government, (b)&nbsp;any readily-marketable direct obligations issued by any other agency of the United States federal government, any state of the United
States or any political subdivision of any such state or any public instrumentality thereof, in each case having a rating of at least "A-1" from S&amp;P or at least "P-1" from
Moody's, (c)&nbsp;any commercial paper rated at least "</FONT><FONT SIZE=2><I>A-1</I></FONT><FONT SIZE=2>" by S&amp;P or "</FONT><FONT SIZE=2><I>P-1</I></FONT><FONT SIZE=2>" by
Moody's and issued by any Person organized under the laws of any state of the United States, (d)&nbsp;any Dollar-denominated time deposit, insured certificate of deposit, overnight bank deposit or
bankers' acceptance issued or accepted by (i)&nbsp;any Lender or (ii)&nbsp;any commercial bank that is (A)&nbsp;organized under the laws of the United States, any state thereof or the District
of Columbia, (B)&nbsp;"adequately capitalized" (as defined in the regulations of its primary federal banking regulators) and (C)&nbsp;has Tier 1 capital (as defined in such regulations) in excess
of $250,000,000 and (e)&nbsp;shares of any United States money market fund that (i)&nbsp;has substantially all of its assets invested continuously in the types of investments referred to in </FONT> <FONT SIZE=2><I>clause&nbsp;(a)</I></FONT><FONT
SIZE=2>, </FONT><FONT SIZE=2><I>(b)</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>(c)</I></FONT><FONT SIZE=2> or (d)&nbsp;above with
maturities as set forth in the proviso below, (ii)&nbsp;has net assets in excess of $500,000,000 and (iii)&nbsp;has obtained from either S&amp;P or Moody's the highest rating obtainable for money
market funds in the United States; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that the maturities of all obligations specified
in any of </FONT><FONT SIZE=2><I>clauses (a)</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>(b)</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>(c)</I></FONT><FONT SIZE=2> and </FONT> <FONT SIZE=2><I>(d)</I></FONT><FONT SIZE=2> above shall not
exceed 365&nbsp;days. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>CERCLA</I></FONT><FONT SIZE=2>" means the United States Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C.
&sect;&sect; 9601 et seq.). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Change of Control</I></FONT><FONT SIZE=2>" means the occurrence of any of the following: (a)&nbsp;the stockholders of Holdings on the Closing Date, together
with their Affiliates, shall cease to own and control, legally and beneficially, the economic and voting rights associated with ownership of at least 51% of the outstanding shares of Stock of Holdings
on a fully-diluted basis free and clear of all Liens, rights, options, warrants or other similar agreements or understandings, (b)&nbsp;the Sponsor Group collectively shall cease to own and control,
legally and beneficially, the economic and voting rights associated with ownership of at least 20% of the outstanding shares of Stock of Holdings on a fully-diluted basis free and clear of all Liens,
rights, options, warrants or other similar agreements or understandings, (c)&nbsp;Holdings shall cease to own and control, legally and beneficially, all of the economic and voting rights associated
with ownership of all outstanding Stock of General Partner and Limited Partner, or (d)&nbsp;General Partner and Limited Partner shall cease to own and control, legally and beneficially, all of the
economic and voting rights associated with ownership of all outstanding Stock of Borrower. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Churchill</I></FONT><FONT SIZE=2>" has the meaning specified in the preamble to this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Closing Checklist</I></FONT><FONT SIZE=2>" means the checklist of closing items attached as </FONT><FONT SIZE=2><I>Exhibit&nbsp;I</I></FONT><FONT SIZE=2>. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Closing Date</I></FONT><FONT SIZE=2>" means the first date on which any Loan is made or any Letter of Credit is Issued. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Code</I></FONT><FONT SIZE=2>" means the U.S. Internal Revenue Code of 1986, as amended. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Collateral</I></FONT><FONT SIZE=2>" means all property and interests in property and proceeds thereof now owned or hereafter acquired by any Loan Party in or
upon which a Lien is granted or purported to be granted pursuant to any Loan Document. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Commitment</I></FONT><FONT SIZE=2>" means, with respect to any Lender, such Lender's Revolving Credit Commitment and Term Loan Commitment. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Compliance Certificate</I></FONT><FONT SIZE=2>" means a certificate substantially in the form of </FONT> <FONT SIZE=2><I>Exhibit&nbsp;G</I></FONT><FONT SIZE=2>. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Consolidated</I></FONT><FONT SIZE=2>" means, with respect to any Person, the accounts of such Person and its Subsidiaries consolidated in accordance with GAAP. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Consolidated Cash Interest Expense</I></FONT><FONT SIZE=2>" means, with respect to any Person for any period, the Consolidated Interest Expense of such Person
paid or payable in cash during such fiscal period. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Consolidated EBITDA</I></FONT><FONT SIZE=2>" means, with respect to any Person for any period, (a)&nbsp;the Consolidated Net Income of such Person for such
period </FONT><FONT SIZE=2><I>plus</I></FONT><FONT SIZE=2> (b)&nbsp;the sum of, in each case to the extent included in the calculation of such Consolidated Net Income but without duplication,
(i)&nbsp;any provision for United States federal income taxes or other taxes measured by income, (ii)&nbsp;Consolidated Interest Expense, amortization of debt discount and commissions and other
fees and charges associated with Indebtedness, (iii)&nbsp;any depreciation and amortization expense, (iv)&nbsp;any aggregate net loss on the Sale of property (other than accounts (as defined under
the applicable UCC) and inventory) outside the ordinary course of business, (v)&nbsp;the aggregate amount of all fees, costs or expenses (up to but not exceeding an aggregate amount of $400,000)
paid to the holders of the Notes pursuant to the terms of this Agreement or otherwise incurred in connection with the financing transactions contemplated hereby, and (vi)&nbsp;any other
non-cash expenditure, charge or loss for such period (other than any non-cash expenditure, charge or loss relating to write-offs, write-downs or reserves with
respect to accounts and inventory), including the amount of any compensation deduction as the result of any grant of Stock or Stock Equivalents to employees, officers, directors or consultants made
pursuant to an equity incentive plan approved by the board of directors of such Person, and </FONT><FONT SIZE=2><I>minus</I></FONT><FONT SIZE=2> (c)&nbsp;the sum of, in each case to the extent
included in the calculation of such Consolidated Net Income and without duplication, (i)&nbsp;any credit for United States federal income taxes or other taxes measured by income, (ii)&nbsp;any
gain from extraordinary items and any other non-recurring gain, (iii)&nbsp;any aggregate net gain from the Sale of property (other than accounts (as defined in the applicable UCC) and
inventory) outside the ordinary course of business by such Person, (iv)&nbsp;any other non-cash gain, including any reversal of a charge referred to in </FONT> <FONT SIZE=2><I>clause&nbsp;(b)(vi)</I></FONT><FONT SIZE=2> above by reason of a decrease
in the value of any Stock or Stock Equivalent, and (v)&nbsp;any other cash payment in respect of
expenditures, charges and losses that have been added to Consolidated EBITDA of such Person pursuant to </FONT><FONT SIZE=2><I>clause&nbsp;(b)(vi)</I></FONT><FONT SIZE=2> above in any prior period. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, for purposes of calculating the Consolidated Leverage Ratio for any reference period, Borrower may include without duplication the EBITDA of Permitted Acquisitions during
the reference period as if such transaction had occurred as of the first day of the reference period; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, however, that (a)&nbsp;only the actual
historical results of operations of the Person so acquired, without adjustment for pro forma expense savings or revenue increases, shall be used for such calculation, (b)&nbsp;such acquired EBITDA
may be included only if (i)&nbsp;the financial statements of such Permitted Acquisitions have been audited for the period sought to be included or (ii)&nbsp;the Required Lenders consent to such
inclusion after being furnished with other acceptable financial statements, (c)&nbsp;such acquired EBITDA shall be adjusted to exclude expenses which are discontinued upon acquisition (including,
without limitation, owner's compensation), as approved by the Required Lenders, and (d)&nbsp;any Indebtedness of such Person that assumed by a Loan Party shall be included during the reference
period as if such Indebtedness had been assumed as of the first day of the reference period. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Consolidated Fixed Charge Coverage Ratio</I></FONT><FONT SIZE=2>" means, with respect to any Person for any period, the ratio of (a)&nbsp;Consolidated EBITDA
of such Person for such period </FONT><FONT SIZE=2><I>minus</I></FONT><FONT SIZE=2> Non-Financed Capital Expenditures of such Person for such period </FONT> <FONT SIZE=2><I>minus</I></FONT><FONT SIZE=2> the total liability for United States federal
income taxes and other taxes measured by net income actually payable by such Person during such
period (other than the Excluded Tax Payment) to (b)&nbsp;the Consolidated Fixed Charges of such Person for such period. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Consolidated Fixed Charges</I></FONT><FONT SIZE=2>" means, with respect to any Person for any period, the sum, determined on a Consolidated basis, of
(a)&nbsp;Consolidated Cash Interest Expense, (b)&nbsp;the principal amount of Consolidated Total Debt payable during such period, (c)&nbsp;all cash dividends on Stock in respect of such period
paid or payable by such Person and its Subsidiaries other than the Specified Dividend, (d)&nbsp;all commitment fees and other costs, fees and expenses payable in order to effect, or because of, the
incurrence of any Indebtedness and (e)&nbsp;management fees payable during such period. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Consolidated Interest Expense</I></FONT><FONT SIZE=2>" means, for any Person for any period, (a)&nbsp;Consolidated total interest expense of such Person for
such period and including, in any event, (i)&nbsp;interest capitalized during such period and net costs under Interest Rate Contracts for such period and (ii)&nbsp;all fees, charges, commissions,
discounts and other similar obligations (other than reimbursement obligations) with respect to letters of credit, bank guarantees, banker's acceptances, surety bonds and performance bonds (whether or
not matured) payable during such period minus (b)&nbsp;the sum of (i)&nbsp;Consolidated net gains of such Person under Interest Rate Contracts for such period and (ii)&nbsp;Consolidated interest
income of such Person. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Consolidated Leverage Ratio</I></FONT><FONT SIZE=2>" means, with respect to any Person as of any date, the ratio of (a)&nbsp;Consolidated Total Debt of such
Person outstanding as of such date to (b)&nbsp;Consolidated EBITDA for such Person for the last period of four consecutive Fiscal Quarters ending on or before such date. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Consolidated Net Income</I></FONT><FONT SIZE=2>" means, with respect to any Person, for any period, the Consolidated net income (or loss) of such Person and its
Subsidiaries for such period; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that the following shall be excluded: (a)&nbsp;the
net income of any other Person in which such Person or one of its Subsidiaries has a joint interest with a third-party (which interest does not cause the net income of such other Person to be
Consolidated into the net income of such Person), except to the extent of the amount of cash dividends or distributions paid to such Person or Subsidiary, (b)&nbsp;the net income of any Subsidiary
of such Person that is, on the last day of such period, subject to any restriction or limitation on the payment of dividends or the making of other distributions, to the extent of such restriction or
limitation and (c)&nbsp;the net income of any other Person arising prior to such other Person becoming a Subsidiary of such Person or merging or consolidating into such Person or its Subsidiaries. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Consolidated Total Debt</I></FONT><FONT SIZE=2>" of any Person means all Indebtedness of a type described in </FONT> <FONT SIZE=2><I>clause&nbsp;(a)</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>(b)</I></FONT><FONT SIZE=2>, </FONT><FONT
SIZE=2><I>(c)(i)</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>(d)</I></FONT><FONT SIZE=2> or </FONT><FONT SIZE=2><I>(f)</I></FONT><FONT SIZE=2> of the definition thereof and all Guaranty Obligations with respect to any such Indebtedness,
in each case of such Person and its Subsidiaries on a Consolidated basis. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Constituent Documents</I></FONT><FONT SIZE=2>" means, with respect to any Person, collectively and, in each case, together with any modification of any term
thereof, (a)&nbsp;the articles of incorporation, certificate of incorporation, constitution or certificate of formation of such Person, (b)&nbsp;the bylaws, operating agreement or joint venture
agreement of such Person, (c)&nbsp;any other constitutive, organizational or governing document of such Person, whether or not equivalent, and (d)&nbsp;any other document setting forth the manner
of election or duties of the directors, officers or managing members of such Person or the designation, amount or relative rights, limitations and preferences of any Stock of such Person. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Contractual Obligation</I></FONT><FONT SIZE=2>" means, with respect to any Person, any provision of any Security issued by such Person or of any document or
undertaking (other than a Loan Document) to which such Person is a party or by which it or any of its property is bound or to which any of its property is subject. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Control Agreement</I></FONT><FONT SIZE=2>" means, with respect to any deposit account, any securities account, commodity account, securities entitlement or
commodity contract, an agreement, in form and substance reasonably satisfactory to the Administrative Agent, among the Administrative Agent, the financial institution or other Person at which such
account is maintained or with which such entitlement or contract is carried and the Loan Party maintaining such account, effective to grant "control" (as defined under the applicable UCC) over such
account to the Administrative Agent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Controlled Deposit Account</I></FONT><FONT SIZE=2>" means each deposit account (including all funds on deposit therein) that is the subject of an effective
Control Agreement and that is maintained by any Loan Party with a financial institution approved by the Administrative Agent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Controlled Securities Account</I></FONT><FONT SIZE=2>" means each securities account or commodity account (including all financial assets held therein and all
certificates and instruments, if any, representing or evidencing such financial assets) that is the subject of an effective Control Agreement and that is maintained by any Loan Party with a securities
intermediary or commodity intermediary approved by the Administrative Agent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Copyrights</I></FONT><FONT SIZE=2>" means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or
relating to copyrights and all mask work, database and design rights, whether or not registered or published, all registrations and recordations thereof and all applications in connection therewith. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Corporate Chart</I></FONT><FONT SIZE=2>" means a document in form reasonably acceptable to the Administrative Agent and setting forth, as of a date set forth
therein, for each Person that is a Loan Party, that is subject to </FONT> <FONT SIZE=2><I>Section&nbsp;7.10</I></FONT><FONT SIZE=2> or that is a Subsidiary or joint venture of any of them, (a)&nbsp;the full legal name of such Person, (b)&nbsp;the
jurisdiction
of organization and any organizational number and tax identification number of such Person, (c)&nbsp;the location of such Person's chief executive office (or, if applicable, sole place of business)
and (d)&nbsp;the number of shares of each class of Stock of such Person (other than Holdings) authorized, the number outstanding and the number and percentage of such outstanding shares for each
such class owned, directly or indirectly, by any Loan Party or any Subsidiary or any other equity holder of any of them. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Customary Permitted Liens</I></FONT><FONT SIZE=2>" means, with respect to any Person, any of the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Liens
(i)&nbsp;with respect to the payment of taxes, assessments or other governmental charges or (ii)&nbsp;of suppliers, carriers, materialmen, warehousemen,
workmen or mechanics and other similar Liens, in each case imposed by law or arising in the ordinary course of business, and, for each of the Liens in </FONT><FONT SIZE=2><I>clauses
(i)</I></FONT><FONT SIZE=2> and </FONT><FONT SIZE=2><I>(ii)</I></FONT><FONT SIZE=2> above for amounts that are not yet due or that are being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves or other appropriate provisions are maintained on the books of such Person in accordance with GAAP; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Liens
of a collection bank on items in the course of collection arising under Section&nbsp;4-208 of the UCC as in effect in the State of New York or any
similar section under any applicable UCC or any similar Requirement of Law of any foreign jurisdiction; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;pledges
or cash deposits made in the ordinary course of business (i)&nbsp;in connection with workers' compensation, unemployment insurance or other types of social
security benefits (other than any Lien imposed by ERISA), (ii)&nbsp;to secure the performance of bids, tenders, leases (other than Capital Leases), sales or other trade contracts (other than for the
repayment of borrowed money) or (iii)&nbsp;made in lieu of, or to secure the performance of, surety, customs, reclamation or performance bonds (in each case not related to judgments or litigation); </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;judgment
liens (other than for the payment of taxes, assessments or other governmental charges) securing judgments and other proceedings not constituting an Event of
Default under </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

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<UL>
<BR>

<P><FONT SIZE=2><I> Section&nbsp;9.1(e)</I></FONT><FONT SIZE=2> and pledges or cash deposits made in lieu of, or to secure the performance of, judgment or appeal bonds in respect of such judgments and proceedings; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;Liens
(i)&nbsp;arising by reason of zoning restrictions, easements, licenses, reservations, restrictions, covenants, rights-of-way,
encroachments, minor defects or irregularities in title (including leasehold title) and other similar encumbrances on the use of real property or (ii)&nbsp;consisting of leases, licenses, subleases
or sublicenses granted by a lessor, licensor, sublicensor or
sublessor on its property (in each case other than Capital Leases) otherwise permitted under </FONT><FONT SIZE=2><I>Section&nbsp;8.4</I></FONT><FONT SIZE=2> that, for each of the Liens in </FONT> <FONT SIZE=2><I>clauses (i)</I></FONT><FONT SIZE=2>
and </FONT><FONT SIZE=2><I>(ii)</I></FONT><FONT SIZE=2> above, do not, in the aggregate, materially (x)&nbsp;impair the value or
marketability of such real property or (y)&nbsp;interfere with the ordinary conduct of the business conducted and proposed to be conducted at such real property; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;Liens
of landlords and mortgagees of landlords (i)&nbsp;arising by statute or under any lease or related Contractual Obligation entered into in the ordinary course of
business, (ii)&nbsp;on fixtures and movable tangible property located on the real property leased or subleased from such landlord, (iii)&nbsp;for amounts not yet due or that are being contested in
good faith by appropriate proceedings diligently conducted and (iv)&nbsp;for which adequate reserves or other appropriate provisions are maintained on the books of such Person in accordance with
GAAP; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;the
title and interest of a lessor or sublessor in and to personal property leased or subleased (other than through a Capital Lease), in each case extending only to such
personal property. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Default</I></FONT><FONT SIZE=2>" means any Event of Default and any event that, with the passing of time or the giving of notice or both, would become an Event
of Default. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Disclosure Documents</I></FONT><FONT SIZE=2>" means, collectively, (a)&nbsp;all confidential information memoranda and related materials prepared in connection
with the syndication of the Facilities and (b)&nbsp;all other documents filed by any Group Member with the United States Securities and Exchange Commission. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Dollars</I></FONT><FONT SIZE=2>" and the sign "</FONT><FONT SIZE=2><I>$</I></FONT><FONT SIZE=2>" each mean the lawful money of the United States of America. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Domestic Person</I></FONT><FONT SIZE=2>" means any "</FONT><FONT SIZE=2><I>United States person</I></FONT><FONT SIZE=2>" under and as defined in
Section&nbsp;770l(a)(30) of the Code. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Electronic Transmission</I></FONT><FONT SIZE=2>" means each document, instruction, authorization, file, information and any other communication transmitted,
posted or otherwise made or communicated by e-mail or E-Fax, or otherwise to or from an E-System or other equivalent service. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Employee Stock Buybacks</I></FONT><FONT SIZE=2>" means the redemption, purchase or other acquisition or retirement for value by Holdings of its common Stock (or
Stock Equivalents with respect to its common Stock) from any present or former employee, director or officer (or the assigns, estate, heirs or current or former spouses thereof) of any Group Member
upon the death, disability or termination of employment of such employee, director or officer. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Environmental Laws</I></FONT><FONT SIZE=2>" means all Requirements of Law and Permits imposing liability or standards of conduct for or relating to the
regulation and protection of human health, safety, the environment and natural resources, including CERCLA, the SWDA, the Hazardous Materials Transportation Act (49 U.S.C. &sect;&sect;
5101 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. &sect;&sect; 136 et seq.), the Toxic Substances Control Act (15 U.S.C. &sect;&sect; 2601 et
seq.), the Clean Air Act (42 U.S.C. &sect;&sect; 7401 et seq.), the Federal Water Pollution Control Act (33 U.S.C. &sect;&sect; 1251 et seq.), the Occupational Safety and
Health Act (29 U.S.C. &sect;&sect; 651 et seq.), the Safe Drinking Water Act (42 U.S.C. &sect;&sect; 300(f) et seq.), all regulations promulgated under any of the
foregoing, all analogous Requirements of Law and Permits and any environmental transfer of ownership notification or approval statutes, including the Industrial Site Recovery Act (N.J. Stat. Ann.
&sect;&sect; 13:1K-6 et seq.). </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>7</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Environmental Liabilities</I></FONT><FONT SIZE=2>" means all Liabilities (including costs of Remedial Actions, natural resource damages and costs and expenses of
investigation and feasibility studies) that may be imposed on, incurred by or asserted against any Group Member as a result of, or related to, any claim, suit, action, investigation, proceeding or
demand by any Person, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law or otherwise, arising under any Environmental Law or in
connection with any environmental, health or safety condition or with any Release and resulting from the ownership, lease, sublease or other operation or occupation of property by any Group Member,
whether on, prior or after the date hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>ERISA</I></FONT><FONT SIZE=2>" means the United States Employee Retirement Income Security Act of 1974. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>ERISA Affiliate</I></FONT><FONT SIZE=2>" means, collectively, any Group Member, and any Person under common control, or treated as a single employer, with any
Group Member, within the meaning of Section&nbsp;414(b), (c), (m)&nbsp;or (o)&nbsp;of the Code. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>ERISA Event</I></FONT><FONT SIZE=2>" means any of the following: (a)&nbsp;a reportable event described in Section&nbsp;4043(b) of ERISA (or, unless the
30-day notice requirement has been duly waived under the applicable regulations, Section&nbsp;4043(c) of ERISA) with respect to a Title IV Plan, (b)&nbsp;the withdrawal of any ERISA
Affiliate from a Title IV Plan subject to Section&nbsp;4063 of ERISA during a plan year in which it was a substantial employer, as defined in Section&nbsp;4001(a)(2) of ERISA, (c)&nbsp;the
complete or partial withdrawal of any ERISA Affiliate from any Multiemployer Plan, (d)&nbsp;with respect to any Multiemployer Plan, the filing of a notice of reorganization, insolvency or
termination (or treatment of a plan amendment as termination) under Section&nbsp;4041A of ERISA, (e)&nbsp;the filing of a notice of intent to terminate a Title IV Plan (or treatment of a plan
amendment as termination) under Section&nbsp;4041 of ERISA, (f)&nbsp;the institution of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC, (g)&nbsp;the failure to make
any required contribution to any Title IV Plan or Multiemployer Plan
when due, (h)&nbsp;the imposition of a lien under Section&nbsp;412 of the Code or Section&nbsp;302 or 4068 of ERISA on any property (or rights to property, whether real or personal) of any ERISA
Affiliate, (i)&nbsp;the failure of a Benefit Plan or any trust thereunder intended to qualify for tax exempt status under Section&nbsp;401 or 501 of the Code or other Requirements of Law to
qualify thereunder and (j)&nbsp;any other event or condition that might reasonably be expected to constitute grounds under Section&nbsp;4042 of ERISA for the termination of, or the appointment of
a trustee to administer, any Title IV Plan or Multiemployer Plan or for the imposition of any liability upon any ERISA Affiliate under Title IV of ERISA other than for PBGC premiums due but not
delinquent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>E-Signature</I></FONT><FONT SIZE=2>" means the process of attaching to or logically associating with an Electronic Transmission an electronic symbol,
encryption, digital signature or process (including the name or an abbreviation of the name of the party transmitting the Electronic Transmission) with the intent to sign, authenticate or accept such
Electronic Transmission. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>E-System</I></FONT><FONT SIZE=2>" means any electronic system, including Intralinks&reg; and any other Internet or extranet-based site,
whether such electronic system is owned, operated or hosted by the Administrative Agent, any of its Related Persons or any other Person, providing for access to data protected by passcodes or other
security system. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Eurodollar Base Rate</I></FONT><FONT SIZE=2>" means, with respect to any Interest Period for any Eurodollar Rate Loan, the rate determined by the Administrative
Agent to be the offered rate for deposits in Dollars for the applicable Interest Period appearing on the Reuters Screen LIBOR01 Page as of 11:00&nbsp;a.m. (London time) on the second full Business
Day next preceding the first day of each Interest Period. In the event that such rate does not appear on the Reuters Screen LIBOR01 Page (or otherwise on the Reuters screen) at such time, the
"</FONT><FONT SIZE=2><I>Eurodollar Base Rate</I></FONT><FONT SIZE=2>" shall be determined by reference to such other page as may replace that page on that service or such other comparable publicly
available service for displaying the offered rate for deposit in Dollars in the London interbank market as may be selected by </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>8</FONT></P>

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<P><FONT SIZE=2>the
Administrative Agent and, in the absence of availability, such other method to determine such offered rate as may be selected by the Administrative Agent in its reasonable discretion. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Eurodollar Rate</I></FONT><FONT SIZE=2>" means, with respect to any Interest Period and for any Eurodollar Rate Loan, an interest rate per annum determined as
the ratio of (a)&nbsp;the Eurodollar Base Rate with respect to such Interest Period for such Eurodollar Rate Loan to (b)&nbsp;the difference between the number one and the Eurodollar Reserve
Requirements with respect to such Interest Period and for such Eurodollar Rate Loan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Eurodollar Rate Loan</I></FONT><FONT SIZE=2>" means any Loan that bears interest based on the Eurodollar Rate. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Eurodollar Reserve Requirements</I></FONT><FONT SIZE=2>" means, with respect to any Interest Period and for any Eurodollar Rate Loan, a rate per annum equal to
the aggregate, without duplication, of the maximum rates (expressed as a decimal number) of reserve requirements in effect 2 Business Days prior to the first day of such Interest Period (including
basic, supplemental, marginal and emergency reserves) under any regulations of the Federal Reserve Board or other Governmental Authority having jurisdiction with respect thereto dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as "eurocurrency liabilities" in Regulation&nbsp;D of the Federal Reserve Board) maintained by a member bank of the United
States Federal Reserve System. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Event of Default</I></FONT><FONT SIZE=2>" has the meaning specified in </FONT><FONT SIZE=2><I>Section&nbsp;9.1</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Excess Cash Flow</I></FONT><FONT SIZE=2>" means, for any period, Consolidated EBITDA of Holdings for such period </FONT> <FONT SIZE=2><I>plus</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>minus</I></FONT><FONT SIZE=2>) reductions
(additions) to Working Capital for such period, </FONT> <FONT SIZE=2><I>minus</I></FONT><FONT SIZE=2>, without duplication, (i)&nbsp;any cash principal payment on the Loans during such period (but only, in the case of payment in respect of
Revolving Loans, to the extent that the Revolving Credit Commitments are permanently reduced by the amount of such payment) including any mandatory prepayments made to the Administrative Agent
pursuant to </FONT><FONT SIZE=2><I>Sections 2.8(b)</I></FONT><FONT SIZE=2> or </FONT><FONT SIZE=2><I>Section&nbsp;2.8(c)</I></FONT><FONT SIZE=2>, (ii)&nbsp;any scheduled cash principal payment
made by Borrower or any of its Subsidiaries during such period on any Capitalized Lease Obligation or other Indebtedness (but only, if such Indebtedness may be reborrowed, to the extent such payment
results in a permanent reduction in commitments thereof), (iii)&nbsp;any Capital Expenditure made by Holdings or any of its Subsidiaries during such period to the extent permitted by this Agreement,
excluding the portion thereof financed with Indebtedness payable over a period in excess of 12&nbsp;months, (iv)&nbsp;the Consolidated Cash Interest Expense of Holdings for such period,
(v)&nbsp;any cash payment made during such period to satisfy obligations for United States federal income taxes or other taxes measured by income, and (vi)&nbsp;the aggregate amount of all fees,
costs or expenses (up to but not exceeding an aggregate amount of $400,000) paid to the holders of the Notes pursuant to the terms of this Agreement or otherwise incurred in connection with the
financing transactions contemplated hereby. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Excluded Foreign Subsidiary</I></FONT><FONT SIZE=2>" means any Subsidiary of Holdings that is not a Domestic Person and in respect of which any of (a)&nbsp;the
pledge of all of the Stock of such Subsidiary as Collateral for the Obligations, (b)&nbsp;the grant by such Subsidiary of a Lien on any of its property as Collateral for any Obligation of Holdings
or any Subsidiary thereof or (c)&nbsp;such Subsidiary incurring Guaranty Obligations with respect to any Obligation of Holdings, Borrower or any Domestic Person would, in the good faith judgment of
Holdings, result in incremental adverse income tax consequences to the Loan Parties and their Subsidiaries, taken as a whole under Section&nbsp;956 of the Code taking into account actual anticipated
repatriation of funds, foreign tax credits and all relevant factors; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that
(x)&nbsp;the Required Lenders and Holdings may agree that, despite the foregoing, any such Subsidiary shall not be an "</FONT><FONT SIZE=2><I>Excluded Foreign Subsidiary</I></FONT><FONT SIZE=2>"
and (y)&nbsp;no such Subsidiary shall be an "</FONT><FONT SIZE=2><I>Excluded Foreign Subsidiary</I></FONT><FONT SIZE=2>" if, with substantially similar tax consequences, such Subsidiary has entered
into any Guaranty Obligations with respect to, such Subsidiary has granted a security interest in any of its property to secure, or more than 66% of the Voting Stock of such Subsidiary was pledged to
secure, directly or indirectly, any Indebtedness (other than the Obligations) of any Loan Party. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>9</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Excluded Tax Payment</I></FONT><FONT SIZE=2>" means the cash tax payment in an amount of up to $1,200,000 made or to be made by Borrower during the Fiscal
Quarter ended March&nbsp;31, 2007 relating to earnings during the Fiscal Year ended December&nbsp;31, 2006. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Facilities</I></FONT><FONT SIZE=2>" means (a)&nbsp;the Term Loan Facility and (b)&nbsp;the Revolving Credit Facility. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Federal Funds Rate</I></FONT><FONT SIZE=2>" means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as determined by the Administrative Agent in its sole
discretion. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Federal Reserve Board</I></FONT><FONT SIZE=2>" means the Board of Governors of the United States Federal Reserve System and any successor thereto. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Fee Letter</I></FONT><FONT SIZE=2>" means the letter agreement from Borrower and addressed to and accepted by Churchill, with respect to certain fees to be paid
from time to time to Churchill as the Administrative Agent and its Related Persons. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Financial Statement</I></FONT><FONT SIZE=2>" means each financial statement delivered pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;4.4</I></FONT><FONT SIZE=2> or </FONT><FONT SIZE=2><I>6.1</I></FONT><FONT SIZE=2>. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Fiscal Quarter</I></FONT><FONT SIZE=2>" means each 3 fiscal month period ending on March&nbsp;31, June&nbsp;30, September&nbsp;30 or December&nbsp;31. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Fiscal Year</I></FONT><FONT SIZE=2>" means the twelve month period ending on December&nbsp;31. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>GAAP</I></FONT><FONT SIZE=2>" means generally accepted accounting principles in the United States of America, as in effect from time to time, set forth in the
opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants, in the statements and pronouncements of the Financial Accounting Standards
Board and in such other statements by such other entity as may be in general use by significant segments of the accounting profession that are applicable to the circumstances as of the date of
determination. Subject to </FONT><FONT SIZE=2><I>Section&nbsp;1.3</I></FONT><FONT SIZE=2>, all references to "</FONT><FONT SIZE=2><I>GAAP</I></FONT><FONT SIZE=2>" shall be to GAAP applied
consistently with the principles used in the preparation of the Financial Statements described in </FONT><FONT SIZE=2><I>Section&nbsp;4.4(a)</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>General Partner</I></FONT><FONT SIZE=2>" means PROS Revenue I, LLC, a Delaware limited liability company. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Governmental Authority</I></FONT><FONT SIZE=2>" means any nation, sovereign or government, any state or other political subdivision thereof, any agency,
authority or instrumentality thereof and any entity or authority exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, including
any central bank, stock exchange, regulatory body, arbitrator, public sector entity, supra-national entity (including the European Union and the European Central Bank) and any
self-regulatory organization (including the National Association of Insurance Commissioners). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Group Members</I></FONT><FONT SIZE=2>" means, collectively, Holdings and each of its Subsidiaries (including Borrower). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Group Members' Accountants</I></FONT><FONT SIZE=2>" means PricewaterhouseCoopers LLC or other nationally-recognized independent registered certified public
accountants acceptable to the Administrative Agent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Guarantor</I></FONT><FONT SIZE=2>" means Holdings, each Subsidiary of Holdings, each Wholly Owned Subsidiary of Borrower that is not an Excluded Foreign
Subsidiary, and each other Person that enters into any Guaranty Obligation with respect to any Obligation of any Loan Party. As of the Closing Date, the Guarantors are: Holdings, General Partner and
Limited Partner. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Guaranty, Pledge and Security Agreement</I></FONT><FONT SIZE=2>" means a guaranty, pledge and security agreement, in substantially the form of </FONT> <FONT SIZE=2><I>Exhibit&nbsp;H</I></FONT><FONT SIZE=2>, among the Administrative Agent,
Borrower and Guarantors from time to time party thereto. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>10</FONT></P>

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<P><FONT SIZE=2><A
NAME="page_og76602_1_11"> </A> </FONT> <FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT SIZE=2><I>Guaranty Obligation</I></FONT><FONT SIZE=2>" means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of such Person for any
Indebtedness, lease, dividend or other obligation (the "</FONT><FONT SIZE=2><I>primary obligation</I></FONT><FONT SIZE=2>") of another Person (the "</FONT><FONT SIZE=2><I>primary
obligor</I></FONT><FONT SIZE=2>"), if the purpose or intent of such Person in incurring such liability, or the economic effect thereof, is to guarantee such primary obligation or provide support,
assurance or comfort to the holder of such primary obligation or to protect or indemnify such holder against loss with respect to such primary obligation, including (a)&nbsp;the direct or indirect
guaranty, endorsement (other than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of any primary
obligation, (b)&nbsp;the incurrence of reimbursement obligations with respect to any letter of credit or bank guarantee in support of any primary obligation, (c)&nbsp;the existence of any Lien, or
any right, contingent or otherwise, to receive a Lien, on the property of such Person securing any part of any primary obligation and (d)&nbsp;any liability of such Person for a primary obligation
through any Contractual Obligation (contingent or otherwise) or other arrangement (i)&nbsp;to purchase, repurchase or otherwise acquire such primary obligation or any security therefor or to provide
funds for the payment or discharge of such primary obligation (whether in the form of a loan, advance, stock purchase, capital contribution or otherwise), (ii)&nbsp;to maintain the solvency, working
capital, equity capital or any balance sheet item, level of income or cash flow, liquidity or financial condition of any primary obligor, (iii)&nbsp;to make take-or-pay or
similar payments, if required, regardless of non-performance by any other party to any Contractual Obligation, (iv)&nbsp;to purchase, sell or lease (as lessor or lessee) any property, or
to purchase or sell services, primarily for the purpose of enabling the primary obligor to satisfy such primary obligation or to protect the holder of such primary obligation against loss or
(v)&nbsp;to supply funds to or in any other manner invest in, such primary obligor (including to pay for property or services irrespective of whether such property is received or such services are
rendered); </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that "</FONT><FONT SIZE=2><I>Guaranty
Obligations</I></FONT><FONT SIZE=2>" shall not include (x)&nbsp;endorsements for collection or deposit in the ordinary course of business and (y)&nbsp;product warranties given in the ordinary
course of business. The outstanding amount of any Guaranty Obligation shall equal the outstanding amount of the primary obligation so guaranteed or otherwise supported or, if lower, the stated maximum
amount for which such Person may be liable under such Guaranty Obligation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Hazardous Material</I></FONT><FONT SIZE=2>" means any substance, material or waste that is classified, regulated or otherwise characterized under any
Environmental Law as hazardous, toxic, a contaminant or a pollutant or by other words of similar meaning or regulatory effect, including petroleum or any fraction thereof, asbestos, polychlorinated
biphenyls and radioactive substances. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Hedging Agreement</I></FONT><FONT SIZE=2>" means any Interest Rate Contract, foreign exchange, swap, option or forward contract, spot, cap, floor or collar
transaction, any other derivative instrument and any other similar speculative transaction and any other similar agreement or arrangement designed to alter the risks of any Person arising from
fluctuations in any underlying variable. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Holdings</I></FONT><FONT SIZE=2>" means PROS Holdings,&nbsp;Inc., a Delaware corporation. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Indebtedness</I></FONT><FONT SIZE=2>" of any Person means, without duplication, any of the following, whether or not matured: (a)&nbsp;all indebtedness for
borrowed money, (b)&nbsp;all obligations evidenced by notes, bonds, debentures or similar instruments, (c)&nbsp;all reimbursement and all obligations with respect to (i)&nbsp;letters of credit,
bank guarantees or bankers' acceptances or (ii)&nbsp;surety, customs, reclamation or performance bonds (in each case not related to judgments or litigation), (d)&nbsp;all obligations to pay the
deferred purchase price of property or services, other than trade payables incurred in the ordinary course of business that are unsecured and not overdue by more than 60&nbsp;days unless being
contested in good faith, (e)&nbsp;all obligations created or arising under any conditional sale or other title retention agreement, regardless of whether the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession or sale of such property, (f)&nbsp;all Capitalized Lease Obligations and the net present value (discounted at the Base
Rate as in effect on the Closing Date) of future rental payments under all synthetic leases, (g)&nbsp;all obligations, whether or not contingent, to purchase, redeem, </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>11</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2>retire,
defease or otherwise acquire for value any of its own Stock or Stock Equivalents (or any Stock or Stock Equivalent of a direct or indirect parent entity thereof) prior to the date that is one
year after the Scheduled Maturity Date, valued at, in the case of redeemable preferred Stock, the greater of the voluntary liquidation preference and the involuntary liquidation preference of such
Stock plus accrued and unpaid dividends, (h)&nbsp;all payments that would be required to be made in respect of any Hedging Agreement in the event of a termination (including an early termination) on
the date of determination, (i)&nbsp;"earnouts" and similar payment obligations, and (j)&nbsp;all Guaranty Obligations for obligations of any other Person constituting Indebtedness of such other
Person; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that the items in each of </FONT><FONT SIZE=2><I>clauses
(a)</I></FONT><FONT SIZE=2> through </FONT><FONT SIZE=2><I>(j)</I></FONT><FONT SIZE=2> above shall constitute "</FONT><FONT SIZE=2><I>Indebtedness</I></FONT><FONT SIZE=2>" of such Person solely to
the extent, directly or indirectly, (x)&nbsp;such Person is liable for any part of any such item, (y)&nbsp;any such item is secured by a Lien on such Person's property or (z)&nbsp;any other
Person has a right, contingent or otherwise, to cause such Person to become liable for any part of any such item or to grant such a Lien. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Indemnified Matter</I></FONT><FONT SIZE=2>" has the meaning specified in </FONT><FONT SIZE=2><I>Section&nbsp;12.4</I></FONT><FONT SIZE=2>. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Indemnitee</I></FONT><FONT SIZE=2>" has the meaning specified in </FONT><FONT SIZE=2><I>Section&nbsp;12.4</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Initial Projections</I></FONT><FONT SIZE=2>" means those financial projections, dated March&nbsp;2, covering the Fiscal Years ending in 2007 through 2011 and
delivered to the Administrative Agent by Borrower prior to the date hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Intellectual Property</I></FONT><FONT SIZE=2>" means all rights, title and interests in or relating to intellectual property and industrial property arising
under any Requirement of Law and all IP Ancillary Rights relating thereto, including all Copyrights, Patents, Trademarks, Internet Domain Names, Trade Secrets and IP Licenses. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Interest Period</I></FONT><FONT SIZE=2>" means, with respect to any Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is made or
converted to a Eurodollar Rate Loan or, if such loan is continued, on the last day of the immediately preceding Interest Period therefor and, in each case, ending 1, 2, 3, 6 or, if available to all
Lenders, 9 or 12&nbsp;months thereafter, as selected by Borrower pursuant hereto; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>,
that (a)&nbsp;if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day, unless the result of such
extension would be to extend such Interest Period into another such Business Day falls in the next calendar month, in which case such Interest Period shall end on the immediately preceding Business
Day, (b)&nbsp;any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a calendar month, (c)&nbsp;Borrower may not select any Interest Period (i)&nbsp;in the case of Revolving Loans, ending after the Scheduled
Maturity Date and (ii)&nbsp;in the case of Term Loans, ending after the Term Loan Maturity Date, (d)&nbsp;Borrower may not select any Interest Period in respect of Loans having an aggregate
principal amount of less than $1,000,000 and (e)&nbsp;there shall be outstanding at any one time no more than 8 Interest Periods. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Interest Rate Contracts</I></FONT><FONT SIZE=2>" means all interest rate swap agreements, interest rate cap agreements, interest rate collar agreements and
interest rate insurance. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Internet Domain Names</I></FONT><FONT SIZE=2>" means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law
in or relating to Internet domain names. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Investment</I></FONT><FONT SIZE=2>" means, with respect to any Person, directly or indirectly, (a)&nbsp;to own, purchase or otherwise acquire, in each case
whether beneficially or otherwise, any investment in, including any interest in, any Security of any other Person (other than any evidence of any Obligation), (b)&nbsp;to purchase or otherwise
acquire, whether in one transaction or in a series of transactions, all or a significant part of the property of any other Person or a business conducted by any other Person or all or substantially
all of the assets constituting the business of a division, branch, brand or other unit operation of any other Person, (c)&nbsp;to incur, or to remain liable under, any Guaranty Obligation for
Indebtedness of any other Person, to assume the Indebtedness of any other Person or to make, hold, </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>12</FONT></P>

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<P><FONT SIZE=2>purchase
or otherwise acquire, in each case directly or indirectly, any deposit, loan, advance, commitment to lend or advance, or other extension of credit (including by deferring or extending the
date of, in each case outside the ordinary course of business, the payment of the purchase price for Sales of property or services to any other Person, to the extent such payment obligation
constitutes Indebtedness of such other Person), excluding deposits with financial institutions available for withdrawal on demand, prepaid expenses, accounts receivable and similar items created in
the ordinary course of business, (d)&nbsp;to make, directly or indirectly, any contribution to the capital of any other Person or (e)&nbsp;to Sell any property for less than fair market value
(including a disposition of cash or Cash Equivalents in exchange for consideration of lesser value); </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that such Investment shall be
valued at the difference between the value of the consideration for such Sale and the fair market value of the
property Sold. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>IP Ancillary Rights</I></FONT><FONT SIZE=2>" means, with respect to any Intellectual Property, as applicable, all foreign counterparts to, and all divisionals,
reversions, continuations, continuations-in-part, reissues, reexaminations, renewals and extensions of, such Intellectual Property and all income, royalties, proceeds and
Liabilities at any time due or payable or asserted under or with respect to any of the foregoing or otherwise with respect to such Intellectual Property, including all rights to sue or recover at law
or in equity for any past, present or future infringement, misappropriation, dilution, violation or other impairment thereof, and, in each case, all rights to obtain any other IP Ancillary Right. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>IP License</I></FONT><FONT SIZE=2>" means all Contractual Obligations (and all related IP Ancillary Rights), whether written or oral, granting any right title
and interest in or relating to any Intellectual Property. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>IRS</I></FONT><FONT SIZE=2>" means the Internal Revenue Service of the United States and any successor thereto. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Issue</I></FONT><FONT SIZE=2>" means, with respect to any Letter of Credit, to issue, extend the expiration date of, renew (including by failure to object to any
automatic renewal on the last day such objection is permitted), increase the face amount of, or reduce or eliminate any scheduled decrease in the face amount of, such Letter of Credit, or to cause any
Person to do any of the foregoing. The terms "</FONT><FONT SIZE=2><I>Issued</I></FONT><FONT SIZE=2>" and "</FONT><FONT SIZE=2><I>Issuance</I></FONT><FONT SIZE=2>" have correlative meanings. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Landlord Waiver</I></FONT><FONT SIZE=2>" means the waiver executed by Houston Community College System as lessor of office space located at ComTech Center, 3100
South Main Street, Houston, Harris County, Texas, in a form reasonably acceptable to the Administrative Agent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>L/C Cash Collateral Account</I></FONT><FONT SIZE=2>" means any Cash Collateral Account (a)&nbsp;specifically designated as such by the applicable Borrower in a
notice to the Administrative Agent and (b)&nbsp;from and after the effectiveness of such notice, not containing any funds other than those required under the Loan Documents to be placed therein. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>L/C Issuer</I></FONT><FONT SIZE=2>" means (a)&nbsp;the Administrative Agent or any of its Affiliates and (b)&nbsp;each Person that hereafter becomes an L/C
Issuer with the approval of, and pursuant to an agreement with and in form and substance satisfactory to, the Administrative Agent and Borrower, in each case in their capacity as L/C Issuers hereunder
and together with their successors. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>L/C Obligations</I></FONT><FONT SIZE=2>" means, for any Letter of Credit at any time, the sum of (a)&nbsp;the L/C Reimbursement Obligations at such time for
such Letter of Credit and (b)&nbsp;the aggregate maximum undrawn face amount of such Letter of Credit outstanding at such time. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>L/C Reimbursement Agreement</I></FONT><FONT SIZE=2>" has the meaning specified in </FONT><FONT SIZE=2><I>Section&nbsp;2.4(a)</I></FONT><FONT SIZE=2>. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>L/C Reimbursement Date</I></FONT><FONT SIZE=2>" has the meaning specified in </FONT><FONT SIZE=2><I>Section&nbsp;2.4(e)</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>L/C Reimbursement Obligation</I></FONT><FONT SIZE=2>" means, for any Letter of Credit, the obligation of Borrower to the L/C Issuer thereof, as and when matured,
to pay all amounts drawn under such Letter of Credit. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>L/C Request</I></FONT><FONT SIZE=2>" has the meaning specified in </FONT><FONT SIZE=2><I>Section&nbsp;2.4(b)</I></FONT><FONT SIZE=2>. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>13</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>L/C Sublimit</I></FONT><FONT SIZE=2>" means $1,000,000. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Lender</I></FONT><FONT SIZE=2>" means, collectively, the Swingline Lender and any other financial institution or other Person that (a)&nbsp;is listed on the
signature pages hereof as a "</FONT><FONT SIZE=2><I>Lender</I></FONT><FONT SIZE=2>" or (b)&nbsp;from time to time becomes a party hereto by execution of an Assignment, in each case together with
its successors. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Letter of Credit</I></FONT><FONT SIZE=2>" means any letter of credit Issued pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;2.4</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Liabilities</I></FONT><FONT SIZE=2>" means all claims, actions, suits, judgments, damages, losses, liability, obligations, responsibilities, fines, penalties,
sanctions, costs, fees, taxes, commissions, charges, disbursements and expenses, in each case of any kind or nature (including interest accrued thereon or as a result thereto and fees, charges and
disbursements of financial, legal and other advisors and consultants), whether joint or several, whether or not indirect, contingent, consequential, actual, punitive, treble or otherwise. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Lien</I></FONT><FONT SIZE=2>" means any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit arrangement, encumbrance, easement, lien
(statutory or other), security interest or other security arrangement and any other preference, priority or preferential arrangement of any kind or nature whatsoever, including any conditional sale
contract or other title retention agreement, the interest of a lessor under a Capital Lease and any synthetic or other financing lease having substantially the same economic effect as any of the
foregoing. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Limited Partner</I></FONT><FONT SIZE=2>" means PROS Revenue II, LLC, a Delaware limited liability company. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Loan</I></FONT><FONT SIZE=2>" means any loan made or deemed made by any Lender hereunder. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Loan Documents</I></FONT><FONT SIZE=2>" means, collectively, this Agreement, any Notes, the Guaranty, Pledge and Security Agreement, any Mortgages, the Control
Agreements, the Fee Letter, the L/C Reimbursement Agreements, the Landlord Waiver, and, when executed, each document executed by a Loan Party and delivered to the Administrative Agent, any Lender or
any L/C Issuer in connection with or pursuant to any of the foregoing or the Obligations, together with any modification of any term, or any waiver with respect to, any of the foregoing. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Loan Party</I></FONT><FONT SIZE=2>" means Borrower and each Guarantor. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Material Adverse Effect</I></FONT><FONT SIZE=2>" means an effect that results in or causes, or could reasonably be expected to result in or cause, a material
adverse change in any of (a)&nbsp;the condition (financial or otherwise), business, performance, operations or property of the Group Members, taken as a whole, (b)&nbsp;the ability of any Loan
Party to perform its obligations under any Loan Document and (c)&nbsp;the validity or enforceability of any Loan Document or the rights and remedies of the Administrative Agent, the Lenders and the
other Secured Parties under any Loan Document. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Material Contract</I></FONT><FONT SIZE=2>" means with respect to any Person, each contract or agreement to which such Person is a party as to which the breach,
nonperformance, cancellation or failure to renew by any party thereto would reasonably be expected to have a Material Adverse Effect. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Material Environmental Liabilities</I></FONT><FONT SIZE=2>" means Environmental Liabilities exceeding $250,000 in the aggregate. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Moody's</I></FONT><FONT SIZE=2>" means Moody's Investors Service,&nbsp;Inc. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Mortgage</I></FONT><FONT SIZE=2>" means any mortgage, deed of trust or other document executed or required herein to be executed by any Loan Party and granting a
security interest over real property in favor of the Administrative Agent as security for the Obligations. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Mortgage Supporting Documents</I></FONT><FONT SIZE=2>" means, with respect to any Mortgage for a parcel of real property, each document (including title policies
or marked-up unconditional insurance binders (in each case, together with copies of all documents referred to therein), maps, ALTA (or TLTA, if applicable) as-built surveys (in
form and as to date that is sufficiently acceptable to the title insurer issuing title </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>14</FONT></P>

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<P><FONT SIZE=2>insurance
to the Administrative Agent for such title insurer to deliver endorsements to such title insurance as reasonably requested by the Administrative Agent), environmental assessments and reports
and evidence regarding recording and payment of fees, insurance premium and taxes) that the Administrative Agent may reasonably request, to create, register, perfect, maintain, evidence the existence,
substance, form or validity of or enforce a valid lien on such parcel of real property in favor of the Administrative Agent for the benefit of the Secured Parties, subject only to such Liens as the
Administrative Agent may approve. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Multiemployer Plan</I></FONT><FONT SIZE=2>" means any multiemployer plan, as defined in Section&nbsp;400l(a)(3) of ERISA, to which any ERISA Affiliate incurs
or otherwise has any obligation or liability, contingent or otherwise. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Net Cash Proceeds</I></FONT><FONT SIZE=2>" means proceeds received in cash from (a)&nbsp;any Sale of, or Property Loss Event with respect to, property, net of
(i)&nbsp;the customary reasonable out-of-pocket cash costs, fees and expenses paid in connection therewith, (ii)&nbsp;taxes paid or reasonably estimated to be payable as a
result thereof and (iii)&nbsp;any amount required to be paid or prepaid on Indebtedness (other than the Obligations and Indebtedness owing to any Group Member) secured by the property subject
thereto or (b)&nbsp;any sale or issuance of Stock or incurrence of Indebtedness, in each case net of brokers', advisors', legal, printing and investment banking fees and other customary reasonable
out-of-pocket underwriting discounts, commissions and other customary reasonable out-of-pocket cash costs, fees and expenses, in each case incurred in
connection with such transaction; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that any such proceeds received by any Subsidiary
of Holdings that is not a Wholly Owned Subsidiary of Holdings shall constitute "</FONT><FONT SIZE=2><I>Net Cash Proceeds</I></FONT><FONT SIZE=2>" only to the extent of the aggregate direct and
indirect beneficial ownership interest of Holdings therein. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Non-Financed Capital Expenditures</I></FONT><FONT SIZE=2>" means Capital Expenditures that are not financed by the incurrence of Indebtedness. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Non-Funding Lender</I></FONT><FONT SIZE=2>" has the meaning specified in </FONT><FONT SIZE=2><I>Section&nbsp;2.2(c)</I></FONT><FONT SIZE=2>. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Non-U.S. Lender Party</I></FONT><FONT SIZE=2>" means each of the Administrative Agent, each Lender, each L/C Issuer, each SPV and each participant,
in each case that is not a Domestic Person. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Note</I></FONT><FONT SIZE=2>" means a promissory note of Borrower, in substantially the form of </FONT><FONT SIZE=2><I>Exhibit&nbsp;B</I></FONT><FONT SIZE=2>,
payable to the order of a Lender in any Facility in a principal amount equal to the amount of such Lender's Commitment under such Facility (or, in the case of the Term Loan Facility, the aggregate
initial principal amount of the Term Loans). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Notice of Borrowing</I></FONT><FONT SIZE=2>" has the meaning specified in </FONT><FONT SIZE=2><I>Section&nbsp;2.2</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Notice of Conversion or Continuation</I></FONT><FONT SIZE=2>" has the meaning specified in </FONT><FONT SIZE=2><I>Section&nbsp;2.10</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Obligations</I></FONT><FONT SIZE=2>" means, with respect to any Loan Party, all amounts, obligations, liabilities, covenants and duties of every type and
description owing by such Loan Party to the Administrative Agent, any Lender, any L/C Issuer, any other Indemnitee, any participant or any SPV arising out of, under, or in connection with, any Loan
Document, whether direct or indirect (regardless of whether acquired by assignment), absolute or contingent, due or to become due, whether liquidated or not, now existing or hereafter arising and
however acquired, and whether or not evidenced by any instrument or for the payment of money, including, without duplication, (a)&nbsp;if such Loan Party is a Borrower, all Loans and L/C Obligations
of such Loan Party, (b)&nbsp;all interest, whether or not accruing after the filing of any petition in bankruptcy or after the commencement of any insolvency, reorganization or similar proceeding,
and whether or not a claim for post-filing or post-petition interest is allowed in any such proceeding, and (c)&nbsp;all other fees, expenses (including reasonable fees,
charges and disbursement of counsel), interest, commissions, charges, costs, disbursements, indemnities and reimbursement of amounts paid and other sums chargeable to such Loan Party under any Loan
Document (including those payable to L/C Issuers as described in </FONT><FONT SIZE=2><I>Section&nbsp;2.11</I></FONT><FONT SIZE=2>). </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>15</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Other Taxes</I></FONT><FONT SIZE=2>" has the meaning specified in </FONT><FONT SIZE=2><I>Section&nbsp;2.17(c)</I></FONT><FONT SIZE=2>. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Parent Guarantors</I></FONT><FONT SIZE=2>" means, collectively, Holdings, General Partner and Limited Partner. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Patents</I></FONT><FONT SIZE=2>" means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or relating
to letters patent and applications therefor. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>PBGC</I></FONT><FONT SIZE=2>" means the United States Pension Benefit Guaranty Corporation and any successor thereto. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Permit</I></FONT><FONT SIZE=2>" means, with respect to any Person, any permit, approval, authorization, license, registration, certificate, concession, grant,
franchise, variance or permission from, and any other Contractual Obligations with, any Governmental Authority, in each case whether or not having the force of law and applicable to or binding upon
such Person or any of its property or to which such Person or any of its property is subject. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Permitted Acquisition</I></FONT><FONT SIZE=2>" means any Proposed Acquisition satisfying each of the following conditions: (a)&nbsp;the aggregate amounts
payable in connection with, and other consideration for (in each case, including all transaction costs and all Indebtedness, liabilities and Guaranty Obligations incurred or assumed in connection
therewith or otherwise reflected in a Consolidated balance sheet of Holdings and the Proposed Acquisition Target), such Proposed Acquisition shall not exceed $2,000,000 individually and $4,000,000
when aggregated with all other Permitted Acquisitions, (b)&nbsp;the Administrative Agent shall have received reasonable advance notice of such Proposed Acquisition including a reasonably detailed
description thereof at least 15&nbsp;days prior to the consummation of such Proposed Acquisition (or such later date as may be agreed by the Administrative Agent) and on or prior to the date of such
Proposed Acquisition, the Administrative Agent shall have received copies of the acquisition agreement and related Contractual Obligations and other documents (including financial information and
analysis, environmental assessments and reports, opinions, certificates and lien searches) and information reasonably requested by the Administrative Agent, (c)&nbsp;as of the date of consummation
of such Proposed Acquisition and after giving effect to all transactions to occur on such date as part of such Proposed Acquisition, all conditions set forth in </FONT><FONT SIZE=2><I>clauses
(i)</I></FONT><FONT SIZE=2> and </FONT><FONT SIZE=2><I>(ii)</I></FONT><FONT SIZE=2> of </FONT><FONT SIZE=2><I>Section&nbsp;3.2(b)</I></FONT><FONT SIZE=2> shall be satisfied or duly waived,
(d)&nbsp;as of the date of consummation of such Proposed Acquisition and after giving effect to all transactions to occur on such date as part of such Proposed Acquisition, there shall be not less
than $2,000,000 Revolver Availability, (e)&nbsp;such Proposed Acquisition shall only involve assets located in the United States and comprising a business, or those assets of a business, of the type
engaged in by Borrower as of the Closing Date, (f)&nbsp;such Proposed Acquisition shall be consensual and shall have been approved by the Proposed Acquisition Target's board of directors,
(g)&nbsp;the Proposed Acquisition Target shall not have incurred an operating loss for the trailing twelve-month period preceding the date of the Proposed Acquisition, as determined based upon the
Target's financial statements for its most recently completed fiscal year and its most recent interim financial period completed within sixty (60)&nbsp;days prior to the date of consummation of such
Proposed Acquisition, (h)&nbsp;at or prior to the closing of any Proposed Acquisition, the Administrative Agent will be granted a first priority perfected Lien in all assets acquired pursuant
thereto or in the assets and Stock of the Target to the extent required under </FONT><FONT SIZE=2><I>Section&nbsp;7.10</I></FONT><FONT SIZE=2>, and Loan Parties shall have executed such documents
and taken such actions as may be reasonably required by the Administrative Agent in connection therewith, (i)&nbsp;as of the date of consummation of such Proposed Acquisition and after giving effect
to all transactions to occur on such date as part of such Proposed Acquisition, Borrower and its Subsidiaries shall continue to be in compliance with the financial covenants set forth in </FONT> <FONT SIZE=2><I>Article&nbsp;V</I></FONT><FONT SIZE=2>,
</FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that the
Consolidated Leverage Ratio of Borrower shall be at least 0.25 below the maximum Consolidated Leverage Ratio permitted as of the applicable date (for example, if the maximum Consolidated Leverage
Ratio then permitted under </FONT><FONT SIZE=2><I>Article&nbsp;V</I></FONT><FONT SIZE=2> is 3.50 to 1.0, then, after giving effect to the Proposed Acquisition, the Consolidated Leverage Ratio could
not greater than 3.25 to </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>16</FONT></P>

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<P><FONT SIZE=2>1.0);
and (j)&nbsp;Borrower shall have delivered to Administrative Agent, in form and substance reasonably satisfactory to Administrative Agent: </FONT></P>

<UL>
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>1.</FONT></DT><DD><FONT SIZE=2>the
Acquisition Pro Forma;
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>2.</FONT></DT><DD><FONT SIZE=2>the
Acquisition Projections; and
<BR><BR></FONT></DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>3.</FONT></DT><DD><FONT SIZE=2>a
certificate of the most senior financial officer of Borrower to the effect that: (w)&nbsp;Borrower will be Solvent upon the consummation of the Proposed Acquisition, (x)&nbsp;the
Acquisition Pro Forma fairly presents in all material respects the financial condition of Borrower and its Subsidiaries (on a consolidated basis) as of the date thereof after giving effect to the
Proposed Acquisition, (y)&nbsp;the Acquisition Projections are good faith estimates based on assumptions believed by management of Borrower to be reasonable at the time made of the future financial
performance of Borrower and its Subsidiaries subsequent to the date thereof based upon the historical performance of Borrower and its Subsidiaries and the Proposed Acquisition Target (provided,
however, that Borrower gives no assurances whatsoever that such projections will be attained) and show that Borrower and its Subsidiaries shall continue to be in compliance with the financial
covenants set forth in </FONT><FONT SIZE=2><I>Article&nbsp;V</I></FONT><FONT SIZE=2> and clause&nbsp;(i) of the definition of Permitted Acquisitions, and (z)&nbsp;Borrower and its Subsidiaries
have completed their due diligence investigation with respect to the Proposed Acquisition Target and such Proposed Acquisition, which investigation was conducted in a manner similar to that which
would have been conducted by a prudent purchaser of a comparable business and the results of which investigation were delivered to the Administrative Agent and the Lenders. </FONT></DD></DL>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Permitted Indebtedness</I></FONT><FONT SIZE=2>" means any Indebtedness of any Group Member that is not prohibited by </FONT> <FONT SIZE=2><I>Section&nbsp;8.1</I></FONT><FONT SIZE=2> or any other provision of any Loan Document. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Permitted Investment</I></FONT><FONT SIZE=2>" means any Investment of any Group Member that is not prohibited by </FONT> <FONT SIZE=2><I>Section&nbsp;8.3</I></FONT><FONT SIZE=2> or any other provision of any Loan Document. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Permitted Lien</I></FONT><FONT SIZE=2>" means any Lien on or with respect to the property of any Group Member that is not prohibited by </FONT> <FONT SIZE=2><I>Section&nbsp;8.2</I></FONT><FONT SIZE=2> or any other provision of any Loan
Document. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Permitted Redemptions</I></FONT><FONT SIZE=2>" means, collectively, the redemption of Holdings' redeemable preferred stock on or before April&nbsp;6, 2007 in
an amount not to exceed $17,618,212 and a subsequent redemption at a date selected by Holdings in an amount not to exceed $1,000. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Permitted Refinancing</I></FONT><FONT SIZE=2>" means Indebtedness constituting a refinancing or extension of Permitted Indebtedness that (a)&nbsp;has an
aggregate outstanding principal amount not greater than the aggregate principal amount of such Permitted Indebtedness outstanding at the time of such refinancing or
extension, (b)&nbsp;has a weighted average maturity (measured as of the date of such refinancing or extension) and maturity no shorter than that of such Permitted Indebtedness, (c)&nbsp;is not
secured by any property or any Lien other than those securing such Permitted Indebtedness, (d)&nbsp;is subordinated to the Obligations on terms no less favorable (in the reasonable judgment of the
Administrative Agent) to the holders of the Obligations as the Indebtedness being refinanced or extended and (e)&nbsp;is otherwise on terms no less favorable to the Group Members, taken as a whole,
than those of such Permitted Indebtedness; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that, notwithstanding the foregoing,
(x)&nbsp;the terms of such Permitted Indebtedness may be modified as part of such Permitted Refinancing if such modification would have been permitted pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;8.11</I></FONT><FONT SIZE=2> and (y)&nbsp;no
Guaranty Obligation for such Indebtedness shall constitute part of such Permitted Refinancing unless similar
Guaranty Obligations with respect to such Permitted Indebtedness existed and constituted Permitted Indebtedness prior to such refinancing or extension. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Permitted Reinvestment</I></FONT><FONT SIZE=2>" means, with respect to the Net Cash Proceeds received by any Group Member from any Sale or Property Loss Event,
to acquire (or make Capital Expenditures to finance </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>17</FONT></P>

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<P><FONT SIZE=2>the
acquisition, repair, improvement or construction of), to the extent otherwise permitted hereunder, property useful in the business of Borrower or any of its Subsidiaries or, if such Property Loss
Event involves loss or damage to property, to repair such loss or damage. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Person</I></FONT><FONT SIZE=2>" means any individual, partnership, corporation (including a business trust and a public benefit corporation), joint stock
company, estate, association, firm, enterprise, trust, limited liability company, unincorporated association, joint venture and any other entity or Governmental Authority. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Primary Syndication</I></FONT><FONT SIZE=2>" means the assignment by Churchill of Commitments to one or more Lenders such that the amount of Churchill's total
Commitment does not exceed $15,000,000. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Pro Forma Balance Sheet</I></FONT><FONT SIZE=2>" has the meaning specified in </FONT><FONT SIZE=2><I>Section&nbsp;4.4(d)</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Pro Forma Basis</I></FONT><FONT SIZE=2>" means, with respect to any determination for any period and any Pro Forma Transaction, that such determination shall be
made by giving </FONT><FONT SIZE=2><I>pro forma</I></FONT><FONT SIZE=2> effect to each such Pro Forma Transaction, as if each such Pro Forma Transaction had been consummated on the first day of such
period, based on historical results accounted for in accordance with GAAP and, to the extent applicable, reasonable assumptions that are specified in detail in the relevant Compliance Certificate,
Financial Statement or other document provided to the Administrative Agent or any Lender in connection herewith in accordance with Regulation&nbsp;S-X of the Securities Act of 1933. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Pro Forma Transaction</I></FONT><FONT SIZE=2>" means any transaction consummated as part of any Permitted Acquisition, together with each other transaction
relating thereto and consummated in connection therewith, including any incurrence or repayment of Indebtedness. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Projections</I></FONT><FONT SIZE=2>" means, collectively, the Initial Projections and any document delivered pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;6.1(f)</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Property Loss Event</I></FONT><FONT SIZE=2>" means, with respect to any property, any loss of or damage to such property or any taking of such property or
condemnation thereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Proposed Acquisition</I></FONT><FONT SIZE=2>" means (a)&nbsp;any proposed acquisition that is consensual and approved by the board of directors of the
applicable Proposed Acquisition Target, of all or substantially all of the assets or Stock of such Proposed Acquisition Target by Borrower or any Subsidiary (that is a Loan Party) of Borrower (or by
Holdings to the extent such assets and Stock are transferred to Borrower or any Subsidiary (that is a Loan Party) of Borrower contemporaneously with such acquisition) or (b)&nbsp;any proposed merger
of any Proposed Acquisition Target with or into Borrower or any Subsidiary (that is a Loan Party) of Borrower (and, in the case of a merger with Borrower, with Borrower being the surviving
corporation). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Proposed Acquisition Target</I></FONT><FONT SIZE=2>" means any Person or any brand, line of business, division, branch, operating division or other unit
operation of any Person. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Pro Rata Outstandings</I></FONT><FONT SIZE=2>", of any Lender at any time, means (a)&nbsp;in the case of the Term Loan Facility, the outstanding principal
amount of the Term Loans owing to such Lender and (b)&nbsp;in the case of the Revolving Credit Facility, the sum of (i)&nbsp;the outstanding principal amount of Revolving Loans owing to such
Lender and (ii)&nbsp;the amount of the participation of such Lender in the L/C Obligations outstanding with respect to all Letters of Credit. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Pro Rata Share</I></FONT><FONT SIZE=2>" means, with respect to any Lender and any Facility or Facilities at any time, the percentage obtained by dividing
(a)&nbsp;the sum of the Commitments (or, if such Commitments in any such Facility are terminated, the Pro Rata Outstandings therein) of such Lender then in effect under such Facilities by
(b)&nbsp;the sum of the Commitments (or, if such Commitments in any such Facility are terminated, the Pro Rata Outstandings therein) of all Lenders then in effect under such Facilities; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>,
</FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that, if there are no Commitments and no Pro Rata Outstandings in any of such
Facilities, such Lender's Pro Rata Share in such Facilities shall be determined based on the Pro Rata </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>18</FONT></P>

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<P><FONT SIZE=2>Share
in such Facilities most recently in effect, after giving effect to any subsequent assignment and any subsequent non-pro rata payments of any Lender pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;2.18</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Register</I></FONT><FONT SIZE=2>" has the meaning specified in </FONT><FONT SIZE=2><I>Section&nbsp;2.14(b)</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Reinvestment Prepayment Amount</I></FONT><FONT SIZE=2>" means, with respect to any Net Cash Proceeds received by any Group Member and on the Reinvestment
Prepayment Date therefor, the amount of such Net Cash Proceeds </FONT><FONT SIZE=2><I>less</I></FONT><FONT SIZE=2> any amount actually paid by any Group Member to make Permitted Reinvestments with
such Net Cash Proceeds pursuant to a Contractual Obligation entered into prior to such Reinvestment Prepayment Date with any Person that is not an Affiliate of Borrower. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Reinvestment Prepayment Date</I></FONT><FONT SIZE=2>" means, with respect to any portion of any Net Cash Proceeds received by any Group Member from any Sale or
Loss Event, the earliest of (a)&nbsp;the 180<SUP>th</SUP> day after the completion of the portion of such Sale or Property Loss Event corresponding to such Net Cash Proceeds, (b)&nbsp;the date
that is 5 Business Days after the date on which Borrower shall have notified the Administrative Agent of the determination of the applicable Group Member not to make Permitted Reinvestments with such
Net Cash Proceeds, (c)&nbsp;the occurrence of any Event of Default set forth in </FONT><FONT SIZE=2><I>Section&nbsp;9.1(e)(ii)</I></FONT><FONT SIZE=2> and (d)&nbsp;5 Business Days after the
delivery of a notice by the Administrative Agent or the Required Lenders to such Group Member during the continuance of any other Event of Default. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Related Person</I></FONT><FONT SIZE=2>" means, with respect to any Person, each Affiliate of such Person and each director, officer, employee, agent, trustee,
representative, attorney, accountant and each insurance, environmental, legal, financial and other advisor (including those retained in connection with the satisfaction or attempted satisfaction of
any condition set forth in </FONT><FONT SIZE=2><I>Article&nbsp;III</I></FONT><FONT SIZE=2>) and other consultants and agents of or to such Person or any of its Affiliates, together with, if such
Person is the Administrative Agent, each other Person or individual designated, nominated or otherwise mandated by or helping the Administrative Agent pursuant to and in accordance with </FONT> <FONT SIZE=2><I>Section&nbsp;11.4</I></FONT><FONT
SIZE=2> or any comparable provision of any Loan Document. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Release</I></FONT><FONT SIZE=2>" means any release, threatened release, spill, emission, leaking, pumping, pouring, emitting, emptying, escape, injection,
deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous Material into or through the environment. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Remedial Action</I></FONT><FONT SIZE=2>" means all actions required to (a)&nbsp;clean up, remove, treat or in any other way address any Hazardous Material in
the indoor or outdoor environment, (b)&nbsp;prevent or minimize any Release so that a Hazardous Material does not migrate or endanger or threaten to endanger public health or welfare or the indoor
or outdoor environment or (c)&nbsp;perform pre-remedial studies and investigations and post-remedial monitoring and care with respect to any Hazardous Material. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Required Lenders</I></FONT><FONT SIZE=2>" means, at any time, Lenders having at such time at least 51% of the sum of the aggregate Revolving Credit Commitments
(or, if such Commitments are terminated, the sum of the amounts of the participations in Swing Loans, the principal amount of unparticipated portions of the Swing Loans and the Pro Rata Outstandings
in the Revolving Credit Facility) and Term Loan Commitments (or, if such Commitments are terminated, the Pro Rata Outstandings in the Term Loan Facility) then in effect, ignoring, in such calculation,
the amounts held by any Non-Funding Lender; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that if at any time there are
only two (2)&nbsp;Lenders, then "</FONT><FONT SIZE=2><I>Required Lenders</I></FONT><FONT SIZE=2>" shall mean each of the Lenders; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that each
Lender and its Approved Funds and Affiliates shall be deemed to be a single Lender for all purposes of this definition. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Required Revolving Credit Lenders</I></FONT><FONT SIZE=2>" means, at any time, Lenders having at such time at least 51% of the aggregate Revolving Credit
Commitments (or, if such Commitments are terminated, the sum of the amounts of the participations in Swing Loans, the principal amount of the unparticipated portions of the Swing Loans and the Pro
Rata Outstandings in the Revolving Credit Facility) then in effect, ignoring, in such calculation, the amounts held by any Non-Funding Lender; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT
SIZE=2>, that if at any time there are only two (2)&nbsp;Revolving Credit Lenders, then
"</FONT><FONT SIZE=2><I>Required Revolving Credit Lenders</I></FONT><FONT SIZE=2>" </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>19</FONT></P>

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<P><FONT SIZE=2>shall
mean each of the Revolving Credit Lenders; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that each Lender and its Approved Funds and Affiliates shall be deemed to be a single Lender
for all purposes of this definition. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Required Term Loan Lenders</I></FONT><FONT SIZE=2>" means, at any time, Lenders having at such time at least 51% of the aggregate Term Loan Commitments (or, if
such Commitments are terminated, the Pro Rata Outstandings in the Term Loan Facility) then in effect, ignoring, in such calculation, the Commitments and Pro Rata Outstandings of any
Non-Funding Lender; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that if at any time there are only two
(2)&nbsp;Term Loan Lenders, then "</FONT><FONT SIZE=2><I>Required Term Loan Lenders</I></FONT><FONT SIZE=2>" shall mean each of the Term Loan Lenders; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that each Lender and its Approved Funds
and Affiliates shall be deemed to be a single Lender for all purposes of this definition. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Requirements of Law</I></FONT><FONT SIZE=2>" means, with respect to any Person, collectively, the common law and all federal, state, local, foreign,
multinational or international laws, statutes, codes, treaties, standards, rules and regulations, guidelines, ordinances, orders, judgments, writs, injunctions, decrees (including administrative or
judicial precedents or authorities) and the interpretation or administration thereof by, and other determinations, directives, requirements or requests of, any Governmental Authority, in each case
whether or not having the force of law and that are applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Responsible Officer</I></FONT><FONT SIZE=2>" means, with respect to any Person, any of the president, chief executive officer, treasurer, assistant treasurer,
controller, managing member or general partner of such Person but, in any event, with respect to financial matters, any such officer that is responsible for preparing the Financial Statements
delivered hereunder and, with respect to the Corporate Chart and other documents delivered pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;6.1(e)</I></FONT><FONT SIZE=2>, documents delivered on the
Closing Date and documents delivered pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;7.10</I></FONT><FONT SIZE=2>, the secretary or assistant secretary of such Person or any other officer
responsible for maintaining the corporate and similar records of such Person. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Restricted Payment</I></FONT><FONT SIZE=2>" means (a)&nbsp;any dividend, return of capital, distribution or any other payment or Sale of property for less than
fair market value, whether direct or indirect (including through the use of Hedging Agreements, the making, repayment, cancellation or forgiveness of Indebtedness and similar Contractual Obligations)
and whether in cash, Securities or other property, on account of any Stock or Stock Equivalent of any Group Member, in each case now or hereafter outstanding, including with respect to a claim for
rescission of a Sale of such Stock or Stock Equivalent, (b)&nbsp;any redemption, retirement, termination, defeasance, cancellation, purchase or other acquisition for value, whether direct or
indirect (including through the use of Hedging Agreements, the making, repayment, cancellation or forgiveness of Indebtedness and similar Contractual Obligations), of any Stock or Stock Equivalent of
any Group Member or of any direct or indirect parent entity of Borrower, now or hereafter outstanding, and any payment or other transfer setting aside funds for any such redemption, retirement,
termination, cancellation, purchase or other acquisition, whether directly or indirectly and whether to a sinking fund, a similar fund or otherwise and (c)&nbsp;any payment of a consulting or
management fee (or other fee of a similar nature) or out-of-pocket expenses in connection therewith by any Group Member to any holder of Stock of such Group Member or its
Affiliates. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Revolver Availability</I></FONT><FONT SIZE=2>" means, as of any date of determination, the amount by which the then effective aggregate Revolving Credit
Commitments exceeds the aggregate Revolving Credit Outstandings at such time. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Revolving Credit Commitment</I></FONT><FONT SIZE=2>" means, with respect to each Revolving Credit Lender, the commitment of such Lender to make Revolving Loans
and acquire interests in other Revolving Credit Outstandings, which commitment is in the amount set forth opposite such Lender's name on </FONT> <FONT SIZE=2><I>Schedule&nbsp;I</I></FONT><FONT SIZE=2> under the caption "</FONT><FONT
SIZE=2><I>Revolving Credit Commitment</I></FONT><FONT SIZE=2>", as amended to reflect Assignments and
as such amount may be reduced pursuant to this Agreement. The aggregate amount of the Revolving Credit Commitments on the date hereof equals $8,000,000. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>20</FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT SIZE=2><I>Revolving Credit Facility</I></FONT><FONT SIZE=2>" means the Revolving Credit Commitments and the provisions herein related to the Revolving Loans, Swing Loans
and Letters of Credit. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Revolving Credit Lender</I></FONT><FONT SIZE=2>" means each Lender that has a Revolving Credit Commitment, holds a Revolving Loan or participates in any Swing
Loan or Letter of Credit. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Revolving Credit Outstandings</I></FONT><FONT SIZE=2>" means, at any time, the sum of, in each case to the extent outstanding at such time, (a)&nbsp;the
aggregate principal amount of the Revolving Loans and Swing Loans and (b)&nbsp;the L/C Obligations for all Letters of Credit. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Revolving Credit Termination Date</I></FONT><FONT SIZE=2>" shall mean the earliest of (a)&nbsp;the Scheduled Maturity Date, (b)&nbsp;the date of termination
of the Revolving Credit Commitments pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;2.5</I></FONT><FONT SIZE=2> or </FONT><FONT SIZE=2><I>9.2</I></FONT><FONT SIZE=2> and (c)&nbsp;the date on
which the Obligations become due and payable pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;9.2</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Revolving Loan</I></FONT><FONT SIZE=2>" has the meaning specified in </FONT><FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Rollover Amount</I></FONT><FONT SIZE=2>" has the meaning specified in Section&nbsp;5.4(b). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>S&amp;P</I></FONT><FONT SIZE=2>" means Standard&nbsp;&amp; Poor's Rating Services. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Sale and Leaseback Transaction</I></FONT><FONT SIZE=2>" means, with respect to any Person (the "</FONT><FONT SIZE=2><I>obligor</I></FONT><FONT SIZE=2>"), any
Contractual Obligation or other arrangement with any other Person (the "</FONT><FONT SIZE=2><I>counterparty</I></FONT><FONT SIZE=2>") consisting of a lease by such obligor of any property that,
directly or indirectly, has been or is to be Sold by the obligor to such counterparty or to any other Person to whom funds have been advanced by such counterparty based on a Lien on, or an assignment
of, such property or any obligations of such obligor under such lease. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Scheduled Maturity Date</I></FONT><FONT SIZE=2>" means the fifth anniversary of the Closing Date. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Secured Parties</I></FONT><FONT SIZE=2>" means the Lenders, the L/C Issuers, the Administrative Agent, each other Indemnitee and any other holder of any
Obligation of any Loan Party. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Security</I></FONT><FONT SIZE=2>" means all Stock, Stock Equivalents, voting trust certificates, bonds, debentures, instruments and other evidence of
Indebtedness, whether or not secured, convertible or subordinated, all certificates of interest, share or participation in, all certificates for the acquisition of, and all warrants, options and other
rights to acquire, any Security. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Sell</I></FONT><FONT SIZE=2>" means, with respect to any property, to sell, convey, transfer, assign, license, lease or otherwise dispose of, any interest
therein or to permit any Person to acquire any such interest, including, in each case, through a Sale and Leaseback Transaction or through a sale, factoring at maturity, collection of or other
disposal, with or without recourse, of any notes or accounts receivable. Conjugated forms thereof and the noun "</FONT><FONT SIZE=2><I>Sale</I></FONT><FONT SIZE=2>" have correlative meanings. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Solvent</I></FONT><FONT SIZE=2>" means, with respect to any Person as of any date of determination, that, as of such date, on a Consolidated basis,
(a)&nbsp;such Person is able to pay all liabilities of such Person as such liabilities mature and (b)&nbsp;such Person does not have unreasonably small capital for the normal obligations
reasonably foreseeable in a business of its size and in light of its contemplated business operations. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities
shall be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Specified Dividend</I></FONT><FONT SIZE=2>" means a distribution or distributions to be made (a)&nbsp;by Borrower to General Partner and Limited Partner,
(b)&nbsp;by General Partner and Limited Partner to Holdings, and (c)&nbsp;by Holdings (i)&nbsp;to be paid as a ratable dividend by Holdings to the holders of Stock in an aggregate amount up to
but not exceeding $41,600,000, which will occur on or before March&nbsp;31, 2007, and (ii)&nbsp;to fund the Permitted Redemptions. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>21</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Sponsor Group</I></FONT><FONT SIZE=2>" means, collectively, JMI Equity Fund III, L.P., TA / Advent VIII, L.P., Advent Atlantic and Pacific III, L.P., TA
Executive Fund, L.L.C., and TA Venture Investors, L.P. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>SPV</I></FONT><FONT SIZE=2>" means any special purpose funding vehicle identified as such in a writing by any Lender to the Administrative Agent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Stock</I></FONT><FONT SIZE=2>" means all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial,
partnership or membership interests, joint venture interests, participations or other ownership or profit interests in or equivalents (regardless of how designated) of or in a Person (other than an
individual), whether voting or non-voting. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Stock Equivalents</I></FONT><FONT SIZE=2>" means all securities convertible into or exchangeable for Stock or any other Stock Equivalent and all warrants,
options or other rights to purchase, subscribe for or otherwise acquire any Stock or any other Stock Equivalent, whether or not presently convertible, exchangeable or exercisable. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Subordinated Debt</I></FONT><FONT SIZE=2>" means any Indebtedness that is subordinated to the payment in full of the Obligations on terms and conditions
satisfactory to the Administrative Agent and otherwise satisfactory to the Administrative Agent. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Subsidiary</I></FONT><FONT SIZE=2>" means, with respect to any Person, any corporation, partnership, joint venture, limited liability company, association or
other entity, the management of which is, directly or indirectly, controlled by, or of which an aggregate of more than 50% of the outstanding Voting Stock is, at the time, owned or controlled directly
or indirectly by, such Person or one or more Subsidiaries of such Person. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Substitute Lender</I></FONT><FONT SIZE=2>" has the meaning specified in </FONT><FONT SIZE=2><I>Section&nbsp;2.18(a)</I></FONT><FONT SIZE=2>. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>SWDA</I></FONT><FONT SIZE=2>" means the Solid Waste Disposal Act (42 U.S.C. &sect;&sect; 6901 et seq.). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Swingline Commitment</I></FONT><FONT SIZE=2>" means $500,000. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Swingline Lender</I></FONT><FONT SIZE=2>" means, each in its capacity as Swingline Lender hereunder, Churchill Financial Cayman&nbsp;Ltd., by its agent,
Churchill, or, upon the resignation of Churchill as Administrative Agent hereunder, any Lender (or Affiliate or Approved Fund of any Lender) that agrees, with the approval of the Administrative Agent
(or, if there is no such successor Administrative Agent, the Required Lenders) and Borrower, to act as the Swingline Lender hereunder. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Swingline Request</I></FONT><FONT SIZE=2>" has the meaning specified in </FONT><FONT SIZE=2><I>Section&nbsp;2.3(b)</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Swing Loan</I></FONT><FONT SIZE=2>" has the meaning specified in </FONT><FONT SIZE=2><I>Section&nbsp;2.3</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Tax Affiliate</I></FONT><FONT SIZE=2>" means, (a)&nbsp;each Group Member and (b)&nbsp;any Affiliate of any Group Member with which such Group Member files or
is eligible to file consolidated, combined or unitary tax returns. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Tax Return</I></FONT><FONT SIZE=2>" has the meaning specified in </FONT><FONT SIZE=2><I>Section&nbsp;4.8</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Taxes</I></FONT><FONT SIZE=2>" has the meaning specified in </FONT><FONT SIZE=2><I>Section&nbsp;2.17(a)</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Term Loan</I></FONT><FONT SIZE=2>" has the meaning specified in </FONT><FONT SIZE=2><I>Section&nbsp;2.1(b)</I></FONT><FONT SIZE=2>. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Term Loan Commitment</I></FONT><FONT SIZE=2>" means, with respect to each Term Loan Lender, the commitment of such Lender to make Term Loans to Borrower, which
commitment is in the amount set forth opposite such Lender's name on </FONT><FONT SIZE=2><I>Schedule&nbsp;I</I></FONT><FONT SIZE=2> under the caption "</FONT><FONT SIZE=2><I>Term Loan
Commitment</I></FONT><FONT SIZE=2>", as amended to reflect Assignments and as such amount may be reduced pursuant to this Agreement. The aggregate amount of the Term Loan Commitments on the date
hereof equals $20,000,000. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Term Loan Facility</I></FONT><FONT SIZE=2>" means the Term Loan Commitments and the provisions herein related to the Term Loans. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>22</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Term Loan Lender</I></FONT><FONT SIZE=2>" means each Lender that has a Term Loan Commitment or that holds a Term Loan. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Title IV Plan</I></FONT><FONT SIZE=2>" means a pension plan subject to Title IV of ERISA, other than a Multiemployer Plan, to which any ERISA Affiliate incurs or
otherwise has any obligation or liability, contingent or otherwise. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Trademarks</I></FONT><FONT SIZE=2>" means all rights, title and interests (and all related IP Ancillary Rights) arising under any Requirement of Law in or
relating to trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers and, in each
case, all goodwill associated therewith, all registrations and recordations thereof and all applications in connection therewith. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Trade Secrets</I></FONT><FONT SIZE=2>" means all right, title and interest (and all related IP Ancillary Rights) arising under any Requirement of Law in or
relating to trade secrets. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>UCC</I></FONT><FONT SIZE=2>" means the Uniform Commercial Code of any applicable jurisdiction and, if the applicable jurisdiction shall not have any Uniform
Commercial Code, the Uniform Commercial Code as in effect in the State of New York. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>United States</I></FONT><FONT SIZE=2>" means the United States of America. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Unused Commitment Fee</I></FONT><FONT SIZE=2>" has the meaning specified in </FONT><FONT SIZE=2><I>Section&nbsp;2.11</I></FONT><FONT SIZE=2>. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>U.S. Lender Party</I></FONT><FONT SIZE=2>" means each of the Administrative Agent, each Lender, each L/C Issuer, each SPV and each participant, in each case that
is a Domestic Person. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Voting Stock</I></FONT><FONT SIZE=2>" means Stock of any Person having ordinary power to vote in the election of members of the board of directors, managers,
trustees or other controlling Persons, of such Person (irrespective of whether, at the time, Stock of any other class or classes of such entity shall have or might have voting power by reason of the
occurrence of any contingency). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Wholly Owned Subsidiary</I></FONT><FONT SIZE=2>" of any Person means any Subsidiary of such Person, all of the Stock of which (other than nominal holdings and
director's qualifying shares) is owned by such Person, either directly or through one or more Wholly Owned Subsidiaries of such Person. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Withdrawal Liability</I></FONT><FONT SIZE=2>" means, at any time, any liability incurred (whether or not assessed) by any ERISA Affiliate and not yet satisfied
or paid in full at such time with respect to any Multiemployer Plan pursuant to Section&nbsp;4201 of ERISA. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Working Capital"</I></FONT><FONT SIZE=2> means, as at any date of determination and in conformity with GAAP, the excess, if any, of (i)&nbsp;Borrower's
Consolidated current assets, except cash and Cash Equivalents, </FONT><FONT SIZE=2><I>over</I></FONT><FONT SIZE=2> (ii)&nbsp;Borrower's Consolidated current liabilities, except current maturities
of Indebtedness due within 12&nbsp;months of the date of determination. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;1.2&nbsp;&nbsp;&nbsp;&nbsp;UCC Terms.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The following terms have the meanings given to them in the applicable UCC:
"</FONT><FONT SIZE=2><I>account</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>commodity account</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>commodity contract</I></FONT><FONT SIZE=2>",
"</FONT><FONT SIZE=2><I>commodity intermediary</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>deposit account</I></FONT><FONT SIZE=2>",
"</FONT><FONT SIZE=2><I>entitlement holder</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>entitlement order</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>equipment</I></FONT><FONT SIZE=2>",
"</FONT><FONT SIZE=2><I>financial asset</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>general intangible</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>goods</I></FONT><FONT SIZE=2>",
"</FONT><FONT SIZE=2><I>instruments</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>inventory</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>securities account</I></FONT><FONT SIZE=2>",
"</FONT><FONT SIZE=2><I>securities intermediary</I></FONT><FONT SIZE=2>" and "</FONT><FONT SIZE=2><I>security entitlement</I></FONT><FONT SIZE=2>". </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;1.3&nbsp;&nbsp;&nbsp;&nbsp;Accounting Terms and Principles.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT> <FONT SIZE=2><I>GAAP</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;All accounting determinations required
to be made pursuant hereto shall, unless expressly otherwise provided herein, be made in
accordance with GAAP. No change in the accounting principles used in the preparation of any Financial Statement hereafter adopted by Borrower shall be given effect if such change would affect a
calculation that measures compliance with any provision of </FONT><FONT SIZE=2><I>Article&nbsp;V</I></FONT><FONT SIZE=2> or </FONT><FONT SIZE=2><I>VIII</I></FONT><FONT SIZE=2> unless Borrower, the
Administrative Agent and the Required Lenders agree to modify such provisions to reflect such changes in GAAP and, </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>23</FONT></P>

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<P><FONT SIZE=2>unless
such provisions are modified, all Financial Statements, Compliance Certificates and similar documents provided hereunder shall be provided together with a reconciliation between the
calculations and amounts set forth therein before and after giving effect to such change in GAAP. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Pro Forma.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;All components of financial calculations made to determine compliance with </FONT> <FONT SIZE=2><I>Article&nbsp;V</I></FONT><FONT SIZE=2> shall be adjusted on
a Pro Forma Basis to include or exclude, as the case may be, without duplication, such components of such
calculations attributable to any Pro Forma Transaction consummated after the first day of the applicable period of determination and prior to the end of such period, as determined in good faith by
Borrower based on assumptions expressed therein and that were reasonable based on the information available to Borrower at the time of preparation of the Compliance Certificate setting forth such
calculations. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;1.4&nbsp;&nbsp;&nbsp;&nbsp;Payments.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Administrative Agent may set up standards and procedures to determine or
redetermine the equivalent in Dollars of any amount expressed in any currency other than Dollars and otherwise may, but shall not be obligated to, rely on any determination made by any Loan Party or
any L/C Issuer. Any such determination or redetermination by the Administrative Agent shall be conclusive and binding for all purposes, absent manifest error. No determination or redetermination by
any Secured Party or Loan Party and no other currency conversion shall change or release any obligation of any Loan Party or of any Secured Party (other than the Administrative Agent and its Related
Persons) under any Loan Document, each of which agrees to pay separately for any shortfall remaining after any conversion and payment of the amount as converted. The Administrative Agent may round up
or down, and may set up appropriate mechanisms to round up or down, any amount hereunder to nearest higher or lower amounts and may determine reasonable de minimis payment thresholds. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;1.5&nbsp;&nbsp;&nbsp;&nbsp;Interpretation.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT><FONT SIZE=2><I>Certain
Terms</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Except as set forth in any Loan Document, all accounting terms not specifically defined herein shall be construed in accordance with GAAP (except for the
term "</FONT><FONT SIZE=2><I>property</I></FONT><FONT SIZE=2>", which shall be interpreted as broadly as possible, including, in any case, cash, Securities, other assets, rights under Contractual
Obligations and Permits and any right or interest in any property). The terms "</FONT><FONT SIZE=2><I>herein</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>hereof</I></FONT><FONT SIZE=2>" and
similar terms refer to this Agreement as a whole. In the computation of periods of time from a specified date to a later specified date in any Loan Document, the terms
"</FONT><FONT SIZE=2><I>from</I></FONT><FONT SIZE=2>" means "from and including" and the words "</FONT><FONT SIZE=2><I>to</I></FONT><FONT SIZE=2>" and
"</FONT><FONT SIZE=2><I>until</I></FONT><FONT SIZE=2>" each mean "to but excluding" and the word "</FONT><FONT SIZE=2><I>through</I></FONT><FONT SIZE=2>" means "to and including." In any other case,
the term "</FONT><FONT SIZE=2><I>including</I></FONT><FONT SIZE=2>"
when used in any Loan Document means "including without limitation." The term "</FONT><FONT SIZE=2><I>documents</I></FONT><FONT SIZE=2>" means all writings, however evidenced and whether in physical
or electronic form, including all documents, instruments, agreements, notices, demands, certificates, forms, financial statements, opinions and reports. The term
"</FONT><FONT SIZE=2><I>incur</I></FONT><FONT SIZE=2>" means incur, create, make, issue, assume or otherwise become directly or indirectly liable in respect of or responsible for, in each case
whether directly or indirectly, and the terms "incurrence" and "incurred" and similar derivatives shall have correlative meanings. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Certain References.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Unless otherwise expressly indicated, references (i)&nbsp;in this Agreement to an
Exhibit, Schedule, Article, Section or clause refer to the appropriate Exhibit or Schedule to, or Article, Section or clause in, this Agreement and (ii)&nbsp;in any Loan Document, to (A)&nbsp;any
agreement shall include, without limitation, all exhibits, schedules, appendixes and annexes to such agreement and, unless the prior consent of any Secured Party required therefor is not obtained, any
modification, amendment, restatement or amendment and restatement to any term of such agreement, (B)&nbsp;any statute shall be to such statute as modified from time to time and to any successor
legislation thereto, in each case as in effect at the time any such reference is operative and (C)&nbsp;any time of day shall be a reference to New York time. Titles of articles, sections, clauses,
exhibits, schedules and annexes contained in any Loan Document are without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto. Unless
otherwise expressly indicated, </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>24</FONT></P>

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<P><FONT SIZE=2>the
meaning of any term defined (including by reference) in any Loan Document shall be equally applicable to both the singular and plural forms of such term. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="oi76602_article_ii_the_facilities"> </A>
<A NAME="toc_oi76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE II    <BR>    <BR>    THE FACILITIES    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.1&nbsp;&nbsp;&nbsp;&nbsp;The Commitments.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT><FONT SIZE=2><I>Revolving Credit
Commitments</I></FONT><FONT SIZE=2>. On the terms and subject to the conditions contained in this Agreement, each Revolving Credit Lender, severally but not jointly, agrees to make loans in Dollars
(each a "</FONT><FONT SIZE=2><I>Revolving Loan</I></FONT><FONT SIZE=2>") to Borrower from time to time on any Business Day during the period from the date hereof until the Revolving Credit
Termination Date in an aggregate principal amount at any time outstanding for all such loans by such Lender not to exceed such Lender's Revolving Credit Commitment; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT
SIZE=2><I>however</I></FONT><FONT SIZE=2>, that (i)&nbsp;at no time shall any Revolving Credit Lender be obligated to make a
Revolving Loan in excess of such Lender's Pro Rata Share of the amount by which the then effective Revolving Credit Commitments exceeds the aggregate Revolving Credit Outstandings at such time and
(ii)&nbsp;none of the Revolving Credit Commitments (including Letters of Credit) may be utilized on the Closing Date. Within the limits set forth in the first sentence of this </FONT> <FONT SIZE=2><I>clause&nbsp;(a)</I></FONT><FONT SIZE=2>, amounts
of Revolving Loans repaid may be reborrowed under this </FONT><FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Term Loan Commitments.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;On the terms and subject to the conditions contained in this Agreement, each Term
Loan Lender, severally but not jointly, agrees to make, on March&nbsp;29, 2007 (or such earlier date as may be requested by Borrower by delivery of a Notice of Borrowing at least 48&nbsp;hours in
advance), a loan (each a "</FONT><FONT SIZE=2><I>Term Loan</I></FONT><FONT SIZE=2>") in Dollars to Borrower in an amount not to exceed such Lender's Term Loan Commitment. Amounts of Term Loans repaid
may not be reborrowed. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.2&nbsp;&nbsp;&nbsp;&nbsp;Borrowing Procedures.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT><FONT SIZE=2><I>Notice From the Applicable
Borrower</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each Borrowing shall be made on notice given by Borrower to the Administrative Agent not later than 11:00&nbsp;a.m. on (i)&nbsp;the first Business
Day, in the case of a Borrowing of Base Rate Loans and (ii)&nbsp;the third Business Day, in the case of a Borrowing of Eurodollar Rate Loans, prior to the date of the proposed Borrowing; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>,
</FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that Borrower may not request a Eurodollar Rate Loan until the earlier to occur of
(x)&nbsp;the date that is 45&nbsp;days after the Closing Date and (y)&nbsp;the date of completion of the Primary Syndication. Each such notice may be made in a writing substantially in the form
of </FONT><FONT SIZE=2><I>Exhibit&nbsp;C</I></FONT><FONT SIZE=2> (a "</FONT><FONT SIZE=2><I>Notice of Borrowing</I></FONT><FONT SIZE=2>") duly completed or by telephone if confirmed promptly, but
in any event confirmed in writing prior to such Borrowing. Loans shall be made as Base Rate Loans unless, outside of a suspension period pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;2.15</I></FONT><FONT SIZE=2>, the Notice of Borrowing specifies
that all or a portion thereof shall be Eurodollar Rate Loans. Each Borrowing shall be in an
aggregate amount that is an integral multiple of $1,000,000. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Notice to Each Lender.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Administrative Agent shall give to each Lender prompt notice of the
Administrative Agent's receipt of a Notice of Borrowing and, if Eurodollar Rate Loans are properly requested in such Notice of Borrowing, prompt notice of the applicable interest rate. Each Lender
shall, before 11:00&nbsp;a.m. on the date of the proposed Borrowing, make available to the Administrative Agent at its address referred to in </FONT> <FONT SIZE=2><I>Section&nbsp;12.11</I></FONT><FONT SIZE=2> such Lender's Pro Rata Share of such
proposed Borrowing. Upon fulfillment or due waiver (i)&nbsp;on the Closing Date, of the
applicable conditions set forth in </FONT><FONT SIZE=2><I>Section&nbsp;3.1</I></FONT><FONT SIZE=2> and (ii)&nbsp;on the Closing Date and any time thereafter, of the applicable conditions set
forth in </FONT><FONT SIZE=2><I>Section&nbsp;3.2</I></FONT><FONT SIZE=2>, the Administrative Agent shall make such funds available to the applicable Borrower. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Non-Funding Lenders.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Unless the Administrative Agent shall have received notice from any Lender
prior to the date such Lender is required to make any payment hereunder with respect to any Loan or any participation in any Swing Loan or Letter of Credit that such Lender will not make such payment
(or any portion thereof) available to the Administrative Agent, the Administrative Agent may assume that such Lender has made such payment available to the Administrative Agent on the date </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>25</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=30,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="20",CHK=550315,FOLIO='25',FILE='DISK130:[07ZBA2.07ZBA76602]OI76602A.;3',USER='BSKELLE',CD=';2-APR-2007;18:36' -->
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<BR>

<P><FONT SIZE=2>such
payment is required to be made in accordance with this </FONT><FONT SIZE=2><I>Article&nbsp;II</I></FONT><FONT SIZE=2> and the Administrative Agent may, in reliance upon such assumption, make
available to Borrower on such date a corresponding amount. The Borrower agrees to repay to the Administrative Agent on demand such amount (until repaid by such Lender) with respect to Loans and
Letters of Credit of Borrower with interest thereon for each day from the date such amount is made available to Borrower until the date such amount is repaid to the Administrative Agent, at the
interest rate applicable to the Obligation that would have been created when the Administrative Agent made available such amount to Borrower had such Lender made a corresponding payment available; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT
SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that such payment shall not relieve such Lender of any obligation it may have to
Borrower, the Swingline Lender or any L/C Issuer. In addition, any Lender that shall not have made available to the Administrative Agent any portion of any payment described above (any such Lender, a
"</FONT><FONT SIZE=2><I>Non-Funding Lender</I></FONT><FONT SIZE=2>") agrees to pay such amount to the Administrative Agent on demand together with interest thereon, for each day from the
date such amount is made available to the applicable Borrower until the date such amount is repaid to the Administrative Agent, at the Federal Funds Rate for the first Business Day and thereafter
(i)&nbsp;in the case of a payment in respect of a Loan, at the interest rate applicable at the time to such Loan and (ii)&nbsp;otherwise, at the interest rate applicable to Base Rate Loans under
the Revolving Credit Facility. Such repayment shall then constitute the funding of the corresponding Loan (including any Loan deemed to have been made hereunder with such payment) or participation.
The existence of any Non-Funding Lender shall not relieve any other Lender of its obligations under any Loan Document, but no other Lender shall be responsible for the failure of any
Non-Funding Lender to make any payment required under any Loan Document. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.3&nbsp;&nbsp;&nbsp;&nbsp;Swing Loans</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT><FONT SIZE=2><I>Availability</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;On
the terms and subject to the conditions contained in this Agreement, the Swingline Lender may, in its sole discretion, make loans in Dollars (each a "</FONT><FONT SIZE=2><I>Swing
Loan</I></FONT><FONT SIZE=2>") available to Borrower under the Revolving Credit Facility from time to time on any Business Day during the period from the date hereof until the Revolving Credit
Termination Date in an aggregate principal amount at any time outstanding not to exceed its Swingline Commitment; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that the Swingline
Lender may not make any Swing Loan (x)&nbsp;to the extent that after giving effect to such Swing Loan, the aggregate
Revolving Credit Outstandings would exceed the Revolving Credit Commitments and (y)&nbsp;in the period commencing on the first Business Day after it receives notice from the Administrative Agent or
the Required Revolving Credit Lenders that one or more of the conditions precedent contained in </FONT><FONT SIZE=2><I>Section&nbsp;3.2</I></FONT><FONT SIZE=2> are not satisfied and ending when
such conditions are satisfied or duly waived. In connection with the making of any Swing Loan, the Swingline Lender may but shall not be required to determine that, or take notice whether, the
conditions precedent set forth in </FONT><FONT SIZE=2><I>Section&nbsp;3.2</I></FONT><FONT SIZE=2> have been satisfied or waived. Each Swing Loan shall be a Base Rate Loan and must be repaid in full
on the earliest of (i)&nbsp;the funding date of any Borrowing of Revolving Loans and (ii)&nbsp;the Revolving Credit Termination Date. Within the limits set forth in the first sentence of this </FONT> <FONT SIZE=2><I>clause&nbsp;(a)</I></FONT><FONT
SIZE=2>, amounts of Swing Loans repaid may be reborrowed under this </FONT><FONT SIZE=2><I>clause&nbsp;(a)</I></FONT><FONT SIZE=2>.
 </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Borrowing Procedures.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In order to request a Swing Loan, Borrower shall give to the Administrative Agent a
notice to be received not later than 1:00&nbsp;p.m. on the day of the proposed borrowing, which may be made in a writing substantially in the form of </FONT> <FONT SIZE=2><I>Exhibit&nbsp;D</I></FONT><FONT SIZE=2> duly completed (a "</FONT><FONT
SIZE=2><I>Swingline Request</I></FONT><FONT SIZE=2>") or by telephone if confirmed promptly but, in
any event, prior to such borrowing, with such a Swingline Request. In addition, if any Notice of Borrowing from Borrower requests a Borrowing of Base Rate Loans, the Swing Line Lender may,
notwithstanding anything else to the contrary in </FONT><FONT SIZE=2><I>Section&nbsp;2.2</I></FONT><FONT SIZE=2>, make a Swing Loan available to Borrower in an aggregate amount not to exceed such
proposed Borrowing, and the aggregate amount of the corresponding proposed Borrowing shall be reduced accordingly by the principal amount of such Swing Loan. The Administrative Agent shall promptly
notify the Swingline Lender of the details of the requested Swing Loan. Upon receipt of such notice and subject to the terms of this Agreement, the Swingline Lender may make a Swing Loan available to
Borrower by making the proceeds thereof available to the Administrative Agent and, in </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>26</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=31,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="20",CHK=1034114,FOLIO='26',FILE='DISK130:[07ZBA2.07ZBA76602]OI76602A.;3',USER='BSKELLE',CD=';2-APR-2007;18:36' -->
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<BR>

<P><FONT SIZE=2>turn,
the Administrative Agent shall make such proceeds available to Borrower on the date set forth in the relevant Swingline Request. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Refinancing Swing Loans.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Swingline Lender may at any time, and shall no less frequently than once each
week, forward a demand to the Administrative Agent (which the Administrative Agent shall, upon receipt, forward to each Revolving Credit Lender) that each Revolving Credit Lender pay to the
Administrative Agent, for the account of the Swingline Lender, such Revolving Credit Lender's Pro Rata Share of all or a portion of the outstanding Swing Loans. Each Revolving Credit Lender shall pay
such Pro Rata Share to the Administrative Agent for the account of the Swingline Lender. Upon receipt by the Administrative Agent of such payment (other than during the continuation of any Event of
Default under </FONT><FONT SIZE=2><I>Section&nbsp;9.1(e)</I></FONT><FONT SIZE=2>), such Revolving Credit Lender shall be deemed to have made a Revolving Loan to Borrower, which, upon receipt of
such payment by the Swingline Lender from the Administrative Agent, Borrower shall be deemed to have used in whole to refinance such Swing Loan. In addition, regardless of whether any such demand is
made, upon the occurrence of any Event of Default under </FONT><FONT SIZE=2><I>Section&nbsp;9.1(e)</I></FONT><FONT SIZE=2>, each Revolving Credit Lender shall be deemed to have acquired, without
recourse or warranty, an undivided interest and participation in each Swing Loan in an amount equal to such Lender's Pro Rata Share of such Swing Loan. If any payment made by any Revolving Credit
Lender as a result of any such demand is not deemed a Revolving Loan, such payment shall be deemed a funding by such Lender of such participation. Such participation shall not be otherwise required to
be funded. Upon receipt by the Swingline Lender of any payment from any Revolving Credit Lender pursuant to this </FONT><FONT SIZE=2><I>clause&nbsp;(c)</I></FONT><FONT SIZE=2> with respect to any
portion of any Swing Loan, the Swingline Lender shall promptly pay over to such Revolving Credit Lender all payments of principal (to the extent received after such payment by such Lender) and
interest (to the extent accrued with respect to periods after such payment) received by the Swingline Lender with respect to such portion. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Obligation to Fund Absolute.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Revolving Credit Lender's obligations pursuant to </FONT> <FONT SIZE=2><I>clause&nbsp;(c)</I></FONT><FONT SIZE=2> above shall be
absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement
under any and all circumstances whatsoever, including (A)&nbsp;the existence of any setoff, claim, abatement, recoupment, defense or other right that such Lender, any Affiliate thereof or any other
Person may have against the Swing Loan Lender, any other Secured Party or any other Person, (B)&nbsp;the failure of any condition precedent set forth in </FONT> <FONT SIZE=2><I>Section&nbsp;3.2</I></FONT><FONT SIZE=2> to be satisfied or the failure
of Borrower to deliver any notice set forth in </FONT> <FONT SIZE=2><I>Section&nbsp;2.2(a)</I></FONT><FONT SIZE=2> (each of which requirements the Revolving
Credit Lenders hereby irrevocably waive) and (C)&nbsp;any adverse change in the condition (financial or otherwise) of any Loan Party. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.4&nbsp;&nbsp;&nbsp;&nbsp;Letters of Credit.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT><FONT SIZE=2><I>Commitment and
Conditions</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;On the terms and subject to the conditions contained herein, each L/C Issuer agrees to Issue, at the request of Borrower on behalf of Borrower, in
accordance with such L/C Issuer's usual and customary business practices, and for the account of Borrower (or, as long as Borrower remains responsible for the payment in full of all amounts drawn
thereunder and related fees, costs and expenses, for the account of any Group Member), Letters of Credit (denominated in Dollars and with face amounts that are multiples of $100,000) from time to time
on any Business Day during the period from the Closing Date through the earlier of the Revolving Credit Termination Date and 7&nbsp;days prior to the Scheduled Maturity Date; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT
SIZE=2><I>however</I></FONT><FONT SIZE=2>, that such L/C Issuer shall not be under any obligation to Issue any Letter of Credit
for the account of Borrower upon the occurrence of any of the following, after giving effect to such Issuance: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;(A)
the aggregate Revolving Credit Outstandings would exceed the aggregate Revolving Credit Commitments or (B)&nbsp;the L/C Obligations for all Letters of Credit
would exceed the L/C Sublimit; </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>27</FONT></P>

<HR NOSHADE>
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<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;the
expiration date of such Letter of Credit (A)&nbsp;is not a Business Day, (B)&nbsp;is more than one year after the date of issuance thereof or (C)&nbsp;is
later than 7&nbsp;days prior to the Scheduled Revolving Credit Termination Date; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>,
that any Letter of Credit with a term not exceeding one year may provide for its renewal for additional periods not exceeding one year as long as (x)&nbsp;each of Borrower and such L/C Issuer has
the option to prevent such renewal before the expiration of such term or any such period and (y)&nbsp;neither such L/C Issuer nor Borrower shall permit any such renewal to extend such expiration
date beyond the date set forth in </FONT><FONT SIZE=2><I>clause&nbsp;(C)</I></FONT><FONT SIZE=2> above; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;(A)
any fee due in connection with, and on or prior to, such Issuance has not been paid (after giving effect to any applicable grace period), (B)&nbsp;such Letter of
Credit is requested to be Issued in a form that is not acceptable to such L/C Issuer or (C)&nbsp;such L/C Issuer shall not have received, each in form and substance reasonably acceptable to it and
duly executed by Borrower (and, if such Letter of Credit is Issued for the account of any other Group Member, such Group Member), the documents that such L/C Issuer generally uses in the ordinary
course of its business for the Issuance of letters of credit of the type of such Letter of Credit (collectively, the "</FONT><FONT SIZE=2><I>L/C Reimbursement Agreement</I></FONT><FONT SIZE=2>"). </FONT></P>

</UL>

<P><FONT SIZE=2>For
each such Issuance, the applicable L/C Issuer may, but shall not be required to, determine that, or take notice whether, the conditions precedent set forth in </FONT> <FONT SIZE=2><I>Section&nbsp;3.2</I></FONT><FONT SIZE=2> have been satisfied or
waived in connection with the Issuance of any Letter of Credit; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that no Letter of Credit shall be Issued during the period starting on
the first
Business Day after the receipt by such L/C Issuer of notice from the Administrative Agent or the Required Revolving Credit Lenders that any condition
precedent contained in </FONT><FONT SIZE=2><I>Section&nbsp;3.2</I></FONT><FONT SIZE=2> is not satisfied and ending on the date all such conditions are satisfied or duly waived. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Notice of Issuance.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower shall give the relevant L/C Issuer and the Administrative Agent a notice of
any Issuance of any Letter of Credit requested on behalf of Borrower, which shall be effective only if received by such L/C Issuer and the Administrative Agent not later than 11:00&nbsp;a.m. on the
third Business Day prior to the date of such requested Issuance. Such notice may be made in a writing substantially the form of </FONT><FONT SIZE=2><I>Exhibit&nbsp;E</I></FONT><FONT SIZE=2> duly
completed or in a writing in any other form acceptable to such L/C Issuer (an "</FONT><FONT SIZE=2><I>L/C Request</I></FONT><FONT SIZE=2>") or by telephone if confirmed promptly, but in any event
within one Business Day and prior to such Issuance, with such an L/C Request. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Reporting Obligations of L/C Issuers.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each L/C Issuer agrees to provide the Administrative Agent (which,
after receipt, the Administrative Agent shall provide to each Revolving Credit Lender), in form and substance satisfactory to the Administrative Agent, each of the following on the following dates:
(i)&nbsp;on or prior to (A)&nbsp;any Issuance of any Letter of Credit by such L/C Issuer, (B)&nbsp;any drawing under any such Letter of Credit or (C)&nbsp;any payment (or failure to pay when
due) by the applicable Loan Party of any related L/C Reimbursement Obligation, notice thereof, which shall contain a reasonably detailed description of such Issuance, drawing or payment,
(ii)&nbsp;upon the request of the Administrative Agent (or any Revolving Credit Lender through the Administrative Agent), copies of any Letter of Credit Issued by such L/C Issuer and any related L/C
Reimbursement Agreement and such other documents and information as may reasonably be requested by the Administrative Agent and (iii)&nbsp;on the first Business Day of each calendar week, a schedule
of the Letters of Credit Issued by such L/C Issuer, in form and substance reasonably satisfactory to the Administrative Agent, setting forth the L/C Obligations for such Letters of Credit outstanding
on the last Business Day of the previous calendar week. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Acquisition of Participations.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Upon any Issuance of a Letter of Credit in accordance with the terms of this
Agreement resulting in any increase in the L/C Obligations, each Revolving Credit Lender shall be deemed to have acquired, without recourse or warranty, an undivided interest and participation </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>28</FONT></P>

<HR NOSHADE>
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<BR>

<P><FONT SIZE=2>in
such Letter of Credit and the related L/C Obligations in an amount equal to such Lender's Pro Rata Share of such L/C Obligations. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Reimbursement Obligations of Borrower.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Borrower agrees to pay to the L/C Issuer of any Letter of Credit
Issued for the account of any Loan Party each L/C Reimbursement Obligation owing with respect to such Letter of Credit no later than the first Business Day after Borrower receives notice from such L/C
Issuer that payment has been made under such Letter of Credit or that such L/C Reimbursement Obligation is otherwise due (the "</FONT><FONT SIZE=2><I>L/C Reimbursement Date</I></FONT><FONT SIZE=2>")
with interest thereon computed as set forth in </FONT><FONT SIZE=2><I>clause&nbsp;(i)</I></FONT><FONT SIZE=2> below. In the event that any L/C Issuer incurs any L/C Reimbursement Obligation not
repaid by Borrower as provided in this </FONT><FONT SIZE=2><I>clause&nbsp;(e)</I></FONT><FONT SIZE=2> (or any such payment by Borrower is rescinded or set aside for any reason), such L/C Issuer
shall promptly notify the Administrative Agent of such failure (and, upon receipt of such notice, the Administrative Agent shall forward a copy to each Revolving Credit Lender) and, irrespective of
whether such notice is given, such
L/C Reimbursement Obligation shall be payable on demand by Borrower with interest thereon computed (i)&nbsp;from the date on which such L/C Reimbursement Obligation arose to the L/C Reimbursement
Date, at the interest rate applicable during such period to Revolving Loans that are Base Rate Loans and (ii)&nbsp;thereafter until payment in full, at the interest rate applicable during such
period to past due Revolving Loans that are Base Rate Loans. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Reimbursement Obligations of the Revolving Credit Lenders.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Upon receipt of the notice described in </FONT> <FONT SIZE=2><I>clause&nbsp;(e)</I></FONT><FONT SIZE=2> above
from the Administrative Agent, each Revolving Credit Lender shall pay to the Administrative Agent for the account of such L/C
Issuer its Pro Rata Share of such L/C Reimbursement Obligation. By making such payment (other than during the continuation of an Event of Default under </FONT> <FONT SIZE=2><I>Section&nbsp;9.1(e)</I></FONT><FONT SIZE=2>), such Lender shall be deemed
to have made a Revolving Loan to Borrower, which, upon receipt thereof by such L/C Issuer, Borrower
shall be deemed to have used in whole to repay such L/C Reimbursement Obligation. Any such payment that is not deemed a Revolving Loan shall be deemed a funding by such Lender of its participation in
the applicable Letter of Credit and the related L/C Obligations. Such participation shall not otherwise be required to be funded. Upon receipt by any L/C Issuer of any payment from any Lender pursuant
to this </FONT><FONT SIZE=2><I>clause&nbsp;(f)</I></FONT><FONT SIZE=2> with respect to any portion of any L/C Reimbursement Obligation, such L/C Issuer shall promptly pay over to such Lender all
payments received after such payment by such L/C Issuer with respect to such portion. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Obligations Absolute.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The obligations of Borrower and the Revolving Credit Lenders pursuant to </FONT> <FONT SIZE=2><I>clauses (d)</I></FONT><FONT SIZE=2>, </FONT><FONT
SIZE=2><I>(e)</I></FONT><FONT SIZE=2> and </FONT><FONT SIZE=2><I>(f)</I></FONT><FONT SIZE=2> above shall be absolute,
unconditional and irrevocable and performed strictly in accordance with the terms of this Agreement irrespective of (i)&nbsp;(A) the invalidity or unenforceability of any term or provision in any
Letter of Credit, any document transferring or purporting to transfer a Letter of Credit, any Loan Document (including the sufficiency of any such instrument), or any modification to any provision of
any of the foregoing, (B)&nbsp;any document presented under a Letter of Credit being forged, fraudulent, invalid, insufficient or inaccurate in any respect or failing to comply with the terms of
such Letter of Credit or (C)&nbsp;any loss or delay, including in the transmission of any document, (ii)&nbsp;the existence of any setoff, claim, abatement, recoupment, defense or other right that
any Person (including any Group Member) may have against the beneficiary of any Letter of Credit or any other Person, whether in connection with any Loan Document or any other Contractual Obligation
or transaction, or the existence of any other withholding, abatement or reduction, (iii)&nbsp;in the case of the obligations of any Revolving Credit Lender, (A)&nbsp;the failure of any condition
precedent set forth in </FONT><FONT SIZE=2><I>Section&nbsp;3.2</I></FONT><FONT SIZE=2> to be satisfied (each of which conditions precedent the Revolving Credit Lenders hereby irrevocably waive) or
(B)&nbsp;any adverse change in the condition (financial or otherwise) of any Loan Party and (iv)&nbsp;any other act or omission to act or delay of any kind of any Secured Party or any other Person
or any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this </FONT> <FONT SIZE=2><I>Section&nbsp;2.4</I></FONT><FONT SIZE=2>, constitute a legal or equitable discharge of
any obligation of Borrower or any Revolving Credit Lender hereunder. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>29</FONT></P>

<HR NOSHADE>
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<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.5&nbsp;&nbsp;&nbsp;&nbsp;Reduction and Termination of the Commitments.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT> <FONT SIZE=2><I>Optional</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Borrower may, upon
notice to the Administrative Agent, terminate in whole or reduce in part ratably any unused portion of the
Revolving Credit Commitments; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that each partial reduction shall be in an aggregate
amount that is an integral multiple of $100,000. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Mandatory. </I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;All outstanding Commitments shall terminate (i)&nbsp;in the case of the Term Loan Facility, on
the Closing Date (after giving effect to any Borrowing occurring on such date) and (ii)&nbsp;in the case of the Revolving Credit Facility, on the Scheduled Revolving Credit Termination Date. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.6&nbsp;&nbsp;&nbsp;&nbsp;Repayment of Loans.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) The Borrower promises to repay the entire unpaid principal amount of
the Revolving Loans and the Swing Loans advanced to Borrower on the Scheduled Revolving Credit Termination Date. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;The
Borrower promises to repay the Term Loans on the Term Loan Maturity Date and at the dates and in the amounts set forth below: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="68%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="78%" ALIGN="LEFT"><FONT SIZE=1><B>DATE<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>AMOUNT</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="78%"><FONT SIZE=2>June 30, 2007</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>50,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="78%"><FONT SIZE=2>September 30, 2007</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>50,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="78%"><FONT SIZE=2>December 31, 2007</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>50,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="78%"><FONT SIZE=2>March 31, 2008</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>50,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="78%"><FONT SIZE=2>June 30, 2008</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>50,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="78%"><FONT SIZE=2>September 30, 2008</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>50,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="78%"><FONT SIZE=2>December 31, 2008</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>50,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="78%"><FONT SIZE=2>March 31, 2009</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>50,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="78%"><FONT SIZE=2>June 30, 2009</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>50,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="78%"><FONT SIZE=2>September 30, 2009</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>50,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="78%"><FONT SIZE=2>December 31, 2009</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>50,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="78%"><FONT SIZE=2>March 31, 2010</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>50,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="78%"><FONT SIZE=2>June 30, 2010</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>50,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="78%"><FONT SIZE=2>September 30, 2010</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>50,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="78%"><FONT SIZE=2>December 31, 2010</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>50,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="78%"><FONT SIZE=2>March 31, 2011</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>50,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="78%"><FONT SIZE=2>June 30, 2011</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>50,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="78%"><FONT SIZE=2>September 30, 2011</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>50,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="78%"><FONT SIZE=2>December 31, 2011</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>50,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="78%"><FONT SIZE=2>March 22, 2012</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="16%" ALIGN="RIGHT"><FONT SIZE=2>19,050,000</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>Amounts
repaid on the Term Loan may not be reborrowed. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.7&nbsp;&nbsp;&nbsp;&nbsp;Optional Prepayments.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) The Borrower may prepay the outstanding principal amount of any
Loan advanced to it in whole or in part at any time (together with any breakage costs that may be owing pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;2.16(a)</I></FONT><FONT SIZE=2> after giving
effect to such prepayment) upon at least two (2)&nbsp;Business Days' prior written notice to the Administrative Agent; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that each partial
prepayment that is not of the entire outstanding amount under any Facility shall be in an aggregate amount that is an
integral multiple of $100,000. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Any
payments made to the Administrative Agent pursuant to this </FONT><FONT SIZE=2><I>Section&nbsp;2.7</I></FONT><FONT SIZE=2> shall be applied to the Obligations in
accordance with </FONT><FONT SIZE=2><I>Section&nbsp;2.12(a)</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.8&nbsp;&nbsp;&nbsp;&nbsp;Mandatory Prepayments.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT><FONT SIZE=2><I>Excess Cash
Flow</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Borrower shall pay or cause to be paid to the Administrative Agent, on the earlier of (x)&nbsp;the date on which Financial Statements are
delivered pursuant to Section&nbsp;6.1(c) for any Fiscal Year ending after the Closing Date and (y)&nbsp;the last date Financial Statements can be delivered pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;6.1(c)</I></FONT><FONT SIZE=2> for any
Fiscal Year ending </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>30</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=10,SEQ=35,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="20",CHK=986478,FOLIO='30',FILE='DISK130:[07ZBA2.07ZBA76602]OI76602A.;3',USER='BSKELLE',CD=';2-APR-2007;18:36' -->
<A NAME="page_oi76602_1_31"> </A>
<BR>

<P><FONT SIZE=2>after
the Closing Date, an amount equal to 50% of the Excess Cash Flow for such Fiscal Year; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that (i)&nbsp;in the event that the Consolidated
Leverage Ratio for any Fiscal Year is less than 2.00 to 1 and greater than or equal to 1.50
to 1, then the percentage of Excess Cash Flow required to be paid under this </FONT><FONT SIZE=2><I>Section&nbsp;2.8(a)</I></FONT><FONT SIZE=2> in the immediately succeeding Fiscal Year shall be
25%), and (ii)&nbsp;in the event that the Consolidated Leverage Ratio for any Fiscal Year is less than 1.50 to 1, then the percentage of Excess Cash Flow required to be paid under this </FONT> <FONT SIZE=2><I>Section&nbsp;2.8(a)</I></FONT><FONT
SIZE=2> in the immediately succeeding Fiscal Year shall be 0%. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Equity and Debt Issuances.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Upon receipt on or after the Closing Date by any Group Member or any of its
Subsidiaries of Net Cash Proceeds arising from either (i)&nbsp;the issuance or Sale by any Group Member of its own Stock or (ii)&nbsp;the incurrence by any Group Member of Indebtedness for
borrowed money, Borrower shall immediately pay or cause to be paid to the Administrative Agent an amount equal to the amount of such Net Cash Proceeds; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT
SIZE=2><I>however</I></FONT><FONT SIZE=2>, that there shall be excluded from the requirements of this paragraph the following:
(x)&nbsp;Net Cash Proceeds arising from sales of its Stock by Holdings to the Sponsor Group, to the other Persons (and their Affiliates) that are stockholders of Holdings on the Closing Date, and to
officers, directors and employees of Borrower pursuant to an equity incentive plan approved by the board of directors of Holdings, and (y)&nbsp;Net Cash Proceeds of any Indebtedness permitted
hereunder in reliance upon any of clauses </FONT><FONT SIZE=2><I>(a)</I></FONT><FONT SIZE=2> through </FONT><FONT SIZE=2><I>(h)</I></FONT><FONT SIZE=2> of </FONT> <FONT SIZE=2><I>Section&nbsp;8.1</I></FONT><FONT SIZE=2>. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Asset Sales and Property Loss Events.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Upon receipt on or after the Closing Date by any Loan Party or any of
its Subsidiaries of Net Cash Proceeds arising from (i)&nbsp;any Sale by any Group Member of any of its property other than (i)&nbsp;Sales of its own Stock and (ii)&nbsp;Sales of property
permitted hereunder in reliance upon any of clauses (a)&nbsp;through (d)&nbsp;of </FONT><FONT SIZE=2><I>Section&nbsp;8.4</I></FONT><FONT SIZE=2> or (ii)&nbsp;any Property Loss Event with
respect to any property of any Group Member to the extent resulting in the aggregate with all other such Property Loss Events in the receipt by any of them of Net Cash Proceeds in excess of $250,000,
Borrower shall immediately pay or cause to be paid to the Administrative Agent an amount equal to the amount of such Net Cash Proceeds; </FONT><FONT SIZE=2><I>provided,
however</I></FONT><FONT SIZE=2>, that, upon any such receipt, as long as no Event of Default shall be continuing, any Group Member may make Permitted Reinvestments with such Net Cash Proceeds and
Borrower shall not be required to make or cause such payment on such Loans with such Net Cash Proceeds to the extent (x)&nbsp;such Net Cash Proceeds are intended to be used to make Permitted
Reinvestments and (y)&nbsp;on each Reinvestment Prepayment Date for such Net Cash Proceeds, Borrower shall pay or cause to be paid to the Administrative Agent an amount equal to the Reinvestment
Prepayment Amount applicable to such Reinvestment Prepayment Date. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Excess Outstandings.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;On any date on which the aggregate principal amount of Revolving Credit Outstandings
exceeds the aggregate Revolving Credit Commitments, Borrower shall pay to the Administrative Agent an amount equal to such excess. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Application of Payments.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Any payments made to the Administrative Agent pursuant to this </FONT> <FONT SIZE=2><I>Section&nbsp;2.8</I></FONT><FONT SIZE=2> shall be applied
to the Obligations in accordance with </FONT><FONT SIZE=2><I>Section&nbsp;2.12(b)</I></FONT><FONT SIZE=2>. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.9&nbsp;&nbsp;&nbsp;&nbsp;Interest.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT><FONT SIZE=2><I>Rate</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;All Loans
and the outstanding amount of all other Obligations shall bear interest, in the case of Loans, on the unpaid principal amount thereof from the date such Loans are made and, in the case of such other
Obligations, from the date such other Obligations are due and payable until, in all cases, paid in full, except as otherwise provided in </FONT> <FONT SIZE=2><I>clause&nbsp;(c)</I></FONT><FONT SIZE=2> below, as follows: (i)&nbsp;in the case of Base
Rate Loans, at a rate per annum equal to the sum of the Base Rate and the Applicable
Margin, each as in effect from time to time, (ii)&nbsp;in the case of Eurodollar Rate Loans, at a rate per annum equal to the sum of the Eurodollar Rate and the Applicable Margin, each as in effect
for the applicable Interest Period, and (iii)&nbsp;in the case of other Obligations, at a rate per annum equal to the sum of the Base Rate and the Applicable Margin for Revolving Loans that are Base
Rate Loans, each as in effect from time to time. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>31</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=11,SEQ=36,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="20",CHK=119557,FOLIO='31',FILE='DISK130:[07ZBA2.07ZBA76602]OI76602A.;3',USER='BSKELLE',CD=';2-APR-2007;18:36' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->

<P><FONT SIZE=2><A
NAME="page_ok76602_1_32"> </A> </FONT></P>

<!-- TOC_END -->

<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Payments.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Interest accrued shall be payable in arrears (i)&nbsp;if accrued on the principal amount of any
Loan, (A)&nbsp;at maturity (whether by acceleration or otherwise), (B)&nbsp;if such Loan is a Term Loan, upon the payment or prepayment of the principal amount on which such interest has accrued
and (C)(1) if such Loan is a Base Rate Loan (including a Swing Loan), on the last day of each calendar quarter commencing on the first such day following the making of such Loan, (2)&nbsp;if such
Loan is a Eurodollar Rate Loan, on the last day of each Interest Period applicable to such Loan and, if applicable, on each date during such Interest Period occurring every 3&nbsp;months from the
first day of such Interest Period and (ii)&nbsp;if accrued on any other Obligation, on demand after the time such Obligation is due and payable (whether by acceleration or otherwise). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Default Interest.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the rates of interest specified in </FONT> <FONT SIZE=2><I>clause&nbsp;(a)</I></FONT><FONT SIZE=2> above or elsewhere in any Loan
Document, effective immediately upon (A)&nbsp;the occurrence of any Event of Default under </FONT> <FONT SIZE=2><I>Section&nbsp;9.1(e)</I></FONT><FONT SIZE=2> or (B)&nbsp;the delivery of a notice by the Administrative Agent or the Required Lenders to
Borrower during the continuance of
any other Event of Default arising under </FONT><FONT SIZE=2><I>Section&nbsp;9.1(a)</I></FONT><FONT SIZE=2> or </FONT><FONT SIZE=2><I>Section&nbsp;9.1(c)</I></FONT><FONT SIZE=2> as a result of a
breach of </FONT><FONT SIZE=2><I>Article&nbsp;V</I></FONT><FONT SIZE=2>, and, in each case, for as long as such Event of Default shall be continuing, all Obligations (including any Obligation that
bears interest by reference to the rate applicable to any other Obligation) shall bear interest at a rate that is 2% per annum in excess of the interest rate applicable to such Obligations from time
to time (</FONT><FONT SIZE=2><I>e.g.</I></FONT><FONT SIZE=2>, an Applicable Margin of 1.50% would become an Applicable Margin of 3.50%), payable on demand or, in the absence of demand, on the date
that would otherwise be applicable. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.10&nbsp;&nbsp;&nbsp;&nbsp;Conversion and Continuation Options.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT> <FONT SIZE=2><I>Option</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Borrower may elect
(i)&nbsp;in the case of any Eurodollar Rate Loan advanced to Borrower, upon 3 Business Days' prior written
notice given to the Administrative Agent not later than 11:00&nbsp;a.m. (A)&nbsp;to continue such Eurodollar Rate Loan or any portion thereof for an additional Interest Period on the last day of
the Interest Period applicable thereto and (B)&nbsp;to convert such Eurodollar Rate Loan or any portion thereof into a Base Rate Loan at any time on any Business Day, subject to the payment of any
breakage costs required by </FONT><FONT SIZE=2><I>Section&nbsp;2.16(a)</I></FONT><FONT SIZE=2>, and (ii)&nbsp;in the case of Base Rate Loans (other than Swing Loans) advanced to Borrower, to
convert such Base Rate Loans or any portion thereof into Eurodollar Rate Loans at any time on any Business Day upon 3 Business Days' prior written notice given to the Administrative Agent not later
than 11:00&nbsp;a.m.; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that, (x)&nbsp;for each Interest Period, the aggregate
amount of Eurodollar Rate Loans having such Interest Period must be an integral multiple of $500,000 and (y)&nbsp;no conversion in whole or in part of Base Rate Loans to Eurodollar Rate Loans and no
continuation in whole or in part of Eurodollar Rate Loans shall be permitted at any time at which (1)&nbsp;a Default or Event of Default shall be continuing and the Administrative Agent or the
Required Lenders shall have determined in their sole discretion not to permit such conversions or continuations or (2)&nbsp;such continuation or conversion would be made during a suspension imposed
by </FONT><FONT SIZE=2><I>Section&nbsp;2.15</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Procedure.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each such election shall be made by giving the Administrative Agent at least 3 Business Days'
prior notice in substantially the form of </FONT><FONT SIZE=2><I>Exhibit&nbsp;F</I></FONT><FONT SIZE=2> (a "</FONT><FONT SIZE=2><I>Notice of Conversion or Continuation</I></FONT><FONT SIZE=2>")
duly
completed. The Administrative Agent shall promptly notify each Lender of its receipt of a Notice of Conversion or Continuation and of the options selected therein. If the Administrative Agent does not
receive a timely Notice of Conversion or Continuation from Borrower containing a permitted election to continue or convert any Eurodollar Rate Loan, then, upon the expiration of the applicable
Interest Period, such Loan shall be automatically converted to a Base Rate Loan. Each partial conversion or continuation shall be allocated ratably among the Lenders in the applicable Facility in
accordance with their Pro Rata Share. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.11&nbsp;&nbsp;&nbsp;&nbsp;Fees.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT><FONT SIZE=2><I>Unused Commitment
Fee</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Borrower agrees to pay to each Revolving Credit Lender a commitment fee on the average daily amount by which the Revolving Credit Commitment of such
Lender exceeds its Pro Rata Share of the sum of (i)&nbsp;the aggregate outstanding principal amount of Revolving Loans and (ii)&nbsp;the outstanding amount of the L/C Obligations for all Letters
of Credit from the date hereof through the Revolving Credit Termination Date at a rate of </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>32</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=37,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="20",CHK=304774,FOLIO='32',FILE='DISK130:[07ZBA2.07ZBA76602]OK76602A.;4',USER='BSKELLE',CD=';2-APR-2007;18:36' -->
<A NAME="page_ok76602_1_33"> </A>
<BR>

<P><FONT SIZE=2>0.50%
per annum, payable in arrears (x)&nbsp;on the last day of each calendar quarter and (y)&nbsp;on the Revolving Credit Termination Date (the "</FONT><FONT SIZE=2><I>Unused Commitment
Fee</I></FONT><FONT SIZE=2>"). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Letter of Credit Fees.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower agrees to pay, with respect to all Letters of Credit Issued by any L/C
Issuer, (i)&nbsp;to such L/C Issuer, certain fees, documentary and processing charges as separately agreed between Borrower and such L/C Issuer or otherwise in accordance with such L/C Issuer's
standard schedule in effect at the time of determination thereof and (ii)&nbsp;to the Administrative Agent, for the benefit of the Revolving Credit Lenders according to their Pro Rata Shares, a fee
accruing at a rate per annum equal to the Applicable Margin for Revolving Loans that are Eurodollar Rate Loans on the maximum undrawn face amount of such Letters of Credit, payable in arrears
(A)&nbsp;on the last day of each calendar quarter, ending after the issuance of such Letter of Credit and (B)&nbsp;on the Revolving Credit Termination Date; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT
SIZE=2><I>however</I></FONT><FONT SIZE=2>, that the fee payable under this </FONT> <FONT SIZE=2><I>clause&nbsp;(ii)</I></FONT><FONT SIZE=2> shall be increased by 2% per annum and shall be payable, in addition to being payable on any date it is
otherwise required to be paid
hereunder, on demand effective immediately upon (x)&nbsp;the occurrence of any Event of Default under </FONT><FONT SIZE=2><I>Section&nbsp;9.1(e)</I></FONT><FONT SIZE=2> or (y)&nbsp;the delivery
of a notice by the Administrative Agent or the Required Lenders to Borrower during the continuance of any Event of Default arising under </FONT> <FONT SIZE=2><I>Section&nbsp;9.1(a)</I></FONT><FONT SIZE=2> or </FONT><FONT SIZE=2><I>Section&nbsp;9.1(c)
</I></FONT><FONT SIZE=2> as a result of a breach of </FONT> <FONT SIZE=2><I>Article&nbsp;V</I></FONT><FONT SIZE=2>, and, in each case, for as long as such Event of Default shall be continuing.
 </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Additional Fees.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower (i)&nbsp;shall pay to the Administrative Agent and its Related Persons its
reasonable and customary fees and expenses in connection with any payments made pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;2.16(a)</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>Breakage
Costs</I></FONT><FONT SIZE=2>) and (ii)&nbsp;has agreed to pay the additional fees described in the Fee Letter. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.12&nbsp;&nbsp;&nbsp;&nbsp;Application of Payments.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT><FONT SIZE=2><I>Application of Voluntary
Prepayments</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Unless otherwise provided in this </FONT><FONT SIZE=2><I>Section&nbsp;2.12</I></FONT><FONT SIZE=2> or elsewhere in any Loan Document, all payments
and any other amounts received by the Administrative Agent from or for the benefit of Borrower as a voluntary prepayment of the Term Loan shall be applied as directed by Borrower. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Application of Mandatory Prepayments.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subject to the provisions of </FONT> <FONT SIZE=2><I>clause&nbsp;(c)</I></FONT><FONT SIZE=2> below with respect to the application
of payments during the continuance of an Event of Default, any payment made by Borrower to the
Administrative Agent pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;2.8</I></FONT><FONT SIZE=2> or any other prepayment of the Obligations required to be applied in accordance with this </FONT> <FONT SIZE=2><I>clause&nbsp;(b)</I></FONT><FONT SIZE=2>
shall be applied </FONT><FONT SIZE=2><I>first</I></FONT><FONT SIZE=2>, (other than in respect of any payment required pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;2.8(d)</I></FONT><FONT SIZE=2>) to repay the outstanding principal balance of the
Term Loans, ratably among all remaining scheduled payments of principal thereof
until the Term Loan is repaid in full, </FONT><FONT SIZE=2><I>second</I></FONT><FONT SIZE=2>, to repay the outstanding principal balance of the Revolving Loans and the Swing Loans (which shall not
effect a permanent reduction in the Revolving Credit Commitment unless Borrower so elects), </FONT><FONT SIZE=2><I>third</I></FONT><FONT SIZE=2>, in the case of any payment required pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;2.8(d)
</I></FONT><FONT SIZE=2>, to provide cash collateral to the extent and in the manner set forth in </FONT> <FONT SIZE=2><I>Section&nbsp;9.3</I></FONT><FONT SIZE=2> and, </FONT><FONT SIZE=2><I>then</I></FONT><FONT SIZE=2>, any excess shall be retained
by the applicable Borrower. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Application of Payments During an Event of Default.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Borrower and each Parent Guarantor hereby irrevocably
waives, and agrees to cause each Loan Party and each other Group Member to waive, the right to direct the application during the continuance of an Event of Default of any and all payments in respect
of any Obligation and any proceeds of Collateral and agrees that, notwithstanding the provisions of </FONT><FONT SIZE=2><I>clauses (a)</I></FONT><FONT SIZE=2> and </FONT> <FONT SIZE=2><I>(b)</I></FONT><FONT SIZE=2> above, the Administrative Agent may,
 and, upon either (A)&nbsp;the direction of the Required Lenders or (B)&nbsp;the termination of any
Commitment or the acceleration of any Obligation pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;9.2</I></FONT><FONT SIZE=2>, shall, apply all payments in respect of any Obligation, all funds on
deposit in any Cash Collateral Account and all other proceeds of Collateral (i)&nbsp;</FONT><FONT SIZE=2><I>first</I></FONT><FONT SIZE=2>, to pay Obligations in respect of any cost or expense
reimbursements, fees or indemnities then due to the Administrative Agent, (ii)&nbsp;</FONT><FONT SIZE=2><I>second</I></FONT><FONT SIZE=2>, to pay Obligations in respect of any cost or expense
reimbursements, fees or indemnities then due to the Lenders and the L/C Issuers, (iii)&nbsp;</FONT><FONT SIZE=2><I>third</I></FONT><FONT SIZE=2>, to pay interest then due and payable in respect of
the Loans and L/C Reimbursement Obligations, (iv)&nbsp;</FONT><FONT SIZE=2><I>fourth</I></FONT><FONT SIZE=2>, to repay the </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>33</FONT></P>

<HR NOSHADE>
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<BR>

<P><FONT SIZE=2>outstanding
principal amounts of the Loans and L/C Reimbursement Obligations, to provide cash collateral for Letters of Credit in the manner and to the extent described in </FONT> <FONT SIZE=2><I>Section&nbsp;9.3</I></FONT><FONT SIZE=2>, and (v)
&nbsp;</FONT><FONT SIZE=2><I>fifth</I></FONT><FONT SIZE=2>, to the ratable payment of all other Obligations. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Application of Payments Generally.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;All payments that would otherwise be allocated to the Revolving Credit
Loans pursuant to this </FONT><FONT SIZE=2><I>Section&nbsp;2.12</I></FONT><FONT SIZE=2> shall instead be allocated </FONT><FONT SIZE=2><I>first</I></FONT><FONT SIZE=2>, to repay interest on Swing
Loans, on any portion of the Revolving Loans that the Administrative Agent may have advanced on behalf of any Lender and on any L/C Reimbursement Obligation, in each case for which the Administrative
Agent or, as the case may be, the L/C Issuer has not then been reimbursed by such Lender or the applicable Borrower, </FONT><FONT SIZE=2><I>second</I></FONT><FONT SIZE=2> to pay the outstanding
principal amount of the foregoing obligations and </FONT><FONT SIZE=2><I>third</I></FONT><FONT SIZE=2>, to repay the Revolving Loans. All repayments of any Revolving Loans or the Term Loan shall be
applied </FONT><FONT SIZE=2><I>first</I></FONT><FONT SIZE=2>, to repay such Loans outstanding as Base Rate Loans and </FONT><FONT SIZE=2><I>then</I></FONT><FONT SIZE=2>, to repay such Loans
outstanding as Eurodollar Rate Loans, with those Eurodollar Rate Loans having earlier expiring Interest Periods being repaid prior to those having later expiring Interest Periods. All repayments of
the Term Loan shall be applied to reduce ratably the remaining installments of such outstanding principal amounts of the Term Loan. If sufficient amounts are not available to repay all outstanding
Obligations described in any priority level set forth in this </FONT><FONT SIZE=2><I>Section&nbsp;2.12</I></FONT><FONT SIZE=2>, the available amounts shall be applied, unless otherwise expressly
specified herein, to such Obligations ratably based on the proportion of the Secured Parties' interest in such Obligations. Any priority level set forth in
this </FONT><FONT SIZE=2><I>Section&nbsp;2.12</I></FONT><FONT SIZE=2> that includes interest shall include all such interest, whether or not accruing after the filing of any petition in bankruptcy
or the commencement of any insolvency, reorganization or similar proceeding, and whether or not a claim for post-filing or post-petition interest is allowed in any such
proceeding. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.13&nbsp;&nbsp;&nbsp;&nbsp;Payments and Computations.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT> <FONT SIZE=2><I>Procedure</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Borrower shall make each payment to
be made by it under any Loan Document not later than 11:00&nbsp;a.m. on the day when
due to the Administrative Agent by wire transfer to the following account (or at such other account or by such other means to such other address as the Administrative Agent shall have notified
Borrower in writing within a reasonable time prior to such payment) in immediately available Dollars and without setoff or counterclaim: </FONT></P>

<UL>
<UL>

<P><FONT SIZE=2>ABA
No.&nbsp;091000022<BR>
Account Number 173103781352 (Attn: Roy Vorrelli)<BR>
U.S. Bank N.A.<BR>
Account Name: Churchill Financial LLC<BR>
Reference: PROS Revenue Management, L.P. </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2>The
Administrative Agent shall promptly thereafter cause to be distributed immediately available funds relating to the payment of principal, interest or fees to the Lenders, in accordance with the
application of payments set forth in </FONT><FONT SIZE=2><I>Section&nbsp;2.12</I></FONT><FONT SIZE=2>. The Lenders shall make any payment under any Loan Document in immediately available Dollars
and without setoff or counterclaim. Each Revolving Credit Lender shall make each payment for the account of any L/C Issuer or Swingline Lender required pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;2.3</I></FONT><FONT SIZE=2> or </FONT><FONT
SIZE=2><I>2.4</I></FONT><FONT SIZE=2> (A)&nbsp;if the notice or demand therefor was received by such Lender prior
to 11:00&nbsp;a.m. on any Business Day, on such Business Day and (B)&nbsp;otherwise, on the Business Day following such receipt. Payments received by the Administrative Agent after
11:00&nbsp;a.m. shall be deemed to be received on the next Business Day. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Computations of Interests and Fees.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;All computations of interest and of fees shall be made by the
Administrative Agent on the basis of a year of 360&nbsp;days (or, in the case of Base Rate Loans whose interest rate is calculated based on the rate set forth in </FONT> <FONT SIZE=2><I>clause&nbsp;(a)</I></FONT><FONT SIZE=2> of the definition of
"Base Rate", 365/366&nbsp;days), in each case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest and fees are payable. Each determination of an interest rate or the amount of a fee hereunder shall be made by the
Administrative Agent (including </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>34</FONT></P>

<HR NOSHADE>
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<BR>

<P><FONT SIZE=2>determinations
of a Eurodollar Rate or Base Rate in accordance with the definitions of "Eurodollar Rate" and "Base Rate", respectively) and shall be conclusive, binding and final for all purposes,
absent manifest error. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Payment Dates.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Whenever any payment hereunder shall be stated to be due on a day other than a Business Day,
the due date for such payment shall be extended to the next succeeding Business Day without any increase in such payment as a result of additional interest or fees; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT
SIZE=2><I>however</I></FONT><FONT SIZE=2>, that such interest and fees shall continue accruing as a result of such extension of
time. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Advancing Payments.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Unless the Administrative Agent shall have received notice from Borrower to the Lenders
prior to the date on which any payment is due hereunder that Borrower will not make such payment in full, the Administrative Agent may assume that Borrower has made such payment in full to the
Administrative Agent on such date and the Administrative Agent may, in reliance upon such assumption, cause to be distributed to each Lender on such due date an amount equal to the amount then due
such Lender. If and to the extent that Borrower shall not have made such payment in full to the Administrative Agent, each Lender shall repay to the Administrative Agent on demand such amount
distributed to such Lender together with interest thereon (at the Federal Funds Rate for the first Business Day and thereafter, at the rate applicable to Base Rate Loans under the applicable Facility)
for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Administrative Agent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.14&nbsp;&nbsp;&nbsp;&nbsp;Evidence of Debt.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT><FONT SIZE=2><I>Records of
Lenders</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each Lender shall maintain in accordance with its usual practice accounts evidencing Indebtedness of Borrower to such Lender resulting from each Loan of
such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement. In addition, each Lender having sold a
participation in any of its Obligations or having identified an SPV as such to the Administrative Agent, acting as agent of Borrower solely for this purpose and solely for tax purposes, shall
establish and maintain at its address referred to in </FONT><FONT SIZE=2><I>Section&nbsp;12.11</I></FONT><FONT SIZE=2> (or at such other address as such Lender shall notify Borrower) a record of
ownership, in which such Lender shall register by book entry (A)&nbsp;the name and address of each such participant and SPV (and each change thereto, whether by assignment or otherwise) and
(B)&nbsp;the rights, interest or obligation of each such participant and SPV in any Obligation, in any Commitment and in any right to receive any payment hereunder. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Records of Administrative Agent.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Administrative Agent, acting as agent of Borrower solely for tax
purposes and solely with respect to the actions described in this </FONT><FONT SIZE=2><I>Section&nbsp;2.14</I></FONT><FONT SIZE=2>, shall establish and maintain at its address referred to in </FONT> <FONT SIZE=2><I>Section&nbsp;12.11</I></FONT><FONT
SIZE=2> (or at such other address as the Administrative Agent may notify Borrower) (A)&nbsp;a record of ownership (the
"</FONT><FONT SIZE=2><I>Register</I></FONT><FONT SIZE=2>") in which the Administrative Agent agrees to register by book entry the interests (including any rights to receive payment hereunder) of the
Administrative Agent, each Lender and each L/C Issuer in the Term Loan advanced to, and the Revolving Credit Outstandings of, Borrower, its obligations under this Agreement to participate in each Loan
to be advanced to, Letter of Credit to be Issued for the amount of, and L/C Reimbursement Obligation of, Borrower, and any assignment of any such interest, obligation or right and (B)&nbsp;accounts
in the Register in accordance with its usual practice in which it shall record (1)&nbsp;the names and addresses of the Lenders and the L/C Issuers (and each change thereto pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;2.18</I></FONT><FONT SIZE=2>
(</FONT><FONT SIZE=2><I>Substitution of Lenders</I></FONT><FONT SIZE=2>) and </FONT> <FONT SIZE=2><I>Section&nbsp;12.2</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>Assignments and Participations; Binding Effect</I></FONT><FONT SIZE=2>)),
(2)&nbsp;the Commitments of
each Lender, (3)&nbsp;the amount of each Loan advanced to Borrower and each funding of any participation described in </FONT><FONT SIZE=2><I>clause&nbsp;(A)</I></FONT><FONT SIZE=2> above and, for
Eurodollar Rate Loans, the Interest Period applicable thereto, (4)&nbsp;the amount of any principal or interest due from, and payable or paid by, Borrower, (5)&nbsp;the amount of the L/C
Reimbursement Obligations of Borrower due and payable or paid and (6)&nbsp;any other payment received by the Administrative Agent from Borrower and its application to the Obligations. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>35</FONT></P>

<HR NOSHADE>
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<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Registered Obligations.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary contained in this Agreement, the Loans
(including any Notes evidencing such Loans and, in the case of Revolving Loans, the corresponding obligations to participate in L/C Obligations and Swing Loans) and the L/C Reimbursement Obligations
are registered obligations, the right, title and interest of the Lenders and the L/C Issuers and their assignees in and to such Loans or L/C Reimbursement Obligations, as the case may be, shall be
transferable only upon notation of such transfer in the Register and no assignment thereof shall be effective until recorded therein. This </FONT> <FONT SIZE=2><I>Section&nbsp;2.14</I></FONT><FONT SIZE=2> and </FONT><FONT
SIZE=2><I>Section&nbsp;12.2</I></FONT><FONT SIZE=2> shall be construed so that the Loans and L/C Reimbursement
Obligations are at all times maintained in "</FONT><FONT SIZE=2><I>registered form</I></FONT><FONT SIZE=2>" within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and any related
regulations (and any successor provisions). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Prima Facie Evidence.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The entries made in the Register and in the accounts maintained pursuant to </FONT> <FONT SIZE=2><I>clauses (a)</I></FONT><FONT SIZE=2> and
</FONT><FONT SIZE=2><I>(b)</I></FONT><FONT SIZE=2> above shall, to the extent permitted by applicable Requirements of Law, be prima
facie evidence of the existence and amounts of the obligations recorded therein; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that
no error in such account and no failure of any Lender or the Administrative Agent to maintain any such account shall affect the obligations of any Loan Party to repay the Loans in accordance with
their terms. In addition, the Loan Parties, the Administrative Agent, the Lenders and the L/C Issuers shall treat each Person whose name is recorded in the Register as a Lender or L/C Issuer, as
applicable, for all purposes of this Agreement. Information contained in the Register with respect to any Lender or L/C Issuer shall be available for inspection by Borrower, the Administrative Agent,
such Lender or such L/C Issuer at any reasonable time and from time to time upon reasonable prior notice. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Notes.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Upon any Lender's request, Borrower shall promptly execute and deliver Notes to such Lender
evidencing the Loans of such Lender in a Facility and substantially in the form of </FONT><FONT SIZE=2><I>Exhibit&nbsp;B</I></FONT><FONT SIZE=2>; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT
SIZE=2>, that only one Note for each Facility shall be issued by Borrower to each Lender,
except (i)&nbsp;to an existing Lender exchanging existing Notes to reflect changes in the Register relating to such Lender, in which case the new Notes delivered to such Lender shall be dated the
date of the original Notes and the original Notes shall forthwith be cancelled and destroyed, and (ii)&nbsp;in the case of loss, destruction or mutilation of existing Notes and similar
circumstances. Each Note, if issued, shall only be issued as means to evidence the right, title or interest of a Lender or a registered assignee in and to the related Loan, as set forth in the
Register, and in no event shall any Note be considered a bearer instrument or obligation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.15&nbsp;&nbsp;&nbsp;&nbsp;Suspension of Eurodollar Rate Option.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding any provision to the contrary in this </FONT> <FONT SIZE=2><I>Article&nbsp;II</I></FONT><FONT
SIZE=2>, the following shall apply: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Interest Rate Unascertainable, Inadequate or Unfair.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In the event that (A)&nbsp;the Administrative Agent
determines that adequate and fair means do not exist for ascertaining the applicable interest rates by reference to which the Eurodollar Rate is determined or (B)&nbsp;the Required Lenders notify
the Administrative Agent that the Eurodollar Rate for any Interest Period will not adequately reflect the cost to the Lenders of making or maintaining such Loans for such Interest Period, the
Administrative Agent shall promptly so notify Borrower and the Lenders, whereupon the obligation of each Lender to make or to continue Eurodollar Rate Loans shall be suspended as provided in </FONT> <FONT SIZE=2><I>clause&nbsp;(c)</I></FONT><FONT
SIZE=2> below until the Administrative Agent shall notify Borrower that the Required Lenders have determined that the circumstances causing
such suspension no longer exist. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Illegality.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If any Lender determines that the introduction of, or any change in or in the interpretation of,
any Requirement of Law after the date of this Agreement shall make it unlawful, or any Governmental Authority shall assert that it is unlawful, for any Lender or its applicable lending office to make
Eurodollar Rate Loans or to continue to fund or maintain Eurodollar Rate Loans, then, on notice thereof and demand therefor by such Lender to Borrower through the </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>36</FONT></P>

<HR NOSHADE>
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<A NAME="page_ok76602_1_37"> </A>
<UL>
<BR>

<P><FONT SIZE=2>Administrative
Agent, the obligation of such Lender to make or to continue Eurodollar Rate Loans shall be suspended as provided in </FONT><FONT SIZE=2><I>clause&nbsp;(c)</I></FONT><FONT SIZE=2>
below until such Lender shall, through the Administrative Agent, notify Borrower that it has determined that it may lawfully make Eurodollar Rate Loans. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Effect of Suspension.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If the obligation of any Lender to make or to continue Eurodollar Rate Loans is
suspended, (A)&nbsp;the obligation of such Lender to convert Base Rate Loans into Eurodollar Rate Loans shall be suspended, (B)&nbsp;such Lender shall make a Base Rate Loan at any time such Lender
would otherwise be obligated to make a Eurodollar Rate Loan, (C)&nbsp;Borrower may revoke any pending Notice of Borrowing or Notice of Conversion or Continuation delivered on behalf of Borrower to
make or continue any Eurodollar Rate Loan or to convert any Base Rate Loan into a Eurodollar Rate Loan and (D)&nbsp;each Eurodollar Rate Loan of such Lender shall automatically and immediately (or,
in the case of any suspension pursuant to </FONT><FONT SIZE=2><I>clause&nbsp;(a)</I></FONT><FONT SIZE=2> above, on the last day of the current Interest Period thereof) be converted into a Base Rate
Loan. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.16&nbsp;&nbsp;&nbsp;&nbsp;Breakage Costs; Increased Costs; Capital Requirements.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT><FONT SIZE=2><I>Breakage
Costs</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Borrower shall compensate each Lender, upon demand from such Lender to Borrower (with copy to the Administrative Agent), for all Liabilities (including,
in each case, those incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to prepare to fund, to fund or to maintain the Eurodollar Rate Loans of
such Lender to Borrower but excluding any loss of the Applicable Margin on the relevant Loans) that such Lender may incur (A)&nbsp;to the extent, for any reason other than solely by reason of such
Lender being a Non-Funding Lender, a proposed Borrowing, conversion into or continuation of Eurodollar Rate Loans by Borrower does not occur on a date specified therefor in a Notice of
Borrowing or a Notice of Conversion or Continuation or in a similar request made by telephone by Borrower, (B)&nbsp;to the extent any Eurodollar Rate Loan is paid (whether through a scheduled,
optional or mandatory prepayment) or converted to a Base Rate Loan (including because of </FONT><FONT SIZE=2><I>Section&nbsp;2.15</I></FONT><FONT SIZE=2>) on a date that is not the last day of the
applicable Interest Period or (C)&nbsp;as a consequence of any failure by Borrower to repay Eurodollar Rate Loans when required by the terms hereof. For purposes of this </FONT> <FONT SIZE=2><I>clause&nbsp;(a)</I></FONT><FONT SIZE=2>, each Lender
shall be deemed to have funded each Eurodollar Rate Loan made by it using a matching deposit or other borrowing in the
London interbank market. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Increased Costs.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If at any time any Lender or L/C Issuer determines that, after the date hereof, the
adoption of, or any change in or in the interpretation, application or administration of, or compliance with, any Requirement of Law (other than any imposition or increase of Eurodollar Reserve
Requirements) from any Governmental Authority shall have the effect of (i)&nbsp;increasing the cost to such Lender of making, funding or maintaining any Eurodollar Rate Loan to Borrower or to agree
to do so or of participating, or agreeing to participate, in extensions of credit to Borrower, (ii)&nbsp;increasing the cost to such L/C Issuer of Issuing or maintaining any Letter of Credit for the
account of Borrower or of agreeing to do so or (iii)&nbsp;imposing any other cost to such Lender or L/C Issuer with respect to compliance with its obligations under any Loan Document, then, upon
demand by such Lender or L/C Issuer (with copy to the Administrative Agent), Borrower shall pay to the Administrative Agent for the account of such Lender or L/C Issuer amounts sufficient to
compensate such Lender or L/C Issuer for such increased cost. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Increased Capital Requirements.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If at any time any Lender or L/C Issuer determines that, after the date
hereof, the adoption of, or any change in or in the interpretation, application or administration of, or compliance with, any Requirement of Law (other than any imposition or increase of Eurodollar
Reserve Requirements) from any Governmental Authority regarding capital adequacy, reserves, special deposits, compulsory loans, insurance charges against property of, deposits with or for the account
of, Obligations of Borrower owing to, or other credit extended or participated in by, any Lender or L/C Issuer or any similar requirement (in each case other than any imposition or increase of
Eurodollar Reserve Requirements) shall have the effect of reducing the rate of return on the capital of </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>37</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<BR>

<P><FONT SIZE=2>such
Lender's or L/C Issuer (or any corporation controlling such Lender or L/C Issuer) as a consequence of its obligations under or with respect to any Loan Document or Letter of Credit for the
account of Borrower to a level below that which, taking into account the capital adequacy policies of such Lender, L/C Issuer or corporation, such Lender, L/C Issuer or corporation could have achieved
but for such adoption or change, then, upon demand from time to time by such Lender or L/C Issuer (with a copy of such demand to the Administrative Agent), Borrower shall pay to the Administrative
Agent for the account of such Lender amounts sufficient to compensate such Lender for such reduction. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Compensation Certificate.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each demand for compensation under this </FONT> <FONT SIZE=2><I>Section&nbsp;2.16</I></FONT><FONT SIZE=2> shall be accompanied by a certificate
of the Lender or L/C Issuer claiming such compensation, setting forth the amounts to be paid
hereunder, which certificate shall be conclusive, binding and final for all purposes, absent manifest error. In determining such amount, such Lender or L/C Issuer may use any reasonable averaging and
attribution methods. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;Failure
or delay on the part of any Lender or L/C Issuer to demand compensation pursuant to clauses (b)&nbsp;or (c)&nbsp;of this </FONT> <FONT SIZE=2><I>Section&nbsp;2.16</I></FONT><FONT SIZE=2> shall not constitute a waiver of such Lender's or L/C Issuer's
right to demand such compensation; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that Borrower shall not be required to compensate a Lender or L/C Issuer pursuant to this Section for any increased costs or reductions
incurred more than 180&nbsp;days prior to the date that such Lender or L/C Issuer, as the case may be, notifies Borrower of the change in law giving rise to such increased costs or reductions and of
such Lender's or L/C Issuer's intention to claim compensation therefor; </FONT><FONT SIZE=2><I>provided further</I></FONT><FONT SIZE=2> that, if the change in law giving rise to such increased costs
or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.17&nbsp;&nbsp;&nbsp;&nbsp;Taxes.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT><FONT SIZE=2><I>Payments Free and Clear of
Taxes</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Except as otherwise provided in this </FONT><FONT SIZE=2><I>Section&nbsp;2.17</I></FONT><FONT SIZE=2>, each payment by any Loan Party under any Loan
Document shall be made free and clear of all present or future taxes, levies, imposts, deductions, charges or withholdings and all liabilities with respect thereto (and without deduction for any of
them) (collectively "</FONT><FONT SIZE=2><I>Taxes</I></FONT><FONT SIZE=2>") other than (i)&nbsp;Taxes measured by net income (including branch profits taxes) and franchise taxes imposed in lieu of
net income taxes, in each case imposed on any Secured Party as a result of a present or former connection between such Secured Party and the jurisdiction of the Governmental Authority imposing such
Tax or any political subdivision or taxing authority thereof or therein (other than such connection arising from any Secured Party having executed, delivered or performed its obligations or received a
payment under, or enforced, any Loan Document), (ii)&nbsp;U.S. federal withholding Taxes that are imposed on amounts payable to a
Secured Party to the extent that the obligation to withhold amounts existed on the date that such Secured Party became a "Secured Party" under this Agreement in the capacity under which such Secured
Party makes a claim under </FONT><FONT SIZE=2><I>clause&nbsp;(b)</I></FONT><FONT SIZE=2>, except in each case to the extent such Secured Party is a direct or indirect assignee (other than pursuant
to </FONT><FONT SIZE=2><I>Section&nbsp;2.18</I></FONT><FONT SIZE=2> (Substitution of Lenders)) of any other Secured Party that was entitled, at the time the assignment of such other Secured Party
became effective, to receive additional amounts under </FONT><FONT SIZE=2><I>clause&nbsp;(b)</I></FONT><FONT SIZE=2> or (iii)&nbsp;Taxes that are directly attributable to the failure (other than
as a result of a change in any Requirement of Law) by any Secured Party to deliver the documentation required to be delivered pursuant to </FONT> <FONT SIZE=2><I>clause&nbsp;(f)</I></FONT><FONT SIZE=2> below (collectively, "</FONT><FONT
SIZE=2><I>Excluded Taxes</I></FONT><FONT SIZE=2>" and all such non-Excluded Taxes,
"</FONT><FONT SIZE=2><I>Non-Excluded Taxes</I></FONT><FONT SIZE=2>"). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Additional Payments.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If any Taxes shall be required by law to be deducted from or in respect of any amount
payable under any Loan Document to any Secured Party (i)&nbsp;in the case of Non-Excluded Taxes, such amount shall be increased as necessary to ensure that, after all required deductions
for Non-Excluded Taxes are made (including deductions applicable to any increases to any amount under this </FONT><FONT SIZE=2><I>Section&nbsp;2.17</I></FONT><FONT SIZE=2>), such
Secured Party receives on, an after-Tax basis, the amount it would have received had no such deductions been made, (ii)&nbsp;the relevant Loan Party shall make such deductions,
(iii)&nbsp;the relevant Loan Party shall timely pay the full amount deducted to the relevant taxing authority or other authority in accordance with applicable Requirements of Law and
(iv)&nbsp;within </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>38</FONT></P>

<HR NOSHADE>
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<BR>

<P><FONT SIZE=2>30&nbsp;days
after such payment is made, the relevant Loan Party shall deliver to the Administrative Agent an original or certified copy of a receipt evidencing such payment. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Other Taxes.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In addition, Borrower agrees to pay, and authorize the Administrative Agent to pay in their
name, any stamp, documentary, excise or property tax, charges or similar levies imposed by any applicable Requirement of Law or Governmental Authority and all Liabilities with respect thereto
(including by reason of any delay in payment thereof), in each case arising from the execution, delivery or registration of, or otherwise with respect to, any Loan Document or any transaction
contemplated therein (collectively, "</FONT><FONT SIZE=2><I>Other Taxes</I></FONT><FONT SIZE=2>"). The Swingline Lender may, without any need for notice, demand or consent from Borrower, by making
funds available to the Administrative Agent in the amount equal to any such payment, make a Swing Loan to Borrower in such amount, the proceeds of which shall be used by the Administrative Agent in
whole to make such payment. Within 30&nbsp;days after the date of any payment of Taxes or Other Taxes by any Loan Party, Borrower shall furnish to the Administrative Agent, at its address referred
to in </FONT><FONT SIZE=2><I>Section&nbsp;12.11</I></FONT><FONT SIZE=2>, the original or a certified copy of a receipt evidencing payment thereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Indemnification.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower shall reimburse and indemnify, within 30&nbsp;days after receipt of demand
therefor (with copy to the Administrative Agent), each Secured Party for all Non-Excluded Taxes and Other Taxes (including any Non-Excluded Taxes and Other Taxes imposed by any
jurisdiction on amounts payable under this </FONT><FONT SIZE=2><I>Section&nbsp;2.17</I></FONT><FONT SIZE=2>) paid by such Secured Party and any Liabilities arising therefrom or with respect
thereto, whether or not such Non-Excluded Taxes or Other Taxes were correctly or legally asserted. A certificate of the Secured Party (or of the Administrative Agent on behalf of such
Secured Party) claiming any compensation under this </FONT><FONT SIZE=2><I>clause&nbsp;(d)</I></FONT><FONT SIZE=2>, setting forth the amounts to be paid thereunder and delivered to
Borrower with copy to the Administrative Agent, shall be conclusive, binding and final for all purposes, absent manifest error. In determining such amount, the Administrative Agent and such Secured
Party may use any reasonable averaging and attribution methods. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Mitigation.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Any Lender claiming any additional amounts payable pursuant to this </FONT> <FONT SIZE=2><I>Section&nbsp;2.17</I></FONT><FONT SIZE=2> shall use its
reasonable efforts (consistent with its internal policies and Requirements of Law) to change the jurisdiction of its
lending office if such a change would reduce any such additional amounts (or any similar amount that may thereafter accrue) and would not, in the sole determination of such Lender, be otherwise
disadvantageous to such Lender. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Tax Forms.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;Each Non-U.S. Lender Party that, at any of the following times, is
entitled to an exemption from United States withholding tax or, after a change in any Requirement of Law, is subject to such withholding tax at a reduced rate under an applicable tax treaty, shall
(w)&nbsp;on or prior to the date such Non-U.S. Lender Party becomes a "Non-U.S. Lender Party" hereunder, (x)&nbsp;upon reasonable request of Borrower or Administrative
Agent, on or prior to the date on which any such form or certification expires or becomes obsolete, (y)&nbsp;after the occurrence of any event requiring a change in the most recent form or
certification previously delivered by it pursuant to this </FONT><FONT SIZE=2><I>clause&nbsp;(i)</I></FONT><FONT SIZE=2> and (z)&nbsp;from time to time if otherwise reasonably requested by
Borrower or the Administrative Agent (or, in the case of a participant or SPV, the relevant Lender), provide the Administrative Agent and Borrower (or, in the case of a participant or SPV, the
relevant Lender) with two properly completed originals of each of the following, as applicable: (A)&nbsp;Forms W-8ECI (claiming exemption from U.S. withholding tax because the income is
effectively connected with a U.S. trade or business), W-8BEN (claiming exemption from, or a reduction of, U.S. withholding tax under an income tax treaty) or any successor forms,
(B)&nbsp;in the case of a Non-U.S. Lender Party claiming exemption under Sections 871(h) or 881(c) of the Code, Form&nbsp;W-8BEN (claiming exemption from U.S. withholding
tax under the portfolio interest exemption) or any successor form and a certificate in form and substance acceptable to the Administrative Agent that such Non-U.S. Lender Party is not
(1)&nbsp;a "bank" within the meaning of Section&nbsp;881(c)(3)(A) of the Code, (2)&nbsp;a "10&nbsp;percent shareholder" of Borrower within the meaning of Section&nbsp;881(c)(3)(B) of the
Code or (3)&nbsp;a "controlled foreign corporation" described in </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>39</FONT></P>

<HR NOSHADE>
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<BR>

<P><FONT SIZE=2>Section&nbsp;881(c)(3)(C)
of the Code or (C)&nbsp;any other applicable document prescribed by the IRS properly certifying as to the entitlement of such Non-U.S. Lender Party to such
exemption from United States withholding tax or reduced rate with respect to all payments to be made to such Non-U.S. Lender Party under the Loan Documents. Unless Borrower and the
Administrative Agent have received forms or other documents satisfactory to them indicating that payments under any Loan Document to or for a Non-U.S. Lender Party are not subject to
United States withholding tax, the Loan Parties and the Administrative Agent shall withhold amounts required to be withheld by applicable Requirements of Law from such payments at the applicable
statutory rate. </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;Each
U.S. Lender Party shall (A)&nbsp;on or prior to the date such U.S. Lender Party becomes a "U.S. Lender Party" hereunder, (B)&nbsp;upon reasonable request of
Borrower or Administrative Agent, on or prior to the date on which any such form or certification expires or becomes obsolete, (C)&nbsp;after the
occurrence of any event requiring a change in the most recent form or certification previously delivered by it pursuant to this </FONT><FONT SIZE=2><I>clause&nbsp;(f)</I></FONT><FONT SIZE=2> and
(D)&nbsp;from time to time if otherwise reasonably requested by Borrower or the Administrative Agent (or, in the case of a participant or SPV, the relevant Lender), provide the Administrative Agent
and Borrower (or, in the case of a participant or SPV, the relevant Lender) with two properly completed originals of Form&nbsp;W-9 (certifying that such U.S. Lender Party is entitled to
an exemption from U.S. backup withholding tax) or any successor form. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;Each
Lender having sold a participation in any of its Obligations or identified an SPV as such to the Administrative Agent shall collect from such participant or SPV
the documents described in this </FONT><FONT SIZE=2><I>clause&nbsp;(f)</I></FONT><FONT SIZE=2> and provide them to the Administrative Agent. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.18&nbsp;&nbsp;&nbsp;&nbsp;Substitution of Lenders.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT><FONT SIZE=2><I>Substitution
Right</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;In the event that any Lender in any Facility that is not an Affiliate of the Administrative Agent (an "</FONT><FONT SIZE=2><I>Affected
Lender</I></FONT><FONT SIZE=2>"), (i)&nbsp;makes a claim under </FONT><FONT SIZE=2><I>clause&nbsp;(b)</I></FONT><FONT SIZE=2>(</FONT><FONT SIZE=2><I>Increased Costs</I></FONT><FONT SIZE=2>) or </FONT> <FONT SIZE=2><I>(c)</I></FONT><FONT SIZE=2>
(</FONT><FONT SIZE=2><I>Increased Capital Requirements</I></FONT><FONT SIZE=2>) of </FONT> <FONT SIZE=2><I>Section&nbsp;2.16</I></FONT><FONT SIZE=2>, (ii)&nbsp;notifies Borrower pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;2.15(b)</I></FONT><FONT
SIZE=2>
(</FONT><FONT SIZE=2><I>Illegality</I></FONT><FONT SIZE=2>) that it becomes illegal for such Lender to continue to fund or make any Eurodollar Rate Loan in such Facility, (iii)&nbsp;makes a claim
for payment pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;2.17(b)</I></FONT><FONT SIZE=2>(</FONT><FONT SIZE=2><I>Taxes</I></FONT><FONT SIZE=2>), (iv)&nbsp;becomes a Non-Funding
Lender with respect to such Facility or (v)&nbsp;does not consent to any amendment, waiver or consent to any Loan Document for which the consent of the Required Lenders is obtained but that requires
the consent of other Lenders in such Facility, Borrower or the Administrative Agent may either pay in full such Affected Lender with respect to amounts due in such Facility with the consent of the
Administrative Agent or substitute for such Affected Lender in such Facility any Lender or any Affiliate or Approved Fund of any Lender or any other Person acceptable (which acceptance shall not be
unreasonably withheld or delayed) to the Administrative Agent (in each case, a "</FONT><FONT SIZE=2><I>Substitute Lender</I></FONT><FONT SIZE=2>"). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Procedure.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;To substitute such Affected Lender or pay in full the Obligations owed to such Affected Lender
under such Facility, Borrower shall deliver a notice to the Administrative Agent and such Affected Lender. The effectiveness of such payment or substitution shall be subject to the delivery to the
Administrative Agent by Borrower (or, as may be applicable in the case of a substitution, by the Substitute Lender) of (i)&nbsp;payment for the account of such Affected Lender, of, to the extent
accrued through, and outstanding on, the effective date for such payment or substitution, all Obligations owing to such Affected Lender with respect to such Facility (including those that will be owed
because of such payment and all Obligations that would be owed to such Lender if it was solely a Lender in such Facility), (ii)&nbsp;in the case of a payment in full of the Obligations owing to such
Affected Lender in the Revolving Credit Facility, payment of any amount that, after giving effect to the termination of the Commitment of such Affected Lender, is required to be paid pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;2.8(e)
</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>Excess Outstandings</I></FONT><FONT SIZE=2>) and (iii)&nbsp;in the case of a substitution,
(A)&nbsp;payment of the assignment fee set forth in </FONT><FONT SIZE=2><I>Section&nbsp;12.2(c)</I></FONT><FONT SIZE=2> and (B)&nbsp;an assumption agreement in form and substance satisfactory
to the Administrative Agent whereby the Substitute Lender shall, among other things, agree to be bound by </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>40</FONT></P>

<HR NOSHADE>
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<BR>

<P><FONT SIZE=2>the
terms of the Loan Documents and assume the Commitment of the Affected Lender under such Facility. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Effectiveness.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Upon satisfaction of the conditions set forth in </FONT> <FONT SIZE=2><I>clause&nbsp;(b)</I></FONT><FONT SIZE=2> above, the Administrative Agent shall
record such substitution or payment in the Register, whereupon (i)&nbsp;in the case of any
payment in full in any Facility, such Affected Lender's Commitments in such Facility shall be terminated and (ii)&nbsp;in the case of any substitution in any Facility, (A)&nbsp;the Affected Lender
shall sell and be relieved of, and the Substitute Lender shall purchase and assume, all rights and claims of such Affected Lender under the Loan Documents with respect to such Facility, except that
the Affected Lender shall retain such rights expressly providing that they survive the repayment of the Obligations and the termination of the Commitments, (B)&nbsp;the Substitute Lender shall
become a "</FONT><FONT SIZE=2><I>Lender</I></FONT><FONT SIZE=2>" hereunder having a Commitment in such Facility in the amount of such Affected Lender's Commitment in such Facility and (C)&nbsp;the
Affected Lender shall execute and deliver to the Administrative Agent an Assignment to evidence such substitution and deliver any Note in its possession with respect to such Facility; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>,
</FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that the failure of any Affected Lender to execute any such Assignment or deliver any
such Note shall not render such sale and purchase (or the corresponding assignment) invalid. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ok76602_article_iii_conditions__ok702200"> </A>
<A NAME="toc_ok76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE III    <BR>    <BR>    CONDITIONS TO LOANS AND LETTERS OF CREDIT    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;3.1&nbsp;&nbsp;&nbsp;&nbsp;Conditions Precedent to Initial Loans and Letters of Credit.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The obligation of each Lender
to make any Loan on the Closing Date and the obligation of each L/C Issuer to Issue any Letter of Credit on the Closing Date is subject to the satisfaction or written waiver of each of the following
conditions precedent on or before March&nbsp;23, 2007: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Certain Documents.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Administrative Agent shall have received on or prior to the Closing Date each of the
following, each dated the Closing Date unless otherwise agreed by the Administrative Agent, in form and substance satisfactory to the Administrative Agent and each Lender: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;this
Agreement duly executed by Holdings and Borrower and, for the account of each Lender having requested the same, by notice to the Administrative Agent and Borrower
received by each at least 3 Business Days prior to the Closing Date (or such later date as may be agreed by Borrower), Notes in each applicable Facility conforming to the requirements set forth in </FONT> <FONT SIZE=2><I>Section&nbsp;2.14(e)
</I></FONT><FONT SIZE=2>; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;the
Guaranty, Pledge and Security Agreement, duly executed by each Guarantor, together with (A)&nbsp;copies of UCC, Intellectual Property and other appropriate search
reports and of all effective prior filings listed therein, together with evidence of the termination of such prior filings and other documents with respect to the priority of the security interest of
the Administrative Agent in the
Collateral, in each case as may be reasonably requested by the Administrative Agent, (B)&nbsp;all documents representing all Securities being pledged pursuant to such Guaranty, Pledge and Security
Agreement and related undated powers or endorsements duly executed in blank (C)&nbsp;all Control Agreements that, in the reasonable judgment of the Administrative Agent, are required for the Loan
Parties to comply with the Loan Documents as of the Closing Date, each duly executed by, in addition to the applicable Loan Party, the applicable financial institution (it being agreed, however, that
such Control Agreements may be delivered up to 30&nbsp;days following the Closing Date or such later date as the Administrative Agent may in writing agree), and (D)&nbsp;properly completed
perfection certificates with respect to Borrower and each Guarantor; </FONT></P>

</UL>
</UL>
<P ALIGN="CENTER"><FONT SIZE=2>41</FONT></P>

<HR NOSHADE>
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<UL>
</UL>
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<P><FONT SIZE=2><A
NAME="page_om76602_1_42"> </A> </FONT></P>

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<UL>
<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;a
duly executed favorable opinion of DLA Piper US LLP, counsel to the Loan Parties, addressed to the Administrative Agent, the L/C Issuers and the Lenders and
addressing such matters as the Administrative Agent may reasonably request; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;a
copy of each Constituent Document of each Loan Party that is on file with any Governmental Authority in any jurisdiction, certified as of a recent date by such
Governmental Authority, together with, if applicable, certificates attesting to the good standing of such Loan Party in such jurisdiction and each other jurisdiction where such Loan Party is qualified
to do business as a foreign entity or where such qualification is necessary (and, if appropriate in any such jurisdiction, related tax certificates), except where the failure to be so qualified would
not be materially adverse to such Loan Party; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;a
certificate of the secretary or other officer of each Loan Party in charge of maintaining books and records of such Loan Party certifying as to (A)&nbsp;the names
and signatures of each officer of such Loan Party authorized to execute and deliver any Loan Document, (B)&nbsp;the Constituent Documents of such Loan Party attached to such certificate are complete
and correct copies of such Constituent Documents as in effect on the date of such certification (or, for any such Constituent Document delivered pursuant to </FONT> <FONT SIZE=2><I>clause&nbsp;(v)</I></FONT><FONT SIZE=2> above, that there have been
no changes from such Constituent Document so delivered), and (C)&nbsp;the resolutions of such Loan
Party's board of directors or other appropriate governing body approving and authorizing the execution, delivery and performance of each Loan Document to which such Loan Party is a party; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;a
certificate of a Responsible Officer of Borrower to the effect that (A)&nbsp;each condition set forth in </FONT> <FONT SIZE=2><I>Section&nbsp;3.2(b)</I></FONT><FONT SIZE=2> has been satisfied with respect to Borrower, and (B)&nbsp;Borrower and each
other Loan Party on a Consolidated basis, are
Solvent after giving effect to the Term Loan, the application of the proceeds thereof in accordance with </FONT><FONT SIZE=2><I>Section&nbsp;7.9</I></FONT><FONT SIZE=2>, the payment of the
Specified Dividend, and the payment of all estimated legal, accounting and other fees and expenses related hereto and thereto; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;insurance
certificates in form and substance satisfactory to the Administrative Agent demonstrating that the insurance policies required by </FONT> <FONT SIZE=2><I>Section&nbsp;7.5</I></FONT><FONT SIZE=2> are in full force and effect and have all endorsements
required by such </FONT> <FONT SIZE=2><I>Section&nbsp;7.5</I></FONT><FONT SIZE=2>; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)&nbsp;&nbsp;satisfactory
completion of the Administrative Agent's legal, accounting and financial due diligence investigations, including receipt and review of the Initial
Projections, review of Borrower's insurance, review of employment and noncompetition agreements of Borrower's key employees, review of Borrower's standard forms of customer contracts and its actual
contracts with its major customers, and review of such other documents as the Administrative Agent or any Lender may reasonably request to
determine that all third-party and regulatory approvals and consents necessary to consummate the transactions contemplated on the Closing Date and the Specified Dividend shall have been obtained and
shall be final and non-appealable, </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix)&nbsp;&nbsp;the
other documents listed on the Closing Checklist; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;&nbsp;such
other documents and information as any Lender through the Administrative Agent may reasonably request. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Fee and Expenses.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;There shall have been paid to the Administrative Agent, for the account of the
Administrative Agent, its Related Persons, any L/C Issuer or any Lender, as the case may be, all fees and all reimbursements of costs or expenses, in each case due and payable under any Loan Document
on or before the Closing Date. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>42</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Consents.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Group Member shall have received all material consents and authorizations required pursuant
to any material Contractual Obligation with any other Person and shall have obtained all material Permits of, and effected all material notices to and filings with, any Governmental Authority, in each
case, as may be necessary in connection with the consummation of the transactions contemplated in any Loan Document and the payment of the Specified Dividend. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;No Initial Revolving Loans.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;On the Closing Date, after giving effect to the Loans and payment in full of the
Specified Dividend, there shall be no Revolving Loans or L/Cs outstanding and none shall be required to pay in full the Specified Dividend. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Opening Cash Balance</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;On the Closing Date, Borrower will have an opening unencumbered amount of cash and Cash
Equivalents of at least $4,500,000 after giving effect to payment in full of the Specified Dividend and the borrowing of the Term Loan, and assuming that no Revolving Loans or L/Cs are outstanding. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Minimum Consolidated EBITDA.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;On the Closing Date, the aggregate Adjusted EBITDA of Borrower for the 12
consecutive preceding months for which financial statements are available shall be no less than $7,800,000. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Consolidated Total Debt.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;On the Closing Date, after giving effect to the transactions occurring on the
Closing Date and the payment of the Specified Dividend, (i)&nbsp;the Consolidated Total Debt of Borrower shall not exceed $20,000,000, and (ii)&nbsp;the ratio of Consolidated Total Debt to
Adjusted EBITDA shall be less than 2.60 to 1. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;No Material Adverse Change.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;No event shall have occurred (including with respect to the contracts
or other Collateral of Borrower and the other Loan Parties) that would cause or in the reasonable judgment of the Administrative Agent be reasonably likely to result in a Material Adverse Effect, and
(y)&nbsp;no litigation, suit or investigation by any Governmental Authority shall have commenced or been threatened in writing against any Loan Party that in the reasonable judgment of the
Administrative Agent could reasonably be expected to have a Material Adverse Effect if determined adversely to such Loan Party. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;3.2&nbsp;&nbsp;&nbsp;&nbsp;Conditions Precedent to Each Loan and Letter of Credit.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The obligation of each Lender on any
date (including the Closing Date) to make any Loan and of each L/C Issuer on any date (including the Closing Date) to Issue any Letter of Credit is subject to the satisfaction of each of the following
conditions precedent: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Request.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Administrative Agent (and, in the case of any Issuance, the relevant L/C Issuer) shall have
received, to the extent required by </FONT><FONT SIZE=2><I>Article&nbsp;II</I></FONT><FONT SIZE=2>, a written, timely and duly executed and completed Notice of Borrowing, Swingline Request or, as
the case may be, L/C Request. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Representations and Warranties; No Defaults.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The following statements shall be true on such date, both
before and after giving effect to such Loan or, as applicable, such Issuance: (i)&nbsp;the representations and warranties set forth in any Loan Document shall be true and correct (A)&nbsp;if such
date is the Closing Date, on and as of such date and (B)&nbsp;otherwise, in all material respects (if not qualified as to materiality or Material Adverse Effect) or in any respect (if so qualified)
on and as of such date or, to the extent such representations and warranties expressly relate to an earlier date, on and as of such earlier date and (ii)&nbsp;no Default or Event of Default shall be
continuing. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Additional Matters.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Administrative Agent shall have received such additional documents and information
as any Lender, through the Administrative Agent, may reasonably request. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>43</FONT></P>

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</UL>

<P><FONT SIZE=2>The
representations and warranties set forth in any Notice of Borrowing, Swingline Request or L/C Request (or any certificate delivered in connection therewith) shall be deemed to be made again on and
as of the date of the relevant Loan or Issuance and the acceptance of the proceeds thereof or of the delivery of the relevant Letter of Credit. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;3.3&nbsp;&nbsp;&nbsp;&nbsp;Determinations of Initial Borrowing Conditions.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;For purposes of determining compliance with
the conditions specified in </FONT><FONT SIZE=2><I>Section&nbsp;3.1</I></FONT><FONT SIZE=2>, each Lender shall be deemed to be satisfied with each document and each other matter required to be
satisfactory to such Lender unless, prior to the Closing Date, the Administrative Agent receives notice from such Lender specifying such Lender's objections and such Lender has not made available its
Pro Rata Share of any Borrowing scheduled to be made on the Closing Date. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="om76602_article_iv_representations_and_warranties"> </A>
<A NAME="toc_om76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE IV    <BR>    <BR>    REPRESENTATIONS AND WARRANTIES    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To induce the Lenders, the L/C Issuers and the Administrative Agent to enter into the Loan Documents, Borrower and each Parent Guarantor (and, to the extent set
forth in any other Loan Document, each other Loan Party) represents and warrants to each of them each of the following on and as of each date applicable pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;3.2</I></FONT><FONT SIZE=2>: </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.1&nbsp;&nbsp;&nbsp;&nbsp;Corporate Existence; Compliance with Law.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Group Member (a)&nbsp;is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its organization, (b)&nbsp;is duly qualified to do business as a foreign entity and in good standing under the laws of
each jurisdiction where such qualification is necessary, except where the failure to be so qualified or in good standing would not, in the aggregate, have a Material Adverse Effect, (c)&nbsp;has all
requisite power and authority and the legal right to own, pledge, mortgage and operate its property, to lease or sublease any property it operates under lease or sublease and to conduct its business
as now or currently proposed to be conducted, (d)&nbsp;is in compliance with its Constituent Documents, (e)&nbsp;is in compliance with all applicable Requirements of Law except where the failure
to be in compliance would not have a Material Adverse Effect and (f)&nbsp;has all necessary Permits from or by, has made all necessary filings with, and has given all necessary notices to, each
Governmental Authority having jurisdiction, to the extent required for such ownership, lease, sublease, operation, occupation or conduct of business, except where the failure to obtain such Permits,
make such filings or give such notices would not, in the aggregate, have a Material Adverse Effect. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.2&nbsp;&nbsp;&nbsp;&nbsp;Loan and Related Documents.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT><FONT SIZE=2><I>Power and
Authority</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The execution, delivery and performance by each Loan Party of the Loan Documents to which it is a party and the payment of the Specified Dividend
(i)&nbsp;are within such Loan Party's corporate or similar powers and, at the time of execution thereof, have been duly authorized by all necessary corporate and similar action (including, if
applicable, consent of holders of its Securities), (ii)&nbsp;do not (A)&nbsp;contravene such Loan Party's Constituent Documents, (B)&nbsp;violate any applicable Requirement of Law,
(C)&nbsp;conflict with, contravene, constitute a default or breach under, or result in or permit the termination or acceleration of, any material Contractual Obligation of any Loan Party or any of
its Subsidiaries (including other Loan Documents) other than those that would not, in the aggregate, have a Material Adverse Effect and are not created or caused by, or a conflict, breach, default or
termination or acceleration event under, any Loan Document or (D)&nbsp;result in the imposition of any Lien (other than a Permitted Lien) upon any property of any Loan Party or any of its
Subsidiaries and (iii)&nbsp;do not require any Permit of, or filing with, any Governmental Authority or any consent of, or notice to, any Person, other than (A)&nbsp;with respect to the Loan
Documents, the filings required to perfect the Liens created by the Loan Documents, and (B)&nbsp;those listed on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.2</I></FONT><FONT SIZE=2> and that have
been, or will be prior to the Closing Date, obtained or made, copies of which have been, or will be prior to the Closing Date, delivered to the Administrative Agent, and each of which on the Closing
Date will be in full force and effect. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>44</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Due Execution and Delivery.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;From and after its delivery to the Administrative Agent, each Loan Document has
been duly executed and delivered to the other parties thereto by each Loan Party thereto, is the legal, valid and binding obligation of such Loan Party and is enforceable against such Loan Party in
accordance with its terms except as such enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws affecting creditors' rights generally and by
general principles of equity. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.3&nbsp;&nbsp;&nbsp;&nbsp;Ownership of Group Members.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.3</I></FONT><FONT SIZE=2> is a complete and accurate list showing, as of
the Closing Date, for each Group Member and each Subsidiary of any Group Member and
each joint venture of any of them, its jurisdiction of organization, the number of shares of each class of Stock authorized (if applicable), the number outstanding on the Closing Date and the number
and percentage of the outstanding shares of each such class owned (directly or indirectly) by Borrower and each Parent Guarantor. All outstanding Stock of each of them has been validly issued, is
fully paid and non-assessable (to the extent applicable) and, except in the case of Holdings, is owned beneficially and of record by a Group Member free and clear of all Liens other than
the security interests created by the Loan Documents and, in the case of joint ventures, Permitted Liens. There are no Stock Equivalents with respect to the Stock of any Group Member (other than
Holdings) or any Subsidiary of any Group Member or any joint venture of any of them and, as of the Closing Date, except as set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.3</I></FONT><FONT SIZE=2>, there are no Stock Equivalents with respect to
the Stock of Holdings. There are no Contractual Obligations or other understandings
to which any Group Member, any Subsidiary of any Group Member or any joint venture of any of them is a party with respect to (including any restriction on) the issuance, voting, Sale or pledge of any
Stock or Stock Equivalent of any Group Member or any such Subsidiary or joint venture. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.4&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) Each of (i)&nbsp;the audited Consolidated balance sheet of
Borrower as at December&nbsp;31, 2006, and the related Consolidated statements of income, retained earnings and cash flows of Borrower for the Fiscal Year then ended, certified by
PricewaterhouseCoopers LLP, and (ii)&nbsp;subject to the absence of footnote disclosure and normal recurring year-end audit adjustments, the unaudited Consolidated balance sheets of
Borrower as at January&nbsp;31, 2007 and the related Consolidated statements of income, retained earnings and cash flows of Borrower for the one month then ended, copies of each of which have been
furnished to the Administrative Agent, fairly present in all material respects the Consolidated financial position, results of operations and cash flow of Borrower as at the dates indicated and for
the periods indicated in accordance with GAAP. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;On
the Closing Date, (i)&nbsp;Holdings has no material property (other than the Stock of General Partner and Limited Partner), liabilities or Contractual Obligations
other than the Loan Documents, and (ii)&nbsp;General Partner and Limited Partner have no property (other than the Stock of Borrower), liabilities or Contractual Obligations other than the Loan
Documents. On the Closing Date, (x)&nbsp;neither Borrower nor any of its Subsidiaries has any material liability or other obligation (including Indebtedness, Guaranty Obligations, contingent
liabilities and liabilities for taxes, long-term leases and unusual forward or long-term commitments) that is not reflected in the Financial Statements referred to in </FONT> <FONT SIZE=2><I>clause&nbsp;(a)</I></FONT><FONT SIZE=2> above or in the
notes thereto and not otherwise permitted by this Agreement and (y)&nbsp;since the date of the unaudited Financial
Statements referenced in </FONT><FONT SIZE=2><I>clause&nbsp;(a)(ii)</I></FONT><FONT SIZE=2> above, there has been no Sale of any material property of Borrower or any of its Subsidiaries and no
purchase or other acquisition of any material property. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;The
Initial Projections have been prepared by Borrower in light of the past operations of the business of Borrower and its Subsidiaries and reflect projections for the
5-year period beginning as of January&nbsp;1, 2007 on a year by year basis. As of the Closing Date, the Initial Projections are based upon estimates and assumptions stated therein, all
of which Borrower believes to be reasonable and fair in light of conditions and facts known to Borrower as of the Closing Date and reflect the good faith, reasonable and fair estimates by Borrower of
the future Consolidated financial performance of </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>45</FONT></P>

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<P><FONT SIZE=2>Borrower
and the other information projected therein for the periods set forth therein; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, however, that Borrower gives no assurances whatsoever
that such projections will be attained. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;The
unaudited Consolidated balance sheet of Holdings (the "</FONT><FONT SIZE=2><I>Pro Forma Balance Sheet</I></FONT><FONT SIZE=2>") delivered to the Administrative
Agent prior to the date hereof has been prepared as of March&nbsp;31, 2007 and reflects as of such date, on a Pro Forma Basis for the Related Transactions and the other transactions contemplated
herein to occur on the Closing Date, the Consolidated financial condition of Holdings, and the assumptions expressed therein are reasonable based on the information available to Holdings and Borrower
at such date and on the Closing Date. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.5&nbsp;&nbsp;&nbsp;&nbsp;Material Adverse Effect.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Since December&nbsp;31, 2006, there have been no events,
circumstances, developments or other changes in facts that could reasonably be expected, in the aggregate, to have a Material Adverse Effect. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.6&nbsp;&nbsp;&nbsp;&nbsp;Solvency.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Both before and after giving effect to (a)&nbsp;the Loans and Letters of Credit
made or Issued on or prior to the date this representation and warranty is made, (b)&nbsp;the disbursement of the proceeds of such Loans, (c)&nbsp;the payment of the Specified Dividend and
(d)&nbsp;the payment and accrual of all transaction costs in connection with the foregoing, all of the Loan Parties on a Consolidated basis are Solvent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.7&nbsp;&nbsp;&nbsp;&nbsp;Litigation.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;There are no pending (or, to the knowledge of any Group Member, threatened in
writing) actions, investigations, suits, proceedings, audits, claims, demands, orders or disputes affecting Borrower or any of its Subsidiaries or any Guarantor with, by or before any Governmental
Authority other than those that cannot reasonably be expected to affect the Obligations, the Loan Documents, the Letters of Credit, and the other transactions contemplated in any of the foregoing and
would not, in the aggregate, have a Material Adverse Effect. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.8&nbsp;&nbsp;&nbsp;&nbsp;Taxes.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;All federal, state, local and foreign income and franchise and other material tax
returns, reports and statements (collectively, the "</FONT><FONT SIZE=2><I>Tax Returns</I></FONT><FONT SIZE=2>") required to be filed by any Tax Affiliate have been filed with the appropriate
Governmental Authorities in all jurisdictions in which such Tax Returns are required to be filed, all such Tax Returns are true and correct in all material respects, and all taxes, charges and other
impositions reflected therein or otherwise due and payable have been paid prior to the date on which any Liability may be added thereto for non-payment thereof except for those contested
in good faith by appropriate proceedings diligently conducted and for which adequate reserves are maintained on the books of the appropriate Tax Affiliate in accordance with GAAP. No Tax Return is
under audit or examination by any Governmental Authority and no notice of such an audit or examination or any assertion of any claim for Taxes has been given or made by any Governmental Authority.
Proper and accurate amounts have been withheld by each Tax Affiliate from their respective employees for all periods in full and complete compliance with the tax, social security and unemployment
withholding provisions of applicable Requirements of Law and such withholdings have been timely paid to the respective Governmental Authorities. No Tax Affiliate has participated in a "reportable
transaction" within the meaning of Treasury Regulation Section&nbsp;1.6011-4(b) or has been a member of an affiliated, combined or unitary group other than the group of which a Tax
Affiliate is the common parent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.9&nbsp;&nbsp;&nbsp;&nbsp;Margin Regulations.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No Loan Party is engaged in the business of extending credit for the
purpose of, and no proceeds of any Loan or other extensions of credit hereunder will be used for the purpose of, buying or carrying margin stock (within the meaning of Regulation&nbsp;U of the
Federal Reserve Board) or extending credit to others for the purpose of purchasing or carrying any such margin stock, in each case in contravention of Regulation&nbsp;T, U or X of the Federal
Reserve Board. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.10&nbsp;&nbsp;&nbsp;&nbsp;No Burdensome Obligations; No Defaults.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No Group Member is a party to any Contractual
Obligation, no Group Member has Constituent Documents containing obligations, and, to the knowledge of any Group Member, there are no applicable Requirements of Law, in each case the </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>46</FONT></P>

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<P><FONT SIZE=2>compliance
with which would have, in the aggregate, a Material Adverse Effect. No Group Member (and, to the knowledge of each Group Member, no other party thereto) is in default under or with respect
to any Contractual Obligation of any Group Member, other than those that would not, in the aggregate, have a Material Adverse Effect. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.11&nbsp;&nbsp;&nbsp;&nbsp;Investment Company Act.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No Group Member is an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company", as such terms are defined in the Investment Company Act of 1940. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.12&nbsp;&nbsp;&nbsp;&nbsp;Labor Matters.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;There are no strikes, work stoppages, slowdowns or lockouts existing, pending
(or, to the knowledge of any Group Member, threatened in writing) against or involving any Group Member, except for those that would not, in the aggregate, have a Material Adverse Effect. Except as
set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.12</I></FONT><FONT SIZE=2>, as of the Closing Date, (a)&nbsp;there is no collective bargaining or similar agreement with any union, labor
organization, works council or similar representative covering any employee of any Group Member, (b)&nbsp;no petition for certification or election of any such representative is existing or pending
with respect to any employee of any Group Member and (c)&nbsp;no such representative has sought certification or recognition with respect to any employee of any Group Member. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.13&nbsp;&nbsp;&nbsp;&nbsp;ERISA.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Schedule&nbsp;4.13</I></FONT><FONT SIZE=2> sets forth, as
of the Closing Date, a complete and correct list of, and that separately identifies, (a)&nbsp;all Title IV Plans, (b)&nbsp;all Multiemployer Plans and (c)&nbsp;all material Benefit Plans. Each
Benefit Plan, and each trust thereunder, intended to qualify for tax exempt status under Section&nbsp;401 or 501 of the Code or other Requirements of Law so qualifies. Except for those that would
not, in the aggregate, have a Material Adverse Effect, (x)&nbsp;each Benefit Plan is in compliance with applicable provisions of ERISA, the Code and other Requirements of Law, (y)&nbsp;there are
no existing or pending (or, to the knowledge of any Group Member, threatened in writing) claims (other than routine claims for benefits in the normal course), sanctions, actions, lawsuits or other
proceedings or investigation involving any Benefit Plan to which any Group Member incurs or otherwise has or could have an obligation or any Liability and (z)&nbsp;no ERISA Event is reasonably
expected to occur. On the Closing Date, no ERISA Event has occurred in connection with which obligations and liabilities (contingent or otherwise) remain outstanding. No ERISA Affiliate would have any
Withdrawal Liability as a result of a complete withdrawal from any Multiemployer Plan on the date this representation is made. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.14&nbsp;&nbsp;&nbsp;&nbsp;Environmental Matters.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except as set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;4.14</I></FONT><FONT SIZE=2>, (a)&nbsp;the operations of each Group
Member are and have been in compliance with all applicable Environmental Laws, including
obtaining, maintaining and complying with all Permits required by any applicable Environmental Law, other than non-compliances that, in the aggregate, would not have a reasonable
likelihood of resulting in Material Environmental Liabilities, (b)&nbsp;no Group Member is party to, and no Group Member and no real property currently (or to the knowledge of any Group Member
previously) owned, leased, subleased, operated or otherwise occupied by or for any Group Member is subject to or the subject of, any Contractual Obligation or any pending (or, to the knowledge of any
Group Member, threatened) order, action, investigation, suit, proceeding, audit, claim, demand, dispute or notice of violation or of potential liability or similar notice under or pursuant to any
Environmental Law other than those that, in the aggregate, are not reasonably likely to result in Material Environmental Liabilities, (c)&nbsp;no Lien in favor of any Governmental Authority
securing, in whole or in part, Environmental Liabilities has attached to any property of any Group Member and, to the knowledge of any Group Member, no facts, circumstances or conditions exist that
could reasonably be expected to result in any such Lien attaching to any such property, (d)&nbsp;no Group Member has caused or suffered to occur a Release of Hazardous Materials at, to or from any
real property of any Group Member and each such real property is free of contamination by any Hazardous Materials except for such Release or contamination that could not reasonably be expected to
result, in the aggregate, in Material Environmental Liabilities, (e)&nbsp;no Group Member (i)&nbsp;is or has been engaged in, or has permitted any </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>47</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_om76602_1_48"> </A>
<BR>

<P><FONT SIZE=2>current
or former tenant to engage in, operations, or (ii)&nbsp;knows of any facts, circumstances or conditions, including receipt of any information request or notice of potential responsibility
under CERCLA or similar Environmental Laws, that, in the aggregate, would have a reasonable likelihood of resulting in Material Environmental Liabilities and (f)&nbsp;each Group Member has made
available to the Administrative Agent copies of all existing environmental reports, reviews and audits and all documents pertaining to actual or potential Environmental Liabilities, in each case to
the extent such reports, reviews, audits and documents are in their possession, custody or control. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.15&nbsp;&nbsp;&nbsp;&nbsp;Intellectual Property.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Group Member owns or licenses all Intellectual Property that is
necessary for the operations of its businesses. The conduct and operations of the businesses of each Group Member does not, to the knowledge of any Group Member, infringe, misappropriate, dilute,
violate or otherwise impair any Intellectual Property owned by any other Person and (b)&nbsp;no other Person has contested any right, title or interest of any Group Member in, or relating to, any
Intellectual Property, other than, in each case, as cannot reasonably be expected to affect the Loan Documents and the transactions contemplated therein and would not, in the aggregate, have a
Material Adverse Effect. In addition, (x)&nbsp;there are no pending (or, to the knowledge of any Group Member, threatened) actions, investigations, suits, proceedings, audits, claims, demands,
orders or disputes affecting any Group Member with respect to, (y)&nbsp;no judgment or order regarding any such claim has been rendered by any competent Governmental Authority, no settlement
agreement or similar Contractual Obligation has been entered into by any Group Member, with respect to and (z)&nbsp;no Group Member knows or has any reason to know of any valid basis for any claim
based on, any such infringement, misappropriation, dilution, violation or impairment or contest, other than, in each case, as cannot reasonably be expected to affect the Loan Documents and the
transactions contemplated therein and would not, in the aggregate, have a Material Adverse Effect. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.16&nbsp;&nbsp;&nbsp;&nbsp;Title; Real Property.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) As of the Closing Date, no Group Member owns any real property.
Each Group Member owns all personal property, in each case that is purported to be owned or leased by it, including those reflected on the most recent Financial Statements delivered by Borrower, and
none of such property is subject to any Lien except Permitted Liens. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Set
forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;4.16</I></FONT><FONT SIZE=2> is, as of the Closing Date, a complete and accurate list of all real property in which
any Group Member owns a leasehold interest setting forth, for each such real property, the current street address (including, where applicable, county, state and other relevant jurisdictions) and the
record owner thereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.17&nbsp;&nbsp;&nbsp;&nbsp;Full Disclosure.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The written information prepared or furnished by or on behalf of any Group
Member in connection with any Loan Document (including the information contained in any Financial Statement or Disclosure Document), taken as a whole, does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements contained therein, taken as a whole, in light of the circumstances when made, not materially misleading; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>,
</FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that projections contained therein are not to be viewed as factual and that actual
results during the periods covered thereby may differ from the results set forth in such projections by a material amount. All projections that are part of such information (including those set forth
in any Projections delivered subsequent to the Closing Date) are based upon good faith estimates and stated assumptions believed to be reasonable and fair as of the date made in light of conditions
and facts then known and, as of such date, reflect good faith, reasonable and fair estimates of the information projected for the periods set forth therein. All facts known to any Group Member and
material to an understanding of the financial condition, business, property or prospects of the Group Member taken as one enterprise have been disclosed to the Lenders. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>48</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_om76602_1_49"> </A>
<BR>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="om76602_article_v_financial_covenants"> </A>
<A NAME="toc_om76602_2"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE V    <BR>    <BR>    FINANCIAL COVENANTS    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Borrower and each Parent Guarantor (and, to the extent set forth in any other Loan Document, each other Loan Party) agrees with the Lenders, the L/C Issuers and
the Administrative Agent to each of the following, as long as any Obligation or any Commitment remains outstanding: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;5.1&nbsp;&nbsp;&nbsp;&nbsp;Maximum Consolidated Leverage Ratio.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Holdings shall not have, on the last day of each Fiscal
Quarter set forth below, a Consolidated Leverage Ratio greater than the maximum ratio set forth opposite such Fiscal Quarter: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="63%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="68%" ALIGN="LEFT"><FONT SIZE=1><B>FISCAL QUARTER ENDING<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="29%" ALIGN="CENTER"><FONT SIZE=1><B>MAXIMUM&nbsp;CONSOLIDATED<BR>
LEVERAGE&nbsp;RATIO</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>March 31, 2007</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>3.50 to 1</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>June 30, 2007</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>3.50 to 1</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>September 30, 2007</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>3.50 to 1</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>December 31, 2007</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>3.50 to 1</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>March 31, 2008</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>3.30 to 1</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>June 30, 2008</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>3.10 to 1</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>September 30, 2008</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>2.90 to 1</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>December 31, 2008</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>2.80 to 1</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>March 31, 2009</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>2.65 to 1</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>June 30, 2009</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>2.50 to 1</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>September 30, 2009</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>2.35 to 1</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>December 31, 2009</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>2.25 to 1</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>March 31, 2010</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>2.10 to 1</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>June 30, 2010</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>1.95 to 1</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>September 30, 2010</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>1.80 to 1</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>December 31, 2010</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>1.75 to 1</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>March 31, 2011</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>1.70 to 1</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>June 30, 2011</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>1.60 to 1</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>September 30, 2011</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>1.60 to 1</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>December 31, 2011</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="29%"><FONT SIZE=2>1.50 to 1</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;5.2&nbsp;&nbsp;&nbsp;&nbsp;Minimum Consolidated Fixed Charge Coverage Ratio.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Holdings shall not have, on the last day of
any Fiscal Quarter, a Consolidated Fixed Charge Coverage Ratio for the four (4)&nbsp;Fiscal Quarter period ending on such day less than 1.40 to 1 (taking into account, for the applicable periods,
the carve-out for the Excluded Tax Payment that is contained within the definition of such ratio). </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>49</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_om76602_1_50"> </A>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;5.3&nbsp;&nbsp;&nbsp;&nbsp;Minimum Consolidated EBITDA.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Holdings shall not have, on the last day of each Fiscal Quarter
set forth below, a Consolidated EBITDA for the four (4)&nbsp;Fiscal Quarter period ending on such day less than the minimum Consolidated EBITDA set forth opposite such Fiscal Quarter: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="63%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="68%" ALIGN="LEFT"><FONT SIZE=1><B>FISCAL QUARTER ENDING<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>MINIMUM&nbsp;CONSOLIDATED<BR>
EBITDA</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>March 31, 2007</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>7,200,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>June 30, 2007</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>7,300,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>September 30, 2007</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>6,800,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>December 31, 2007</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>6,700,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>March 31, 2008</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>7,100,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>June 30, 2008</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>7,600,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>September 30, 2008</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>8,000,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>December 31, 2008</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>8,500,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>March 31, 2009</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>8,500,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>June 30, 2009</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>8,600,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>September 30, 2009</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>8,600,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>December 31, 2009</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>8,700,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>March 31, 2010</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>8,900,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>June 30, 2010</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>9,200,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>September 30, 2010</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>9,500,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>December 31, 2010</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>9,800,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>March 31, 2011</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>10,100,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>June 30, 2011</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>10,500,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>September 30, 2011</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>10,800,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="68%"><FONT SIZE=2>December 31, 2011</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="25%" ALIGN="RIGHT"><FONT SIZE=2>11,100,000</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;5.4&nbsp;&nbsp;&nbsp;&nbsp;Capital Expenditures</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;The
Group Members shall not, on a Consolidated basis, incur or permit to be incurred Capital Expenditures in the aggregate during any Fiscal Year set forth below in
excess of the maximum amount set forth below for such Fiscal Year: </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="71%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="67%" ALIGN="LEFT"><FONT SIZE=1><B>FISCAL YEAR ENDING<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER"><FONT SIZE=1><B>MAXIMUM&nbsp;CAPITAL<BR>
EXPENDITURES</B></FONT><HR NOSHADE></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="67%"><FONT SIZE=2>Fiscal Year 2007</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="27%" ALIGN="RIGHT"><FONT SIZE=2>2,200,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="67%"><FONT SIZE=2>Fiscal Year 2008</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="27%" ALIGN="RIGHT"><FONT SIZE=2>3,025,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="67%"><FONT SIZE=2>Fiscal Year 2009</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="27%" ALIGN="RIGHT"><FONT SIZE=2>3,135,000</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD WIDTH="67%"><FONT SIZE=2>Fiscal Year 2010</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="27%" ALIGN="RIGHT"><FONT SIZE=2>3,300,000</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD WIDTH="67%"><FONT SIZE=2>Fiscal Year 2011</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>$</FONT></TD>
<TD WIDTH="27%" ALIGN="RIGHT"><FONT SIZE=2>3,300,000</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Notwithstanding
anything to the contrary contained in </FONT><FONT SIZE=2><I>clause&nbsp;(a)</I></FONT><FONT SIZE=2> above, to the extent that the aggregate amount of
Capital Expenditures made by the Group Members in any Fiscal Year pursuant to Section&nbsp;5.5(a) is less than the amount set forth for such fiscal year, an amount equal to 50% of such difference
(the "</FONT><FONT SIZE=2><I>Rollover Amount</I></FONT><FONT SIZE=2>") may be carried forward and used to make Capital Expenditures in the immediately succeeding fiscal year (with the Rollover Amount
being used after the current year's amount). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;5.5&nbsp;&nbsp;&nbsp;&nbsp;Make-Well Payments.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding anything to the contrary contained in
Section&nbsp;5.1, the stockholders of Holdings shall have the right, but not the obligation, to cure any Default of the Maximum Consolidated Leverage Ratio occurring at the end of a Fiscal Quarter
by contributing additional equity to Holdings, which shall contribute such equity to Borrower (each such equity investment by the stockholders, a "</FONT><FONT SIZE=2><I>Make-Well
Payment</I></FONT><FONT SIZE=2>"); </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, however, that such right to </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>50</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_om76602_1_51"> </A>
<BR>

<P><FONT SIZE=2>cure
the Maximum Consolidated Leverage Ratio shall be limited to two such occasions during any period of four consecutive Fiscal Quarters. Any Make-Well Payment must, as a condition to
curing a Default, (a)&nbsp;be contributed to Borrower within 5 Business Days of the occurrence of such Default, (b)&nbsp;be used by Borrower solely to repay the Term Loan, and (c)&nbsp;be equal
to, but not exceed, the amount necessary to effect a cure of the applicable Default. For the purposes of calculating the Maximum Consolidated Leverage Ratio for any Fiscal Quarter with respect to
which a Make-Well Payment is being made, the Consolidated Total Debt for such Fiscal Quarter shall be reduced by the amount of the Make-Well Payment. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="om76602_article_vi_reporting_covenants"> </A>
<A NAME="toc_om76602_3"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE VI    <BR>    <BR>    REPORTING COVENANTS    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Borrower and each Parent Guarantor (and, to the extent set forth in any other Loan Document, each other Loan Party) agrees with the Lenders, the L/C Issuers and
the Administrative Agent to each of the following, as long as any Obligation or any Commitment remains outstanding: </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;6.1&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower shall deliver to the Administrative Agent each of the
following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Monthly Reports.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;As soon as available, and in any event within 30&nbsp;days after the end of each fiscal
month (other than any fiscal month constituting the last month of a Fiscal Quarter), the Consolidated and consolidating unaudited balance sheet of Holdings as of the close of such fiscal month and
related Consolidated and consolidating statements of income and cash flow for such fiscal month and that portion of the Fiscal Year ending as of the close of such fiscal month, setting forth in
comparative form the figures for the corresponding periods in the prior Fiscal Year and the figures contained in the latest Projections, in each case certified by a Responsible Officer of Borrower as
fairly presenting in all material respects the Consolidated financial position, results of operations and cash flow of Holdings as at the dates indicated and for the periods indicated in accordance
with GAAP (subject to the absence of footnote disclosure and normal year-end audit adjustments). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Quarterly Reports.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;As soon as available, and in any event within 45&nbsp;days after the end of each Fiscal
Quarter, the Consolidated and consolidating unaudited balance sheet of Holdings as of the close of such Fiscal Quarter and related Consolidated and consolidating statements of income and cash flow for
such Fiscal Quarter and that portion of the Fiscal Year ending as of the close of such Fiscal Quarter, setting forth in comparative form the figures for the corresponding periods in the prior Fiscal
Year and the figures contained in the latest Projections, in each case certified by a Responsible Officer of Borrower as fairly presenting in all material respects the Consolidated and consolidating
financial position, results of operations and cash flow of Holdings as at the dates indicated and for the periods indicated in accordance with GAAP (subject to the absence of footnote disclosure and
normal year-end audit adjustments). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Annual Reports.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;As soon as available, and in any event within 90&nbsp;days after the end of each Fiscal
Year, the Consolidated and consolidating balance sheet of Holdings as of the end of such year and related Consolidated and consolidating statements of income, stockholders' equity and cash flow for
such Fiscal Year, each prepared in accordance with GAAP, together with a certification by the Group Members' Accountants that (i)&nbsp;such Consolidated Financial Statements fairly present in all
material respects the Consolidated financial position, results of operations and cash flow of Holdings as at the dates indicated and for the periods indicated therein in accordance with GAAP without
qualification as to the scope of the audit or as to going concern and without any other similar qualification and (ii)&nbsp;in the course of the regular audit of the businesses of the Group Members,
which audit was conducted in accordance with the standards of the United States' Public Company Accounting Oversight Board (or any successor entity), such Group </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>51</FONT></P>

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<A NAME="page_om76602_1_52"> </A>
<UL>
<BR>

<P><FONT SIZE=2>Members'
Accountants have obtained no knowledge that a Default in respect of any financial covenant contained in </FONT><FONT SIZE=2><I>Article&nbsp;V</I></FONT><FONT SIZE=2> is continuing or, if
in the opinion of the Group Members' Accountants such a Default is continuing, a statement as to the nature thereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Compliance Certificate.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Together with each delivery of any Financial Statement pursuant to </FONT> <FONT SIZE=2><I>clause&nbsp;(b)</I></FONT><FONT SIZE=2> or
</FONT><FONT SIZE=2><I>(c)</I></FONT><FONT SIZE=2> above, a Compliance Certificate duly executed by a Responsible Officer of
Borrower that, among other things, (i)&nbsp;shows in reasonable detail the calculations used in determining Excess Cash Flow, if delivered together with any Financial Statement pursuant to </FONT> <FONT SIZE=2><I>clause&nbsp;(c)</I></FONT><FONT
SIZE=2> above, (ii)&nbsp;demonstrates compliance with each financial covenant contained in </FONT> <FONT SIZE=2><I>Article&nbsp;V</I></FONT><FONT SIZE=2> that is tested at least on a quarterly basis and (iii)&nbsp;states that no Default is continuing
as of the date of delivery of such
Compliance Certificate or, if a Default is continuing, states the nature thereof and the action that Borrower proposes to take with respect thereto. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Additional Projections.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;As soon as available and in any event not later than 30&nbsp;days after the end of
each Fiscal Year, (i)&nbsp;the annual business plan of the Group Members for the Fiscal Year next succeeding such Fiscal Year and (ii)&nbsp;forecasts prepared by management of Borrower
(A)&nbsp;for each Fiscal Quarter in such next succeeding Fiscal Year and (B)&nbsp;for each other succeeding Fiscal Year through the Fiscal Year containing the Scheduled Maturity Date, in each case
including in such forecasts (x)&nbsp;a projected year-end Consolidated balance sheet, income statement and statement of cash flows, (y)&nbsp;a statement of all of the material
assumptions on which such forecasts are based and (z)&nbsp;substantially the same type of financial information as that contained in the Initial Projections. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Management Discussion and Analysis.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Together with each delivery of any Financial Statement pursuant to </FONT> <FONT SIZE=2><I>clause&nbsp;(b)</I></FONT><FONT SIZE=2>
above, a discussion and analysis of the financial condition and results of operations of the Group Members for the portion of the
Fiscal Year then elapsed and discussing the reasons for any significant variations from the Projections for such period and the figures for the corresponding period in the previous Fiscal Year. In
addition, Borrower and its senior management will be available to discuss with the Administrative Agent and the Lenders any monthly Financial Statement that, in the reasonable judgment of the
Administrative Agent, requires discussion. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Audit Reports, Management Letters, Etc.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Together with each delivery of any Financial Statement for any
Fiscal Year pursuant to </FONT><FONT SIZE=2><I>clause&nbsp;(c)</I></FONT><FONT SIZE=2> above, copies of each management letter, audit report or similar letter or report received by any Group Member
from any independent registered certified public accountant (including the Group Members' Accountants) in connection with such Financial Statements or any audit thereof, each certified to be complete
and correct copies by a Responsible Officer of Borrower as part of the Compliance Certificate delivered in connection with such Financial Statements. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Insurance.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Together with each delivery of any Financial Statement for any Fiscal Year pursuant to </FONT> <FONT SIZE=2><I>clause&nbsp;(c)</I></FONT><FONT SIZE=2> above,
each in form and substance satisfactory to the Administrative Agent and certified as complete and correct by a Responsible
Officer of Borrower as part of the Compliance Certificate delivered in connection with such Financial Statements, a summary of all material insurance coverage maintained as of the date thereof by any
Group Member, together with such other related documents and information as the Administrative Agent may reasonably require. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;6.2&nbsp;&nbsp;&nbsp;&nbsp;Other Events.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower shall give the Administrative Agent notice of each of the
following (which may be made by telephone if promptly confirmed in writing) promptly after any Responsible Officer of any Group Member knows or has reason to know of it: (a)(i)&nbsp;any Default or
Event of Default and (ii)&nbsp;any event or condition that could reasonably be expected to have a Material Adverse Effect, specifying, in each case, the nature and anticipated effect thereof and any
action proposed to be taken in connection therewith, (b)&nbsp;any event (other than any event involving loss or </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>52</FONT></P>

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<A NAME="page_om76602_1_53"> </A>

<P><FONT SIZE=2>damage
to property) reasonably expected to result in a mandatory payment of the Obligations pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;2.8</I></FONT><FONT SIZE=2>, stating the material terms
and conditions of such transaction and estimating the Net Cash Proceeds thereof, (c)&nbsp;the commencement of, or any material developments in, any action, investigation, suit, proceeding, audit,
claim, demand, order or dispute with, by or before any Governmental Authority affecting any Group Member or any property of any Group Member that (i)&nbsp;seeks injunctive or similar relief,
(ii)&nbsp;in the reasonable judgment of Borrower exposes any Group Member to liability in an aggregate amount in excess of $250,000 or (iii)&nbsp;if adversely determined would have a Material
Adverse Effect, and (d)&nbsp;the acquisition of any material real property or the entering into of any material lease. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;6.3&nbsp;&nbsp;&nbsp;&nbsp;Copies of Notices and Reports.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower shall promptly deliver to the Administrative
Agent copies of each of the following: (a)&nbsp;all reports that Holdings transmits to its security holders generally, (b)&nbsp;all documents that any Group Member files with the Securities and
Exchange Commission, the National Association of Securities Dealers,&nbsp;Inc., any securities exchange or any Governmental Authority exercising similar functions, (c)&nbsp;all press releases not
made available directly to the general public, (d)&nbsp;all material documents transmitted or received pursuant to, or in connection with, any Related Document, (e)&nbsp;any material document
transmitted or received pursuant to, or in connection with, any default, termination, waiver or material amendment of any Contractual Obligation governing Indebtedness of any Group Member and
(f)&nbsp;any material notices that any Loan Party executes or receives in connection with any Material Contract. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;6.4&nbsp;&nbsp;&nbsp;&nbsp;Taxes.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower shall give the Administrative Agent notice of each of the following
(which may be made by telephone if promptly confirmed in writing) promptly after any Responsible Officer of any Group Member knows or has reason to know of it: (a)&nbsp;the creation, or filing with
the IRS or any other Governmental Authority, of any Contractual Obligation or other document extending, or having the effect of extending, the period for assessment or collection of any taxes with
respect to any Tax Affiliate and (b)&nbsp;the creation of any Contractual Obligation of any Tax Affiliate, or the receipt of any request directed to any Tax Affiliate, to make any adjustment under
Section&nbsp;481(a) of the Code, by reason of a change in accounting method or otherwise, which would have a Material Adverse Effect. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;6.5&nbsp;&nbsp;&nbsp;&nbsp;Labor Matters.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower shall give the Administrative Agent notice of each of the
following (which may be made by telephone if promptly confirmed in writing), promptly after any Responsible Officer of any Group Member knows or has reason to know of it: (a)&nbsp;the commencement
of any material labor dispute to which any Group Member is or may become a party, including any strikes, lockouts or other disputes relating to any of such Person's plants and other facilities and
(b)&nbsp;the incurrence by any Group Member of any Worker Adjustment and Retraining Notification Act or related or similar liability incurred with respect to the closing of any plant or other
facility of any such Person (other than, in the case of this </FONT><FONT SIZE=2><I>clause&nbsp;(b)</I></FONT><FONT SIZE=2>, those that would not, in the aggregate, have a Material Adverse Effect). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;6.6&nbsp;&nbsp;&nbsp;&nbsp;ERISA Matters.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Borrower shall give the Administrative Agent (a)&nbsp;on or prior to any
filing by any ERISA Affiliate of any notice of intent to terminate any Title IV Plan, a copy of such notice and (b)&nbsp;promptly, and in any event within 10&nbsp;days, after any Responsible
Officer of any ERISA Affiliate knows or has reason to know that a request for a minimum funding waiver under Section&nbsp;412 of the Code has been filed with respect to any Title IV Plan or
Multiemployer Plan, a notice (which may be made by telephone if promptly confirmed in writing) describing such waiver request and any action that any ERISA Affiliate proposes to take with respect
thereto, together with a copy of any notice filed with the PBGC or the IRS pertaining thereto. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;6.7&nbsp;&nbsp;&nbsp;&nbsp;Environmental Matters.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) The Borrower shall provide the Administrative Agent notice of each
of the following (which may be made by telephone if promptly confirmed by the Administrative Agent in writing) promptly after any Responsible Officer of any Group Member knows </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>53</FONT></P>

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<A NAME="page_om76602_1_54"> </A>
<BR>

<P><FONT SIZE=2>or
has reason to know of it (and, upon reasonable request of the Administrative Agent, documents and information in connection therewith): (i)(A) unpermitted Releases, (B)&nbsp;the receipt by any
Group Member of any notice of violation of or potential liability or similar notice under, or the existence of any condition that could reasonably be expected to result in violations of or liabilities
under, any Environmental Law or (C)&nbsp;the commencement of, or any material change to, any action, investigation, suit, proceeding, audit, claim, demand, dispute alleging a violation of or
liability under any Environmental Law, that, for each of </FONT><FONT SIZE=2><I>clauses (A)</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>(B)</I></FONT><FONT SIZE=2> and </FONT> <FONT SIZE=2><I>(C)</I></FONT><FONT SIZE=2> above (and, in the case of
</FONT><FONT SIZE=2><I>clause&nbsp;(C)</I></FONT><FONT SIZE=2>, if adversely determined), in the aggregate for each
such clause, could reasonably be expected to result in Environmental Liabilities in excess of $250,000, (ii)&nbsp;the receipt by any Group Member of notification that any property of any Group
Member is subject to any Lien in favor of any Governmental Authority securing, in whole or in part, Environmental Liabilities and (iii)&nbsp;any proposed acquisition or lease of real property
(except as part of any Permitted Acquisition) if such acquisition or lease would have a reasonable likelihood of resulting in aggregate Environmental Liabilities in excess of $250,000. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Upon
the reasonable request of the Administrative Agent, Borrower shall provide the Administrative Agent a report containing an update as to the status of any
environmental, health or safety compliance, hazard or liability issue identified in any document delivered to any Secured Party pursuant to any Loan Document or as to any condition reasonably believed
by the Administrative Agent to result in or to be reasonably likely to result in material Environmental Liabilities. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;6.8&nbsp;&nbsp;&nbsp;&nbsp;Other Information.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Borrower shall provide the Administrative Agent with updates to the
information disclosed herein and in the Perfection Certificate as and when any information contained herein or therein becomes obsolete or incomplete. Borrower shall also provide the Administrative
Agent such other documents and information with respect to the business, property, condition (financial or otherwise), legal, financial or corporate or similar affairs or operations of any Group
Member as the Administrative Agent or any Lender through the Administrative Agent may from time to time reasonably request. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="om76602_article_vii_affirmative_covenants"> </A>
<A NAME="toc_om76602_4"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE VII    <BR>    <BR>    AFFIRMATIVE COVENANTS    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each of Holdings and Borrower (and, to the extent set forth in any other Loan Document, each other Loan Party) agrees with the Lenders, the L/C Issuers and the
Administrative Agent to each of the following, as long as any Obligation or any Commitment remains outstanding: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;7.1&nbsp;&nbsp;&nbsp;&nbsp;Maintenance of Corporate Existence.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Group Member shall (a)&nbsp;preserve and maintain
its legal existence, except in the consummation of transactions expressly permitted by </FONT><FONT SIZE=2><I>Sections 8.4</I></FONT><FONT SIZE=2> and </FONT> <FONT SIZE=2><I>8.7</I></FONT><FONT SIZE=2>, and (b)&nbsp;preserve and maintain it rights
(charter and statutory), privileges, franchises and Permits necessary or desirable in the conduct of
its business, except, in the case of this clause&nbsp;(b), where the failure to do so would not, in the aggregate, have a Material Adverse Effect. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;7.2&nbsp;&nbsp;&nbsp;&nbsp;Compliance with Laws, Etc.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Group Member shall comply with all applicable Requirements of
Law, Contractual Obligations and Permits, except for such failures to comply that would not, in the aggregate, have a Material Adverse Effect. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;7.3&nbsp;&nbsp;&nbsp;&nbsp;Payment of Obligations.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Group Member shall pay or discharge before they become due
(a)&nbsp;all material claims, taxes, assessments, charges and levies imposed by any Governmental Authority and (b)&nbsp;all other lawful claims that if unpaid would, by the operation of applicable
Requirements of Law, become a Lien (other than a Permitted Lien) upon any property of any Group Member, except, in each case, for those whose amount or validity is being contested in good faith by
proper proceedings diligently conducted and for which adequate reserves are maintained on the books of the appropriate Group Member in accordance with GAAP. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>54</FONT></P>

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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Section&nbsp;7.4&nbsp;&nbsp;&nbsp;&nbsp;Maintenance of Property.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Group Member shall maintain and preserve (a)&nbsp;in good
working order and condition all of its property necessary in the conduct of its business and (b)&nbsp;all rights, permits, licenses, approvals and privileges (including all Permits) necessary, used
or useful, whether because of its ownership, lease, sublease or other operation or occupation of property or other conduct of its business, and shall make all necessary or appropriate filings with,
and give all required notices to, Government Authorities, except for such failures to maintain and preserve the items set forth in </FONT><FONT SIZE=2><I>clauses&nbsp;(a)</I></FONT><FONT SIZE=2>
and </FONT><FONT SIZE=2><I>(b)</I></FONT><FONT SIZE=2> above, and the failures to make filings or give notices, that would not in the aggregate have a Material Adverse Effect. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;7.5&nbsp;&nbsp;&nbsp;&nbsp;Maintenance of Insurance.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Group Member shall (a)&nbsp;maintain or cause to be
maintained in full force and effect all policies of insurance of any kind with respect to the property and businesses of the Group Members (including policies of life, fire, theft, errors and
omissions, product liability, public liability, property damage, other casualty, employee fidelity, workers' compensation, business interruption and employee health and welfare insurance) with
financially sound and reputable insurance companies or associations (in each case that are not Affiliates of Borrower) of a nature and providing such coverage as is sufficient and as is customarily
carried by businesses of the size and character of the business of the Group Members and (b)&nbsp;cause all such insurance relating to any property or business of any Loan Party to name the
Administrative Agent on behalf of the Secured Parties as additional insured or loss payee, as appropriate, and to provide that no cancellation, material addition in amount or material change in
coverage shall be effective until after 30&nbsp;days' notice thereof to the Administrative Agent; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that with respect to business
interruption insurance, Borrower's obligation to cause such policies to name the Administrative Agent as loss
payee or additional insured shall be limited to Borrower's use of its commercially reasonable efforts. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;7.6&nbsp;&nbsp;&nbsp;&nbsp;Keeping of Books.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Group Members shall keep proper books of record and account, in which
full, true and correct entries shall be made in accordance with GAAP and all other applicable Requirements of Law of all financial transactions and the assets and business of each Group Member. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;7.7&nbsp;&nbsp;&nbsp;&nbsp;Access to Books and Property.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Group Member shall permit the Administrative Agent, the
Lenders and any Related Person of any of them, at any reasonable time during normal business hours and with reasonable advance notice (except that, during the continuance of an Event of Default, no
such notice shall be required) to: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;visit
and inspect the property of each Group Member and examine and make copies of and abstracts from, the corporate, partnership, financial, operating and other books
and records of each Group Member; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that in the absence of any Event of Default
hereunder, such visits shall (i)&nbsp;be undertaken solely by Administrative Agent and its Related Persons, and shall occur no more than twice in any 12-month period, or (ii)&nbsp;be
undertaken by another Lender at its sole
expense after the Company's completion of its own audit and no more than once in any 12-month period, </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;discuss
the affairs, finances and accounts of each Group Member with any officer or director of any Group Member, and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;communicate
directly with any registered certified public accountants (including the Group Members' Accountants) of any Group Member. </FONT></P>

</UL>

<P><FONT SIZE=2>Each
Group Member shall maintain the authorization of their respective registered certified public accountants (including the Group Members' Accountants) to communicate directly with the
Administrative Agent, the Lenders and their Related Persons and to disclose to the Administrative Agent, the Lenders and their Related Persons all financial statements and other financial documents
and information as they might have and the Administrative Agent or any Lender reasonably requests with respect to any Group Member. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>55</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;7.8&nbsp;&nbsp;&nbsp;&nbsp;Environmental.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Group Member shall comply with, and maintain its real property, whether
owned, leased, subleased or otherwise operated or occupied, in compliance with, all applicable Environmental Laws (including by implementing any Remedial Action necessary to achieve such compliance or
that is required by orders and directives of any Governmental Authority) except for failures to comply that would not, in the aggregate, have a Material Adverse Effect or be reasonably likely to cause
a Material Adverse Effect. Without limiting the foregoing, if an Event of Default is continuing or if the Administrative Agent at any time has a reasonable basis to believe that there exist violations
of Environmental Laws by any Group Member or that there exist any Environmental Liabilities, in each case, that would have or be reasonably likely to cause, in the aggregate, a Material Adverse
Effect, then each Group Member shall, promptly upon receipt of request from the Administrative Agent, cause the performance of, and allow the Administrative Agent and its Related Persons access to
such real property for the purpose of conducting, such environmental audits and assessments, including subsurface sampling of soil and groundwater, and cause the preparation of such reports, in each
case as the Administrative Agent may from time to time reasonably request. Such audits, assessments and reports, to the extent not conducted by the Administrative Agent or any of its Related Persons,
shall be conducted and prepared by reputable environmental consulting firms reasonably acceptable to the Administrative Agent and shall be in form and substance reasonably acceptable to the
Administrative Agent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;7.9&nbsp;&nbsp;&nbsp;&nbsp;Use of Proceeds.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The proceeds of the Loans shall be used by Borrower (and, to the extent
distributed to them by Borrower, each other Group Member) solely (a)&nbsp;to pay the Specified Dividend, (b)&nbsp;for the payment of transaction costs, fees and expenses incurred in connection
with the Loan
Documents and the transactions contemplated therein and (c)&nbsp;for working capital and general corporate purposes. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;7.10&nbsp;&nbsp;&nbsp;&nbsp;Additional Collateral and Guaranties.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;To the extent not delivered to the Administrative
Agent on or before the Closing Date (including in respect of after-acquired property and Persons that become Subsidiaries of any Loan Party after the Closing Date), each Group Member shall, promptly,
do each of the following, unless otherwise agreed by the Administrative Agent: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;deliver
to the Administrative Agent such modifications to the terms of the Loan Documents (or, to the extent applicable as determined by the Administrative Agent, such
other documents), in each case in form and substance reasonably satisfactory to the Administrative Agent and as the Administrative Agent reasonably deems necessary or advisable in order to ensure the
following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;(A)
each Subsidiary of any Loan Party that has entered into Guaranty Obligations with respect to any Indebtedness of Borrower and (B)&nbsp;each Wholly Owned
Subsidiary of any Loan Party shall guaranty, as primary obligor and not as surety, the payment of the Obligations of Borrower; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;each
Loan Party (including any Person required to become a Guarantor pursuant to </FONT><FONT SIZE=2><I>clause&nbsp;(i)</I></FONT><FONT SIZE=2> above) shall
effectively grant to the Administrative Agent, for the benefit of the Secured Parties, a valid and enforceable security interest in all of its property, including all of its Stock and Stock
Equivalents and other Securities owned by it, as security for the Obligations of such Loan Party; </FONT></P>

</UL>

<P><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that, unless Borrower and the Administrative Agent otherwise agree, in no event shall
(x)&nbsp;any Excluded Foreign Subsidiary be required to guaranty the payment of any Obligation, (y)&nbsp;the Loan Parties, individually or collectively, be required to pledge in excess of 66% of
the outstanding Voting Stock of any Excluded Foreign Subsidiary or (z)&nbsp;a security interest be required to be granted on any property of any Excluded Foreign Subsidiary as security for any
Obligation; </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>56</FONT></P>

<HR NOSHADE>
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<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;deliver
to the Administrative Agent all documents representing all Stock, Stock Equivalents and other Securities pledged pursuant to the documents delivered pursuant to </FONT> <FONT SIZE=2><I>clause&nbsp;(a)</I></FONT><FONT SIZE=2> above, together with
undated powers or endorsements duly executed in blank; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;upon
request of the Administrative Agent, deliver to it a Mortgage on any real property owned by any Loan Party and on any of its leases, together with all Mortgage
Supporting Documents relating thereto (or, if such real property or the real property subject to such lease is located in a jurisdiction
outside the United States, similar documents deemed appropriate by the Administrative Agent to obtain the equivalent in such jurisdiction of a first-priority mortgage on such real property or lease); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;to
take all other actions reasonably necessary or advisable to ensure the validity or continuing validity of any guaranty for any Obligation or any Lien securing any
Obligation, to perfect, maintain, evidence or enforce any Lien securing any Obligation or to ensure such Liens have the same priority as that of the Liens on similar Collateral set forth in the Loan
Documents executed on the Closing Date, including the filing of UCC financing statements in such jurisdictions as may be required by the Loan Documents or applicable Requirements of Law or as the
Administrative Agent may otherwise reasonably request; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;deliver
to the Administrative Agent legal opinions relating to the matters described in this </FONT><FONT SIZE=2><I>Section&nbsp;7.10</I></FONT><FONT SIZE=2>, which
opinions shall be as reasonably required by, and in form and substance and from counsel reasonably satisfactory to, the Administrative Agent. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;7.11&nbsp;&nbsp;&nbsp;&nbsp;Deposit Accounts; Securities Accounts and Cash Collateral Accounts.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Borrower
and each of its Subsidiaries (other than Excluded Foreign Subsidiaries that are not required to provide a guaranty of the Obligations) shall, within 30&nbsp;days following the Closing Date (or such
later date as the Administrative Agent may agree to in writing): </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;deposit
all of its cash in deposit accounts that are Controlled Deposit Account, and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;deposit
all of its Cash Equivalents in securities accounts that are Controlled Securities Accounts, </FONT></P>

</UL>

<P><FONT SIZE=2>in
each case except for cash and Cash Equivalents the aggregate value of which does not exceed $25,000 at any time, and </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that each Group
Member may maintain payroll accounts and may maintain zero-balance accounts for the purpose of managing local
disbursements. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;The
Administrative Agent shall not have any responsibility for, or bear any risk of loss of, any investment or income of any funds in any Cash Collateral Account. At any
time and from time to time after and during the continuance of an Event of Default, the Administrative Agent may apply funds then held in such Cash Collateral Accounts to the payment of Obligations in
accordance with </FONT><FONT SIZE=2><I>Section&nbsp;2.12</I></FONT><FONT SIZE=2>. During the continuance of an Event of Default, no Group Member and no Person claiming on behalf of or through any
Group Member shall have any right to demand payment of any funds held in any Cash Collateral Account. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;7.12&nbsp;&nbsp;&nbsp;&nbsp;Payment of Taxes.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Tax Affiliate shall properly prepare and file all material tax
returns and shall timely pay and discharge (or cause to be paid and discharged) all material taxes, assessments and governmental and other charges or levies imposed upon it or upon its income or
profits, or upon property belonging to it; provided that such Tax Affiliate shall not be required to pay any such tax, assessment, charge or levy that is being contested in good faith by appropriate
proceedings and for which the affected Tax Affiliate shall have set aside on its books adequate reserves with respect thereto in conformance with GAAP. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>57</FONT></P>

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<BR>
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="oo76602_article_viii_negative_covenants"> </A>
<A NAME="toc_oo76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE VIII    <BR>    <BR>    NEGATIVE COVENANTS    <BR>    </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Borrower and each Parent Guarantor (and, to the extent set forth in any other Loan Document, each other Loan Party) agrees with the Lenders, the L/C Issuers and
the Administrative Agent to each of the following, as long as any Obligation or any Commitment remains outstanding: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.1&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No Group Member shall, directly or indirectly, incur or otherwise remain liable
with respect to or responsible for, any Indebtedness except for the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;the
Obligations; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Indebtedness
existing on the date hereof and set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;8.1</I></FONT><FONT SIZE=2>, together with any Permitted Refinancing of
any Indebtedness permitted pursuant to this </FONT><FONT SIZE=2><I>clause&nbsp;(b)</I></FONT><FONT SIZE=2>; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Indebtedness
consisting of Capitalized Lease Obligations and purchase money Indebtedness, in each case incurred by any Group Member (other than Holdings) to finance the
acquisition, repair, improvement or construction of fixed or capital assets of such Group Member, together with any Permitted Refinancing of any Indebtedness permitted pursuant to this </FONT> <FONT SIZE=2><I>clause&nbsp;(c)</I></FONT><FONT SIZE=2>;
</FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that
(i)&nbsp;the aggregate outstanding principal amount of all such Indebtedness does not exceed $500,000 at any time and (ii)&nbsp;the principal amount of such Indebtedness does not exceed the lower
of the cost or fair market value of the property so acquired or built or of such repairs or improvements financed, whether directly or through a Permitted Refinancing, with such Indebtedness (each
measured at the time such acquisition, repair, improvement or construction is made); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;Indebtedness
of Holdings on account of Employee Stock Buybacks; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that the amount of such Indebtedness incurred shall not exceed $150,000 in any Fiscal
Year and $200,000 in the aggregate for all Fiscal Years;
and </FONT><FONT SIZE=2><I>provided further</I></FONT><FONT SIZE=2>, that all such Indebtedness incurred under this clause&nbsp;(d) shall be subordinated to the payment in full of the Obligations
on terms and conditions satisfactory to the Administrative Agent; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;intercompany
loans owing to any Group Member and constituting Permitted Investments of such Group Member; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;obligations
under Hedging Agreements entered into for the sole purpose of hedging in the normal course of business and consistent with industry practices; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;Indebtedness
in respect of appeal, bid, performance or surety or similar bonds, workers' compensation claims, self-insurance obligations and bankers
acceptances issued for the account of any Group Member in the ordinary course of business, including guarantees or obligations of any Group Member with respect to letters of credit supporting such
bid, performance or surety bonds, workers' compensation claims, self-insurance obligations and bankers acceptances (in each case other than for an obligation for money borrowed); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;Indebtedness
arising in connection with endorsement of instruments for deposit in the ordinary course of business; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;Guaranty
Obligations of (i)&nbsp;any Loan Party with respect to Indebtedness of any other Loan Party, or (ii)&nbsp;any Loan Party with respect to Indebtedness of any
Group Member that is not a Loan Party; provided that the aggregate outstanding amount of all Indebtedness guaranteed pursuant to this clause&nbsp;(ii) shall not exceed $50,000 at any time; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;Indebtedness
of any Loan Party assumed in connection with a Permitted Acquisition in an aggregate amount not greater than $250,000; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2> that (A)&nbsp;after giving pro forma effect to the assumption or existence
of such Indebtedness and the use of proceeds thereof, the Loan
Parties </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>58</FONT></P>

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<UL>
<BR>

<P><FONT SIZE=2>would,
on a pro forma basis, for the Fiscal Quarter immediately preceding such assumption, be in compliance with the requirements of </FONT><FONT SIZE=2><I>Article&nbsp;V</I></FONT><FONT SIZE=2>
and the proviso of clause&nbsp;(i) of the definition of Permitted Acquisition, (B)&nbsp;the Loan Parties shall, prior to such assumption, have provided to the Administrative Agent calculations
showing compliance with this clause&nbsp;(j), (C)&nbsp;the credit documentation with respect to such Indebtedness shall not contain covenants or default provisions relating to any Loan Party that
are more restrictive than the covenants and default provisions contained in the Loan Documents, (D)&nbsp;no Default or Event of Default exists or would exist immediately after giving effect thereto,
and (E)&nbsp;for purposes of this clause&nbsp;(j), the Loan Party shall be deemed to have assumed any Indebtedness of the Person acquired pursuant to such Permitted Acquisition at such time
outstanding; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;&nbsp;any
unsecured Subordinated Debt that the Administrative Agent permits in its sole discretion; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;&nbsp;&nbsp;any
unsecured Indebtedness of any Group Member; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that
the aggregate outstanding principal amount of all such unsecured Indebtedness shall not exceed $250,000 at any time. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.2&nbsp;&nbsp;&nbsp;&nbsp;Liens.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No Group Member shall incur, maintain or otherwise suffer to exist any Lien upon or
with respect to any of its property, whether now owned or hereafter acquired, or assign any right to receive income or profits, except for the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Liens
created pursuant to any Loan Document; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Customary
Permitted Liens of Group Members; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Liens
existing on the date hereof and set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;8.2</I></FONT><FONT SIZE=2>; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;Liens
on the property of Borrower or any of its Subsidiaries securing Indebtedness permitted hereunder in reliance upon </FONT> <FONT SIZE=2><I>Section&nbsp;8.1(c)</I></FONT><FONT SIZE=2>; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>,
</FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that
(i)&nbsp;such Liens exist prior to the acquisition of, or attach substantially simultaneously with, or within 90&nbsp;days after, the acquisition, repair, improvement or construction of, such
property financed, whether directly or through a Permitted Refinancing, by such Indebtedness and (ii)&nbsp;such Liens do not extend to any property of any Group Member other than the property (and
proceeds thereof) acquired or built, or the improvements or repairs, financed, whether directly or through a Permitted Refinancing, by such Indebtedness; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;Liens
on the property of Borrower or any of its Subsidiaries securing the Permitted Refinancing of any Indebtedness secured by any Lien on such property permitted
hereunder in reliance upon </FONT><FONT SIZE=2><I>clause&nbsp;(c)</I></FONT><FONT SIZE=2> or </FONT><FONT SIZE=2><I>(d)</I></FONT><FONT SIZE=2> above or this </FONT> <FONT SIZE=2><I>clause&nbsp;(e)</I></FONT><FONT SIZE=2> without any change in the
property subject to such Liens; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;any
Lien existing on any asset of any Person at the time such Person becomes a Subsidiary of any Loan Party in connection with a Permitted Acquisition, provided that
(A)&nbsp;such Lien shall be less than the fair market value of the asset secured thereby, (B)&nbsp;such Lien shall not have been created in contemplation of such event, (C)&nbsp;such Lien does
not at any time encumber any property other than the property financed by such applicable Indebtedness, (D)&nbsp;such Lien does not extend to any inventory or accounts of any Loan Party, and
(E)&nbsp;the amount of the Indebtedness secured thereby is not increased; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;other
Liens on any property of Borrower or any of its Subsidiaries securing any of their Indebtedness or their other liabilities; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that the
aggregate outstanding principal amount of all such Indebtedness and other
liabilities shall not exceed $50,000 at any time. </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>59</FONT></P>

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<UL>
<BR>
</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.3&nbsp;&nbsp;&nbsp;&nbsp;Investments.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No Group Member shall make or maintain, directly or indirectly, any Investment
except for the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Investments
existing on the date hereof and set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;8.3</I></FONT><FONT SIZE=2>; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Investments
in cash and Cash Equivalents; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;(i)&nbsp;endorsements
for collection or deposit in the ordinary course of business consistent with past practice, (ii)&nbsp;extensions of trade credit (other than to
Affiliates of Borrower) arising or acquired in the ordinary course of business and (iii)&nbsp;Investments received in settlements in the ordinary course of business of such extensions of trade
credit; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;Investments
made as part of a Permitted Acquisition; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;Investments
by (i)&nbsp;Holdings in General Partner and Limited Partner, (ii)&nbsp;General Partner and Limited Partner in Borrower, (iii)&nbsp;Borrower in any Loan
Party that is a Subsidiary of Borrower, (iv)&nbsp;any Group Member that is not a Loan Party in any Group Member (other than a Parent Guarantor) or in any joint venture or (v)&nbsp;Borrower or any
Subsidiary of Borrower in any Group Member that is not a Loan Party or in any joint venture; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that the aggregate outstanding amount of
all Investments permitted pursuant to this </FONT> <FONT SIZE=2><I>clause&nbsp;(v)</I></FONT><FONT SIZE=2> shall not exceed $25,000 at any time; and </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT
SIZE=2><I>further</I></FONT><FONT SIZE=2>, that any Investment consisting of loans or advances to any Loan Party pursuant to </FONT> <FONT SIZE=2><I>clause&nbsp;(iv)</I></FONT><FONT SIZE=2> above shall be subordinated in full to the payment of the
Obligations of such Loan Party on terms and conditions satisfactory to the
Administrative Agent; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;loans
or advances to employees of Borrower or any of its Subsidiaries to finance travel, entertainment and relocation expenses and other ordinary business purposes in
the ordinary course of business as presently conducted; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that the aggregate
outstanding principal amount of all loans and advances permitted pursuant to this </FONT><FONT SIZE=2><I>clause&nbsp;(f)</I></FONT><FONT SIZE=2> shall not exceed $50,000 at any time; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;Investments
in Excluded Foreign Subsidiaries in an aggregate amount not to exceed $250,000 for all Excluded Foreign Subsidiaries; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;equity
interests of an account debtor distributed to a Loan Party under such account debtor's confirmed chapter 11 plan of reorganization in respect of such Loan Party's
allowed unsecured claim in such account debtor's case under chapter 11 of the Bankruptcy Code; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;to
the extent they accrue, assets accruing or arising under any Hedging Agreement; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;&nbsp;&nbsp;any
Investment by Borrower or any of its Subsidiaries; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>,
that the aggregate outstanding amount of all such Investments shall not exceed $250,000 at any time. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.4&nbsp;&nbsp;&nbsp;&nbsp;Asset Sales.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No Group Member shall Sell any of its property (other than cash) or issue shares
of its own Stock, except for the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Sales
of inventory in the ordinary course of business and, in each case to the extent entered into in the ordinary course of business and made to a Person that is not an
Affiliate of Borrower, (i)&nbsp;Sales of Cash Equivalents or property that has become obsolete or worn out and (ii)&nbsp;non-exclusive licenses of Intellectual Property; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Intentionally
Omitted; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Intentionally
Omitted; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;(i)&nbsp;any
Sale or issuance by Holdings of its own Stock, (ii)&nbsp;any Sale or issuance by Borrower of its own Stock to a Loan Party that is a Subsidiary of
Holdings, (iii)&nbsp;any Sale or issuance by any Subsidiary of Borrower of its own Stock to any Group Member (other than </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>60</FONT></P>

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<UL>
<BR>

<P><FONT SIZE=2>Holdings), </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that the proportion of such Stock and of each class of such Stock (both on
an outstanding and fully-diluted basis) held by the Loan Parties, taken as a whole, does not change as a result of such Sale or issuance and (iv)&nbsp;to the extent necessary to satisfy any
Requirement of Law in the jurisdiction of incorporation of any Subsidiary of Borrower, any Sale or issuance by such Subsidiary of its own Stock constituting directors' qualifying shares or nominal
holdings; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;as
long as no Default is continuing or would result therefrom, any Sale of property of, or Sale or issuance of its own Stock by, any Group Member (other than Holdings)
for fair market value payable in cash upon such sale; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that the aggregate
consideration received during any Fiscal Year for all such Sales shall not exceed $50,000. </FONT></P>

</UL>

<P><FONT SIZE=2>Without
limiting the foregoing, no Group Member shall engage in any Sale and Leaseback Transaction. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.5&nbsp;&nbsp;&nbsp;&nbsp;Restricted Payments.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No Group Member (other than Holdings) shall directly or indirectly
declare, order, pay, make or set apart any sum for any Restricted Payment except for the following (and Holdings shall not use the proceeds of any Restricted Payment permitted pursuant to </FONT> <FONT SIZE=2><I>clause&nbsp;(c)</I></FONT><FONT
SIZE=2> below other than as set forth in such </FONT><FONT SIZE=2><I>clause&nbsp;(c)</I></FONT><FONT SIZE=2>):
 </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;(i)&nbsp;Restricted
Payments by any Subsidiary of Borrower to Borrower or any Wholly Owned Subsidiary of Borrower and (ii)&nbsp;dividends and distributions by any
Subsidiary of Borrower that is not a Loan Party to any holder of its Stock, to the extent made to all such holders ratably according to their ownership interests in such Stock; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;the
Specified Dividend (including the Permitted Redemptions); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;cash
distributions on the Stock of Borrower to General Partner and Limited Partner, and cash distributions by General Partner and Limited Partner to Holdings, paid and
declared solely for the purpose of funding the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;payments
by Holdings in respect of taxes currently payable by Holdings in respect of the other Group Members; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>,
that each Group Member's aggregate contribution to taxes as a result of filing a consolidated or combined return by Holdings or of having its income otherwise includable on a tax return of Holdings
shall not be greater than it would have been had such Group Member filed a stand-alone return; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;ordinary
operating expenses of Holdings; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that the
amount of such cash dividends paid in any Fiscal Year shall not exceed $100,000 in the aggregate; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;for
Employee Stock Buybacks; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that the amount of such
cash distributions shall not exceed $100,000 in any Fiscal Year and $300,000 in the aggregate for all Fiscal Years; and </FONT><FONT SIZE=2><I>provided further</I></FONT><FONT SIZE=2> that the
aggregate amount of all cash distributions for Employee Stock Buybacks, together with the Indebtedness incurred under Section&nbsp;8.1(d) for Employee Stock Buybacks, shall not exceed $250,000 in
any Fiscal Year and $500,000 in the aggregate for all Fiscal Years; </FONT></P>

</UL>
</UL>

<P><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that no action that would otherwise be permitted pursuant to </FONT> <FONT SIZE=2><I>clauses (ii)</I></FONT><FONT SIZE=2> and </FONT><FONT
SIZE=2><I>(iii)</I></FONT><FONT SIZE=2> of this </FONT><FONT SIZE=2><I>clause&nbsp;(c)</I></FONT><FONT SIZE=2> shall
be permitted if a Default or Event of Default is then continuing or would result therefrom. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.6&nbsp;&nbsp;&nbsp;&nbsp;Prepayment of Indebtedness.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No Group Member shall (x)&nbsp;prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof any Indebtedness, (y)&nbsp;set apart any property for such purpose, whether directly or indirectly and whether to a sinking fund,
a similar fund or otherwise, or (z)&nbsp;make any payment in violation of any subordination terms of any Indebtedness; </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>61</FONT></P>

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<BR>

<P><FONT SIZE=2><I> provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that each Group Member may, to the extent otherwise permitted by the Loan Documents, do each of the
following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;(i)&nbsp;prepay
the Obligations, and (ii)&nbsp;consummate a Permitted Refinancing; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;prepay,
redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof (or set apart any property for such purpose) (A)&nbsp;in the case of any
Group Member that is not a Loan Party, any Indebtedness owing by such Group Member to any other Group Member (other than the Parent Guarantors) and (B)&nbsp;otherwise, any Indebtedness owing to any
Loan Party (other than to any of the Parent Guarantors); and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;make
regularly scheduled or otherwise required repayments or redemptions of Indebtedness (other than Indebtedness owing to any Affiliate of Borrower) but only, in the
case of Subordinated Debt, to the extent permitted by the subordination provisions thereof. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.7&nbsp;&nbsp;&nbsp;&nbsp;Fundamental Changes.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No Group Member shall (a)&nbsp;merge, consolidate or amalgamate with
any Person, (b)&nbsp;acquire all or substantially all of the Stock or Stock Equivalents of any Person or (c)&nbsp;acquire any brand or all or substantially all of the assets of any Person or all
or substantially all of the assets constituting any line of business, division, branch, operating division or other unit operation of any Person, in each case except for the following: (x)&nbsp;to
consummate any Permitted Acquisition, (y)&nbsp;the merger, consolidation or amalgamation of any Subsidiary of Borrower into any Loan Party (excluding any Parent Guarantor) and (z)&nbsp;the merger,
consolidation or amalgamation of any Group Member (other than Holdings) for the sole purpose, and with the sole material effect, of changing its State of organization within the United States; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>,
</FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that (A)&nbsp;in the case of any merger, consolidation or amalgamation involving
Borrower, Borrower shall be the surviving Person and (B)&nbsp;in the case of any merger, consolidation or amalgamation involving any other Loan Party, a Loan Party shall be the surviving entity and
all actions required to maintain the perfection of the Lien of the Administrative Agent on the Stock or property of such Loan Party shall have been made. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.8&nbsp;&nbsp;&nbsp;&nbsp;Change in Nature of Business.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) Except as permitted by Section&nbsp;8.8(b), no Group
Member shall carry on any business, operations or activities (whether directly, through a joint venture, in connection with a Permitted Acquisition or otherwise) substantially different from those
carried on by Borrower and its Subsidiaries at the date hereof and business, operations and activities reasonably related thereto. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;None
of the Parent Guarantors shall engage in any business, operations or activity, or hold any property, other than (i)&nbsp;Holdings holding Stock and Stock
Equivalents in General Partner and Limited Partner, (ii)&nbsp;General Partner and Limited Partner owning Stock and Stock Equivalents in Borrower, (iii)&nbsp;issuing, selling and redeeming its own
Stock, (iv)&nbsp;paying taxes, (v)&nbsp;holding directors', shareholders' and partners' meetings, preparing corporate and similar records and other activities required to maintain its separate
corporate, partnership or other legal structure, (vi)&nbsp;preparing reports to, and preparing and making notices to and filings with, Governmental Authorities and to its holders of Stock and Stock
Equivalents, (vii)&nbsp;receiving, and holding proceeds of, Restricted Payments from Borrower and its Subsidiaries and distributing the proceeds thereof to the extent permitted in </FONT> <FONT SIZE=2><I>Section&nbsp;8.5</I></FONT><FONT SIZE=2> and
(viii)&nbsp;as necessary to consummate any Permitted Acquisition or any other action permitted hereunder.
 </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.9&nbsp;&nbsp;&nbsp;&nbsp;Transactions with Affiliates.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No Group Member shall, except as otherwise expressly permitted
herein, enter into any other transaction directly or indirectly with, or for the benefit of, any Affiliate of Borrower that is not a Loan Party (including Guaranty Obligations with respect to any
obligation of any such Affiliate), except for (a)&nbsp;transactions in the ordinary course of business on a basis no less favorable to such Group Member as would be obtained in a comparable arm's
length transaction with a Person not an Affiliate of Borrower, (b)&nbsp;Restricted Payments, the proceeds of which, </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>62</FONT></P>

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<P><FONT SIZE=2>if
received by Holdings, are used as required by </FONT><FONT SIZE=2><I>Section&nbsp;8.5</I></FONT><FONT SIZE=2> and (c)&nbsp;reasonable salaries and other reasonable director or employee
compensation to officers and directors of any Group Member. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.10&nbsp;&nbsp;&nbsp;&nbsp;Third-Party Restrictions on Indebtedness, Liens, Investments or Restricted Payments.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No
Group Member shall incur or otherwise suffer to exist or become effective or remain liable on or responsible for any Contractual Obligation limiting the ability of (a)&nbsp;any Subsidiary of
Borrower to make Restricted Payments to, or Investments in, or repay Indebtedness or otherwise Sell property to, any Group Member (other than any Parent Guarantor) or (b)&nbsp;any Group Member to
incur or suffer to exist any Lien upon any property of any Group Member, whether now owned or hereafter acquired, securing any of its Obligations (including any "equal and ratable" clause and any
similar Contractual Obligation requiring, when a Lien is granted on any property, another Lien to be granted on such property or any other property), except, in respect of each of </FONT> <FONT SIZE=2><I>clauses (a)</I></FONT><FONT SIZE=2> and
</FONT><FONT SIZE=2><I>(b)</I></FONT><FONT SIZE=2> above, (x)&nbsp;pursuant to the Loan Documents, and (y)&nbsp;limitations on
Liens (other than those securing any Obligation) on any property whose acquisition, repair, improvement or construction is financed by purchase money Indebtedness, Capitalized Lease Obligations or
Permitted Refinancings permitted pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;8.1(b)</I></FONT><FONT SIZE=2> or </FONT><FONT SIZE=2><I>(c)</I></FONT><FONT SIZE=2> set forth in the Contractual
Obligations governing such Indebtedness, Capitalized Lease Obligations or Permitted Refinancing or Guaranty Obligations with respect thereto. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.11&nbsp;&nbsp;&nbsp;&nbsp;Modification of Certain Documents.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No Group Member shall do any of the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;waive
or otherwise modify any term of any Constituent Document of, or otherwise change the capital structure of, any Group Member (including the terms of any of their
outstanding Stock or Stock Equivalents), except for those modifications and waivers that do not materially affect the rights and privileges of any Group Member and do not materially affect the
interests of any Secured Party under the Loan Documents or in the Collateral; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;waive
or otherwise modify any term of any Subordinated Debt if the effect thereof on such Subordinated Debt is to (i)&nbsp;increase the interest rate,
(ii)&nbsp;change the due dates for principal or interest, other than to extend such dates, (iii)&nbsp;modify any default or event of default, other than to delete it or make it less restrictive,
(iv)&nbsp;add any covenant with respect thereto, (v)&nbsp;modify any subordination provision, (vi)&nbsp;modify any redemption or prepayment provision, other than to extend the dates therefor or
to reduce the premiums payable in connection therewith or (vii)&nbsp;materially increase any obligation of any Group Member or confer additional rights to the holder of such Subordinated Debt in a
manner adverse to any Group Member or any Secured Party; </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.12&nbsp;&nbsp;&nbsp;&nbsp;Accounting Changes; Fiscal Year.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No Group Member shall (a)&nbsp;change its accounting
treatment or reporting practices, except as required by GAAP or any Requirement of Law, or (b)&nbsp;its fiscal year or its method for determining fiscal quarters or fiscal months, except that a
Group Member may change its accounting treatment or reporting practices in a manner permitted by GAAP if it receives the prior written consent of the Administrative Agent, which consent shall not be
unreasonably withheld. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.13&nbsp;&nbsp;&nbsp;&nbsp;Margin Regulations.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No Group Member shall use all or any portion of the proceeds of any
credit extended hereunder to purchase or carry margin stock (within the meaning of Regulation&nbsp;U of the Federal Reserve Board) in contravention of Regulation&nbsp;U of the Federal Reserve
Board. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.14&nbsp;&nbsp;&nbsp;&nbsp;Compliance with ERISA.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No ERISA Affiliate shall cause or suffer to exist (a)&nbsp;any
event that could result in the imposition of a Lien with respect to any Title IV Plan or Multiemployer Plan or (b)&nbsp;any other ERISA Event, that would, in the aggregate, have a Material Adverse
Effect. No Group Member shall cause or suffer to exist any event that could result in the imposition of a Lien with respect to any Benefit Plan. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>63</FONT></P>

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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.15&nbsp;&nbsp;&nbsp;&nbsp;Hazardous Materials.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;No Group Member shall cause or suffer to exist any Release of any
Hazardous Material at, to or from any real property owned, leased, subleased or otherwise operated or occupied by any Group Member that would violate any Environmental Law, form the basis for any
Environmental Liabilities or otherwise adversely affect the value or marketability of any real property (whether or not owned by any Group Member), other than such violations, Environmental
Liabilities and effects that would not, in the aggregate, have or be reasonably likely to cause a Material Adverse Effect. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="oo76602_article_ix_events_of_default"> </A>
<A NAME="toc_oo76602_2"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE IX    <BR>    <BR>    EVENTS OF DEFAULT    <BR>    </B></FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;9.1&nbsp;&nbsp;&nbsp;&nbsp;Definition.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each of the following shall be an Event of Default: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Borrower
shall fail to pay (i)&nbsp;any principal of any Loan advanced to Borrower or any L/C Reimbursement Obligation of Borrower or any other Loan Party when the
same becomes due and payable or (ii)&nbsp;any interest on any Loan advanced to Borrower, any fee under any Loan Document or any other Obligation (other than those set forth in </FONT> <FONT SIZE=2><I>clause&nbsp;(i)</I></FONT><FONT SIZE=2> above) and,
 in the case of this </FONT><FONT SIZE=2><I>clause&nbsp;(ii)</I></FONT><FONT SIZE=2>, such non-payment
continues for a period of 3 Business Days after the due date therefor; or </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;any
representation, warranty or certification made or deemed made by or on behalf of any Loan Party in any Loan Document or by or on behalf of any Loan Party (or any
Responsible Officer thereof) in connection with any Loan Document (including in any document delivered in connection with any Loan Document) shall prove to have been incorrect in any material respect
when made or deemed made; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;any
Loan Party shall fail to comply with (i)&nbsp;any provision of </FONT><FONT SIZE=2><I>Article&nbsp;V</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>Financial
Covenants</I></FONT><FONT SIZE=2>), </FONT><FONT SIZE=2><I>Section&nbsp;6.1</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>Financial Statements</I></FONT><FONT SIZE=2>), </FONT> <FONT SIZE=2><I>6.2(a)(i)</I></FONT><FONT SIZE=2> (</FONT><FONT
SIZE=2><I>Other Events</I></FONT><FONT SIZE=2>), </FONT><FONT SIZE=2><I>7.1</I></FONT><FONT SIZE=2>
(</FONT><FONT SIZE=2><I>Maintenance of Corporate Existence</I></FONT><FONT SIZE=2>), </FONT><FONT SIZE=2><I>7.5</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>Maintenance of
Insurance</I></FONT><FONT SIZE=2>), </FONT><FONT SIZE=2><I>7.9</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>Application of Loan Proceeds</I></FONT><FONT SIZE=2>) or </FONT> <FONT SIZE=2><I>Article&nbsp;VIII</I></FONT><FONT SIZE=2> (</FONT><FONT
SIZE=2><I>Negative Covenants</I></FONT><FONT SIZE=2>) or (ii)&nbsp;any other provision of any Loan Document if, in
the case of this </FONT><FONT SIZE=2><I>clause&nbsp;(ii)</I></FONT><FONT SIZE=2>, such failure shall remain unremedied for 30&nbsp;days after the earlier of (A)&nbsp;the date on which a
Responsible Officer of Borrower becomes aware of such failure and (B)&nbsp;the date on which notice thereof shall have been given to Borrower by the Administrative Agent or the Required Lenders; or </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;(i)&nbsp;any
Group Member shall fail to make any payment when due (whether due because of scheduled maturity, required prepayment provisions, acceleration, demand or
otherwise) on any Indebtedness of any Group Member (other than the Obligations) and, in each case, such failure relates to Indebtedness having a principal amount of $100,000 or more, (ii)&nbsp;any
other event shall occur or condition shall exist under any Contractual Obligation relating to any such Indebtedness, if the effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness or (iii)&nbsp;any such Indebtedness shall become or be declared to be due and payable, or be required to be prepaid, redeemed, defeased or
repurchased (other than by a regularly scheduled required prepayment), prior to the stated maturity thereof; or </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;(i)&nbsp;any
Group Member shall generally not pay its debts as such debts become due, shall admit in writing its inability to pay its debts generally or shall make a
general assignment for the benefit of creditors, (ii)&nbsp;any proceeding shall be instituted by or against any Group Member seeking to adjudicate it a bankrupt or insolvent or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, composition of it or its debts or any similar order, in each case under any Requirement of Law relating to bankruptcy,
insolvency or reorganization or relief of debtors or seeking the entry of an order for relief or the appointment of a custodian, receiver, trustee, conservator, liquidating agent, liquidator, other
similar official or other official </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>64</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<UL>
<BR>

<P><FONT SIZE=2>with
similar powers, in each case for it or for any substantial part of its property and, in the case of any such proceedings instituted against (but not by or with the consent of) any Group Member,
either such proceedings shall remain undismissed or unstayed for a period of 60&nbsp;days or more or any action sought in such proceedings shall occur, (iii)&nbsp;any Group Member shall take any
corporate or similar action or any other action to authorize any action described in </FONT><FONT SIZE=2><I>clause&nbsp;(i)</I></FONT><FONT SIZE=2> or </FONT> <FONT SIZE=2><I>(ii)</I></FONT><FONT SIZE=2> above or (iv)&nbsp;the Loan Parties, taken as
a whole, or Borrower, individually, ceases to be Solvent; or </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;one
or more judgments, orders or decrees (or other similar process) shall be rendered against any Group Member (i)(A) in the case of money judgments, orders and decrees,
involving an aggregate amount (excluding amounts adequately covered by insurance payable to any Group Member, to the extent the relevant insurer has not denied coverage therefor) in excess of $100,000
or (B)&nbsp;otherwise, that would have, in the aggregate, a Material Adverse Effect and (ii)(A) enforcement proceedings shall have been commenced by any creditor upon any such judgment, order or
decree or (B)&nbsp;such judgment, order or decree shall not have been vacated or discharged for a period of 30 consecutive days and there shall not be in effect (by reason of a pending appeal or
otherwise) any stay of enforcement thereof; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;except
pursuant to a valid, binding and enforceable termination or release permitted under the Loan Documents and executed by the Administrative Agent or as otherwise
expressly permitted under any Loan Document, (i)&nbsp;any provision of any Loan Document shall, at any time after the delivery of such Loan Document, fail to be valid and binding on, or enforceable
against, any Loan Party thereto, or (ii)&nbsp;any Loan Document purporting to grant a Lien to secure any Obligation shall, at any time after the delivery of such Loan Document, fail to create a
valid and enforceable Lien on any Collateral purported to be covered thereby or such Lien shall fail or cease to be a perfected Lien with the priority required in the relevant Loan Document or any
Group Member shall state in writing that any of the events described in </FONT><FONT SIZE=2><I>clause&nbsp;(i)</I></FONT><FONT SIZE=2> or </FONT><FONT SIZE=2><I>(ii)</I></FONT><FONT SIZE=2> of
this paragraph shall have occurred; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;&nbsp;the
failure of any Group Member to comply with the terms of any subordination or intercreditor agreement or any subordination provisions of any note or other document
running to the benefit of Administrative Agent or Lenders, or if any such document becomes null and void or any Group Member denies further liability under any such document or provides notice to that
effect or any holder of Subordinated Debt or other obligation under such note, agreement or document shall so state in writing; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;there
shall occur any Change of Control. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;9.2&nbsp;&nbsp;&nbsp;&nbsp;Remedies.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;During the continuance of any Event of Default, the Administrative Agent may, and,
at the request of the Required Lenders, shall, in each case by notice to Borrower and in addition to any other right or remedy provided under any Loan Document or by any applicable Requirement of Law,
do each or any of the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;declare
all or any portion of the Commitments terminated, whereupon the Commitments shall immediately be reduced by such portion or, in the case of a termination in
whole, shall terminate together with any obligation any Lender may have hereunder to make any Loan and any L/C Issuer may have hereunder to Issue any Letter of Credit; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;declare
immediately due and payable all or part of the Obligations (including any accrued but unpaid interest thereon), whereupon the same shall become immediately due
and payable, without presentment, demand, protest or further notice or other requirements of any kind, all of which are hereby expressly waived by Holdings and Borrower (and, to the extent provided in
any other Loan Document, other Loan Parties); </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that, effective immediately upon the
occurrence of any Event of Default specified in </FONT><FONT SIZE=2><I>Section&nbsp;9.1(e)</I></FONT><FONT SIZE=2>, (x)&nbsp;the Commitments of each </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>65</FONT></P>

<HR NOSHADE>
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<A NAME="page_oo76602_1_66"> </A>
<UL>
<BR>

<P><FONT SIZE=2>Lender
to make Loans and the commitment of each L/C Issuer to Issue Letters of Credit shall each automatically be terminated and (y)&nbsp;the Obligations (including in each case all accrued but
unpaid interest thereon) shall automatically become and be due and payable, without presentment, demand, protest or further notice or other requirement of any kind, all of which are hereby expressly
waived by Borrower and each Parent Guarantor (and, to the extent provided in any other Loan Document, any other Loan Party), </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;take
the actions described in </FONT><FONT SIZE=2><I>Section&nbsp;9.3</I></FONT><FONT SIZE=2>, and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;exercise
any other remedies which may be available under the Loan Documents or applicable law. </FONT></P>

</UL>

<P><FONT SIZE=2>Notwithstanding
the foregoing, if at any applicable time there are only two Lenders, the Administrative Agent shall not take any of the actions describe in clauses (a)&nbsp;through (d)&nbsp;of
this Section&nbsp;9.2 without the consent of the other Lender, such consent not to be unreasonably withheld or delayed. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;9.3&nbsp;&nbsp;&nbsp;&nbsp;Actions in Respect of Letters of Credit.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;Upon the Revolving Credit Termination
Date, (ii)&nbsp;at any time after the Revolving Credit Termination Date when the aggregate funds on deposit in L/C Cash Collateral Accounts shall be less than 105% of the L/C Obligations for all
Letters of Credit at such time, (iii)&nbsp;during the continuance of any Event of Default and (iv)&nbsp;as required by </FONT><FONT SIZE=2><I>Section&nbsp;2.12</I></FONT><FONT SIZE=2>, Borrower
shall pay to the Administrative Agent in immediately available funds at the Administrative Agent's office referred to in </FONT><FONT SIZE=2><I>Section&nbsp;12.11</I></FONT><FONT SIZE=2>, for
deposit in a L/C Cash Collateral Account, the amount required so that, after such payment, the aggregate funds on deposit in the L/C Cash Collateral Accounts equals or exceeds 105% of the L/C
Obligations for all Letters of Credit at such time Issued for the account of Borrower (not to exceed, in the case of clause&nbsp;(iv) above, the payment to be applied pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;2.12</I></FONT><FONT SIZE=2> to
provide cash collateral for such Letters of Credit). Borrower hereby grants to the Administrative Agent, for the benefit of L/C
Issuers and each Lender with a participation in any Letters of Credit then outstanding, a security interest in such cash collateral to secure all of the L/C Obligations. Any such cash collateral shall
be made available by the Administrative Agent to the L/C Issuers to reimburse L/C Issuers for payments of drafts drawn under such Letters of Credit, and any fees, charges and expenses of L/C Issuers
with respect to such Letters of Credit and the unused portion thereof, after all such Letters of Credit shall have expired or been fully drawn upon, shall be applied to repay any other Obligations.
After all such Letters of Credit shall have expired or been fully drawn upon and all Obligations shall have been satisfied and paid in full, the balance, if any, of such cash collateral shall be
returned to Borrower. Borrower shall from time to time execute and deliver to Administrative Agent such further documents and instruments as Administrative Agent may request with respect to such cash
collateral. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="oo76602_article_x_intentionally_omitted"> </A>
<A NAME="toc_oo76602_3"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE X    <BR>    <BR>    INTENTIONALLY OMITTED    <BR>    </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="oo76602_article_xi_the_administrative_agent"> </A>
<A NAME="toc_oo76602_4"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE XI    <BR>    <BR>    THE ADMINISTRATIVE AGENT    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;11.1&nbsp;&nbsp;&nbsp;&nbsp;Appointment and Duties.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT><FONT SIZE=2><I>Appointment of Administrative
Agent</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each Lender and each L/C Issuer hereby appoints Churchill (together with any successor Administrative Agent pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;11.9</I></FONT><FONT SIZE=2>) as the
Administrative Agent hereunder and authorizes the Administrative Agent to (i)&nbsp;execute and deliver the Loan Documents
and accept delivery thereof on its behalf from any Group Member, (ii)&nbsp;take such action on its behalf and to exercise all rights, powers and remedies and perform
the duties as are expressly delegated to the Administrative Agent under such Loan Documents and (iii)&nbsp;exercise such powers as are reasonably incidental thereto. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>66</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Duties as Collateral and Disbursing Agent.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Without limiting the generality of </FONT> <FONT
SIZE=2><I>clause&nbsp;(a)</I></FONT><FONT SIZE=2> above, the Administrative Agent shall have the sole and exclusive right and authority (to the exclusion of the Lenders and L/C
Issuers), and is hereby authorized, to (i)&nbsp;act as the disbursing and collecting agent for the Lenders and the L/C Issuers with respect to all payments and collections arising in connection with
the Loan Documents (including in any proceeding described in </FONT><FONT SIZE=2><I>Section&nbsp;9.1(e)(ii)</I></FONT><FONT SIZE=2> or any other bankruptcy, insolvency or similar proceeding), and
each Person making any payment in connection with any Loan Document to any Secured Party is hereby authorized to make such payment to the Administrative Agent, (ii)&nbsp;file and prove claims and
file other documents necessary or desirable to allow the claims of the Secured Parties with respect to any Obligation in any proceeding described in </FONT> <FONT SIZE=2><I>Section&nbsp;9.1(e)(ii)</I></FONT><FONT SIZE=2> or any other bankruptcy,
insolvency or similar proceeding (but not to vote, consent or otherwise act on behalf of such Secured
Party), (iii)&nbsp;act as collateral agent for each Secured Party for purposes of the perfection of all Liens created by such agreements and all other purposes stated therein, (iv)&nbsp;manage,
supervise and otherwise deal with the Collateral, (v)&nbsp;take such other action as is necessary or desirable to maintain the perfection and priority of the Liens created or purported to be created
by the Loan Documents, (vi)&nbsp;except as may be otherwise specified in any Loan Document, exercise all remedies given to the Administrative Agent and the other Secured Parties with respect to the
Collateral, whether under the Loan Documents, applicable Requirements of Law or otherwise and (vii)&nbsp;execute any amendment, consent or waiver under the Loan Documents on behalf of any Lender
that has consented in writing to such amendment, consent or waiver; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that the
Administrative Agent hereby appoints, authorizes and directs each Lender and L/C Issuer to act as collateral sub-agent for the Administrative Agent, the Lenders and the L/C Issuers for
purposes of the perfection of all Liens with respect to the Collateral, including any deposit account maintained by a Loan Party with, and cash and Cash Equivalents held by, such Lender or L/C Issuer,
and may further authorize and direct the Lenders and the L/C Issuers to take further actions as collateral sub-agents for purposes of enforcing such Liens or otherwise to transfer the
Collateral subject thereto to the Administrative Agent, and each Lender and L/C Issuer hereby agrees to take such further actions to the extent, and only to the extent, so authorized and directed. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Limited Duties.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Under the Loan Documents, the Administrative Agent (i)&nbsp;is acting solely on behalf of
the Lenders and the L/C Issuers (except to the limited extent provided in </FONT><FONT SIZE=2><I>Section&nbsp;2.14(b)</I></FONT><FONT SIZE=2> with respect to the Register and in </FONT> <FONT SIZE=2><I>Section&nbsp;11.11</I></FONT><FONT SIZE=2>),
with duties that are entirely administrative in nature, notwithstanding the use of the defined term "Administrative Agent", the
terms "agent", "administrative agent" and "collateral agent" and similar terms in any Loan Document to refer to the Administrative Agent, which terms are used for title purposes only, (ii)&nbsp;is
not assuming any obligation under any Loan Document other than as expressly set forth therein or any role as agent, fiduciary or trustee of or for any Lender, L/C Issuer or any other Secured Party and
(iii)&nbsp;shall have no implied functions, responsibilities, duties, obligations or other liabilities under any Loan Document, and each Lender and L/C Issuer hereby waives and agrees not to assert
any claim against the Administrative Agent based on the roles, duties and legal relationships expressly disclaimed in </FONT><FONT SIZE=2><I>clauses (i)</I></FONT><FONT SIZE=2> through </FONT> <FONT SIZE=2><I>(iii)</I></FONT><FONT SIZE=2> above.
</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;11.2&nbsp;&nbsp;&nbsp;&nbsp;Binding Effect.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Lender and each L/C Issuer agrees that (i)&nbsp;any action taken by
the Administrative Agent or the Required Lenders (or, if expressly required hereby, a greater proportion of
the Lenders) in accordance with the provisions of the Loan Documents, (ii)&nbsp;any action taken by the Administrative Agent in reliance upon the instructions of Required Lenders (or, where so
required, such greater proportion) and (iii)&nbsp;the exercise by the Administrative Agent or the Required Lenders (or, where so required, such greater proportion) of the powers set forth herein or
therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Secured Parties. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;11.3&nbsp;&nbsp;&nbsp;&nbsp;Use of Discretion.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT><FONT SIZE=2><I>No Action without
Instructions</I></FONT><FONT SIZE=2>. The Administrative Agent shall not be required to exercise any discretion or take, or to omit to take, any action, including with respect to enforcement or
collection, except any action it is required to take or omit to take (i)&nbsp;under any </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>67</FONT></P>

<HR NOSHADE>
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<BR>

<P><FONT SIZE=2>Loan
Document or (ii)&nbsp;pursuant to instructions from the Required Lenders (or, where expressly required by the terms of this Agreement, a greater proportion of the Lenders). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Right Not to Follow Certain Instructions.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding </FONT> <FONT SIZE=2><I>clause&nbsp;(a)</I></FONT><FONT SIZE=2> above, the Administrative Agent shall not be
required to take, or to omit to take, any action (i)&nbsp;unless, upon demand, the
Administrative Agent receives an indemnification satisfactory to it from the Lenders (or, to the extent applicable and acceptable to the Administrative Agent, any other Secured Party) against all
Liabilities that, by reason of such action or omission, may be imposed on, incurred by or asserted against the Administrative Agent or any Related Person thereof or (ii)&nbsp;that is, in the opinion
of the Administrative Agent or its counsel, contrary to any Loan Document or applicable Requirement of Law. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;11.4&nbsp;&nbsp;&nbsp;&nbsp;Delegation of Rights and Duties.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Administrative Agent may, upon any term or condition it
specifies, delegate or exercise any of its rights, powers and remedies under, and delegate or perform any of its duties or any other action with respect to, any Loan Document by or through any
trustee, co-agent, employee, attorney-in-fact and any other Person (including any Secured Party). Any such Person shall benefit from this </FONT> <FONT SIZE=2><I>Article&nbsp;XI</I></FONT><FONT SIZE=2> to the extent provided by the Administrative
Agent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;11.5&nbsp;&nbsp;&nbsp;&nbsp;Reliance and Liability.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) The Administrative Agent may, without incurring any liability
hereunder, (i)&nbsp;treat the payee of any Note as its holder until such Note has been assigned in accordance with </FONT><FONT SIZE=2><I>Section&nbsp;12.2(e)</I></FONT><FONT SIZE=2>,
(ii)&nbsp;rely on the Register to the extent set forth in </FONT><FONT SIZE=2><I>Section&nbsp;2.14</I></FONT><FONT SIZE=2>, (iii)&nbsp;consult with any of its Related Persons and, whether or
not selected by it, any other advisors, accountants and other experts (including advisors to, and accountants and experts engaged by, any Loan Party) and (iv)&nbsp;rely and act upon any document and
information (including those transmitted by Electronic Transmission) and any telephone message or conversation, in each case believed by it to be genuine and transmitted, signed or otherwise
authenticated by the appropriate parties. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;None
of the Administrative Agent and its Related Persons shall be liable for any action taken or omitted to be taken by any of them under or in connection with any Loan
Document, and each Lender, L/C Issuer, Borrower and each Parent Guarantor hereby waives and shall not assert (and Borrower and each Parent Guarantor shall cause each other Loan Party to waive and
agree not to assert) any right, claim or cause of action based thereon, except to the extent of liabilities resulting primarily from the gross negligence or willful misconduct of the Administrative
Agent or, as the case may be, such Related Person (each as determined in a final, non-appealable judgment by a court of competent jurisdiction) in connection with the duties expressly set
forth herein. Without limiting the foregoing, the Administrative Agent: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;shall
not be responsible or otherwise incur liability for any action or omission taken in reliance upon the instructions of the Required Lenders or for the actions or
omissions of any of its Related Persons selected with reasonable care (other than employees, officers and directors of the Administrative Agent, when acting on behalf of the Administrative Agent); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;shall
not be responsible to any Secured Party for the due execution, legality, validity, enforceability, effectiveness, genuineness, sufficiency or value of, or the
attachment, perfection or priority of any Lien created or purported to be created under or in connection with, any Loan Document; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;makes
no warranty or representation, and shall not be responsible, to any Secured Party for any statement, document, information, representation or warranty made or
furnished by or on behalf of any Related Person, in or in connection with any Loan Document or any transaction contemplated therein, whether or not transmitted by the Administrative Agent, including
as to completeness, accuracy, scope or adequacy thereof, or for the scope, nature or results of any due diligence performed by the Administrative Agent in connection with the Loan Documents; and </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>68</FONT></P>

<HR NOSHADE>
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<UL>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;shall
not have any duty to ascertain or to inquire as to the performance or observance of any provision of any Loan Document, whether any condition set forth in any
Loan Document is satisfied or waived, as to the financial condition of any Loan Party or as to the existence or continuation or possible occurrence or continuation of any Default or Event of Default
and shall not be deemed to have notice or knowledge of such occurrence or continuation unless it has received a notice from Borrower, any Lender or L/C Issuer describing such Default or Event of
Default clearly labeled "notice of default" (in which case the Administrative Agent shall promptly give notice of such receipt to all Lenders); </FONT></P>

</UL>

<P><FONT SIZE=2>and,
for each of the items set forth in </FONT><FONT SIZE=2><I>clauses (i)</I></FONT><FONT SIZE=2> through </FONT><FONT SIZE=2><I>(iv)</I></FONT><FONT SIZE=2> above, each Lender, L/C Issuer,
Borrower and each Parent Guarantor hereby waives and agrees not to assert (and Borrower and each Parent Guarantor shall cause each other Loan Party to waive and agree not to assert) any right, claim
or cause of action it might have against the Administrative Agent based thereon. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;11.6&nbsp;&nbsp;&nbsp;&nbsp;Administrative Agent Individually.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Administrative Agent and its Affiliates may make
loans and other extensions of credit to, acquire Stock and Stock Equivalents of, engage in any kind of business with, any Loan Party or Affiliate thereof as though it were not acting the
Administrative Agent and may receive separate fees and other payments therefor. To the extent the Administrative Agent or any of its Affiliates makes any Loan or otherwise becomes a Lender hereunder,
it shall have and may exercise the same rights and powers hereunder and shall be subject to the same obligations and liabilities as any other Lender and the terms "Lender", "Revolving Credit Lender",
"Term Loan Lender", "Required Lender", "Required Revolving Credit Lender" and "Required Term Loan Lender" and any similar terms shall, except where otherwise expressly provided in any Loan Document,
include, without limitation, the Administrative Agent or such Affiliate, as the case may be, in its individual capacity as Lender, Revolving Credit Lender, Term Loan Lender or as one of the Required
Lenders, Required Revolving Credit Lenders or Required Term Loan Lenders, respectively. Any Person designated as Syndication Agent shall have no rights or duties hereunder other than those applicable
to any other Lender. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;11.7&nbsp;&nbsp;&nbsp;&nbsp;Lender Credit Decision.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Lender and each L/C Issuer acknowledges that it shall,
independently and without reliance upon the Administrative Agent, any Lender or L/C Issuer or any of their Related Persons or upon any document (including the Disclosure Documents) solely or in part
because such document was transmitted by the Administrative Agent or any of its Related Persons, conduct its own independent investigation of the financial condition and affairs of each Loan Party and
make and continue to make its own credit decisions in connection with entering into, and taking or not taking any action under, any Loan Document or with respect to any transaction contemplated in any
Loan Document, in each case based on such documents and information as it shall deem appropriate. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;11.8&nbsp;&nbsp;&nbsp;&nbsp;Expenses; Indemnities.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Lender agrees to reimburse the Administrative Agent and each
of its Related Persons (to the extent not reimbursed by any Loan Party) promptly upon demand for such Lender's Pro Rata Share with respect to the Facilities of any costs and expenses (including fees,
charges and disbursements of financial, legal and other advisors and Other Taxes paid in the name of, or on behalf of, any Loan Party) that may be incurred by the Administrative Agent or any of its
Related Persons in connection with the preparation, syndication, execution, delivery, administration, modification, consent, waiver or enforcement (whether through negotiations, through any
work-out, bankruptcy, restructuring or other legal or other proceeding or otherwise) of, or legal advice in respect of its rights or responsibilities under, any Loan Document. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Each
Lender further agrees to indemnify the Administrative Agent and each of its Related Persons (to the extent not reimbursed by any Loan Party), from and against such
Lender's aggregate Pro Rata Share with respect to the Facilities of the Liabilities (including taxes, interests and penalties imposed for not properly withholding or backup withholding on payments
made to on or for the account of any Lender) that may be imposed on, incurred by or asserted against the Administrative </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>69</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_oq76602_1_70"> </A>
<BR>

<P><FONT SIZE=2>Agent
or any of its Related Persons in any matter relating to or arising out of, in connection with or as a result of any Loan Document, any Related Document or any other act, event or transaction
related, contemplated in or attendant to any such document, or, in each case, any action taken or omitted to be taken by the Administrative Agent or any of its Related Persons under or with respect to
any of the foregoing; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that no Lender shall be liable to the Administrative Agent or
any of its Related Persons to the extent such liability has resulted primarily from the gross negligence or willful misconduct of the Administrative Agent or, as the case may be, such Related Person,
as determined by a court of competent jurisdiction in a final non-appealable judgment or order. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;11.9&nbsp;&nbsp;&nbsp;&nbsp;Resignation of Administrative Agent or L/C Issuer.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) The Administrative Agent may resign
at any time by delivering notice of such resignation to the Lenders and Borrower, effective on the date set forth in such notice or, if not such date is set forth therein, upon the date such notice
shall be effective. If the Administrative Agent delivers any such notice, the Required Lenders shall have the right to appoint a successor Administrative Agent. If, within 30&nbsp;days after the
retiring Administrative Agent having given notice of resignation no successor Administrative Agent has been appointed by the Required Lenders that has accepted such appointment, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent from among the Lenders. Each appointment under this clause&nbsp;(a) shall be subject to the prior consent
of Borrower, which may not be unreasonably withheld, conditioned or delayed but shall not be required during the continuance of a Default or Event of Default. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Effective
immediately upon its resignation, (i)&nbsp;the retiring Administrative Agent shall be discharged from its duties and obligations under the Loan Documents,
(ii)&nbsp;the Lenders shall assume and perform all of the duties of the Administrative Agent until a successor Administrative Agent shall have accepted a valid appointment hereunder,
(iii)&nbsp;the retiring Administrative Agent and its Related Persons shall no longer have the benefit of any provision of any Loan Document other than with respect to any actions taken or omitted to
be taken while such retiring Administrative Agent was, or because such Administrative Agent had been, validly acting as Administrative Agent under the Loan Documents and (iv)&nbsp;subject to its
rights under </FONT><FONT SIZE=2><I>Section&nbsp;11.3</I></FONT><FONT SIZE=2>, the retiring Administrative Agent shall take such action as may be reasonably necessary to assign to the successor
Administrative Agent its rights as Administrative Agent under the Loan Documents. Effective immediately upon its acceptance of a valid appointment as Administrative Agent, a successor Administrative
Agent shall succeed to, and become vested with, all the rights, powers, privileges and duties of the retiring Administrative Agent under the Loan Documents. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Any
L/C Issuer may resign at any time by delivering notice of such resignation to the Administrative Agent, effective on the date set forth in such notice or, if no such
date is set forth therein, on the date such notice shall be effective. Upon such resignation, the L/C Issuer shall remain an L/C Issuer and shall retain its rights and obligations in its capacity as
such (other than any obligation to Issue Letters of Credit but including the right to receive fees or to have Lenders participate in any L/C Reimbursement Obligation thereof) with respect to Letters
of Credit Issued by such L/C Issuer prior to the date of such resignation and shall otherwise be discharged from all other duties and obligations under the Loan Documents. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;11.10&nbsp;&nbsp;&nbsp;&nbsp;Release of Collateral or Guarantors.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Lender and L/C Issuer hereby consents to the
release and hereby directs the Administrative Agent to release (or, in the case of </FONT><FONT SIZE=2><I>clause&nbsp;(b)(ii)</I></FONT><FONT SIZE=2> below, release or subordinate) the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;any
Subsidiary of Borrower from its guaranty of any Obligation of any Loan Party if all of the Securities of such Subsidiary owned by any Group Member are Sold in a Sale
permitted under the Loan Documents (including pursuant to a waiver or consent), to the extent that, after giving effect to such Sale, such Subsidiary would not be required to guaranty any Obligations
pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;7.10</I></FONT><FONT SIZE=2>; and </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>70</FONT></P>

<HR NOSHADE>
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<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;any
Lien held by the Administrative Agent for the benefit of the Secured Parties against (i)&nbsp;any Collateral that is Sold by a Loan Party in a Sale permitted by
the Loan Documents (including pursuant to a valid waiver or consent), to the extent all Liens required to be granted in such Collateral pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;7.10</I></FONT><FONT SIZE=2> after giving effect to such Sale
have been granted, (ii)&nbsp;any property subject to a Lien permitted pursuant to
</FONT><FONT SIZE=2><I>Section&nbsp;8.2(d)</I></FONT><FONT SIZE=2> or </FONT><FONT SIZE=2><I>(e)</I></FONT><FONT SIZE=2> and (iii)&nbsp;all of the Collateral and all Loan Parties, upon
(A)&nbsp;termination of the Commitments, (B)&nbsp;payment and satisfaction in full of all Loans, all L/C Reimbursement Obligations and all other Obligations that the Administrative Agent has been
notified in writing are then due and payable, (C)&nbsp;deposit of cash collateral with respect to all contingent Obligations (or, in the case of any L/C Obligation, a back-up letter of
credit has been issued), in amounts and on terms and conditions and with parties satisfactory to the Administrative Agent and each Indemnitee that is owed such Obligations and (D)&nbsp;to the extent
requested by the Administrative Agent, receipt by the Secured Parties of liability releases from the Loan Parties each in form and substance acceptable to the Administrative Agent. </FONT></P>

</UL>

<P><FONT SIZE=2>Each
Lender and L/C Issuer hereby directs the Administrative Agent, and the Administrative Agent hereby agrees, upon receipt of reasonable advance notice from Borrower, to execute and deliver or file
such documents and to perform other actions reasonably necessary to release the guaranties and Liens when and as directed in this </FONT><FONT SIZE=2><I>Section&nbsp;11.10</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;11.11&nbsp;&nbsp;&nbsp;&nbsp;Additional Secured Parties.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subject to </FONT> <FONT SIZE=2><I>Section&nbsp;12.2</I></FONT><FONT SIZE=2>, the benefit of the provisions of the Loan
Documents directly relating to the Collateral or any Lien granted thereunder shall extend
to and be available to any Secured Party that is not a Lender or L/C Issuer as long as, by accepting such benefits, such Secured Party agrees, as among the Administrative Agent and all other Secured
Parties, that such Secured Party is bound by (and, if requested by the Administrative Agent, shall confirm such agreement in a writing in form and substance acceptable to the Administrative Agent)
this </FONT><FONT SIZE=2><I>Article&nbsp;XI</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>Section&nbsp;12.8</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>Right of
Setoff</I></FONT><FONT SIZE=2>), </FONT><FONT SIZE=2><I>Section&nbsp;12.9</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>Sharing of Payments</I></FONT><FONT SIZE=2>) and </FONT> <FONT SIZE=2><I>Section&nbsp;12.20</I></FONT><FONT SIZE=2>
(</FONT><FONT SIZE=2><I>Confidentiality</I></FONT><FONT SIZE=2>) and the decisions and actions of the Administrative Agent and the
Required Lenders (or, where expressly required by the terms of this Agreement, a greater proportion of the Lenders) to the same extent a Lender is bound; provided, however, that, notwithstanding the
foregoing, (a)&nbsp;such Secured Party shall be bound by </FONT><FONT SIZE=2><I>Section&nbsp;11.8</I></FONT><FONT SIZE=2> only to the extent of Liabilities, costs and expenses with respect to or
otherwise relating to the Collateral held for the benefit of such Secured Party, in which case the obligations of such Secured Party thereunder shall not be limited by any concept of Pro Rata Share or
similar concept, (b)&nbsp;each of the Administrative Agent, the Lenders and the L/C Issuers shall be entitled to act at its sole discretion, without regard to the interest of such Secured Party,
regardless of whether any Obligation to such Secured Party thereafter remains outstanding, is deprived of the benefit of the Collateral, becomes unsecured or is otherwise affected or put in jeopardy
thereby, and without any duty or liability to such Secured Party or any such Obligation and (c)&nbsp;such Secured Party shall not have any right to be notified of, consent to, direct, require or be
heard with respect to, any action taken or omitted in respect of the Collateral or under any Loan Document. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="oq76602_article_xii_miscellaneous"> </A>
<A NAME="toc_oq76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>ARTICLE XII    <BR>    <BR>    MISCELLANEOUS    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;12.1&nbsp;&nbsp;&nbsp;&nbsp;Amendments, Waivers, Etc.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) No amendment or waiver of any provision of any Loan Document
and no consent to any departure by any Loan Party therefrom shall be effective unless the same shall be in writing and signed (i)&nbsp;in the case of an amendment, consent or waiver to cure any
ambiguity, omission, defect or inconsistency or granting a new Lien for the benefit of the Secured Parties or extending an existing Lien over additional property, by the Administrative Agent and
Borrower, (ii)&nbsp;in the case of any other waiver or consent, by the Required Lenders (or by the Administrative Agent with the consent of the Required Lenders) and (iii)&nbsp;in the case of any
other amendment, by the Required Lenders (or by the Administrative Agent with the consent of the Required Lenders) and Borrower; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that
amendments to or waivers of any provision of </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>71</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P><FONT SIZE=2>the
Fee Letter, the Control Agreements, the Landlord Waiver and the L/C Reimbursement require only the written consent of the Borrower, the Administrative Agent and any third parties thereto, and </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>,
</FONT><FONT SIZE=2><I>further</I></FONT><FONT SIZE=2>, that no amendment, consent or waiver described in clause&nbsp;(ii) or
(iii)&nbsp;above shall, unless in writing and signed by each Lender directly affected thereby (or by the Administrative Agent with the consent of such Lender), in addition to any other Person the
signature of which is otherwise required pursuant to any Loan Document, do any of the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;waive
any condition specified in </FONT><FONT SIZE=2><I>Section&nbsp;3.1</I></FONT><FONT SIZE=2>, except any condition referring to any other provision of any Loan
Document; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;increase
the Commitment of such Lender or subject such Lender to any additional obligation; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;reduce
(including through release, forgiveness, assignment or otherwise) (A)&nbsp;the principal amount of, the interest rate on, or any obligation of Borrower to
repay (whether or not on a fixed date), any outstanding Loan owing to such Lender, (B)&nbsp;any fee or accrued interest payable to such Lender or (C)&nbsp;if such Lender is a Revolving Credit
Lender, any L/C Reimbursement Obligation or any obligation of Borrower to repay (whether or not on a fixed date) any L/C Reimbursement Obligation; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT
SIZE=2><I>however</I></FONT><FONT SIZE=2>, that this </FONT><FONT SIZE=2><I>clause&nbsp;(iii)</I></FONT><FONT SIZE=2> does
not apply to (x)&nbsp;any change to any provision increasing any interest rate or fee during the continuance of an Event of Default or to any payment of any such increase or (y)&nbsp;any
modification to any financial covenant set forth in </FONT><FONT SIZE=2><I>Article&nbsp;V</I></FONT><FONT SIZE=2> or in any definition set forth therein or principally used therein; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;waive
or postpone any scheduled maturity date or other scheduled date fixed for the payment, in whole or in part, of principal of or interest on any Loan or fee owing
to such Lender or for the reduction of such Lender's Commitment; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, however, that this clause&nbsp;(iv) does not apply to any change to
mandatory prepayments required by Section&nbsp;2.8(b) or Section&nbsp;2.8(c)(ii); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;except
as provided in </FONT><FONT SIZE=2><I>Section&nbsp;11.10</I></FONT><FONT SIZE=2>, release all or substantially all of the Collateral or any Guarantor from its
guaranty of any Obligation of Borrower; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;reduce
or increase the proportion of Lenders required for the Lenders (or any subset thereof) to take any action hereunder or change the definition of the terms
"Required Lenders", "Pro Rata Share" or "Pro Rata Outstandings"; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;amend </FONT> <FONT SIZE=2><I>Section&nbsp;11.10</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>Release of Collateral or Guarantor</I></FONT><FONT SIZE=2>), </FONT> <FONT
SIZE=2><I>Section&nbsp;12.9</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>Sharing of Payments</I></FONT><FONT SIZE=2>) or this </FONT> <FONT SIZE=2><I>Section&nbsp;12.1</I></FONT><FONT SIZE=2>; </FONT></P>

</UL>

<P><FONT SIZE=2>and
</FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>further</I></FONT><FONT SIZE=2>, that (x)(A) any waiver of any payment applied pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;2.12(b)</I></FONT><FONT SIZE=2>
(</FONT><FONT SIZE=2><I>Application of Mandatory Prepayments</I></FONT><FONT SIZE=2>) to, and any modification of the application
of any such payment to, (1)&nbsp;the Term Loans shall require the consent of the Required Term Loan Lenders and (2)&nbsp;the Revolving Loans shall require the consent of the Required Revolving
Credit Lenders, (B)&nbsp;any change to the definition of the term "Required Term Loan Lender" shall require the consent of the Required Term Loan Lenders and (C)&nbsp;any change to the definition
of the term "Required Revolving Credit Lender" shall require the consent of the Required Revolving Credit Lenders, (y)&nbsp;no amendment, waiver or consent shall affect the rights or duties under
any Loan Document of, or any payment to, the Administrative Agent (or otherwise modify any provision of </FONT><FONT SIZE=2><I>Article&nbsp;X</I></FONT><FONT SIZE=2> or the application thereof),
the Swingline Lender, any L/C Issuer or any SPV that has been granted an option pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;12.2(f)</I></FONT><FONT SIZE=2> unless in writing and signed by the
Administrative Agent, the Swingline Lender, such L/C Issuer or, as the case may be, such SPV in addition to any signature otherwise required and (z)&nbsp;the consent of Borrower shall not be
required to change any order of priority set forth in </FONT><FONT SIZE=2><I>Section&nbsp;2.12</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Each
waiver or consent under any Loan Document shall be effective only in the specific instance and for the specific purpose for which it was given. No notice to or
demand on any Loan Party shall entitle any Loan Party to any notice or demand in the same, similar or other circumstances. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>72</FONT></P>

<HR NOSHADE>
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<BR>

<P><FONT SIZE=2>No
failure on the part of any Secured Party to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other right. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;12.2&nbsp;&nbsp;&nbsp;&nbsp;Assignments and Participations; Binding Effect.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT><FONT SIZE=2><I>Binding
Effect</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall become effective when it shall have been executed by Holdings, General Partner, Limited Partner, Borrower and the Administrative Agent
and when the Administrative Agent shall have been notified by each Lender and L/C Issuer that such Lender or L/C Issuer has executed it. Thereafter, it shall be binding upon and inure to the benefit
of, but only to the benefit of, Holdings, General Partner, Limited Partner, Borrower (in each case except for </FONT><FONT SIZE=2><I>Article&nbsp;X</I></FONT><FONT SIZE=2>), the Administrative
Agent, each Lender and L/C Issuer and, to the extent provided in </FONT><FONT SIZE=2><I>Section&nbsp;11.11</I></FONT><FONT SIZE=2>, each other Indemnitee and Secured Party and, in each case, their
respective successors and permitted assigns. Except as expressly provided in any Loan Document (including in </FONT><FONT SIZE=2><I>Section&nbsp;11.9</I></FONT><FONT SIZE=2>), none of Holdings,
General Partner, Limited Partner, Borrower, any L/C Issuer or the Administrative Agent shall have the right to assign any rights or obligations hereunder or any interest herein. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Right to Assign.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Lender may sell, transfer, negotiate or assign all or a portion of its rights and
obligations hereunder (including all or a portion of its Commitments and its rights and obligations with respect to Loans and Letters of Credit) to (i)&nbsp;any existing Lender, (ii)&nbsp;any
Affiliate or Approved Fund of any existing Lender or (iii)&nbsp;any other Person (other than any Group Member or any of its Affiliates) acceptable (which acceptance shall not be unreasonably
withheld or delayed) to the Administrative Agent and, as long as no Default or Event of Default is continuing, Borrower; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that
(x)&nbsp;such Sales do not have to be ratable between the Facilities but must be ratable among the obligations owing to and owed by such
Lender with respect to a Facility and (y)&nbsp;for each Facility, the aggregate outstanding principal amount (determined as of the effective date of the applicable Assignment) of the Loans,
Commitments and L/C Obligations subject to any such Sale shall be an integral multiple of $1,000,000, unless such Sale is made to an existing Lender or an Affiliate or Approved Fund of any existing
Lender, is of the assignor's (together with its Affiliates and Approved Funds) entire interest in such Facility or is made with the prior consent of Borrower and the Administrative Agent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Procedure.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The parties to each Sale made in reliance on </FONT> <FONT SIZE=2><I>clause&nbsp;(b)</I></FONT><FONT SIZE=2> above (other than those described in </FONT><FONT
SIZE=2><I>clause&nbsp;(e)</I></FONT><FONT SIZE=2> or </FONT> <FONT SIZE=2><I>(f)</I></FONT><FONT SIZE=2> below) shall execute and deliver to the Administrative Agent (which shall keep a copy thereof) an Assignment, together with any existing Note
subject to such Sale (or any affidavit of loss therefor acceptable to the Administrative Agent), any tax forms required to be delivered pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;2.17(f)</I></FONT><FONT SIZE=2> and payment by the assignee of an
assignment fee in the amount of $3,500; provided that no such fee shall be payable for
assignments among a Lender and its Affiliates and Approved Funds. Upon receipt of all the foregoing, and conditioned upon such receipt and upon the Administrative Agent consenting to such Assignment,
from and after the effective date specified in such Assignment, the Administrative Agent shall record or cause to be recorded in the Register the information contained in such Assignment. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Effectiveness.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Effective upon the entry of such record in the Register, (i)&nbsp;such assignee shall
become a party hereto and, to the extent that rights and obligations under the Loan Documents have been assigned to such assignee pursuant to such Assignment, shall have the rights and obligations of
a Lender, (ii)&nbsp;any applicable Note shall be transferred to such assignee through such entry and (iii)&nbsp;the assignor thereunder shall, to the extent that rights and obligations under this
Agreement have been assigned by it pursuant to such Assignment, relinquish its rights (except for those surviving the termination of the Commitments and the payment in full of the Obligations) and be
released from its obligations under the Loan Documents, other than those relating to events or circumstances occurring prior to such assignment (and, in the case of an Assignment covering all or the
remaining portion of an assigning Lender's rights and obligations under the Loan Documents, such Lender shall cease to be a party hereto except that each Lender agrees to remain bound by </FONT> <FONT SIZE=2><I>Article&nbsp;X</I></FONT><FONT SIZE=2>,
</FONT><FONT SIZE=2><I>Section&nbsp;12.8</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>Right of Setoff</I></FONT><FONT SIZE=2>)
 </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>73</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_oq76602_1_74"> </A>
<BR>

<P><FONT SIZE=2>and
</FONT><FONT SIZE=2><I>Section&nbsp;12.9</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>Sharing of Payments</I></FONT><FONT SIZE=2>) to the extent provided in </FONT> <FONT SIZE=2><I>Section&nbsp;11.11</I></FONT><FONT SIZE=2> (</FONT><FONT
SIZE=2><I>Additional Beneficiaries of Collateral</I></FONT><FONT SIZE=2>)). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Grant of Security Interests.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In addition to the other rights provided in this </FONT> <FONT SIZE=2><I>Section&nbsp;12.2</I></FONT><FONT SIZE=2>, each Lender may grant a
security interest in, or otherwise assign as collateral, any of its rights under this Agreement, whether
now owned or hereafter acquired (including rights to payments of principal or interest on the Loans), to (A)&nbsp;any federal reserve bank (pursuant to Regulation&nbsp;A of the Federal Reserve
Board), without notice to the Administrative Agent or (B)&nbsp;any holder of, or trustee for the benefit of the holders of, such Lender's Securities by notice to the Administrative Agent; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>,
</FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that no such holder or trustee, whether because of such grant or assignment or any
foreclosure thereon (unless such foreclosure is made through an assignment in accordance with </FONT><FONT SIZE=2><I>clause&nbsp;(b)</I></FONT><FONT SIZE=2> above), shall be entitled to any rights
of such Lender hereunder and no such Lender shall be relieved of any of its obligations hereunder. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Participants and SPVs.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In addition to the other rights provided in this </FONT> <FONT SIZE=2><I>Section&nbsp;12.2</I></FONT><FONT SIZE=2>, each Lender may, (x)&nbsp;with
notice to the Administrative Agent, grant to an SPV the option to make all or any part of any Loan
that such Lender would otherwise be required to make hereunder (and the exercise of such option by such SPV and the making of Loans pursuant thereto shall satisfy the obligation of such Lender to make
such Loans hereunder) and such SPV may assign to such Lender the right to receive payment with respect to any Obligation and (y)&nbsp;without notice to or consent from the Administrative Agent or
Borrower, sell participations to one or more Persons in or to all or a portion of its rights and obligations under the Loan Documents (including all its rights and obligations with respect to the Term
Loans, Revolving Loans and Letters of Credit); </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that, whether as a result of any term
of any Loan Document or of such grant or participation, (i)&nbsp;no such SPV or participant shall have a commitment, or be deemed to have made an offer to commit, to make Loans hereunder, and,
except as provided in the applicable option agreement, none shall be liable for any obligation of such Lender hereunder, (ii)&nbsp;such Lender's rights and obligations, and the rights and
obligations of the Loan Parties and the Secured Parties towards such Lender, under any Loan Document shall remain unchanged and each other party hereto shall continue to deal solely with such Lender,
which shall remain the holder of the Obligations in the Register, except that (A)&nbsp;each such participant and SPV shall be entitled to the benefit of </FONT><FONT SIZE=2><I>Sections
2.16</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>Breakage Costs; Increased Costs; Capital Requirements</I></FONT><FONT SIZE=2>) and </FONT><FONT SIZE=2><I>2.17</I></FONT><FONT SIZE=2>
(</FONT><FONT SIZE=2><I>Taxes</I></FONT><FONT SIZE=2>), but only to the extent such participant or SPV delivers the tax forms such Lender is required to collect pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;2.17(f)</I></FONT><FONT SIZE=2> and then
only to the extent of any amount to which such Lender would be entitled in the absence of any such grant or
participation and (B)&nbsp;each such SPV may receive other payments that would otherwise be made to such Lender with respect to Loans funded by such SPV to the extent provided in the applicable
option agreement and set forth in a notice provided to the Administrative Agent by such SPV and such Lender, </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that in no case (including
pursuant to </FONT><FONT SIZE=2><I>clause&nbsp;(A)</I></FONT><FONT SIZE=2> or </FONT> <FONT SIZE=2><I>(B)</I></FONT><FONT SIZE=2> above) shall an SPV or participant have the right to enforce any of the terms of any Loan Document, and (iii)&nbsp;the
consent of such SPV or
participant shall not be required (either directly, as a restraint on such Lender's ability to consent hereunder or otherwise) for any amendments, waivers or consents with respect to any Loan Document
or to exercise or refrain from exercising any powers or rights such Lender may have under or in respect of the Loan Documents (including the right to enforce or direct enforcement of the Obligations),
except for those described in </FONT><FONT SIZE=2><I>clauses (iii)</I></FONT><FONT SIZE=2> and </FONT><FONT SIZE=2><I>(iv)</I></FONT><FONT SIZE=2> of </FONT> <FONT SIZE=2><I>Section&nbsp;12.1(a)</I></FONT><FONT SIZE=2> with respect to amounts, or
dates fixed for payment of amounts, to which such participant or SPV would otherwise be entitled and,
in the case of participants, except for those described in </FONT><FONT SIZE=2><I>Section&nbsp;12.1(a)(v)</I></FONT><FONT SIZE=2> (or amendments, consents and waivers with respect to </FONT> <FONT SIZE=2><I>Section&nbsp;11.10</I></FONT><FONT SIZE=2>
to release all or substantially all of the Collateral). No party hereto shall institute against any SPV grantee of an option
pursuant to this </FONT><FONT SIZE=2><I>clause&nbsp;(f)</I></FONT><FONT SIZE=2> any bankruptcy, reorganization, insolvency, liquidation or similar proceeding, prior to the date that is one year and
one day after the payment in full of all outstanding commercial paper of such SPV; provided, however, that each Lender having designated an SPV as such agrees to indemnify each Indemnitee against any
Liability that may be incurred by, or asserted against, such Indemnitee as a result of failing to institute </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>74</FONT></P>

<HR NOSHADE>
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<!-- ZEQ.=8,SEQ=79,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="20",CHK=655432,FOLIO='74',FILE='DISK130:[07ZBA2.07ZBA76602]OQ76602A.;5',USER='MBRADT',CD=';4-APR-2007;13:35' -->
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<P><FONT SIZE=2>such
proceeding (including a failure to get reimbursed by such SPV for any such Liability). The agreement in the preceding sentence shall survive the termination of the Commitments and the payment in
full of the Obligations. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;12.3&nbsp;&nbsp;&nbsp;&nbsp;Costs and Expenses.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Any action taken by any Loan Party under or with respect to any Loan
Document, even if required under any Loan Document or at the request of any Secured Party, shall be at the expense of such Loan Party, and no Secured Party shall be required under any Loan Document to
reimburse any Loan Party or Group Member therefor except as expressly provided therein. In addition, Borrower agrees to pay or reimburse upon demand (a)&nbsp;the Administrative Agent for all
reasonable out-of-pocket costs and expenses incurred by it or any of its Related Persons in connection with the investigation, development, preparation, negotiation,
syndication, execution, interpretation or administration of, any modification of any term of or termination of, any Loan Document, any commitment or proposal letter therefor, any other document
prepared in connection therewith or the consummation and administration of any transaction contemplated therein (including periodic audits in connection therewith and environmental audits and
assessments to the extent permitted hereunder), in each case including the reasonable fees, charges and disbursements of legal counsel to the Administrative Agent or such Related Persons, fees, costs
and expenses incurred in connection with Intralinks&reg; or any other E-System and allocated to the Facilities by the Administrative Agent in its sole discretion, and fees, charges
and disbursements of the auditors, appraisers, printers and other of their Related Persons retained by or on behalf of any of them or any of their Related Persons, (b)&nbsp;the Administrative Agent
for all reasonable costs and expenses incurred by it or any of its Related Persons in connection with internal audit reviews, field examinations and Collateral examinations (which shall be reimbursed,
in addition to the out-of-pocket costs and expenses of such examiners, at the per diem rate per individual charged by the Administrative Agent for its examiners) and
(c)&nbsp;each of the Administrative Agent, its Related Persons, and each Lender and L/C Issuer for all costs and expenses incurred in connection with (i)&nbsp;any refinancing or restructuring of
the credit arrangements provided hereunder in the nature of a "work-out", (ii)&nbsp;the enforcement or preservation of any right or remedy under any Loan Document, any Obligation, with
respect to the Collateral or any other related right or remedy or (iii)&nbsp;the commencement, defense, conduct of, intervention in, or the taking of any other action with respect to, any proceeding
(including any bankruptcy or insolvency proceeding) related to any Group Member, Loan Document, Obligation or Related Transaction (or the response to and preparation for any subpoena or request for
document production relating thereto), including fees and disbursements of counsel (including allocated costs of internal counsel). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;12.4&nbsp;&nbsp;&nbsp;&nbsp;Indemnities.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) Borrower and each Parent Guarantor agrees to indemnify, hold harmless and
defend the Administrative Agent, each Lender, each L/C Issuer, each Person that each L/C Issuer causes to Issue Letters of Credit hereunder and each of their respective Related Persons (each such
Person being an "Indemnitee") from and against all Liabilities (including brokerage commissions, fees and other compensation) that may be imposed on, incurred by or asserted against any such
Indemnitee in any matter relating to or arising out of, in connection with or as a result of (i)&nbsp;any Loan Document, any Related Document, any Disclosure Document, any Obligation (or the
repayment thereof), any Letter of Credit, the use or intended use of the proceeds of any Loan or the use of any Letter of Credit, any Related Transaction, or any securities filing of, or with respect
to, any Group Member, (ii)&nbsp;any commitment letter, proposal letter or term sheet with any Person or any Contractual Obligation, arrangement or understanding with any broker, finder or
consultant, in each case entered into by or on behalf of the Acquired Company, any Group Member or any Affiliate of any of them in connection with any of the foregoing and any Contractual Obligation
entered into in connection with any E-Systems or other Electronic Transmissions, (iii)&nbsp;any actual or prospective investigation, litigation or other proceeding, whether or not
brought by any such Indemnitee or any of its Related Persons, any holders of Securities or creditors (and including reasonable attorneys' fees of one counsel to all Indemnitees in any case), whether
or not any such Indemnitee, Related Person, holder or creditor is a party thereto, and whether or not based on any securities or commercial law or regulation or any other </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>75</FONT></P>

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<P><FONT SIZE=2>Requirement
of Law or theory thereof, including common law, equity, contract, tort or otherwise, or (iv)&nbsp;any other act, event or transaction related, contemplated in or attendant to any of the
foregoing (collectively, the "</FONT><FONT SIZE=2><I>Indemnified Matters</I></FONT><FONT SIZE=2>"); </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that no Borrower shall have any
liability under this </FONT><FONT SIZE=2><I>Section&nbsp;12.4</I></FONT><FONT SIZE=2> to any Indemnitee with
respect to any Indemnified Matter, and no Indemnitee shall have any liability with respect to any Indemnified Matter other than (to the extent otherwise liable), to the extent such liability has
resulted primarily from the gross negligence or willful misconduct of such Indemnitee as determined by a court of competent jurisdiction in a final non-appealable judgment or order.
Furthermore, Borrower and each Parent Company waives and agrees not to assert against any Indemnitee, and shall cause each other Loan Party to waive and not assert against any Indemnitee, any right of
contribution with respect to any Liabilities that may be imposed on, incurred by or asserted against any Related Person. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Without
limiting the foregoing, "</FONT><FONT SIZE=2><I>Indemnified Matters</I></FONT><FONT SIZE=2>" includes all Environmental Liabilities, including those arising
from, or otherwise involving, any property of any Related Person or any actual, alleged or prospective damage to property or natural resources or harm or injury alleged to have resulted from any
Release of Hazardous Materials on, upon or into such property or natural resource or any property on or contiguous to any real property of any Related Person, whether or not, with respect to any such
Environmental Liabilities, any Indemnitee is a mortgagee pursuant to any leasehold mortgage, a mortgagee in possession, the successor-in-interest to any Related Person or the
owner, lessee or operator of any property of any Related Person through any foreclosure action, in each case except to the extent such Environmental Liabilities (i)&nbsp;are incurred solely
following foreclosure by any Secured Party or following any Secured Party having become the successor-in-interest to any Loan Party and (ii)&nbsp;are attributable solely to
acts of such Indemnitee</FONT><FONT SIZE=2><B>.</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;12.5&nbsp;&nbsp;&nbsp;&nbsp;Survival.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Any indemnification or other protection provided to any Indemnitee pursuant to any
Loan Document (including pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;2.17</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>Taxes</I></FONT><FONT SIZE=2>), </FONT> <FONT SIZE=2><I>Section&nbsp;2.16</I></FONT><FONT SIZE=2> (</FONT><FONT
SIZE=2><I>Breakage Costs; Increased Costs; Capital Requirements</I></FONT><FONT SIZE=2>), </FONT> <FONT SIZE=2><I>Article&nbsp;X</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>The Administrative Agent</I></FONT><FONT SIZE=2>), </FONT> <FONT
SIZE=2><I>Section&nbsp;12.3</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>Costs and Expenses</I></FONT><FONT SIZE=2>),
</FONT><FONT SIZE=2><I>Section&nbsp;12.4</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>Indemnities</I></FONT><FONT SIZE=2>) or this </FONT> <FONT SIZE=2><I>Section&nbsp;12.5</I></FONT><FONT SIZE=2>) and all representations and warranties made in
any Loan Document shall (A)&nbsp;survive the termination of the Commitments and
the payment in full of other Obligations and (B)&nbsp;inure to the benefit of any Person that at any time held a right thereunder (as an Indemnitee or otherwise) and, thereafter, its successors and
permitted assigns. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;12.6&nbsp;&nbsp;&nbsp;&nbsp;Limitation of Liability for Certain Damages.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In no event shall any Indemnitee be liable on
any theory of liability for any special, indirect, consequential or punitive damages (including any loss of profits, business or anticipated savings). Borrower and each Parent Guarantor hereby waives,
releases and agrees (and shall cause each other Loan Party to waive, release and agree) not to sue upon any such claim for any special, indirect, consequential or punitive damages, whether or not
accrued and whether or not known or suspected to exist in its favor. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;12.7&nbsp;&nbsp;&nbsp;&nbsp;Lender-Creditor Relationship.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The relationship between the Lenders, the L/C Issuers and the
Administrative Agent, on the one hand, and the Loan Parties, on the other hand, is solely that of lender and debtor. No Secured Party has any fiduciary relationship or duty to any Loan Party arising
out of or in connection with, and there is no agency, tenancy or joint venture relationship between the Secured Parties and the Loan Parties by virtue of, any Loan Document or any transaction
contemplated therein. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;12.8&nbsp;&nbsp;&nbsp;&nbsp;Right of Setoff.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each of the Administrative Agent, each Lender, each L/C Issuer and each
Affiliate (including each branch office thereof) of any of them is hereby authorized, without notice or demand (each of which is hereby waived by Borrower and each Parent Guarantor), at any time and
from time to time during the continuance of any Event of Default and to the fullest extent permitted by applicable Requirements of Law, to set off and apply any and all deposits (whether general or
special, time or demand, provisional or final) at any time held and other Indebtedness, claims or other obligations at any time owing by the Administrative Agent, such Lender, such L/C </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>76</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2>Issuer
or any of their respective Affiliates to or for the credit or the account of Borrower or any Parent Guarantor against any Obligation of any Loan Party now or hereafter existing, whether or not
any demand was made under any Loan Document with respect to such Obligation and even though such Obligation may be unmatured. Each of the Administrative Agent, each Lender and each L/C Issuer agrees
promptly to notify Borrower and the Administrative Agent after any such setoff and application made by such Lender or its Affiliates; provided, however, that the failure to give such notice shall not
affect the validity of such setoff and application. The rights under this Section&nbsp;12.8 are in addition to any other rights and remedies (including other rights of setoff) that the
Administrative Agent, the Lenders and the L/C Issuers and their Affiliates and other Secured Parties may have. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;12.9&nbsp;&nbsp;&nbsp;&nbsp;Sharing of Payments, Etc.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;If any Lender, directly or through an Affiliate or branch office
thereof, obtains any payment of any Obligation of any Loan Party (whether voluntary, involuntary or
through the exercise of any right of setoff or the receipt of any Collateral or "proceeds" (as defined under the applicable UCC) of Collateral) other than pursuant to </FONT><FONT SIZE=2><I>Sections
2.16</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>Breakage Costs; Increased Costs; Capital Requirements</I></FONT><FONT SIZE=2>), </FONT><FONT SIZE=2><I>2.17</I></FONT><FONT SIZE=2>
(</FONT><FONT SIZE=2><I>Taxes</I></FONT><FONT SIZE=2>) and </FONT><FONT SIZE=2><I>2.18</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>Substitution of Lenders</I></FONT><FONT SIZE=2>) and such
payment exceeds the amount such Lender would have been entitled to receive if all payments had gone to, and been distributed by, the Administrative Agent in accordance with the provisions of the Loan
Documents, such Lender shall purchase for cash from other Secured Parties such participations in their Obligations as necessary for such Lender to share such excess payment with such Secured Parties
to ensure such payment is applied as though it had been received by the Administrative Agent and applied in accordance with this Agreement (or, if such application would then be at the discretion of
Borrower, applied to repay the Obligations in accordance herewith); provided, however, that (a)&nbsp;if such payment is rescinded or otherwise recovered from such Lender or L/C Issuer in whole or in
part, such purchase shall be rescinded and the purchase price therefor shall be returned to such Lender or L/C Issuer without interest and (b)&nbsp;such Lender shall, to the fullest extent permitted
by applicable Requirements of Law, be able to exercise all its rights of payment (including the right of setoff) with respect to such participation as fully as if such Lender were the direct creditor
of Borrower in the amount of such participation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;12.10&nbsp;&nbsp;&nbsp;&nbsp;Marshaling; Payments Set Aside.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) Borrower expressly waives all rights it may have now or
in the future under any statute, or at common law, or at law or in equity, or otherwise, to compel Administrative Agent, any Lender or any L/C Issuer to marshal assets or to proceed in respect of the
Obligations guaranteed hereunder against any other Loan Party, any other party or against any security for the payment and performance of the Obligations before proceeding against, or as a condition
to proceeding against, Borrower. It is agreed among Borrower, Administrative Agent, each Lender and each L/C Issuer that the foregoing waivers are of the essence of the transaction contemplated by
this Agreement and the other Loan Documents and that, but for the provisions of this </FONT><FONT SIZE=2><I>Article&nbsp;XII</I></FONT><FONT SIZE=2> and such waivers, Administrative Agent, each
Lender and each L/C Issuer would decline to enter into this Agreement;. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;No
Secured Party shall be under any obligation to marshal any property in favor of any Loan Party or any other party or against or in payment of any Obligation. To the
extent that any Secured Party receives a payment from Borrower, from the proceeds of the Collateral, from the exercise of its rights of setoff, any enforcement action or otherwise, and such payment is
subsequently, in whole or in part, invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party, then to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment
had not occurred. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;12.11&nbsp;&nbsp;&nbsp;&nbsp;Notices.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT><FONT SIZE=2><I>Addresses</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;All
notices, demands, requests, directions and other communications required or expressly authorized to be made by this Agreement shall, whether or not specified to be in writing but unless otherwise
expressly specified to be given by any other means, be given in writing and (i)&nbsp;addressed to (A)&nbsp;if to Holdings or Borrower, to PROS Revenue Management, </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>77</FONT></P>

<HR NOSHADE>
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<!-- ZEQ.=11,SEQ=82,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="20",CHK=557788,FOLIO='77',FILE='DISK130:[07ZBA2.07ZBA76602]OQ76602A.;5',USER='MBRADT',CD=';4-APR-2007;13:35' -->
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<P><FONT SIZE=2>L.P.,
3100 Main Street, Suite 900, Houston, TX 77002, Attention: Charlie Murphy, Chief Financial Officer, Tel: (713)&nbsp;335-5389, Fax: (713)&nbsp;335-8144, with copy to
DLA Piper US LLP, 1221 South MoPac Expressway, Suite 400, Austin, TX 78746, Attention: John J. Gilluly III, Esq., Tel: (512)&nbsp;457-7090, Fax: (512)&nbsp;457-7001,
(B)&nbsp;if to the Administrative Agent or the Swingline Lender, to Churchill Financial LLC, 400 Park Avenue, Suite 1510, New York, NY 10022, Attention: Carey B. Davidson, Tel:
(212)&nbsp;763-4640, Fax: (212)&nbsp;763-4641, and Sean McKeever, Tel: (212)&nbsp;763-4672, Fax: (212)&nbsp;763-4649, with copy to
Goulston&nbsp;&amp; Storrs, 400 Atlantic Avenue, Boston, MA 02110, Attention: Philip A. Herman, Esq., Tel: (617)&nbsp;574-4114, Fax: (617)&nbsp;574-7592, and
(C)&nbsp;otherwise to the party to be notified at its address specified opposite its name on Schedule&nbsp;II or on the signature page of any applicable Assignment, (ii)&nbsp;posted to
Intralinks&reg; (to the extent such system is available and set up by or at the direction of the Administrative Agent prior to posting) in an appropriate location by uploading such notice,
demand, request, direction or other communication to www.intralinks.com, faxing it to 866-545-6600 with an appropriate bar-coded fax coversheet or using such other
means of posting to Intralinks&reg; as may be available and reasonably acceptable to the Administrative Agent prior to such posting, (iii)&nbsp;posted to any other E-System set
up by or at the direction of the Administrative Agent in an appropriate location or (iv)&nbsp;addressed to such other address as shall be notified in writing (A)&nbsp;in the case of Borrower, the
Administrative Agent and the Swingline Lender, to the other parties hereto and (B)&nbsp;in the case of all other parties, to Borrower and the Administrative Agent. Transmission by electronic mail
(including E-Fax, even if transmitted to the fax numbers set forth in clause&nbsp;(i) above) shall not be sufficient or effective to transmit any such notice under this clause&nbsp;(a)
unless such transmission is an available means to post to any E-System. Notwithstanding the foregoing, Notices of Borrowing or Conversion made to the Administrative Agent shall be to such
persons at such addresses as shall be separately specified by the Administrative Agent to Borrower from time to time in writing. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Effectiveness.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;All communications described in </FONT> <FONT SIZE=2><I>clause&nbsp;(a)</I></FONT><FONT SIZE=2> above and all other notices, demands, requests and other
communications made in connection with this Agreement shall be effective and
be deemed to have been received (i)&nbsp;if delivered by hand, upon personal delivery, (ii)&nbsp;if delivered by overnight courier service, one Business Day after delivery to such courier service,
(iii)&nbsp;if delivered by mail, when deposited in the mails, (iv)&nbsp;if delivered by facsimile (other than to post to an E-System pursuant to </FONT> <FONT SIZE=2><I>clause&nbsp;(a)(ii)</I></FONT><FONT SIZE=2> or </FONT><FONT SIZE=2><I>(a)(iii)
</I></FONT><FONT SIZE=2> above), upon sender's receipt of confirmation of proper transmission,
and (v)&nbsp;if delivered by posting to any E-System, on the later of the date of such posting in an appropriate location and the date access to such posting is given to the recipient
thereof in accordance with the standard procedures applicable to such E-System; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that no communications to the Administrative Agent
pursuant to </FONT><FONT SIZE=2><I>Article&nbsp;II</I></FONT><FONT SIZE=2> or </FONT> <FONT SIZE=2><I>Article&nbsp;X</I></FONT><FONT SIZE=2> shall be effective until received by the Administrative Agent. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;12.12&nbsp;&nbsp;&nbsp;&nbsp;Electronic Transmissions.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT> <FONT SIZE=2><I>Authorization</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Subject to the provisions of
Section&nbsp;12.11(a), each of the Administrative Agent, Borrower, the Lenders, the L/C
Issuers and each of their Related Persons is authorized (but not required) to transmit, post or otherwise make or communicate, in its sole discretion, Electronic Transmissions in connection with any
Loan Document and the transactions contemplated therein. Each of Holdings, General partner, Limited Partner, Borrower and each Secured Party hereby acknowledges and agrees, and each of Holdings,
General Partner, Limited Partner and Borrower shall cause each other Group Member to acknowledge and agree, that the use of Electronic Transmissions is not necessarily secure and that there are risks
associated with such use, including risks of interception, disclosure and abuse and each indicates it assumes and accepts such risks by hereby authorizing the transmission of Electronic Transmissions. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Signatures.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Subject to the provisions of </FONT> <FONT SIZE=2><I>Section&nbsp;12.11(a)</I></FONT><FONT SIZE=2>, (i)(A) no posting to any E-System shall be denied legal
effect merely because it is made electronically,
(B)&nbsp;each E-Signature on any such posting shall be deemed sufficient to satisfy any requirement for a "signature" and (C)&nbsp;each such posting shall be deemed sufficient to
satisfy any requirement for a "writing", in each case including pursuant to any Loan Document, any applicable provision of any UCC, the federal Uniform Electronic </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>78</FONT></P>

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<A NAME="page_oq76602_1_79"> </A>
<BR>

<P><FONT SIZE=2>Transactions
Act, the Electronic Signatures in Global and National Commerce Act and any substantive or procedural Requirement of Law governing such subject matter, (ii)&nbsp;each such posting that
is not readily capable of bearing either a signature or a reproduction of a signature may be signed, and shall be deemed signed, by attaching to, or logically associating with such posting, an
E-Signature, upon which each Secured Party and Loan Party may rely and assume the authenticity thereof, (iii)&nbsp;each such posting containing a signature, a reproduction of a signature
or an E-Signature shall, for all intents and purposes, have the same effect and weight as a signed paper original and (iv)&nbsp;each party hereto or beneficiary hereto agrees not to
contest the validity or enforceability of any posting on any E-System or E-Signature on any such posting under the provisions of any applicable Requirement of Law requiring
certain documents to be in writing or signed; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that nothing herein shall limit such
party's or beneficiary's right to contest whether any posting to any E-System or E-Signature has been altered after transmission. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Separate Agreements.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;All uses of an E-System shall be governed by and subject to, in addition to </FONT> <FONT SIZE=2><I>Section&nbsp;12.11</I></FONT><FONT SIZE=2> and
this </FONT><FONT SIZE=2><I>Section&nbsp;12.12</I></FONT><FONT SIZE=2>, separate terms and conditions posted or referenced
in such E-System and related Contractual Obligations executed by Secured Parties and Group Members in connection with the use of such E-System. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;LIMITATION OF LIABILITY.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;ALL E-SYSTEMS AND ELECTRONIC TRANSMISSIONS SHALL BE PROVIDED "AS IS"
AND "AS AVAILABLE". NONE OF ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PERSONS WARRANTS THE ACCURACY, ADEQUACY OR COMPLETENESS OF ANY E-SYSTEMS OR ELECTRONIC TRANSMISSION, AND EACH
DISCLAIMS ALL LIABILITY FOR ERRORS OR OMISSIONS THEREIN. NO WARRANTY OF ANY KIND IS MADE BY THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PERSONS IN CONNECTION WITH
ANY E-SYSTEMS OR ELECTRONIC COMMUNICATION, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD-PARTY RIGHTS OR FREEDOM FROM
VIRUSES OR OTHER CODE DEFECTS. Each of Holdings, Borrower and each Secured Party agrees (and each of Holdings and Borrower shall cause each other Loan Party to agree) that the Administrative Agent has
no responsibility for maintaining or providing any equipment, software, services or any testing required in connection with any Electronic Transmission or otherwise required for any
E-System. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;12.13&nbsp;&nbsp;&nbsp;&nbsp;Governing Law.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Agreement, each other Loan Document that does not expressly set forth
its applicable law, and the rights and obligations of the parties hereto and thereto shall be governed by, and construed and interpreted in accordance with, the law of the State of New York. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;12.14&nbsp;&nbsp;&nbsp;&nbsp;Jurisdiction.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) </FONT><FONT SIZE=2><I>Submission to
Jurisdiction</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Any legal action or proceeding with respect to any Loan Document may be brought in the courts of the State of New York located in the City of New
York, Borough of Manhattan, or of the United States of America for the Southern District of New York and, by execution and delivery of this Agreement, Borrower and each Parent Guarantor hereby accepts
for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. The parties hereto (and, to the extent set forth in any other Loan Document, each
other Loan Party) hereby irrevocably waive any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, that any of them may now or hereafter have to
the bringing of any such action or proceeding in such jurisdictions. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Service of Process.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Borrower and each Parent Guarantor (and, to the extent set forth in any other Loan
Document, each other Loan Party) hereby irrevocably waives personal service of any and all legal process, summons, notices and other documents and other service of process of any kind and consents to
such service in any suit, action or proceeding brought in the United States of America with respect to or otherwise arising out of or in connection with any Loan Document by any means </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>79</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=13,SEQ=84,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="20",CHK=123561,FOLIO='79',FILE='DISK130:[07ZBA2.07ZBA76602]OQ76602A.;5',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<A NAME="page_oq76602_1_80"> </A>
<BR>

<P><FONT SIZE=2>permitted
by applicable Requirements of Law, including by the mailing thereof (by registered or certified mail, postage prepaid) to the address of Borrower specified in </FONT> <FONT SIZE=2><I>Section&nbsp;12.11</I></FONT><FONT SIZE=2> (and shall be effective
when such mailing shall be effective, as provided therein). Borrower and each Parent Guarantor (and, to the
extent set forth in any other Loan Document, each other Loan Party) agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit
on the judgment or in any other manner provided by law. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)</FONT><FONT
SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;Non-Exclusive Jurisdiction.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Nothing contained in this </FONT> <FONT SIZE=2><I>Section&nbsp;12.14</I></FONT><FONT SIZE=2> shall affect the right of the Administrative
Agent or any Lender to serve process in any other manner permitted by applicable
Requirements of Law or commence legal proceedings or otherwise proceed against any Loan Party in any other jurisdiction. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>SECTION 12.15&nbsp;&nbsp;&nbsp;&nbsp;WAIVER OF JURY TRIAL.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY SUIT,
ACTION OR PROCEEDING WITH RESPECT TO, OR DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREIN OR RELATED THERETO (WHETHER
FOUNDED IN CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)&nbsp;CERTIFIES THAT NO OTHER PARTY AND NO RELATED PERSON OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)&nbsp;ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THE LOAN
DOCUMENTS, AS APPLICABLE, BY THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.15. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;12.16&nbsp;&nbsp;&nbsp;&nbsp;Severability.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Any provision of any Loan Document being held illegal, invalid or
unenforceable in any jurisdiction shall not affect any part of such provision not held illegal, invalid or unenforceable, any other provision of any Loan Document or any part of such provision in any
other jurisdiction. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;12.17&nbsp;&nbsp;&nbsp;&nbsp;Execution in Counterparts.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be executed in any number of counterparts and
by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature
pages may be detached from multiple separate counterparts and attached to a single counterpart. Delivery of an executed signature page of this Agreement by facsimile transmission or Electronic
Transmission shall be as effective as delivery of a manually executed counterpart hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;12.18&nbsp;&nbsp;&nbsp;&nbsp;Entire Agreement.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Loan Documents embody the entire agreement of the parties and
supersede all prior agreements and understandings relating to the subject matter thereof and any prior letter of interest, commitment letter, fee letter, confidentiality and similar agreements
involving any Loan Party and any of the Administrative Agent, any Lender or any L/C Issuer or any of their respective Affiliates relating to a financing of substantially similar form, purpose or
effect. In the event of any conflict between the terms of this Agreement and any other Loan Document, the terms of this Agreement shall govern (unless such terms of such other Loan Documents are
necessary to comply with applicable Requirements of Law, in which case such terms shall govern to the extent necessary to comply therewith). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;12.19&nbsp;&nbsp;&nbsp;&nbsp;Use of Name.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;Borrower
and each Parent Guarantor agrees, and shall cause each other Loan Party to agree, that it shall not, and none of its Affiliates shall, issue any press release
or other public disclosure (other than any document filed with any Governmental Authority relating to a public offering of the Securities of any Loan Party) using the name, logo or otherwise referring
to Churchill or any Lender or of any of their Affiliates, the Loan Documents or any transaction contemplated therein to which the Secured </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>80</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=14,SEQ=85,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="20",CHK=649959,FOLIO='80',FILE='DISK130:[07ZBA2.07ZBA76602]OQ76602A.;5',USER='MBRADT',CD=';4-APR-2007;13:35' -->
<A NAME="page_oq76602_1_81"> </A>
<BR>

<P><FONT SIZE=2>Parties
are party without at least 2 Business Days' prior notice to Churchill and any Lender named in such public disclosure and without the prior consent of Churchill or, if applicable, such named
Lender (such consent not to be unreasonably withheld or delayed), except to the extent required to do so under applicable Requirements of Law and then, only after consulting with Churchill (or such
applicable Lender) prior thereto. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Churchill
and each Lender agrees that it shall not, and none of its Affiliates shall, issue any press release or other public disclosure (other than any document filed
with any Governmental Authority relating to a public offering of the Securities of such Person) using the name, logo or otherwise referring to Borrower or any Loan Party, the Loan Documents or any
transaction contemplated therein without the prior written consent of Borrower and of TA Associates,&nbsp;Inc., which shall be in each of their sole discretion. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;12.20&nbsp;&nbsp;&nbsp;&nbsp;Non-Public Information; Confidentiality.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Lender and L/C Issuer
acknowledges and agrees that it may receive material non-public information hereunder concerning the Loan Parties and their Affiliates and Securities and agrees to use such information in
compliance with all relevant policies, procedures and Contractual Obligations and applicable Requirements of Laws (including United States federal and state security laws and regulations). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Each
Lender, L/C Issuer and the Administrative Agent agrees to use all reasonable efforts to maintain, in accordance with its customary practices, the confidentiality of
information obtained by it pursuant to any Loan Document and designated in writing by any Loan Party as confidential, except that such information may be disclosed (i)&nbsp;with Borrower's consent,
(ii)&nbsp;to Related Persons of such Lender, L/C Issuer or the Administrative Agent, as the case may be, or to any Person that any L/C Issuer causes to Issue Letters of Credit hereunder, that are
advised of the confidential nature of such information and are instructed to keep such information confidential, (iii)&nbsp;to the extent such information presently is or hereafter becomes available
to such Lender, L/C Issuer or the Administrative Agent, as the case may be, on a non-confidential basis from a source other than any Loan Party, (iv)&nbsp;to the extent disclosure is
required by applicable Requirements of Law or other legal process or requested or demanded by any Governmental Authority, (v)&nbsp;to the extent necessary or customary for inclusion in league table
measurements or in any tombstone or other advertising materials (and the Loan Parties consent to the publication of such tombstone or other advertising materials by the Administrative Agent, any
Lender, any L/C Issuer or any of their Related Persons), (vi)&nbsp;to the National Association of Insurance Commissioners or any similar organization, any examiner or any nationally recognized
rating agency or otherwise to the extent consisting of general portfolio information that does not identify borrowers, (vii)&nbsp;to current or prospective assignees, SPVs grantees of any option
described in </FONT><FONT SIZE=2><I>Section&nbsp;12.2(f)</I></FONT><FONT SIZE=2> or participants, direct or contractual counterparties to any Hedging Agreement permitted hereunder and to their
respective Related Persons, in each case to the extent such assignees, participants, counterparties or Related Persons agree to be bound by the provisions of this </FONT> <FONT SIZE=2><I>Section&nbsp;12.20</I></FONT><FONT SIZE=2> and (viii)&nbsp;in
connection with the exercise of any remedy under any Loan Document. In the event of any conflict between the
terms of this </FONT><FONT SIZE=2><I>Section&nbsp;12.20</I></FONT><FONT SIZE=2> and those of any other Contractual Obligation entered into with any Loan Party (whether or not a Loan Document), the
terms of this </FONT><FONT SIZE=2><I>Section&nbsp;12.20</I></FONT><FONT SIZE=2> shall govern. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;12.21&nbsp;&nbsp;&nbsp;&nbsp;Patriot Act Notice.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Each Lender subject to the USA Patriot Act of 2001 (31 U.S.C. 5318 et
seq.) hereby notifies Borrower that, pursuant to Section&nbsp;326 thereof, it is required to obtain, verify and record information that identifies Borrower, including the name and address of
Borrower and other information allowing such Lender to identify Borrower in accordance with such act. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>[SIGNATURE
PAGES FOLLOW] </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>81</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P><FONT SIZE=2><A
NAME="page_os76602_1_1"> </A> </FONT> <FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><B>PROS REVENUE MANAGEMENT, L.P.,<BR> </B></FONT><FONT SIZE=2>as Borrower</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
by:</FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2><BR>
PROS Revenue I, LLC,<BR>
its General Partner</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By</FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>CHARLES H. MURPHY</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Charles H. Murphy<BR>
Chief Financial Officer</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>PROS REVENUE I, LLC,<BR> </B></FONT><FONT SIZE=2>as Guarantor</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By</FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>CHARLES H. MURPHY</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Charles H. Murphy<BR>
Chief Financial Officer</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>PROS REVENUE II, LLC,</B></FONT><FONT SIZE=2><BR>
as Guarantor</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By</FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>CHARLES H. MURPHY</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Charles H. Murphy<BR>
Chief Financial Officer</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><BR><FONT SIZE=2><B>PROS HOLDINGS, INC.,<BR> </B></FONT><FONT SIZE=2>as Guarantor</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By</FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>CHARLES H. MURPHY</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Charles H. Murphy<BR>
Chief Financial Officer</FONT></TD>
</TR>
</TABLE>
<!-- insert table folio -->
<BR>
<P ALIGN="CENTER"><FONT SIZE=2>S-1</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_os76602_1_2"> </A>
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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><B>CHURCHILL FINANCIAL LLC,</B></FONT><FONT SIZE=2><BR>
as Administrative Agent and Lead Arranger</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By</FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2>/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>CHRIS COX</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Name: Chris Cox<BR>
Title: MD</FONT></TD>
</TR>
</TABLE>
<!-- insert table folio -->
<P ALIGN="CENTER"><FONT SIZE=2>S-2</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_os76602_1_3"> </A>
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<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><B>CHURCHILL FINANCIAL CAYMAN LTD.,</B></FONT><FONT SIZE=2><BR>
as Swingline Lender,L/C Issuer and Lender</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2><BR>
Churchill Financial LLC, its Agent</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By</FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2>/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>CHRIS COX</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Name: Chris Cox<BR>
Title: MD</FONT></TD>
</TR>
</TABLE>
<!-- insert table folio -->
<BR>
<P ALIGN="CENTER"><FONT SIZE=2>S-3</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_os76602_1_4"> </A>
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<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><B>FREEPORT FINANCIAL LLC,</B></FONT><FONT SIZE=2><BR>
as Syndication Agent and Lender</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By</FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="39%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="54%"><FONT SIZE=2>/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>CHRIS COX</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Name: Chris Cox<BR>
Title: MD</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2>S-4</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<FONT SIZE=2><A HREF="#toc_oe76602_1">ARTICLE I DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS</A></FONT><BR>
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<TYPE>EX-10.15
<SEQUENCE>21
<FILENAME>a2176970zex-10_15.htm
<DESCRIPTION>EXHIBIT 10.15
<TEXT>
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<FONT SIZE=3 ><A HREF="#07ZBA76601_21">QuickLinks</A></FONT>
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<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit&nbsp;10.15  </B></FONT></P>

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<P ALIGN="CENTER"><FONT SIZE=2>GUARANTY,
PLEDGE AND SECURITY AGREEMENT </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>Dated
as of March&nbsp;23, 2007 </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>among </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>PROS REVENUE MANAGEMENT, L.P.</B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>and </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>Each
Grantor From Time to Time Party Hereto </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>and
</FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><B>CHURCHILL FINANCIAL LLC</B></FONT><FONT SIZE=2><BR>
as Administrative Agent and Collateral Agent </FONT></P>

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<BR></FONT><FONT SIZE=2><B>TABLE OF CONTENTS    <BR>    </B></FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="100%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH WIDTH="72%" ALIGN="LEFT"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH WIDTH="3%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="5%" ALIGN="CENTER"><FONT SIZE=1><B>Page</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><BR>
ARTICLE I</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2><BR>
DEFINED TERMS</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
1</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><BR><FONT SIZE=2> Section 1.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2><BR>
Definitions</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
1</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 1.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Certain Other Terms</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>3</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><BR>
ARTICLE II</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2><BR>
GUARANTY</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
3</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><BR><FONT SIZE=2> Section 2.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2><BR>
Guaranty</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
3</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 2.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Limitation of Guaranty</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>4</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 2.3</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Contribution</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>4</FONT></TD>
</TR>
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<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 2.4</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Authorization; Other Agreements</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>4</FONT></TD>
</TR>
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<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 2.5</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Guaranty Absolute and Unconditional</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>4</FONT></TD>
</TR>
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<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 2.6</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Waivers</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>5</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 2.7</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Reliance</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>5</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><BR>
ARTICLE III</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2><BR>
GRANT OF SECURITY INTEREST</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
6</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><BR><FONT SIZE=2> Section 3.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2><BR>
Collateral</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
6</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 3.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Grant of Security Interest in Collateral</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>6</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><BR>
ARTICLE IV</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2><BR>
REPRESENTATIONS AND WARRANTIES</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
7</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><BR><FONT SIZE=2> Section 4.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2><BR>
Title; No Other Liens</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
7</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 4.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Perfection and Priority</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>7</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 4.3</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Jurisdiction of Organization; Chief Executive Office</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>7</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 4.4</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Locations of Inventory, Equipment and Books and Records</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>7</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 4.5</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Pledged Collateral</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>8</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 4.6</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Instruments and Tangible Chattel Paper Formerly Accounts</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>8</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 4.7</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Intellectual Property</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>8</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 4.8</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Commercial Tort Claims</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>8</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 4.9</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Specific Collateral</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>9</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 4.10</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Enforcement</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>9</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 4.11</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Representations and Warranties of the Credit Agreement</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>9</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><BR>
ARTICLE V</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2><BR>
COVENANTS</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
9</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><BR><FONT SIZE=2> Section 5.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2><BR>
Maintenance of Perfected Security Interest; Further Documentation and Consents</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
9</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 5.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Changes in Locations, Name, Etc</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>10</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 5.3</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Pledged Collateral</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>10</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 5.4</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Accounts</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>10</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 5.5</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Commodity Contracts</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>11</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 5.6</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Delivery of Instruments and Tangible Chattel Paper and Control of Investment Property, Letter-of-Credit Rights and Electronic Chattel Paper</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>11</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 5.7</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Intellectual Property</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>11</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 5.8</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Notices</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>12</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 5.9</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Notice of Commercial Tort Claims</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>12</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 5.10</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Compliance with Credit Agreement</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>13</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 5.11</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>UCC Article 8</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>13</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>i</FONT></P>

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<TD COLSPAN=2><FONT SIZE=2><BR>
ARTICLE VI</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2><BR>
REMEDIAL PROVISIONS</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
13</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><BR><FONT SIZE=2> Section 6.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2><BR>
Code and Other Remedies</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
13</FONT></TD>
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<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 6.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Accounts and Payments in Respect of General Intangibles</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>15</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 6.3</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Pledged Collateral</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>16</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 6.4</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Proceeds to be Turned over to and Held by Administrative Agent</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>17</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 6.5</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Registration Rights</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>17</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 6.6</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Deficiency</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>18</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><BR>
ARTICLE VII</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2><BR>
THE ADMINISTRATIVE AGENT</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
18</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><BR><FONT SIZE=2> Section 7.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2><BR>
Administrative Agent's Appointment as Attorney-in-Fact</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
18</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 7.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Authorization to File Financing Statements</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>19</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 7.3</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Authority of Administrative Agent</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>19</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 7.4</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Duty; Obligations and Liabilities</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>20</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD COLSPAN=2><FONT SIZE=2><BR>
ARTICLE VIII</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2><BR>
MISCELLANEOUS</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
20</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><BR><FONT SIZE=2> Section 8.1</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2><BR>
Reinstatement</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2><BR>
20</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 8.2</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Release of Collateral</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>21</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 8.3</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Independent Obligations</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>21</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 8.4</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>No Waiver by Course of Conduct</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>21</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 8.5</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Amendments in Writing</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>21</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 8.6</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Additional Grantors; Additional Pledged Collateral</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>21</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 8.7</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Notices</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>22</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 8.8</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Successors and Assigns</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>22</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 8.9</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Counterparts</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>22</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 8.10</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Severability</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>22</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 8.11</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Governing Law</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>22</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="2%"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>Section 8.12</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="72%"><FONT SIZE=2>Waiver of Jury Trial</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="5%" ALIGN="RIGHT"><FONT SIZE=2>22</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2>ANNEXES
AND SCHEDULES </FONT></P>

<!-- User-specified TAGGED TABLE -->
<TABLE WIDTH="78%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="14%"><FONT SIZE=2>Annex 1</FONT></TD>
<TD WIDTH="86%"><FONT SIZE=2>Form of Pledge Amendment</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="14%"><FONT SIZE=2>Annex 2</FONT></TD>
<TD WIDTH="86%"><FONT SIZE=2>Form of Joinder Agreement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="14%"><FONT SIZE=2>Annex 3</FONT></TD>
<TD WIDTH="86%"><FONT SIZE=2>Form of Intellectual Property Security Agreement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="14%"><FONT SIZE=2><BR>
Schedule 1</FONT></TD>
<TD WIDTH="86%"><FONT SIZE=2><BR>
Commercial Tort Claims</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="14%"><FONT SIZE=2>Schedule 2</FONT></TD>
<TD WIDTH="86%"><FONT SIZE=2>Filings</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="14%"><FONT SIZE=2>Schedule 3</FONT></TD>
<TD WIDTH="86%"><FONT SIZE=2>Jurisdiction of Organization; Chief Executive Office</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="14%"><FONT SIZE=2>Schedule 4</FONT></TD>
<TD WIDTH="86%"><FONT SIZE=2>Location of Inventory and Equipment</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="14%"><FONT SIZE=2>Schedule 5</FONT></TD>
<TD WIDTH="86%"><FONT SIZE=2>Pledged Collateral</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="14%"><FONT SIZE=2>Schedule 6</FONT></TD>
<TD WIDTH="86%"><FONT SIZE=2>Intellectual Property</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2>ii</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GUARANTY, PLEDGE AND SECURITY AGREEMENT, dated as of March&nbsp;23, 2007, by PROS Revenue Management, L.P., a Delaware limited partnership (the "Borrower") and each of the other
entities listed on the signature pages hereof or that becomes a party hereto pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;8.6</I></FONT><FONT SIZE=2> (together with the Borrower, the
"</FONT><FONT SIZE=2><I>Grantors</I></FONT><FONT SIZE=2>"), in favor of Churchill Financial LLC ("</FONT><FONT SIZE=2><I>Churchill</I></FONT><FONT SIZE=2>"), as administrative agent and collateral
agent (in such capacity, together with its successors and permitted assigns, the "</FONT><FONT SIZE=2><I>Administrative Agent</I></FONT><FONT SIZE=2>") for the Lenders and the L/C Issuers and each
other Secured Party (each as defined in the Credit Agreement referred to below). </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>W
I T N E S S E T H: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
pursuant to the Credit Agreement dated as of March&nbsp;23, 2007 (as the same may be modified from time to time, the "</FONT><FONT SIZE=2><I>Credit
Agreement</I></FONT><FONT SIZE=2>") among the Borrower, PROS Revenue I, LLC, PROS Revenue II, LLC, PROS Holdings,&nbsp;Inc., the Lenders and the L/C Issuers from time to time party thereto,
Churchill, as administrative agent and collateral agent for the Lenders and the L/C Issuers, the Lenders and the L/C Issuers have severally agreed to make extensions of credit to the Borrower upon the
terms and subject to the conditions set forth therein; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
each Grantor (other than the Borrower) has agreed to guaranty the Obligations (as defined in the Credit Agreement) of the Borrower; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
each Grantor will derive substantial direct and indirect benefits from the making of the extensions of credit under the Credit Agreement; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
it is a condition precedent to the obligation of the Lenders and the L/C Issuers to make their respective extensions of credit to the Borrower under the Credit Agreement that
the Grantors shall have executed and delivered this Agreement to the Administrative Agent; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW,
THEREFORE, in consideration of the premises and to induce the Lenders, the L/C Issuers and the Administrative Agent to enter into the Credit Agreement and to induce the Lenders and
the L/C Issuers to make their respective extensions of credit to the Borrower thereunder, each Grantor hereby agrees with the Administrative Agent as follows: </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>ARTICLE
I<BR>
DEFINED TERMS </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;1.1</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Definitions</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Capital terms used
herein without definition are used as defined in the Credit Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;The
following terms have the meanings given to them in the UCC and terms used herein without definition that are defined in the UCC have the meanings given to them in
the UCC (such meanings to be equally applicable to both the singular and plural forms of the terms defined): "</FONT><FONT SIZE=2><I>account</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>account
debtor</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>as-extracted collateral</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>certificated security</I></FONT><FONT SIZE=2>",
"</FONT><FONT SIZE=2><I>chattel paper</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>commercial tort claim</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>commodity
contract</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>deposit account</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>electronic chattel paper</I></FONT><FONT SIZE=2>",
"</FONT><FONT SIZE=2><I>equipment</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>farm products</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>fixture</I></FONT><FONT SIZE=2>",
"</FONT><FONT SIZE=2><I>general intangible</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>goods</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>health-care-insurance
receivable</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>instruments</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>inventory</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>investment
property</I></FONT><FONT SIZE=2>", "l</FONT><FONT SIZE=2><I>etter-of-credit right</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>proceeds</I></FONT><FONT SIZE=2>",
"</FONT><FONT SIZE=2><I>record</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>securities account</I></FONT><FONT SIZE=2>", "</FONT><FONT SIZE=2><I>security</I></FONT><FONT SIZE=2>",
"</FONT><FONT SIZE=2><I>supporting obligation</I></FONT><FONT SIZE=2>" and "</FONT><FONT SIZE=2><I>tangible chattel paper</I></FONT><FONT SIZE=2>". </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;The
following terms shall have the following meanings: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Agreement</I></FONT><FONT SIZE=2>" means this Guaranty, Pledge and Security Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Applicable IP Office</I></FONT><FONT SIZE=2>" means the United States Patent and Trademark Office, the United States Copyright Office or any similar office or
agency within or outside the United States. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Collateral</I></FONT><FONT SIZE=2>" has the meaning specified in </FONT><FONT SIZE=2><I>Section&nbsp;3.1</I></FONT><FONT SIZE=2>. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Excluded Equity</I></FONT><FONT SIZE=2>" means any voting stock in excess of 66% of the outstanding voting stock of any Excluded Foreign Subsidiary. For the
purposes of this definition, "</FONT><FONT SIZE=2><I>voting stock</I></FONT><FONT SIZE=2>" means, with respect to any issuer, the issued and outstanding shares of each class of Stock of such issuer
entitled to vote (within the meaning of Treasury Regulations &sect; 1.956-2(c)(2)). </FONT></P>

<HR NOSHADE>
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<A NAME="page_re76602_1_2"> </A>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Excluded Property</I></FONT><FONT SIZE=2>" means, collectively: (i)&nbsp;Excluded Equity; (ii)&nbsp;any permit or license of, or any Contractual Obligation
entered into by, any Grantor (A)&nbsp;that prohibits or requires the consent of any Person other than Borrower and its Affiliates as a condition to the creation by such Grantor of a Lien on any
right, title or interest in such permit, license or Contractual Agreement or any Stock or Stock Equivalent related thereto or (B)&nbsp;to the extent that any Requirement of Law applicable thereto
prohibits the creation of a Lien thereon, but only, with respect to the prohibition in (A)&nbsp;and (B), to the extent, and for as long as, such prohibition is not terminated or rendered
unenforceable or otherwise deemed ineffective by the UCC or any other Requirement of Law; (iii)&nbsp;fixed or capital assets owned by any Grantor that is subject to a purchase money Lien or a
Capital Lease if the Contractual Obligation pursuant to which such Lien is granted (or in the document providing for such Capital Lease) prohibits or requires the consent of any Person other than
Borrower and its Affiliates as a condition to the creation of any other Lien on such equipment; (iv)&nbsp;assets sold to a Person which is not a Loan Party in compliance with the Credit Agreement;
(v)&nbsp;assets owned by a Guarantor after the release of the guarantee of such Guarantor by the Administrative Agent and the Required Lenders pursuant to the Credit Agreement; (vi)&nbsp;any
domestic deposit account of which all or a substantial portion of the funds on deposit are used for funding (A)&nbsp;payroll, (B)&nbsp;401(k) and other retirement plans and employee benefits,
including rabbi trusts for deferred compensation, (C)&nbsp;health care benefits, and (D)&nbsp;escrow arrangements (e.g. environmental indemnity accounts); (vii)&nbsp;any foreign deposit accounts
not in excess of $50,000; (viii)&nbsp;real estate leasehold interests; (ix)&nbsp;any letter of credit rights for a specified purpose to the extent the Loan Party is required by applicable law to
apply the proceeds of such letter of credit rights for a specified purpose; (x)&nbsp;any collateral as to which the Administrative Agent has determined in its sole discretion that collateral value
thereof is insufficient to justify the difficulty, time and/or expense of obtaining a perfected security interest; and (xi)&nbsp;any "intent to use" Trademark applications for which a statement of
use has not been filed (but only until such statement is filed); </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>,
"</FONT><FONT SIZE=2><I>Excluded Property</I></FONT><FONT SIZE=2>" shall not include any proceeds, products, substitutions or replacements of Excluded Property (unless such proceeds, products,
substitutions or replacements would otherwise constitute Excluded Property). </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Guaranteed Obligations</I></FONT><FONT SIZE=2>" has the meaning set forth in </FONT><FONT SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Guarantor</I></FONT><FONT SIZE=2>" means each Grantor other than a Borrower. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Guaranty</I></FONT><FONT SIZE=2>" means the guaranty of the Guaranteed Obligations made by the Guarantors as set forth in this Agreement. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Material Intellectual Property</I></FONT><FONT SIZE=2>" means Intellectual Property that is owned by or licensed to a Grantor and material to the conduct of any
Grantor's business. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Pledged Certificated Stock</I></FONT><FONT SIZE=2>" means all certificated securities and any other Stock or Stock Equivalent of any Person evidenced by a
certificate, instrument or other similar document (as defined in the UCC), in each case owned by any Grantor, and any distribution of property made on, in respect of or in exchange for the foregoing
from time to time, exceeding $100,000 in the aggregate including all Stock and Stock Equivalents listed on </FONT><FONT SIZE=2><I>Schedule&nbsp;5</I></FONT><FONT SIZE=2>. Pledged Certificated Stock
excludes any Excluded Property
and any Cash Equivalents that are not held in Controlled Securities Accounts to the extent permitted by </FONT><FONT SIZE=2><I>Section&nbsp;7.11</I></FONT><FONT SIZE=2> of the Credit Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Pledged Collateral</I></FONT><FONT SIZE=2>" means, collectively, the Pledged Stock and the Pledged Debt Instruments. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Pledged Debt Instruments</I></FONT><FONT SIZE=2>" means all right, title and interest of any Grantor in instruments evidencing any Indebtedness owed to such
Grantor or other obligations, and any distribution of property made on, in respect of or in exchange for the foregoing from time to time, exceeding $100,000 in the aggregate including all Indebtedness
described on </FONT><FONT SIZE=2><I>Schedule&nbsp;5</I></FONT><FONT SIZE=2>, issued by the obligors named therein. Pledged Debt Instruments excludes any Cash Equivalents that are not held in
Controlled Securities Accounts to the extent permitted by </FONT><FONT SIZE=2><I>Section&nbsp;7.11</I></FONT><FONT SIZE=2> of the Credit Agreement. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>2</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Pledged Investment Property</I></FONT><FONT SIZE=2>" means any investment property of any Grantor, and any distribution of property made on, in respect of or in
exchange for the foregoing from time to time, exceeding $100,000 in the aggregate other than any Pledged Stock or Pledged Debt Instruments. Pledged Investment Property excludes any Cash Equivalents
that are not held in Controlled Securities Accounts to the extent permitted by </FONT><FONT SIZE=2><I>Section&nbsp;7.11</I></FONT><FONT SIZE=2> of the Credit Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Pledged Stock</I></FONT><FONT SIZE=2>" means all Pledged Certificated Stock and all Pledged Uncertificated Stock. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Pledged Uncertificated Stock</I></FONT><FONT SIZE=2>" means any Stock or Stock Equivalent of any Person that is not Pledged Certificated Stock, including all
right, title and interest of any Grantor as a limited or general partner in any partnership not constituting Pledged Certificated Stock or as a member of any limited liability company, all right,
title and interest of any Grantor in, to and under any Constituent Document of any partnership or limited liability company to which it is a party, and any distribution of property made on, in respect
of or in exchange for the foregoing from time to time, exceeding $100,000 in the aggregate including in each case those interests set forth on </FONT> <FONT SIZE=2><I>Schedule&nbsp;5</I></FONT><FONT SIZE=2>, to the extent such interests are not
certificated. Pledged Certificated Stock excludes any Excluded Property and any Cash Equivalents
that are not held in Controlled Securities Accounts to the extent permitted by </FONT><FONT SIZE=2><I>Section&nbsp;7.11</I></FONT><FONT SIZE=2> of the Credit Agreement. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Security Cash Collateral Account</I></FONT><FONT SIZE=2>" means a Cash Collateral Account that is not a L/C Cash Collateral Account. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Software</I></FONT><FONT SIZE=2>" means (a)&nbsp;all computer programs, including source code and object code versions, (b)&nbsp;all data, databases and
compilations of data, whether machine readable or otherwise, and (c)&nbsp;all documentation, training materials and configurations related to any of the foregoing. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Subsidiary Guarantor</I></FONT><FONT SIZE=2>" means any Guarantor that is a Subsidiary of Borrower. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>UCC</I></FONT><FONT SIZE=2>" means the Uniform Commercial Code as from time to time in effect in the State of New York; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that,
in the event that, by reason of mandatory provisions of any applicable
Requirement of Law, any of the attachment, perfection or priority of the Administrative Agent's or any other Secured Party's security interest in any Collateral is governed by the Uniform Commercial
Code of a jurisdiction other than the State of New York, "</FONT><FONT SIZE=2><I>UCC</I></FONT><FONT SIZE=2>" shall mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of the definitions related to or otherwise used in such provisions. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;"</FONT><FONT
SIZE=2><I>Vehicles</I></FONT><FONT SIZE=2>" means all vehicles covered by a certificate of title law of any state. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;1.2</I></FONT><FONT SIZE=2>&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Certain Other Terms</I></FONT><FONT SIZE=2>. (a)&nbsp;The meanings given to
terms defined herein shall be equally applicable to both the singular and plural forms of such terms. The terms "</FONT><FONT SIZE=2><I>herein</I></FONT><FONT SIZE=2>",
"</FONT><FONT SIZE=2><I>hereof</I></FONT><FONT SIZE=2>" and similar terms refer to this Agreement as a whole and not to any particular Article, Section or clause in this Agreement. References herein
to an Annex, Schedule, Article, Section or clause refer to the appropriate Annex or Schedule to, or Article, Section or clause in this Agreement. Where the context requires, provisions relating to any
Collateral when used in relation to a Grantor shall refer to such Grantor's Collateral or any relevant part thereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;1.5</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>Interpretation</I></FONT><FONT SIZE=2>) of the Credit Agreement is applicable
to this Agreement as and to the extent set forth therein. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>ARTICLE
II<BR>
GUARANTY </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.1</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Guaranty</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;To induce the Lenders to make the
Loans and the L/C Issuers to Issue Letters of Credit, each Guarantor hereby, jointly and severally, absolutely, unconditionally and irrevocably guarantees, as primary obligor and not merely as surety,
the full and punctual payment </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>3</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P><FONT SIZE=2>when
due, whether at stated maturity or earlier, by reason of acceleration, mandatory prepayment or otherwise in accordance with any Loan Document, of all the Obligations of the Borrower whether
existing on the date hereof or hereinafter incurred or created (the "</FONT><FONT SIZE=2><I>Guaranteed Obligations</I></FONT><FONT SIZE=2>"). This Guaranty by each Guarantor hereunder constitutes a
guaranty of payment and not of collection. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.2</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Limitation of Guaranty</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Any term or provision
of this Guaranty or any other Loan Document to the contrary notwithstanding, the maximum aggregate amount for which any Subsidiary Guarantor shall be liable hereunder shall not exceed the maximum
amount for which such Subsidiary Guarantor can be liable without rendering this Guaranty or any other Loan Document, as it relates to such Subsidiary Guarantor, subject to avoidance under applicable
Requirements of Law relating to fraudulent conveyance or fraudulent transfer (including the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act and Section&nbsp;548 of title 11 of
the United States Code or any applicable provisions of comparable Requirements of Law) (collectively, "</FONT><FONT SIZE=2><I>Fraudulent Transfer Laws</I></FONT><FONT SIZE=2>"). Any analysis of the
provisions of this Guaranty for purposes of Fraudulent Transfer Laws shall take into account the right of contribution established in </FONT><FONT SIZE=2><I>Section&nbsp;2.3</I></FONT><FONT SIZE=2>
and, for purposes of such analysis, give effect to any discharge of intercompany debt as a result of any payment made under the Guaranty. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.3</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Contribution</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;To the extent that any
Subsidiary Guarantor shall be required hereunder to pay any portion of any Guaranteed Obligation exceeding the greater of (a)&nbsp;the amount of the economic benefit actually received by such
Subsidiary Guarantor from the Loans and other Obligations and (b)&nbsp;the amount such Subsidiary Guarantor would otherwise have paid if such Subsidiary Guarantor had paid the aggregate amount of
the Guaranteed Obligations (excluding the amount thereof repaid by the Borrower and Holdings) in the same proportion as such Subsidiary Guarantor's net worth on the date enforcement is sought
hereunder bears to the aggregate net worth of all the Subsidiary Guarantors on such date, then such Guarantor shall be reimbursed by such other Subsidiary Guarantors for the amount of such excess, pro
rata, based on the respective net worth of such other Subsidiary Guarantors on such date. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.4</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Authorization; Other Agreements</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The Secured
Parties are hereby authorized, without notice to or demand upon any Guarantor and without discharging or otherwise affecting the obligations of any Guarantor hereunder and without incurring any
liability hereunder, from time to time, to do each of the following: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;(i)&nbsp;modify,
amend, supplement or otherwise change, (ii)&nbsp;accelerate or otherwise change the time of payment or (iii)&nbsp;waive or otherwise consent to
noncompliance with, any Guaranteed Obligation or any Loan Document; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;apply
to the Guaranteed Obligations any sums by whomever paid or however realized to any Guaranteed Obligation in such order as provided in the Loan Documents; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;refund
at any time any payment received by any Secured Party in respect of any Guaranteed Obligation; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;(i)&nbsp;Sell,
exchange, enforce, waive, substitute, liquidate, terminate, release, abandon, fail to perfect, subordinate, accept, substitute, surrender, exchange,
affect, impair or otherwise alter or release any Collateral for any Guaranteed Obligation or any other guaranty therefor in any manner, (ii)&nbsp;receive, take and hold additional Collateral to
secure any Guaranteed Obligation, (iii)&nbsp;add, release or substitute any one or more other Guarantors, makers or endorsers of any Guaranteed Obligation or any part thereof and
(iv)&nbsp;otherwise deal in any manner with Borrower and any other Guarantor, maker or endorser of any Guaranteed Obligation or any part thereof; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;settle,
release, compromise, collect or otherwise liquidate the Guaranteed Obligations. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.5</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Guaranty Absolute and Unconditional</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each
Guarantor hereby waives and agrees not to assert any defense, whether arising in connection with or in respect of any of the following or </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>4</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P><FONT SIZE=2>otherwise,
and hereby agrees that its obligations under this Guaranty are irrevocable, absolute and unconditional and shall not be discharged as a result of or otherwise affected by any of the
following (which may not be pleaded and evidence of which may not be introduced in any proceeding with respect to this Guaranty, in each case except as otherwise agreed in writing by the
Administrative Agent): </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;the
invalidity or unenforceability of any obligation of Borrower or any other Guarantor under any Loan Document or any other agreement or instrument relating thereto
(including any amendment, consent or waiver thereto), or any security for, or other guaranty of, any Guaranteed Obligation or any part thereof, or the lack of perfection or continuing perfection or
failure of priority of any security for the Guaranteed Obligations or any part thereof; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;the
absence of (i)&nbsp;any attempt to collect any Guaranteed Obligation or any part thereof from Borrower or any other Guarantor or other action to enforce the same
or (ii)&nbsp;any action to enforce any Loan Document or any Lien thereunder; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;the
failure by any Person to take any steps to perfect and maintain any Lien on, or to preserve any rights with respect to, any Collateral; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;any
workout, insolvency, bankruptcy proceeding, reorganization, arrangement, liquidation or dissolution by or against Borrower, any other Guarantor or any of Borrower's
other Subsidiaries or any procedure, agreement, order, stipulation, election, action or omission thereunder, including any discharge or disallowance of, or bar or stay against collecting, any
Guaranteed Obligation (or any interest thereon) in or as a result of any such proceeding; </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;any
foreclosure, whether or not through judicial sale, and any other Sale of any Collateral or any election following the occurrence of an Event of Default by any
Secured Party to proceed separately against any Collateral in accordance with such Secured Party's rights under any applicable Requirement of Law; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;any
other defense, setoff, counterclaim or any other circumstance that might otherwise constitute a legal or equitable discharge of Borrower, any other Guarantor or any
of such Borrower's other Subsidiaries, in each case other than the payment in full of the Guaranteed Obligations. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.6</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Waivers</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each Guarantor hereby
unconditionally and irrevocably waives and agrees not to assert any claim, defense, setoff or counterclaim based on diligence, promptness, presentment, requirements for any demand or notice hereunder
including any of the following: (a)&nbsp;any demand for payment or performance and protest and notice of protest, (b)&nbsp;any notice of acceptance, (c)&nbsp;any presentment, demand, protest or
further notice or other requirements of any kind with respect to any Guaranteed Obligation (including any accrued but unpaid interest thereon) becoming immediately due and payable and (d)&nbsp;any
other notice in respect of any Guaranteed Obligation or any part thereof, and any defense arising by reason of any disability or other defense of Borrower or any other Guarantor. Each Guarantor
further unconditionally and irrevocably agrees not to (x)&nbsp;enforce or otherwise exercise any right of subrogation or any right of reimbursement or contribution or similar right against Borrower
or any other Guarantor by reason of any Loan Document or any payment made thereunder or (y)&nbsp;assert any claim, defense, setoff or counterclaim it may have against any other Loan Party or set off
any of its obligations to such other Loan Party against obligations of such Loan Party to such Guarantor. No obligation of any Guarantor hereunder shall be discharged other than by complete
performance. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.7</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Reliance</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each Guarantor hereby assumes
responsibility for keeping itself informed of the financial condition of Borrower, each other Guarantor and any other guarantor, maker or endorser of any Guaranteed Obligation or any part thereof, and
of all other circumstances bearing upon the risk of nonpayment of any Guaranteed Obligation or any part thereof that diligent inquiry would reveal, and each Guarantor hereby agrees that no Secured
Party shall have any duty to advise </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>5</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P><FONT SIZE=2>any
Guarantor of information known to it regarding such condition or any such circumstances. In the event any Secured Party, in its sole discretion, undertakes at any time or from time to time to
provide any such information to any Guarantor, such Secured Party shall be under no obligation to (a)&nbsp;undertake any investigation not a part of its regular business routine, (b)&nbsp;disclose
any information that such Secured Party, pursuant to commercially reasonable commercial finance or banking practices, wishes to maintain confidential or (c)&nbsp;make any future disclosures of such
information or any other information to any Guarantor. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>ARTICLE
III<BR>
GRANT OF SECURITY INTEREST </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;3.1</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Collateral</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;For the purposes of this
Agreement, all of the following property now owned or at any time hereafter acquired by a Grantor or in which a Grantor now has or at any time in the future may acquire any right, title or interests
is collectively referred to as the "</FONT><FONT SIZE=2><I>Collateral</I></FONT><FONT SIZE=2>": </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;all
accounts, chattel paper, deposit accounts, documents (as defined in the UCC), equipment, general intangibles, instruments, inventory, investment property and any
supporting obligations related thereto; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;the
commercial tort claims described on </FONT><FONT SIZE=2><I>Schedule&nbsp;1</I></FONT><FONT SIZE=2> and on any supplement thereto received by the Administrative
Agent pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;5.9</I></FONT><FONT SIZE=2>; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;all
books and records pertaining to the other property described in this </FONT><FONT SIZE=2><I>Section&nbsp;3.1</I></FONT><FONT SIZE=2>; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;all
property of such Grantor held by any Secured Party, including all property of every description, in the custody of or in transit to such Secured Party for any
purpose, including safekeeping, collection or pledge, for the account of such Grantor or as to which such Grantor may have any right or power, including but not limited to cash; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;all
other goods (including but not limited to fixtures) and personal property of such Grantor, whether tangible or intangible and wherever located; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;to
the extent not otherwise included, all proceeds of the foregoing; </FONT></P>

<P><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that "</FONT><FONT SIZE=2><I>Collateral</I></FONT><FONT SIZE=2>" shall not include
any Excluded Property; and </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>further</I></FONT><FONT SIZE=2>, that if and when any property shall cease to be Excluded
Property, such property shall be deemed at all times from and after the date hereof to constitute Collateral. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;3.2</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Grant of Security Interest in
Collateral</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each Grantor, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of the Obligations of such Grantor (the "</FONT><FONT SIZE=2><I>Secured Obligations</I></FONT><FONT SIZE=2>"), hereby mortgages, pledges and hypothecates to the Administrative Agent for
the benefit of the Secured Parties, and grants to the Administrative Agent for the benefit of the Secured Parties a Lien on and security interest in, all of its right, title and interest in, to and
under the Collateral of such Grantor. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>6</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_rg76602_1_7"> </A> </FONT> <FONT SIZE=2>
ARTICLE IV<BR>
REPRESENTATIONS AND WARRANTIES </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
induce the Lenders, the L/C Issuers and the Administrative Agent to enter into the Loan Documents, each Grantor hereby represents and warrants each of the following to the
Administrative Agent, the Lenders, the L/C Issuers and the other Secured Parties: </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.1</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Title; No Other Liens</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Except for the Lien
granted to the Administrative Agent pursuant to this Agreement and other Permitted Liens (except for those Permitted Liens not permitted to exist on any Collateral) under any Loan Document (including </FONT> <FONT
SIZE=2><I>Section&nbsp;4.2</I></FONT><FONT SIZE=2>), such Grantor owns each item of the Collateral free and clear of any and all Liens or claims of others. Such Grantor (a)&nbsp;is
the record and beneficial owner of the Collateral pledged by it hereunder constituting instruments or certificates and (b)&nbsp;has rights in or the power to transfer each other item of Collateral
in which a Lien is granted by it hereunder, free and clear of any other Lien. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.2</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Perfection and Priority</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The security
interest granted pursuant to this Agreement constitutes a valid and continuing perfected security interest in favor of the Administrative Agent in all Collateral subject, for the following Collateral,
to the occurrence of the following: (i)&nbsp;in the case of all Collateral in which a security interest may be perfected by filing a financing statement under the UCC, the completion of the filings
and other actions specified on </FONT><FONT SIZE=2><I>Schedule&nbsp;2</I></FONT><FONT SIZE=2> (which, in the case of all filings and other documents referred to on such schedule, have been
delivered to the Administrative Agent in completed and duly authorized form), (ii)&nbsp;with respect to any deposit account, the execution of Control Agreements, (iii)&nbsp;in the case of all
Copyrights, Trademarks and Patents for which UCC filings are insufficient, all appropriate filings having been made with the United States Copyright Office or the United States Patent and Trademark
Office, as applicable, (iv)&nbsp;in the case of letter-of-credit rights that are not supporting obligations of Collateral, the execution of a Contractual Obligation granting
control to the Administrative Agent over such letter-of-credit rights, (v)&nbsp;in the case of electronic chattel paper, the completion of all steps necessary to grant
control to the Administrative Agent over such electronic chattel paper and (vi)&nbsp;in the case of Vehicles, the actions required under </FONT> <FONT SIZE=2><I>Section&nbsp;5.1(e)</I></FONT><FONT SIZE=2>. Such security interest shall be prior to all
other Liens on the Collateral except for Customary Permitted Liens having priority
over the Administrative Agent's Lien by operation of law or unless otherwise permitted by any Loan Document upon (i)&nbsp;in the case of all Pledged Certificated Stock, Pledged Debt Instruments and
Pledged Investment Property, the delivery thereof to the Administrative Agent of such Pledged Certificated Stock, Pledged Debt Instruments and Pledged Investment Property consisting of instruments and
certificates, in each case properly endorsed for transfer to the Administrative Agent or in blank, (ii)&nbsp;in the case of all Pledged Investment Property not in certificated form, the execution of
Control Agreements with respect to such investment property and (iii)&nbsp;in the case of all other
instruments and tangible chattel paper that are not Pledged Certificated Stock, Pledged Debt Instruments or Pledged Investment Property, the delivery thereof to the Administrative Agent of such
instruments and tangible chattel paper. Except as set forth in this </FONT><FONT SIZE=2><I>Section&nbsp;4.2</I></FONT><FONT SIZE=2>, all actions by each Grantor necessary or desirable to protect
and perfect the Lien granted hereunder on the Collateral have been duly taken. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.3</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Jurisdiction of Organization; Chief Executive
Office</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Such Grantor's jurisdiction of organization, legal name and organizational identification number, if any, and the location of such Grantor's chief
executive office or sole place of business, in each case as of the date hereof, is specified on </FONT><FONT SIZE=2><I>Schedule&nbsp;3</I></FONT><FONT SIZE=2> and such </FONT> <FONT SIZE=2><I>Schedule&nbsp;3</I></FONT><FONT SIZE=2> also lists all
jurisdictions of incorporation, legal names and locations of such Grantor's chief executive office or sole place of
business for the five years preceding the date hereof. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.4</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Locations of Inventory, Equipment and Books and
Records</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;On the date hereof, such Grantor's inventory and equipment (other than inventory or equipment in transit) and books and records concerning the Collateral
are kept at the locations listed on </FONT><FONT SIZE=2><I>Schedule&nbsp;4</I></FONT><FONT SIZE=2> and such </FONT><FONT SIZE=2><I>Schedule&nbsp;4</I></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>7</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<BR>

<P><FONT SIZE=2>also
lists the locations of such inventory, equipment and books and records for the five years preceding the date hereof. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.5</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Pledged Collateral</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The Pledged
Stock pledged by such Grantor hereunder (a)&nbsp;is listed on </FONT><FONT SIZE=2><I>Schedule&nbsp;5</I></FONT><FONT SIZE=2> and constitutes that percentage of the issued and outstanding equity
of all classes of each issuer thereof as set forth on </FONT><FONT SIZE=2><I>Schedule&nbsp;5</I></FONT><FONT SIZE=2>, (b)&nbsp;has been duly authorized, validly issued and is fully paid and
nonassessable (other than as such rights may arise under mandatory provisions of applicable law that may be waived or otherwise agreed and not as a result of any rights contained in any organizational
documents, or Pledged Stock in limited liability companies and partnerships) and (c)&nbsp;constitutes the legal, valid and binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;As
of the Closing Date, all Pledged Collateral (other than Pledged Uncertificated Stock) and all Pledged Investment Property consisting of instruments and certificates
has been delivered to the Administrative Agent in accordance with </FONT><FONT SIZE=2><I>Section&nbsp;5.3(a)</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Upon
the occurrence and during the continuance of an Event of Default, the Administrative Agent shall be entitled to exercise all of the rights of the Grantor granting
the security interest in any Pledged Stock, and a transferee or assignee of such Pledged Stock shall become a holder of such Pledged Stock to the same extent as such Grantor and be entitled to
participate in the management of the issuer of such Pledged Stock and, upon the transfer of the entire interest of such Grantor, such Grantor shall, by operation of law, cease to be a holder of such
Pledged Stock. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.6</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Instruments and Tangible Chattel Paper Formerly
Accounts</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;No amount payable to such Grantor under or in connection with any account is evidenced by any instrument or tangible chattel paper that has not been
delivered to the Administrative Agent, properly endorsed for transfer, to the extent delivery is required by </FONT><FONT SIZE=2><I>Section&nbsp;5.6(a)</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.7</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Intellectual
Property</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;</FONT><FONT SIZE=2><I>Schedule&nbsp;6</I></FONT><FONT SIZE=2> sets forth a true and complete list of the following Intellectual Property
such Grantor owns, licenses or otherwise has the right to use: (i)&nbsp;Intellectual Property that is registered or subject to applications for registration, (ii)&nbsp;Internet Domain Names and
(iii)&nbsp;Material Intellectual Property and material Software, separately identifying that which is owned or licensed to such Grantor and including for each of the foregoing items (1)&nbsp;the
owner, (2)&nbsp;the title, (3)&nbsp;the jurisdiction in which such item has been registered or otherwise arises or in which an application for registration has been filed, (4)&nbsp;as
applicable, the registration or application number and registration or application date and (5)&nbsp;any IP Licenses or other rights (including franchises) granted by the Grantor with respect
thereto. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;On
the Closing Date, all Material Intellectual Property owned by such Grantor is valid, in full force and effect, subsisting, unexpired and enforceable, and no Material
Intellectual Property has been abandoned. No breach or default of any material IP License shall be caused by any of the following, and none of the following shall limit or impair the ownership, use,
validity or enforceability of, or any rights of such Grantor in, any Material Intellectual Property: (i)&nbsp;the consummation of the transactions contemplated by any Loan Document or
(ii)&nbsp;any holding, decision, judgment or order rendered by any Governmental Authority. There are no pending (or, to the knowledge of such Grantor, threatened) actions, investigations, suits,
proceedings, audits, claims, demands, orders or disputes challenging the ownership, use, validity, enforceability of, or such Grantor's rights in, any Material Intellectual Property of such Grantor.
To such Grantor's knowledge, no Person has been or is infringing, misappropriating, diluting, violating or otherwise impairing any Intellectual Property of such Grantor. Such Grantor, and to such
Grantor's knowledge each other party thereto, is not in material breach or default of any material IP License. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.8</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Commercial Tort Claims</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The only commercial
tort claims of any Grantor existing on the date hereof (regardless of whether the amount, defendant or other material facts can be determined and regardless of whether such commercial tort claim has
been asserted, threatened or has </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>8</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<BR>

<P><FONT SIZE=2>otherwise
been made known to the obligee thereof or whether litigation has been commenced for such claims) are those listed on </FONT><FONT SIZE=2><I>Schedule&nbsp;1</I></FONT><FONT SIZE=2>, which
sets forth such information separately for each Grantor. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.9</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Specific Collateral</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;None of the Collateral
is, or is proceeds or products of, farm products, as-extracted collateral, health-care-insurance receivables or timber to be cut. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.10</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Enforcement</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;No Permit, notice to or filing
with any Governmental Authority or any other Person or any consent from any Person is required for the exercise by the Administrative Agent of its rights (including voting rights) provided for in this
Agreement or the enforcement of remedies in respect of the Collateral pursuant to this Agreement, including the transfer of any Collateral, except as may be required in connection with the disposition
of any portion of the Pledged Collateral by laws affecting the offering and sale of securities generally or any approvals that may be required to be obtained from any bailees or landlords to collect
the Collateral. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.11</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Representations and Warranties of the Credit
Agreement</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The representations and warranties as to such Grantor and its Subsidiaries made by the Borrower in </FONT> <FONT SIZE=2><I>Article&nbsp;IV</I></FONT><FONT SIZE=2> (</FONT><FONT
SIZE=2><I>Representations and Warranties</I></FONT><FONT SIZE=2>) of the Credit Agreement are true and correct on each
date required by </FONT><FONT SIZE=2><I>Section&nbsp;3.2(b)</I></FONT><FONT SIZE=2> of the Credit Agreement. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>ARTICLE
V<BR>
COVENANTS </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
Grantor agrees with the Administrative Agent to the following, as long as any Obligation or Commitment remains outstanding and, in each case, unless the Required Lenders otherwise
consent in writing: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;5.1</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Maintenance of Perfected Security Interest; Further Documentation and
Consents</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;</FONT><FONT SIZE=2><I>Generally</I></FONT><FONT SIZE=2>. Such Grantor shall (i)&nbsp;not use or permit any Collateral to be used
unlawfully or in violation of any provision of any Loan Document, any Related Document, any Requirement of Law or any policy of insurance covering the Collateral and (ii)&nbsp;not enter into any
Contractual Obligation or undertaking restricting the right or ability of such Grantor or the Administrative Agent to Sell any Collateral if such restriction would have a Material Adverse Effect. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Such
Grantor shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in </FONT> <FONT SIZE=2><I>Section&nbsp;4.2</I></FONT><FONT SIZE=2> and shall defend such security interest
and such priority against the claims and demands of all Persons. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Pursuant
to </FONT><FONT SIZE=2><I>Section&nbsp;6.1(e)</I></FONT><FONT SIZE=2> of the Credit Agreement, such Grantor shall furnish to the Administrative Agent from
time to time statements and schedules further identifying and describing the Collateral and such other documents in connection with the Collateral as the Administrative Agent may reasonably request,
all in reasonable detail and in form and substance satisfactory to the Administrative Agent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;At
any time and from time to time upon the written request of the Administrative Agent, such Grantor shall, for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted, (i)&nbsp;promptly and duly execute and deliver, and have recorded, such further documents, including an authorization to file (or, as
applicable, the filing) of any financing statement or amendment under the UCC (or other filings under similar Requirements of Law) in effect in any jurisdiction with respect to the security interest
created hereby and (ii)&nbsp;take such further action as the Administrative Agent may reasonably request, including (A)&nbsp;using its commercially reasonable efforts to secure all approvals
necessary or appropriate for the assignment to or for the benefit of the Administrative Agent of any Contractual Obligation, including any IP License, held by such Grantor and to enforce the security
interests granted hereunder and (B)&nbsp;executing and delivering a Control Agreement with respect to any deposit accounts and securities accounts for which Control Agreements are required under the
Credit Agreement. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>9</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;If
requested by the Administrative Agent, the Grantor shall arrange for the Administrative Agent's first priority security interest to be noted on the certificate of
title of each Vehicle and shall file any other necessary documentation in each jurisdiction that the Administrative Agent shall deem advisable to perfect its security interests in any Vehicle. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;To
ensure that any of the Excluded Property set forth in </FONT><FONT SIZE=2><I>clause&nbsp;(ii)</I></FONT><FONT SIZE=2> of the definition of "Excluded Property"
becomes part of the Collateral, such Grantor shall use its commercially reasonable efforts to obtain any required consents from any Person other than Borrower and its Affiliates with respect to any
permit or license or any Contractual Obligation with such Person entered into by such Grantor that requires such consent as a condition to the creation by such Grantor of a Lien on any right, title or
interest in such permit, license or Contractual Obligation or any Stock or Stock Equivalent related thereto. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;5.2</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Changes in Locations, Name, Etc.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Except upon
30&nbsp;days' prior written notice to the Administrative Agent and delivery to the Administrative Agent of (a)&nbsp;all documents reasonably requested by the Administrative Agent to maintain the
validity, perfection and priority of the security interests provided for herein and (b)&nbsp;if applicable, a written supplement to </FONT><FONT SIZE=2><I>Schedule&nbsp;4</I></FONT><FONT SIZE=2>
showing any additional locations at which inventory or equipment shall be kept, such Grantor shall not do any of the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;permit
any inventory or equipment to be kept at a location other than those listed on </FONT><FONT SIZE=2><I>Schedule&nbsp;4</I></FONT><FONT SIZE=2>, except for
inventory or equipment in transit; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;change
its jurisdiction of organization or its location, in each case from that referred to in </FONT><FONT SIZE=2><I>Section&nbsp;4.3</I></FONT><FONT SIZE=2>; or </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;change
its legal name or organizational identification number, if any, or corporation, limited liability company, partnership or other organizational structure to such
an extent that any financing statement filed in connection with this Agreement would become misleading. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;5.3</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Pledged
Collateral</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;</FONT><FONT SIZE=2><I>Delivery of Pledged Collateral</I></FONT><FONT SIZE=2>. Such Grantor shall (i)&nbsp;deliver to the Administrative
Agent, in suitable form for transfer and in form and substance satisfactory to the Administrative Agent, (A)&nbsp;all Pledged Certificated Stock, (B)&nbsp;all Pledged Debt Instruments and
(C)&nbsp;all certificates and instruments evidencing Pledged Investment Property and (ii)&nbsp;maintain all other Pledged Investment Property in a Controlled Securities Account. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Event of Default</I></FONT><FONT SIZE=2>. During the continuance of an Event of Default, the Administrative Agent shall have the right, at any
time in its discretion and without notice to the Grantor, to (i)&nbsp;transfer to or to register in its name or in the name of its nominees any Pledged Collateral or any Pledged Investment Property
and (ii)&nbsp;exchange any certificate or instrument representing or evidencing any Pledged Collateral or any Pledged Investment Property for certificates or instruments of smaller or larger
denominations. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Cash Distributions with respect to Pledged Collateral</I></FONT><FONT SIZE=2>. Except as provided in </FONT> <FONT SIZE=2><I>Article&nbsp;VI</I></FONT><FONT SIZE=2>, such Grantor shall be entitled to receive all cash distributions paid in
respect of the Pledged Collateral. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Voting Rights</I></FONT><FONT SIZE=2>. Except as provided in </FONT><FONT SIZE=2><I>Article&nbsp;VI</I></FONT><FONT SIZE=2>, such Grantor
shall be entitled to exercise all voting, consent and corporate, partnership, limited liability company and similar rights with respect to the Pledged Collateral; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT
SIZE=2><I>however</I></FONT><FONT SIZE=2>, that no vote shall be cast, consent given or right exercised or other action taken by
such Grantor that would impair the Collateral or be inconsistent with or result in any violation of any provision of any Loan Document. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;5.4</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Accounts</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Such Grantor shall not,
other than in the ordinary course of business, (i)&nbsp;grant any extension of the time of payment of any account, (ii)&nbsp;compromise or settle any account for less than the full amount thereof,
(iii)&nbsp;release, wholly or partially, any Person liable for the payment of any account, (iv)&nbsp;allow any credit or discount on any account or (v)&nbsp;amend, supplement or modify any
account in any manner that could adversely affect the value thereof. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>10</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;The
Administrative Agent shall have the right to make test verifications of the Accounts in any manner and through any medium that it reasonably considers advisable, and
such Grantor shall furnish all such assistance and information as the Administrative Agent may reasonably require in connection therewith. At any time and from time to time, upon the Administrative
Agent's request, such Grantor shall cause independent public accountants or others satisfactory to the Administrative Agent to furnish to the Administrative Agent reports showing reconciliations,
aging and test verifications of, and trial balances for, the accounts; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that unless a
Default shall be continuing, the Administrative Agent shall request no more than three such reports during any calendar year. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;5.5</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Commodity Contracts</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Such Grantor shall not
have any commodity contract other than with a Person approved by the Administrative Agent and subject to a Control Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;5.6</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Delivery of Instruments and Tangible Chattel Paper and Control of Investment
Property, Letter-of-Credit Rights and Electronic Chattel Paper</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;If any amount in excess of $100,000 payable under or in
connection with any Collateral owned by such Grantor shall be or become evidenced by an instrument or tangible chattel paper other than such instrument delivered in accordance with </FONT> <FONT SIZE=2><I>Section&nbsp;5.3(a)</I></FONT><FONT SIZE=2>
and in the possession of the Administrative Agent, such Grantor shall mark all such instruments and tangible chattel paper with
the following legend: "This writing and the obligations evidenced or secured hereby are subject to the security interest of Churchill Financial LLC, as Administrative Agent" and, at the request of the
Administrative Agent, shall deliver within five Business Days such instrument or tangible chattel paper to the Administrative Agent, duly indorsed in a manner satisfactory to the Administrative Agent. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Such
Grantor shall not grant "control" (within the meaning of such term under Article&nbsp;9-106 of the UCC) over any investment property to any Person
other than the Administrative Agent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;If
such Grantor is or becomes the beneficiary of a letter of credit that is (i)&nbsp;not a supporting obligation of any Collateral and (ii)&nbsp;in excess of
$100,000, such Grantor shall promptly, and in any event within 2 Business Days after becoming a beneficiary, notify the Administrative Agent thereof and use commercially reasonable efforts to enter
into a Contractual Obligation with the Administrative Agent, the issuer of such letter of credit or any nominated person with respect to the letter-of-credit rights under such
letter of credit. Such Contractual Obligation shall assign such letter-of-credit rights to the Administrative Agent and such assignment shall be sufficient to grant control for
the purposes of Section&nbsp;9-107 of the UCC (or any similar section under any equivalent UCC). Such Contractual Obligation shall also direct all payments thereunder to a Security Cash
Collateral Account. The provisions of the Contractual Obligation shall be in form and substance reasonably satisfactory to the Administrative Agent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;If
any amount in excess of $100,000 payable under or in connection with any Collateral owned by such Grantor shall be or become evidenced by electronic chattel paper,
such Grantor shall take all steps necessary to grant the Administrative Agent control of all such electronic chattel paper for the purposes of Section&nbsp;9-105 of the UCC (or any
similar section under any equivalent UCC) and all "transferable records" as defined in each of the Uniform Electronic Transactions Act and the Electronic Signatures in Global and National Commerce
Act. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;5.7</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Intellectual Property</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Within
60&nbsp;days after any change to </FONT><FONT SIZE=2><I>Schedule&nbsp;6</I></FONT><FONT SIZE=2> for such Grantor, such Grantor shall provide the Administrative Agent notification thereof and the
short-form intellectual property agreements and assignments as described in this </FONT><FONT SIZE=2><I>Section&nbsp;5.7</I></FONT><FONT SIZE=2> and other documents that the
Administrative Agent reasonably requests with respect thereto. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Such
Grantor shall (and shall cause all its licensees to) (i)&nbsp;(1) continue to use each Trademark included in the Material Intellectual Property in order to
maintain such Trademark in full force and effect with respect to each class of goods for which such Trademark is currently used, free from any claim of abandonment for non-use,
(2)&nbsp;maintain at least the same standards of quality of products and </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>11</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2>services
offered under such Trademark as are currently maintained, (3)&nbsp;use such Trademark with the appropriate notice of registration and all other notices and legends required by applicable
Requirements of Law, (4)&nbsp;not adopt or use any other Trademark that is confusingly similar or a colorable imitation of such Trademark unless the Administrative Agent shall obtain a perfected
security interest in such other Trademark pursuant to this Agreement and (ii)&nbsp;not do any act or omit to do any act whereby (w)&nbsp;such Trademark (or any goodwill associated therewith) may
become destroyed, invalidated, impaired or harmed in any way, (x)&nbsp;any Patent included in the Material Intellectual Property may become forfeited, misused, unenforceable, abandoned or dedicated
to the public, (y)&nbsp;any portion of the Copyrights included in the Material Intellectual Property may become invalidated, otherwise impaired or fall into the public domain or (z)&nbsp;any Trade
Secret that is Material Intellectual Property may become publicly available or otherwise unprotectable. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Such
Grantor shall notify the Administrative Agent immediately if it knows, or has reason to know, that any application or registration relating to any Material
Intellectual Property may become forfeited, misused, unenforceable, abandoned or dedicated to the public, or of any adverse determination or development regarding the validity or enforceability or
such Grantor's ownership of, interest in, right to use, register, own or maintain any Material Intellectual Property (including the institution of, or any such determination or development in, any
proceeding relating to the foregoing in any Applicable IP Office). Such Grantor shall take all actions that are necessary or reasonably requested by the Administrative Agent to maintain and pursue
each application (and to obtain the relevant registration or recordation) and to maintain each registration and recordation included in the Material Intellectual Property. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;Such
Grantor shall not knowingly do any act or omit to do any act to infringe, misappropriate, dilute, violate or otherwise impair the Intellectual Property of any other
Person. In the event that any Material Intellectual Property of such Grantor is or has been, to such Grantor's knowledge, infringed, misappropriated, violated, diluted or otherwise impaired by a third
party, such Grantor shall take such action as it reasonably deems appropriate under the circumstances in response thereto, including promptly bringing suit and recovering all damages therefor. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;Such
Grantor shall execute and deliver to the Administrative Agent in form and substance reasonably acceptable to the Administrative Agent and suitable for
(i)&nbsp;filing in the Applicable IP Office the short-form intellectual property security agreements in the form attached hereto as </FONT><FONT SIZE=2><I>Annex
3</I></FONT><FONT SIZE=2> for all Copyrights, Trademarks, Patents and IP Licenses of such Grantor and (ii)&nbsp;recording with the appropriate Internet domain name registrar, a duly executed form of
assignment for all Internet Domain Names of such Grantor (together with appropriate supporting documentation as may be requested by the Administrative Agent). </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;5.8</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Notices</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Such Grantor shall promptly notify
the Administrative Agent in writing of its acquisition of any interest hereafter in property that is of a type where a security interest or lien must be or may be registered, recorded or filed under,
or notice thereof given under, any federal statute or regulation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;5.9</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Notice of Commercial Tort Claims</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Such
Grantor agrees that, if it shall acquire any interest in any commercial tort claim (whether from another Person or because such commercial tort claim shall have come into existence) in excess of
$250,000, (i)&nbsp;such Grantor shall, immediately upon such acquisition, deliver to the Administrative Agent, in each case in form and substance satisfactory to the Administrative Agent, a notice
of the existence and nature of such commercial tort claim and a supplement to </FONT><FONT SIZE=2><I>Schedule&nbsp;1</I></FONT><FONT SIZE=2> containing a specific description of such commercial
tort claim, (ii)&nbsp;</FONT><FONT SIZE=2><I>Section&nbsp;3.1</I></FONT><FONT SIZE=2> shall apply to such commercial tort claim and (iii)&nbsp;such Grantor shall execute and deliver to the
Administrative Agent, in each case in form and substance satisfactory to the Administrative Agent, any document, and take all other action, deemed by the Administrative Agent to be reasonably
necessary or appropriate for the Administrative Agent to obtain, on behalf of the Lenders, a perfected security interest having at least the priority set forth in </FONT> <FONT SIZE=2><I>Section&nbsp;4.2</I></FONT><FONT SIZE=2> in all such commercial
tort claims. Any supplement to </FONT><FONT SIZE=2><I>Schedule&nbsp;1</I></FONT><FONT SIZE=2> delivered
pursuant to this </FONT><FONT SIZE=2><I>Section&nbsp;5.9</I></FONT><FONT SIZE=2> shall, after the receipt thereof by the Administrative Agent, become part of </FONT> <FONT SIZE=2><I>Schedule&nbsp;1</I></FONT><FONT SIZE=2> for all purposes hereunder
other than in respect of representations and warranties made prior to the date of such receipt. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>12</FONT></P>

<HR NOSHADE>
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<P><FONT SIZE=2><A
NAME="page_ri76602_1_13"> </A> </FONT> <FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Section&nbsp;5.10</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Compliance with Credit Agreement</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Such
Grantor agrees to comply with all covenants and other provisions applicable to it under the Credit Agreement, including </FONT><FONT SIZE=2><I>Sections 2.17</I></FONT><FONT SIZE=2>
(</FONT><FONT SIZE=2><I>Taxes</I></FONT><FONT SIZE=2>), </FONT><FONT SIZE=2><I>12.3</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>Costs and Expenses</I></FONT><FONT SIZE=2>) and </FONT> <FONT SIZE=2><I>12.4</I></FONT><FONT SIZE=2> (</FONT><FONT
SIZE=2><I>Indemnities</I></FONT><FONT SIZE=2>) of the Credit Agreement and agrees to the same submission to jurisdiction as that
agreed to by the Borrower in the Credit Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;5.11</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>UCC Article&nbsp;8</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Such Grantor agrees
and covenants that (a)&nbsp;any Pledged Uncertificated Stock pledged hereunder are not and shall not at any time hereafter be (absent the Administrative Agent's prior written consent, which consent
may be withheld in the Administrative Agent's sole and absolute discretion) (1)&nbsp;governed by Article&nbsp;8 of the UCC, (2)&nbsp;represented by a security certificate either in bearer or
registered form, (3)&nbsp;of a type dealt in or traded on securities exchanges or securities markets, and/or (4)&nbsp;an investment company security under Article&nbsp;8 of the UCC; and
(b)&nbsp;such Grantor shall not amend or otherwise modify such Grantor's operating agreement or other equivalent agreement in violation of subsection (a)&nbsp;of this Section. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>ARTICLE
VI<BR>
REMEDIAL PROVISIONS </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;6.1</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Code and Other
Remedies</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;</FONT><FONT SIZE=2><I>UCC Remedies</I></FONT><FONT SIZE=2>. During the continuance of an Event of Default, the Administrative Agent may
exercise, in addition to all other rights and remedies granted to it in this Agreement and in any other instrument or agreement securing, evidencing or relating to any Secured Obligation, all rights
and remedies of a secured party under the UCC or any other applicable law. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Disposition of Collateral.</I></FONT><FONT SIZE=2> Without limiting the generality of the foregoing, the Administrative Agent may, without demand
of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each
of which demands, defenses, advertisements and notices are hereby waived), during the continuance of any Event of Default (personally or through its agents or attorneys), (i)&nbsp;enter upon the
premises where any Collateral is located, without any obligation to pay rent, through self-help, without judicial process, without first obtaining a final judgment or giving any Grantor or
any other Person notice or opportunity for a hearing on the Administrative Agent's claim or action, (ii)&nbsp;collect, receive, appropriate and realize upon any Collateral and (iii)&nbsp;Sell,
grant option or options to purchase and deliver any Collateral (enter into Contractual Obligations to do any of the foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker's board or office of any Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future
delivery without assumption of any credit risk. The Administrative Agent shall have the right, upon any such public sale or sales and, to the extent permitted by the UCC and other applicable
Requirements of Law, upon any such private sale, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption of any Grantor, which right or equity is hereby
waived and released. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Management of the Collateral.</I></FONT><FONT SIZE=2> Each Grantor further agrees that, during the continuance of any Event of Default,
(i)&nbsp;at the Administrative Agent's request, it shall assemble the Collateral and make it available to the Administrative Agent at places that the Administrative Agent shall reasonably select,
whether at such Grantor's premises or elsewhere, (ii)&nbsp;without limiting the foregoing, the Administrative Agent also has the right to require that each Grantor store and keep any Collateral
pending further action by the Administrative Agent and, while any such Collateral is so stored or kept, provide such guards and maintenance services as shall be necessary to protect the same and to
preserve and maintain such Collateral in good condition, (iii)&nbsp;until the Administrative Agent is able to Sell any Collateral, the Administrative Agent shall have the right to hold or use such
Collateral to the extent that it reasonably deems appropriate for the purpose of preserving the Collateral or its value or for any other purpose deemed appropriate by the Administrative Agent and
(iv)&nbsp;the Administrative Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of any Collateral and to </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>13</FONT></P>

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<P><FONT SIZE=2>enforce
any of the Administrative Agent's remedies (for the benefit of the Secured Parties), with respect to such appointment without prior notice or hearing as to such appointment. The Administrative
Agent shall not have any obligation to any Grantor to maintain or preserve the rights of any Grantor as against third parties with respect to any Collateral while such Collateral is in the possession
of the Administrative Agent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Application of Proceeds.</I></FONT><FONT SIZE=2> The Administrative Agent shall apply the cash proceeds of any action taken by it pursuant to
this </FONT><FONT SIZE=2><I>Section&nbsp;6.1</I></FONT><FONT SIZE=2>, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or
safekeeping of any Collateral or in any way relating to the Collateral or the rights of the Administrative Agent and any other Secured Party hereunder, including reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Secured Obligations, as set forth in the Credit Agreement, and only after such application and after the payment by the Administrative Agent of
any other amount required by any Requirement of Law, need the Administrative Agent account for the surplus, if any, to any Grantor. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Direct Obligation</I></FONT><FONT SIZE=2>. Neither the Administrative Agent nor any other Secured Party shall be required to make any demand
upon, or pursue or exhaust any right or remedy against, any Grantor, any other Loan Party or any other Person with respect to the payment of the Obligations or to pursue or exhaust any right or remedy
with respect to any Collateral therefor or any direct or indirect guaranty thereof. All of the rights and remedies of the Administrative Agent and any other Secured Party under any Loan Document shall
be cumulative, may be exercised individually or concurrently and not exclusive of any other rights or remedies provided by any Requirement of Law. To the extent it may lawfully do so, each Grantor
absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Administrative Agent or any Lender, any valuation, stay, appraisement,
extension, redemption or similar laws and any and all rights or defenses it may have as a surety, now or hereafter existing, arising out of the exercise by them of any rights hereunder. If any notice
of a proposed sale or other disposition of any Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10&nbsp;days before such sale or other
disposition. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Commercially Reasonable</I></FONT><FONT SIZE=2>. To the extent that applicable Requirements of Law impose duties on the Administrative Agent to
exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is not commercially unreasonable for the Administrative Agent to do any of the following: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;fail
to incur significant costs, expenses or other Liabilities reasonably deemed as such by the Administrative Agent to prepare any Collateral for disposition or
otherwise to complete raw material or work in process into finished goods or other finished products for disposition; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;fail
to obtain Permits, or other consents, for access to any Collateral to Sell or for the collection or Sale of any Collateral, or, if not required by other
Requirements of Law, fail to obtain Permits or other consents for the collection or disposition of any Collateral; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;fail
to exercise remedies against account debtors or other Persons obligated on any Collateral or to remove Liens on any Collateral or to remove any adverse claims
against any Collateral; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;advertise
dispositions of any Collateral through publications or media of general circulation, whether or not such Collateral is of a specialized nature or to contact
other Persons, whether or not in the same business as any Grantor, for expressions of interest in acquiring any such Collateral; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;exercise
collection remedies against account debtors and other Persons obligated on any Collateral, directly or through the use of collection agencies or other
collection specialists, hire one or more professional auctioneers to assist in the disposition of any Collateral, whether or not such </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>14</FONT></P>

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<UL>
<BR>

<P><FONT SIZE=2>Collateral
is of a specialized nature or, to the extent deemed appropriate by the Administrative Agent, obtain the services of other brokers, investment bankers, consultants and other professionals to
assist the Administrative Agent in the collection or disposition of any Collateral, or utilize Internet sites that provide for the auction of assets of the types included in the Collateral or that
have the reasonable capacity of doing so, or that match buyers and sellers of assets to dispose of any Collateral; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;dispose
of assets in wholesale rather than retail markets; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;disclaim
disposition warranties, such as title, possession or quiet enjoyment; or </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)&nbsp;purchase
insurance or credit enhancements to insure the Administrative Agent against risks of loss, collection or disposition of any Collateral or to provide to the
Administrative Agent a guaranteed return from the collection or disposition of any Collateral. </FONT></P>

</UL>

<P><FONT SIZE=2>Each
Grantor acknowledges that the purpose of this </FONT><FONT SIZE=2><I>Section&nbsp;6.1</I></FONT><FONT SIZE=2> is to provide a non-exhaustive list of actions or omissions that are
commercially reasonable when exercising remedies against any Collateral and that other actions or omissions by the Secured Parties shall not be deemed commercially unreasonable solely on account of
not being indicated in this </FONT><FONT SIZE=2><I>Section&nbsp;6.1</I></FONT><FONT SIZE=2>. Without limitation upon the foregoing, nothing contained in this </FONT> <FONT SIZE=2><I>Section&nbsp;6.1</I></FONT><FONT SIZE=2> shall be construed to grant
any rights to any Grantor or to impose any duties on the Administrative Agent that would not have been
granted or imposed by this Agreement or by applicable Requirements of Law in the absence of this </FONT><FONT SIZE=2><I>Section&nbsp;6.1</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>IP Licenses</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;For the purpose of enabling the Administrative Agent to exercise rights and remedies under this </FONT> <FONT SIZE=2><I>Section&nbsp;6.1</I></FONT><FONT SIZE=2> during the
continuance of an Event of Default (including in order to take possession of, collect, receive, assemble, process,
appropriate, remove, realize upon, Sell or grant options to purchase any Collateral) at such time as the Administrative Agent shall be lawfully entitled to exercise such rights and remedies, each
Grantor hereby grants to the Administrative Agent, for the benefit of the Secured Parties, (i)&nbsp;a nonexclusive, worldwide license (exercisable without payment of royalty or other compensation to
such Grantor), including in such license the right to sublicense, use and practice any Intellectual Property now owned or hereafter acquired by such Grantor and access to all media in which any of the
licensed items may be recorded or stored and to all Software and programs used for the compilation or printout thereof and (ii)&nbsp;a license (without payment of rent or other compensation to such
Grantor) to use, operate and occupy all Real Property owned, operated, leased, subleased or otherwise occupied by such Grantor, which licenses shall expire only upon the cure or waiver of such Event
of Default. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;6.2</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Accounts and Payments in Respect of General
Intangibles</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;In addition to, and not in substitution for, any similar requirement in the Credit Agreement, if required by the Administrative Agent at
any time during the continuance of an Event of Default, any payment of accounts or payment in respect of general intangibles, when collected by any Grantor, shall be promptly (and, in any event,
within 2 Business Days) deposited by such Grantor in the exact form received, duly indorsed by such Grantor to the Administrative Agent, in a Security Cash Collateral Account, subject to withdrawal by
the Administrative Agent as provided in </FONT><FONT SIZE=2><I>Section&nbsp;6.4</I></FONT><FONT SIZE=2>. Until so turned over, such payment shall be held by such Grantor in trust for the
Administrative Agent, segregated from other funds of such Grantor. Each such deposit of proceeds of accounts and payments in respect of general intangibles shall be accompanied by a report identifying
in reasonable detail the nature and source of the payments included in the deposit. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;At
any time during the continuance of an Event of Default: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;each
Grantor shall, upon the Administrative Agent's request, deliver to the Administrative Agent all original and other documents evidencing, and relating to, the
Contractual Obligations and transactions that gave rise to any account or any payment in respect of general intangibles, including all original orders, invoices and shipping receipts and notify
account debtors </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>15</FONT></P>

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<P><FONT SIZE=2>that
the accounts or general intangibles have been collaterally assigned to the Administrative Agent and that payments in respect thereof shall be made directly to the Administrative Agent; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;the
Administrative Agent may, without notice, at any time during the continuance of an Event of Default, limit or terminate the authority of a Grantor to collect its
accounts or amounts due under general intangibles or any thereof and, in its own name or in the name of others, communicate with account debtors to verify with them to the Administrative Agent's
satisfaction the existence, amount and terms of any account or amounts due under any general intangible. In addition, the Administrative Agent may at any time enforce such Grantor's rights against
such account debtors and obligors of general intangibles; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;each
Grantor shall take all actions, deliver all documents and provide all information necessary or reasonably requested by the Administrative Agent to ensure any
Internet Domain Name is registered. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Anything
herein to the contrary notwithstanding, each Grantor shall remain liable under each account and each payment in respect of general intangibles to observe and
perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto. No Secured Party shall have any
obligation or liability under any agreement giving rise to an account or a payment in respect of a general intangible by reason of or arising out of any Loan Document or the receipt by any Secured
Party of any payment relating thereto, nor shall any Secured Party be obligated in any manner to perform any obligation of any Grantor under or pursuant to any agreement giving rise to an account or a
payment in respect of a general intangible, to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by
any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts that may have been assigned to it or to which it may be
entitled at any time or times. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;6.3</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Pledged
Collateral</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;</FONT><FONT SIZE=2><I>Voting Rights</I></FONT><FONT SIZE=2>. During the continuance of an Event of Default, upon notice by the
Administrative Agent to the relevant Grantor or Grantors, the Administrative Agent or its nominee may exercise (A)&nbsp;any voting, consent, corporate and other right pertaining to the Pledged
Collateral at any meeting of shareholders, partners or members, as the case may be, of the relevant issuer or issuers of Pledged Collateral or otherwise and (B)&nbsp;any right of conversion,
exchange and subscription and any other right, privilege or option pertaining to the Pledged Collateral as if it were the absolute owner thereof (including the right to exchange at its discretion any
Pledged Collateral upon the merger, amalgamation, consolidation, reorganization, recapitalization or other fundamental change in the corporate or equivalent structure of any issuer of Pledged Stock,
the right to deposit and deliver any Pledged Collateral with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent
may determine), all without liability except to account for property actually received by it; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that the Administrative Agent shall have
no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible
for any failure to do so or delay in so doing. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Proxies</I></FONT><FONT SIZE=2>. In order to permit the Administrative Agent to exercise the voting and other consensual rights that it may be
entitled to exercise pursuant hereto and to receive all dividends and other distributions that it may be entitled to receive hereunder, (i)&nbsp;each Grantor shall within five business days execute
and deliver (or cause to be executed and delivered) to the Administrative Agent all such proxies, dividend payment orders and other instruments as the Administrative Agent may from time to time
reasonably request and (ii)&nbsp;without limiting the effect of </FONT><FONT SIZE=2><I>clause&nbsp;(i)</I></FONT><FONT SIZE=2> above, such Grantor hereby grants to the Administrative Agent an
irrevocable proxy to vote all or any part of the Pledged Collateral and to exercise all other rights, powers, privileges and remedies to which a holder of the Pledged Collateral would be entitled
(including giving or withholding written consents of shareholders, partners or members, as the case may be, calling special meetings of shareholders, partners or </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>16</FONT></P>

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<BR>

<P><FONT SIZE=2>members,
as the case may be, and voting at such meetings), which proxy shall be effective, automatically and without the necessity of any action (including any transfer of any Pledged Collateral on
the record books of the issuer thereof) by any other person (including the issuer of such Pledged Collateral or any officer or agent thereof) during the continuance of an Event of Default and which
proxy shall only terminate upon the payment in full of the Secured Obligations. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Authorization of Issuers</I></FONT><FONT SIZE=2>. Each Grantor hereby expressly irrevocably authorizes and instructs, without any further
instructions from such Grantor, each issuer of any Pledged Collateral pledged hereunder by such Grantor to (i)&nbsp;comply with any instruction received by it from the Administrative Agent in
writing that states that an Event of Default is continuing and is otherwise in accordance with the terms of this Agreement and each Grantor agrees that such issuer shall be fully protected from
Liabilities to such Grantor in so complying and (ii)&nbsp;unless otherwise expressly permitted hereby, pay any dividend or make any other payment with respect to the Pledged Collateral directly to
the Administrative Agent. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;6.4</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Proceeds to be Turned over to and Held by Administrative
Agent</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Unless otherwise expressly provided in the Credit Agreement or this Security Agreement, all proceeds of any Collateral received by any Grantor hereunder in
cash or Cash Equivalents shall, upon the request of the Administrative Agent, be turned over to the Administrative Agent in the exact form received (with any necessary endorsement) within five
Business Days of such request. All such proceeds of Collateral and any other proceeds of any Collateral received by the Administrative Agent in cash or Cash Equivalents shall be held by the
Administrative Agent in a Security Cash Collateral Account. All proceeds being held by the Administrative Agent in a Security Cash Collateral Account (or by such Grantor in trust for the
Administrative Agent) shall continue to be held as collateral security for the Secured Obligations and shall not constitute payment thereof until applied as provided in the Credit Agreement. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;6.5</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Registration Rights</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;If, in the
commercially reasonable opinion of the Administrative Agent, it is necessary or advisable to Sell any portion of the Pledged Collateral by registering such Pledged Collateral under the provisions of
the Securities Act of 1933 (the "</FONT><FONT SIZE=2><I>Securities Act</I></FONT><FONT SIZE=2>"), each relevant Grantor shall cause the issuer thereof to do or cause to be done all acts as may be, in
the commercially reasonable opinion of the Administrative Agent, necessary or advisable to register such Pledged Collateral or that portion thereof to be Sold under the provisions of the Securities
Act, all as directed by the Administrative Agent in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto
and in compliance with the securities or "</FONT><FONT SIZE=2><I>Blue Sky</I></FONT><FONT SIZE=2>" laws of any jurisdiction that the Administrative Agent shall designate. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;Each
Grantor recognizes that the Administrative Agent may be unable to effect a public sale of any Pledged Collateral by reason of certain prohibitions contained in the
Securities Act and applicable state or foreign securities laws or otherwise or may determine that a public sale is impracticable, not desirable or not commercially reasonable and, accordingly, may
resort to one or more private sales thereof to a restricted group of purchasers that shall be obliged to agree, among other things, to acquire such securities for their own account for investment and
not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Administrative Agent shall be under no
obligation to delay a sale of any Pledged Collateral for the period of time necessary to permit the issuer thereof to register such securities for public sale under the Securities Act or under
applicable state securities laws even if such issuer would agree to do so. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>17</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P><FONT SIZE=2><A
NAME="page_rk76602_1_18"> </A> </FONT> <FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;Each Grantor agrees to use its commercially reasonable efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of any
portion of the Pledged Collateral pursuant to this </FONT><FONT SIZE=2><I>Section&nbsp;6.5</I></FONT><FONT SIZE=2> valid and binding and in compliance with all applicable Requirements of Law. Each
Grantor further agrees that a breach of any covenant contained in this </FONT><FONT SIZE=2><I>Section&nbsp;6.5</I></FONT><FONT SIZE=2> will cause irreparable injury to the Administrative Agent and
other Secured Parties, that the Administrative Agent and the other Secured Parties have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant
contained in this </FONT><FONT SIZE=2><I>Section&nbsp;6.5</I></FONT><FONT SIZE=2> shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any
defense against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Credit Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;6.6</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Deficiency</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each Grantor shall remain liable
for any deficiency if the proceeds of any sale or other disposition of any Collateral are insufficient to pay the Secured Obligations and the fees and disbursements of any attorney employed by the
Administrative Agent or any other Secured Party to collect such deficiency. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>ARTICLE
VII<BR>
THE ADMINISTRATIVE AGENT </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;7.1</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Administrative Agent's Appointment as
Attorney-in-Fact</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;Each Grantor hereby irrevocably constitutes and appoints the Administrative Agent and any Related Person
thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the
name of such Grantor or in its own name, for the purpose of carrying out the terms of the Loan Documents, to take any appropriate action and to execute any document or instrument that may be necessary
or desirable to accomplish the purposes of the Loan Documents, and, without limiting the generality of the foregoing, each Grantor hereby gives the Administrative Agent and its Related Persons the
power and right, on behalf of such Grantor, without notice to or assent by such Grantor (provided that the Administrative Agent shall endeavor to give notice to such Grantor but, provided further,
that the failure to give such notice shall not in any way limit the rights of the Administrative Agent under this Section), to do any of the following when an Event of Default shall be continuing: </FONT></P>

<UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;in
the name of such Grantor, in its own name or otherwise, take possession of and indorse and collect any check, draft, note, acceptance or other instrument for the
payment of moneys due under any account or general intangible or with respect to any other Collateral and file any claim or take any
other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any such moneys due under any account or general
intangible or with respect to any other Collateral whenever payable; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;in
the case of any Intellectual Property owned by or licensed to the Grantors, execute, deliver and have recorded any document that the Administrative Agent may request
to evidence, effect, publicize or record the Administrative Agent's security interest in such Intellectual Property and the goodwill and general intangibles of such Grantor relating thereto or
represented thereby; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;pay
or discharge taxes and Liens levied or placed on or threatened against any Collateral, effect any repair or pay any insurance called for by the terms of the Credit
Agreement (including all or any part of the premiums therefor and the costs thereof); </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;execute,
in connection with any sale provided for in </FONT><FONT SIZE=2><I>Section&nbsp;6.1</I></FONT><FONT SIZE=2> or </FONT> <FONT SIZE=2><I>Section&nbsp;6.5</I></FONT><FONT SIZE=2>, any document to effect or otherwise necessary or appropriate in relation
to evidence the Sale of any Collateral; or </FONT></P>

</UL>
<P ALIGN="CENTER"><FONT SIZE=2>18</FONT></P>

<HR NOSHADE>
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<A NAME="page_rk76602_1_19"> </A>
<UL>
<BR>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;(A)
direct any party liable for any payment under any Collateral to make payment of any moneys due or to become due thereunder directly to the Administrative Agent or as
the Administrative Agent shall direct, (B)&nbsp;ask or demand for, and collect and receive payment of and receipt for, any moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral, (C)&nbsp;sign and indorse any invoice, freight or express bill, bill of lading, storage or warehouse receipt, draft against debtors, assignment,
verification, notice and other document in connection with any Collateral, (D)&nbsp;commence and prosecute any suit, action or proceeding at law or in equity in any court of competent jurisdiction
to collect any Collateral and to enforce any other right in respect of any Collateral, (E)&nbsp;defend any actions, suits, proceedings, audits, claims, demands, orders or disputes brought against
such Grantor with respect to any Collateral, (F)&nbsp;settle, compromise or adjust any such actions, suits, proceedings, audits, claims, demands, orders or disputes and, in connection therewith,
give such discharges or releases as the Administrative Agent may deem appropriate, (G)&nbsp;assign any Intellectual Property owned by the Grantors or any IP Licenses of the Grantors throughout the
world on such terms and conditions and in such manner as the Administrative Agent shall in its sole discretion determine, including the execution and filing of any document necessary to effectuate or
record such assignment and (H)&nbsp;generally, Sell, grant a Lien on, make any Contractual Obligation with respect to and otherwise deal with, any Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for all purposes and do, at the Administrative Agent's option, at any time or from time to time, all acts and things that the Administrative Agent
deems necessary to protect, preserve or realize upon any Collateral and the Secured Parties' security interests therein and to effect the intent of the Loan Documents, all as fully and effectively as
such Grantor might do. </FONT></P>

</UL>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;If
any Grantor materially fails to perform or comply with any Contractual Obligation contained herein, the Administrative Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such Contractual Obligation. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;The
expenses of the Administrative Agent incurred in connection with actions undertaken as provided in this </FONT> <FONT SIZE=2><I>Section&nbsp;7.1</I></FONT><FONT SIZE=2>, together with interest thereon at a rate set forth in </FONT><FONT
SIZE=2><I>Section&nbsp;2.9</I></FONT><FONT SIZE=2>
(</FONT><FONT SIZE=2><I>Interest</I></FONT><FONT SIZE=2>) of the Credit Agreement, from the date of payment by the Administrative Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the Administrative Agent on demand. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;Each
Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue of this </FONT> <FONT SIZE=2><I>Section&nbsp;7.1</I></FONT><FONT SIZE=2>. All powers, authorizations and agencies contained in this Agreement are coupled
with an interest and are irrevocable until this
Agreement is terminated and the security interests created hereby are released. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;7.2</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Authorization to File Financing
Statements</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each Grantor authorizes the Administrative Agent and its Related Persons, at any time and from time to time, to file or record financing statements,
amendments thereto, and other filing or recording documents or instruments with respect to any Collateral in such form and in such offices as the Administrative Agent reasonably determines appropriate
to perfect the security interests of the Administrative Agent under this Agreement, and such financing statements and amendments may described the Collateral covered thereby as "all assets of the
debtor". A photographic or other reproduction of this Agreement shall be sufficient as a financing statement or other filing or recording document or instrument for filing or recording in any
jurisdiction. Such Grantor also hereby ratifies its authorization for the Administrative Agent to have filed any initial financing statement or amendment thereto under the UCC (or other similar laws)
in effect in any jurisdiction if filed prior to the date hereof. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;7.3</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Authority of Administrative Agent</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each
Grantor acknowledges that the rights and responsibilities of the Administrative Agent under this Agreement with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>19</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_rk76602_1_20"> </A>
<BR>

<P><FONT SIZE=2>voting
right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Administrative Agent and the other Secured Parties, be
governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Administrative Agent and the Grantors, the
Administrative Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and no Grantor shall be under any
obligation or entitlement to make any inquiry respecting such authority. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;7.4</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Duty; Obligations and
Liabilities</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;</FONT><FONT SIZE=2><I>Duty of Administrative Agent</I></FONT><FONT SIZE=2>. The Administrative Agent's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its possession shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own
account. The powers conferred on the Administrative Agent hereunder are solely to protect the Administrative Agent's interest in the Collateral and shall not impose any duty upon the Administrative
Agent to exercise any such powers. The Administrative Agent shall be accountable only for amounts that it receives as a result of the exercise of such powers, and neither it nor any of its Related
Persons shall be responsible to any Grantor for any act or failure to act hereunder, except in connection with their own gross negligence or willful misconduct as finally determined by a court of
competent jurisdiction. In addition, except in connection with the Administrative Agent's gross negligence or willful misconduct, the Administrative Agent shall not be liable or responsible for any
loss or damage to any Collateral, or for any diminution in the value thereof, by reason of the act or omission of any warehousemen, carrier, forwarding agency, consignee or other bailee if such Person
has been selected by the Administrative Agent in good faith. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Obligations and Liabilities with respect to Collateral</I></FONT><FONT SIZE=2>. No Secured Party and no Related Person thereof shall be liable
for failure to demand, collect or realize upon any Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any
Grantor or any other Person or to take any other action whatsoever with regard to any Collateral. The powers conferred on the Administrative Agent hereunder shall not impose any duty upon any other
Secured Party to exercise any such powers. The other Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor
any of their respective officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except in connection with their own gross negligence or
willful misconduct as finally determined by a court of competent jurisdiction. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>ARTICLE
VIII<BR>
MISCELLANEOUS </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.1</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Reinstatement</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Each Grantor agrees that, if
any payment made by any Loan Party or other Person and applied to the Secured Obligations is at any time annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent or preferential
or otherwise required to be refunded or repaid, or the proceeds of any Collateral are required to be returned by any Secured Party to such Loan Party, its estate, trustee, receiver or any other party,
including any Grantor, under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or repayment, any Lien or other Collateral securing such
liability shall be and remain in full force and effect, as fully as if such payment had never been made. If, prior to any of the foregoing, (a)&nbsp;any Lien or other Collateral securing such
Grantor's liability hereunder shall have been released or terminated by virtue of the foregoing or (b)&nbsp;any provision of the Guaranty hereunder shall have been terminated, cancelled or
surrendered, such Lien, other Collateral or provision shall be reinstated in full force and effect and such prior release, termination, cancellation or surrender shall not diminish, release,
discharge, impair or otherwise affect the obligations of any such Grantor in respect of any Lien or other Collateral securing such obligation or the amount of such payment. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>20</FONT></P>

<HR NOSHADE>
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<A NAME="page_rk76602_1_21"> </A>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.2</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Release of Collateral</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;At the time
provided in </FONT><FONT SIZE=2><I>clause&nbsp;(b)(iii)</I></FONT><FONT SIZE=2> of </FONT><FONT SIZE=2><I>Section&nbsp;11.10</I></FONT><FONT SIZE=2> (</FONT><FONT SIZE=2><I>Release of
Collateral or Guarantors</I></FONT><FONT SIZE=2>) of the Credit Agreement, the Collateral shall be released from the Lien created hereby and this Agreement and all obligations (other than those
expressly stated to survive such termination) of the Administrative Agent and each Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and
all rights to the Collateral shall revert to the Grantors. Each Grantor is hereby authorized to file UCC amendments at such time evidencing the termination of the Liens so released. Following any such
termination, the Administrative Agent shall promptly deliver to such Grantor any Collateral of such Grantor held by the Administrative Agent hereunder and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;If
the Administrative Agent shall be directed or permitted pursuant to </FONT><FONT SIZE=2><I>clause&nbsp;(i)</I></FONT><FONT SIZE=2> or </FONT> <FONT SIZE=2><I>(ii)</I></FONT><FONT SIZE=2> of </FONT><FONT SIZE=2><I>Section&nbsp;11.10(b)</I></FONT><FONT
SIZE=2> of the Credit Agreement to release any Lien or any Collateral, such
Collateral shall be released from the Lien created hereby to the extent provided under, and subject to the terms and conditions set forth in, such </FONT><FONT SIZE=2><I>clauses
(i)</I></FONT><FONT SIZE=2> and </FONT><FONT SIZE=2><I>(ii)</I></FONT><FONT SIZE=2>. In connection therewith, the Administrative Agent shall promptly execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such release. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;At
the time provided in </FONT><FONT SIZE=2><I>Section&nbsp;11.10(a)</I></FONT><FONT SIZE=2> of the Credit Agreement and at the request of any Grantor, a Grantor
shall be released from its obligations hereunder in the event that all the Securities of such Grantor shall be Sold to any Person that is not an Affiliate of Holdings, Borrower and the Subsidiaries of
such Borrower in a transaction permitted by the Loan Documents. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.3</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Independent Obligations</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;The obligations of
each Grantor hereunder are independent of and separate from the Secured Obligations and the Guaranteed Obligations. If any Secured Obligation or
Guaranteed Obligation is not paid when due, or upon any Event of Default, the Administrative Agent may, at its sole election, proceed directly and at once, without notice (provided that the
Administrative Agent shall endeavor to give notice to such Grantor but, provided further, that the failure to give such notice shall not in any way limit the rights of the Administrative Agent under
this Section), against any Grantor and any Collateral to collect and recover the full amount of any Secured Obligation or Guaranteed Obligation then due, without first proceeding against any other
Grantor, any other Loan Party or any other Collateral and without first joining any other Grantor or any other Loan Party in any proceeding. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.4</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>No Waiver by Course of Conduct</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;No Secured
Party shall by any act (except by a written instrument pursuant to </FONT><FONT SIZE=2><I>Section&nbsp;8.6</I></FONT><FONT SIZE=2>), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of any Secured Party, any right, power
or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by any Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that such Secured
Party would otherwise have on any future occasion. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.5</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Amendments in Writing</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;None of the terms or
provisions of this Agreement may be waived, amended, supplemented or otherwise modified except in accordance with </FONT><FONT SIZE=2><I>Section&nbsp;12.1</I></FONT><FONT SIZE=2> of the Credit
Agreement; </FONT><FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that annexes to this Agreement may be supplemented (but no existing
provisions may be modified and no Collateral may be released) through Pledge Amendments and Joinder Agreements, in substantially the form of </FONT><FONT SIZE=2><I>Annex 1</I></FONT><FONT SIZE=2> and </FONT> <FONT SIZE=2><I>Annex 2</I></FONT><FONT
SIZE=2>, respectively, in each case duly executed by the Administrative Agent and each Grantor directly affected thereby. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.6</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Additional Grantors; Additional Pledged
Collateral</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;</FONT><FONT SIZE=2><I>Joinder Agreements</I></FONT><FONT SIZE=2>. If, at the option of Borrower or as required pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;7.10</I></FONT><FONT
SIZE=2> of the Credit Agreement, such Borrower shall cause any Subsidiary that is not a Grantor to become a Grantor hereunder, such
Subsidiary shall </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>21</FONT></P>

<HR NOSHADE>
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<A NAME="page_rk76602_1_22"> </A>
<BR>

<P><FONT SIZE=2>execute
and deliver to the Administrative Agent a Joinder Agreement substantially in the form of </FONT><FONT SIZE=2><I>Annex 2</I></FONT><FONT SIZE=2> and shall thereafter for all purposes be a
party hereto and have the same rights, benefits and obligations as a Grantor party hereto on the Closing Date. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Pledge Amendments</I></FONT><FONT SIZE=2>. To the extent any Pledged Collateral has not been delivered as of the Closing Date, such Grantor shall
deliver a pledge amendment duly executed by the Grantor in substantially the form of </FONT><FONT SIZE=2><I>Annex 1</I></FONT><FONT SIZE=2> (each, a "</FONT><FONT SIZE=2><I>Pledge
Amendment</I></FONT><FONT SIZE=2>"). Such Grantor authorizes the Administrative Agent to attach each Pledge Amendment to this Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.7</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Notices</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;All notices, requests and demands to
or upon the Administrative Agent or any Grantor hereunder shall be effected in the manner provided for in </FONT><FONT SIZE=2><I>Section&nbsp;12.11</I></FONT><FONT SIZE=2> of the Credit Agreement; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT
SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT SIZE=2>, that any such notice, request or demand to or upon any Grantor shall be addressed to
the Borrower's notice address set forth in such </FONT><FONT SIZE=2><I>Section&nbsp;12.11</I></FONT><FONT SIZE=2>. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.8</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Successors and Assigns</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall
be binding upon the successors and assigns of each Grantor and shall inure to the benefit of each Secured Party and their successors and assigns; </FONT> <FONT SIZE=2><I>provided</I></FONT><FONT SIZE=2>, </FONT><FONT SIZE=2><I>however</I></FONT><FONT
SIZE=2>, that no Grantor may assign, transfer or delegate any of its rights or obligations
under this Agreement without the prior written consent of the Administrative Agent. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.9</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Counterparts</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement may be executed
in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one
and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart. Delivery of an executed signature page of this Agreement by facsimile
transmission or by Electronic Transmission shall be as effective as delivery of a manually executed counterpart hereof. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.10</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Severability</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;Any provision of this
Agreement being held illegal, invalid or unenforceable in any jurisdiction shall not affect any part of such provision not held illegal, invalid or unenforceable, any other provision of this Agreement
or any part of such provision in any other jurisdiction. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.11</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Governing Law</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement and the rights
and obligations of the parties hereto shall be governed by, and construed and interpreted in accordance with, the law of the State of New York. </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;8.12</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>WAIVER OF JURY TRIAL</I></FONT><FONT SIZE=2>.&nbsp;&nbsp;&nbsp;&nbsp;EACH PARTY HERETO
HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING WITH RESPECT TO, OR DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, ANY LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED THEREIN OR RELATED THERETO (WHETHER FOUNDED IN CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)&nbsp;CERTIFIES THAT NO OTHER PARTY AND NO RELATED PERSON OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)&nbsp;ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS </FONT><FONT SIZE=2><I>SECTION 8.12</I></FONT><FONT SIZE=2>. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>[SIGNATURE
PAGES FOLLOW] </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>22</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<P><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS WHEREOF, each of the undersigned has caused this Guaranty, Pledge and Security Agreement to be duly executed and delivered as of the date first above written. </FONT></P>

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<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
PROS REVENUE MANAGEMENT, L.P., as a Grantor</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>CHARLES H. MURPHY</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Name: Charles H. Murphy<BR>
Title: Executive V.P. and C.F.O.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
PROS HOLDINGS, INC., as a Grantor</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>CHARLES H. MURPHY</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Name: Charles H. Murphy<BR>
Title: Executive V.P. and C.F.O.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
PROS REVENUE I, LLC, as a Grantor</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>CHARLES H. MURPHY</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Name: Charles H. Murphy<BR>
Title: Executive V.P. and C.F.O.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
PROS REVENUE II, LLC, as a Grantor</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="47%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="4%"><FONT SIZE=2><BR>
By</FONT></TD>
<TD WIDTH="47%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>CHARLES H. MURPHY</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Name: Charles H. Murphy<BR>
Title: Executive V.P. and C.F.O.</FONT></TD>
</TR>
</TABLE>
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<TABLE WIDTH="76%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP"><FONT SIZE=2><BR>
ACCEPTED AND AGREED<BR>
as of the date first above written:<BR>
CHURCHILL FINANCIAL LLC, as Administrative Agent</FONT></TD>
<TD WIDTH="48%" VALIGN="TOP"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="4%"><FONT SIZE=2><BR>
By</FONT></TD>
<TD WIDTH="48%"><FONT SIZE=2><BR>
/s/&nbsp;&nbsp;</FONT><FONT SIZE=2>CHRIS COX</FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;<BR></FONT>
<HR NOSHADE></TD>
<TD WIDTH="48%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP"><FONT SIZE=2>Name: Chris Cox<BR>
Title: MD</FONT></TD>
<TD WIDTH="48%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=26,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="21",CHK=6799,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]RM76602A.;3',USER='MBRADT',CD=';4-APR-2007;13:30' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_rn76602_1_1"> </A> </FONT> <FONT SIZE=2>
ANNEX 1<BR>
TO<BR>
GUARANTY, PLEDGE AND SECURITY AGREEMENT </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>FORM
OF PLEDGE AMENDMENT </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
PLEDGE AMENDMENT, dated as of [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 20&nbsp;&nbsp;&nbsp;&nbsp;], is delivered pursuant to </FONT> <FONT
SIZE=2><I>Section&nbsp;8.6</I></FONT><FONT SIZE=2> of the Guaranty, Pledge and Security Agreement, dated as of March&nbsp;23, 2007 (the "</FONT><FONT SIZE=2><I>Guaranty, Pledge and
Security Agreement</I></FONT><FONT SIZE=2>"), by PROS Revenue Management, L.P., a Delaware limited partnership (the "</FONT><FONT SIZE=2><I>Borrower</I></FONT><FONT SIZE=2>"), the undersigned Grantor
and the other Affiliates of the Borrower from time to time party thereto as Grantors in favor of Churchill Financial LLC, as administrative agent and collateral agent for the Secured Parties referred
to therein. Capitalized terms used herein without definition are used as defined in the Guaranty, Pledge and Security Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
undersigned hereby agrees that this Pledge Amendment may be attached to the Guaranty, Pledge and Security Agreement and that the Pledged Collateral listed on </FONT> <FONT SIZE=2><I>Annex 1-A</I></FONT><FONT SIZE=2> to this Pledge Amendment shall be
and become part of the Collateral referred to in the Guaranty, Pledge and Security Agreement and
shall secure all Obligations of the undersigned. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
undersigned hereby represents and warrants that each of the representations and warranties contained in </FONT><FONT SIZE=2><I>Sections 4.1</I></FONT><FONT SIZE=2>, </FONT> <FONT SIZE=2><I>4.2</I></FONT><FONT SIZE=2>, </FONT><FONT
SIZE=2><I>4.5</I></FONT><FONT SIZE=2> and </FONT><FONT SIZE=2><I>4.10</I></FONT><FONT SIZE=2> of the Guaranty, Pledge and Security
Agreement is true and correct and as of the date hereof as if made on and as of such date. </FONT></P>

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<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
[GRANTOR]</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Name: Charles H. Murphy<BR>
Title: Executive V.P. and C.F.O.</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>A1-1</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_rn76602_1_2"> </A>
<P ALIGN="RIGHT"><FONT SIZE=2>Annex
1-A </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><I>PLEDGED STOCK  </I></FONT></P>

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<TABLE WIDTH="81%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TH WIDTH="44%" ALIGN="LEFT"><FONT SIZE=1><B>ISSUER<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="8%" ALIGN="CENTER"><FONT SIZE=1><B>CLASS</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="17%" ALIGN="CENTER"><FONT SIZE=1><B>CERTIFICATE NO(S).</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="9%" ALIGN="CENTER"><FONT SIZE=1><B>PAR VALUE</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="13%" ALIGN="CENTER"><FONT SIZE=1><B>NUMBER OF SHARES, UNITS OR INTERESTS</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="44%"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="44%"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="44%"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="44%"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="44%"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="44%"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="8%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="17%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="9%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="13%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2><I>PLEDGED DEBT INSTRUMENTS  </I></FONT></P>

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<TH WIDTH="33%" ALIGN="LEFT"><FONT SIZE=1><B>ISSUER<BR> </B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="15%" ALIGN="CENTER"><FONT SIZE=1><B>DESCRIPTION OF DEBT</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="16%" ALIGN="CENTER"><FONT SIZE=1><B>CERTIFICATE NO(S).</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="14%" ALIGN="CENTER"><FONT SIZE=1><B>FINAL MATURITY</B></FONT><HR NOSHADE></TH>
<TH WIDTH="2%"><FONT SIZE=1>&nbsp;</FONT></TH>
<TH WIDTH="12%" ALIGN="CENTER"><FONT SIZE=1><B>PRINCIPAL AMOUNT</B></FONT><HR NOSHADE></TH>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="33%"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="33%"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="33%"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="33%"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="33%"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="33%"><FONT SIZE=2>&nbsp;<BR></FONT>
</TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="15%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="16%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="14%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="2%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="12%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>A1-2</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=28,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="21",CHK=413046,FOLIO='A1-2',FILE='DISK130:[07ZBA2.07ZBA76602]RN76602A.;3',USER='MBRADT',CD=';4-APR-2007;13:30' -->
<A NAME="page_rn76602_1_3"> </A>

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<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP"><FONT SIZE=2>ACKNOWLEDGED AND AGREED<BR>
as of the date first above written:</FONT></TD>
<TD WIDTH="48%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP"><FONT SIZE=2><BR>
CHURCHILL FINANCIAL LLC,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;as Administrative Agent</FONT></TD>
<TD WIDTH="48%" VALIGN="TOP"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="48%"><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
<TD WIDTH="48%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="48%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="48%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="48%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="48%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>A1-3</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_ro76602_1_1"> </A> </FONT> <FONT SIZE=2>
ANNEX 2<BR>
TO<BR>
GUARANTY, PLEDGE AND SECURITY AGREEMENT </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>FORM
OF JOINDER AGREEMENT </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
JOINDER AGREEMENT, dated as of [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 20&nbsp;&nbsp;&nbsp;&nbsp;], is delivered pursuant to </FONT> <FONT SIZE=2><I>Section&nbsp;8.6</I></FONT><FONT SIZE=2> of the Guaranty, Pledge
and Security Agreement, dated as of March&nbsp;23, 2007 (the "</FONT><FONT SIZE=2><I>Guaranty, Pledge and
Security Agreement</I></FONT><FONT SIZE=2>"), by PROS Revenue Management, L.P., a Delaware limited partnership (the "</FONT><FONT SIZE=2><I>Borrower</I></FONT><FONT SIZE=2>") and the Affiliates of
the Borrower from time to time party thereto as Grantors in favor of Churchill Financial LLC, as administrative agent and collateral agent for the Secured Parties referred to therein. Capitalized
terms used herein without definition are used as defined in the Guaranty, Pledge and Security Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By
executing and delivering this Joinder Agreement, the undersigned, as provided in </FONT><FONT SIZE=2><I>Section&nbsp;8.6</I></FONT><FONT SIZE=2> of the Guaranty, Pledge and
Security Agreement, hereby becomes a party to the Guaranty, Pledge and Security Agreement as a Grantor thereunder with the same force and effect as if originally named as a Grantor therein and,
without limiting the generality of the foregoing, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the
Secured Obligations of the undersigned, hereby mortgages, pledges and hypothecates to the Administrative Agent for the benefit of the Secured Parties, and grants to the Administrative Agent for the
benefit of the Secured Parties a lien on and security interest in, all of its right, title and interest in, to and under the Collateral of the undersigned and expressly assumes all obligations and
liabilities of a Grantor thereunder. The undersigned hereby agrees to be bound as a Grantor for the purposes of the Guaranty, Pledge and Security Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
information set forth in </FONT><FONT SIZE=2><I>Annex 1-A</I></FONT><FONT SIZE=2> is hereby added to the information set forth in </FONT><FONT SIZE=2><I>Schedules
1</I></FONT><FONT SIZE=2> through </FONT><FONT SIZE=2><I>6</I></FONT><FONT SIZE=2> to the Guaranty, Pledge and Security Agreement. By acknowledging and agreeing to this Joinder Agreement, the
undersigned hereby agree that this Joinder Agreement may be attached to the Guaranty, Pledge and Security Agreement and that the Pledged Collateral listed on </FONT><FONT SIZE=2><I>Annex
1-A</I></FONT><FONT SIZE=2> to this Joinder Amendment shall be and become part of the Collateral referred to in the Guaranty, Pledge and Security Agreement and shall secure all Secured
Obligations of the undersigned. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
undersigned hereby represents and warrants that each of the representations and warranties contained in </FONT><FONT SIZE=2><I>Article&nbsp;IV </I></FONT><FONT SIZE=2>of the
Guaranty, Pledge and Security Agreement applicable to it is true and correct on and as the date hereof as if made on and as of such date. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly executed and delivered as of the date first above written. </FONT></P>

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<TABLE WIDTH="77%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
[ADDITIONAL GRANTOR]</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Name:<BR>
Title:</FONT></TD>
</TR>
</TABLE>
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<P ALIGN="CENTER"><FONT SIZE=2>A2-1</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_ro76602_1_2"> </A>

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<TABLE WIDTH="77%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP"><FONT SIZE=2>ACKNOWLEDGED AND AGREED<BR>
as of the date first above written:</FONT></TD>
<TD WIDTH="48%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP"><FONT SIZE=2><BR>
[EACH GRANTOR PLEDGING<BR>
ADDITIONAL COLLATERAL]</FONT></TD>
<TD WIDTH="48%" VALIGN="TOP"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="48%"><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Name:<BR>
Title:</FONT></TD>
<TD WIDTH="48%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP"><FONT SIZE=2><BR>
CHURCHILL FINANCIAL LLC,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;as Administrative Agent</FONT></TD>
<TD WIDTH="48%" VALIGN="TOP"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="48%"><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE><FONT SIZE=2> Name:<BR>
Title:</FONT></TD>
<TD WIDTH="48%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2>A2-2</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="page_rp76602_1_1"> </A> </FONT> <FONT SIZE=2>
ANNEX 3<BR>
TO<BR>
GUARANTY, PLEDGE AND SECURITY AGREEMENT </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>FORM
OF INTELLECTUAL PROPERTY SECURITY AGREEMENT(1) </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS
[</FONT><FONT SIZE=2><B>COPYRIGHT</B></FONT><FONT SIZE=2>] [</FONT><FONT SIZE=2><B>PATENT</B></FONT><FONT SIZE=2>]
[</FONT><FONT SIZE=2><B>TRADEMARK</B></FONT><FONT SIZE=2>] SECURITY AGREEMENT, dated as of [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
20&nbsp;&nbsp;&nbsp;&nbsp;], is made by each of the
entities listed on the signature pages hereof (each a "</FONT><FONT SIZE=2><I>Grantor</I></FONT><FONT SIZE=2>" and, collectively, the "</FONT><FONT SIZE=2><I>Grantors</I></FONT><FONT SIZE=2>"), in
favor of Churchill Financial LLC ("</FONT><FONT SIZE=2><I>Churchill</I></FONT><FONT SIZE=2>"), as administrative agent and collateral agent (in such capacity, together with its successors and
permitted assigns, the "</FONT><FONT SIZE=2><I>Administrative Agent</I></FONT><FONT SIZE=2>") for the Lenders and the L/C Issuers (as defined in the Credit Agreement referred to below). </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>W
I T N E S S E T H: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
pursuant to the Credit Agreement, dated as of March&nbsp;23, 2007 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the
"</FONT><FONT SIZE=2><I>Credit Agreement</I></FONT><FONT SIZE=2>"), among PROS Revenue Management, L.P. (the "Borrower") the Lenders and the L/C Issuers from time to time party thereto and Churchill,
as Administrative Agent for the Lenders and the L/C Issuers, the Lenders and the L/C Issuers have severally agreed to make extensions of credit to the Borrower upon the terms and subject to the
conditions set forth therein; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
each Grantor (other than the Borrower) has agreed, pursuant to a Guaranty, Pledge and Security Agreement of even date herewith in favor of the Administrative Agent (the
"</FONT><FONT SIZE=2><I>Guaranty, Pledge and Security Agreement</I></FONT><FONT SIZE=2>"), to guarantee the Obligations (as defined in the Credit Agreement) of the Borrower; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
all of the Grantors are party to the Guaranty, Pledge and Security Agreement pursuant to which the Grantors are required to execute and deliver this
[</FONT><FONT SIZE=2><B>Copyright</B></FONT><FONT SIZE=2>] [</FONT><FONT SIZE=2><B>Patent</B></FONT><FONT SIZE=2>]
[</FONT><FONT SIZE=2><B>Trademark</B></FONT><FONT SIZE=2>] Security Agreement; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW,
THEREFORE, in consideration of the premises and to induce the Lenders, the L/C Issuers and the Administrative Agent to enter into the Credit Agreement and to induce the Lenders and
the L/C Issuers to make their respective extensions of credit to the Borrower thereunder, each Grantor hereby agrees with the Administrative Agent as follows: </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;1.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Defined Terms</I></FONT><FONT SIZE=2>. Capitalized terms used herein without
definition are used as defined in the Guaranty, Pledge and Security Agreement. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;2.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Grant of Security Interest in
[</I></FONT><FONT SIZE=2><B><I>Copyright</I></B></FONT><FONT SIZE=2><I>] [</I></FONT><FONT SIZE=2><B><I>Trademark</I></B></FONT><FONT SIZE=2><I>]
[</I></FONT><FONT SIZE=2><B><I>Patent</I></B></FONT><FONT SIZE=2><I>] Collateral</I></FONT><FONT SIZE=2>. Each Grantor, as collateral security for the prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or otherwise) of the Secured Obligations of such Grantor, hereby mortgages, pledges and hypothecates to the Administrative Agent for
the benefit of the Secured Parties, and grants to the Administrative Agent for the benefit of the Secured Parties a Lien on and security interest in, all of its right, title and interest in, to and
under the following Collateral of such Grantor (the "</FONT><FONT SIZE=2><I>[</I></FONT><FONT SIZE=2><B><I>Copyright</I></B></FONT><FONT SIZE=2><I>]
[</I></FONT><FONT SIZE=2><B><I>Patent</I></B></FONT><FONT SIZE=2><I>] [</I></FONT><FONT SIZE=2><B><I>Trademark</I></B></FONT><FONT SIZE=2><I>]
Collateral</I></FONT><FONT SIZE=2>"): </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;[all
of its Copyrights and all IP Licenses providing for the grant by or to such Grantor of any right under any Copyright, including, without limitation,
those referred to on </FONT><FONT SIZE=2><I>Schedule&nbsp;1</I></FONT><FONT SIZE=2> hereto; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;all
renewals, reversions and extensions of the foregoing; and </FONT></P>

<HR NOSHADE ALIGN="LEFT" WIDTH="120">
<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD><FONT SIZE=2>Separate
agreements should be executed relating to each Grantor's respective Copyrights, Patents, and Trademarks. </FONT></DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>A3-1</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_rp76602_1_2"> </A>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;all
income, royalties, proceeds and Liabilities at any time due or payable or asserted under and with respect to any of the foregoing, including, without limitation, all
rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof.] </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>or
</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;[all
of its Patents and all IP Licenses providing for the grant by or to such Grantor of any right under any Patent, including, without limitation, those
referred to on </FONT><FONT SIZE=2><I>Schedule&nbsp;1</I></FONT><FONT SIZE=2> hereto; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;all
reissues, reexaminations, continuations, continuations-in-part, divisionals, renewals and extensions of the foregoing; and </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;all
income, royalties, proceeds and Liabilities at any time due or payable or asserted under and with respect to any of the foregoing, including, without limitation, all
rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof.] </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>or
</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;[all
of its Trademarks and all IP Licenses providing for the grant by or to such Grantor of any right under any Trademark, including, without limitation,
those referred to on </FONT><FONT SIZE=2><I>Schedule&nbsp;1</I></FONT><FONT SIZE=2> hereto; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;&nbsp;all
renewals and extensions of the foregoing; </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;&nbsp;&nbsp;all
goodwill of the business connected with the use of, and symbolized by, each such Trademark; and </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;&nbsp;all
income, royalties, proceeds and Liabilities at any time due or payable or asserted under and with respect to any of the foregoing, including, without limitation, all
rights to sue and recover at law or in equity for any past, present and future infringement, misappropriation, dilution, violation or other impairment thereof.] </FONT></P>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;3.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Guaranty, Pledge and Security Agreement</I></FONT><FONT SIZE=2>. The security
interest granted pursuant to this [</FONT><FONT SIZE=2><B>Copyright</B></FONT><FONT SIZE=2>] [</FONT><FONT SIZE=2><B>Patent</B></FONT><FONT SIZE=2>]
[</FONT><FONT SIZE=2><B>Trademark</B></FONT><FONT SIZE=2>] Security Agreement is granted in conjunction with the security interest granted to the Administrative Agent pursuant
to the Guaranty, Pledge and Security Agreement and each Grantor hereby acknowledges and agrees that the rights and remedies of the Administrative Agent with respect to the security interest in the
[</FONT><FONT SIZE=2><B>Copyright</B></FONT><FONT SIZE=2>] [</FONT><FONT SIZE=2><B>Patent</B></FONT><FONT SIZE=2>]
[</FONT><FONT SIZE=2><B>Trademark</B></FONT><FONT SIZE=2>] Collateral made and granted hereby are more fully set forth in the Guaranty, Pledge and Security Agreement, the
terms and provisions of which are incorporated by reference herein as if fully set forth herein. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;4.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Grantor Remains Liable</I></FONT><FONT SIZE=2>. Each Grantor hereby agrees that,
anything herein to the contrary notwithstanding, such Grantor shall assume full and complete responsibility for the prosecution, defense, enforcement or any other necessary or desirable actions in
connection with their [</FONT><FONT SIZE=2><B>Copyrights</B></FONT><FONT SIZE=2>] [</FONT><FONT SIZE=2><B>Patents</B></FONT><FONT SIZE=2>]
[</FONT><FONT SIZE=2><B>Trademarks</B></FONT><FONT SIZE=2>] and IP Licenses subject to a security interest hereunder. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;5.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Counterparts</I></FONT><FONT SIZE=2>. This
[</FONT><FONT SIZE=2><B>Copyright</B></FONT><FONT SIZE=2>] [</FONT><FONT SIZE=2><B>Patent</B></FONT><FONT SIZE=2>]
[</FONT><FONT SIZE=2><B>Trademark</B></FONT><FONT SIZE=2>] Security Agreement may be executed in any number of counterparts and by different parties in separate counterparts,
each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate
counterparts and attached to a single counterpart. </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>Section&nbsp;6.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Governing Law</I></FONT><FONT SIZE=2>. This
[</FONT><FONT SIZE=2><B>Copyright</B></FONT><FONT SIZE=2>] [</FONT><FONT SIZE=2><B>Patent</B></FONT><FONT SIZE=2>]
[</FONT><FONT SIZE=2><B>Trademark</B></FONT><FONT SIZE=2>] Security Agreement and the rights and obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York. </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>[SIGNATURE
PAGES FOLLOW] </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>A3-2</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
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<A NAME="page_rp76602_1_3"> </A>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, each Grantor has caused this [</FONT><FONT SIZE=2><B>Copyright</B></FONT><FONT SIZE=2>]
[</FONT><FONT SIZE=2><B>Patent</B></FONT><FONT SIZE=2>] [</FONT><FONT SIZE=2><B>Trademark</B></FONT><FONT SIZE=2>] Security Agreement to be executed
and delivered by its duly authorized officer as of the date first set forth above. </FONT></P>

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<TABLE WIDTH="77%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
Very truly yours,</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD COLSPAN=2><FONT SIZE=2><BR>
[GRANTOR]<BR>
&nbsp;&nbsp;&nbsp;&nbsp;as Grantor</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="46%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD WIDTH="3%"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="46%"><BR><HR NOSHADE><FONT SIZE=2> Name: Charles H. Murphy<BR>
Title: Executive V.P. and C.F.O.</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

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<TABLE WIDTH="77%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP"><FONT SIZE=2><BR>
ACCEPTED AND AGREED<BR>
as of the date first above written:</FONT></TD>
<TD WIDTH="48%" VALIGN="TOP"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP"><FONT SIZE=2><BR>
CHURCHILL FINANCIAL LLC,<BR>
&nbsp;&nbsp;&nbsp;&nbsp;as Administrative Agent</FONT></TD>
<TD WIDTH="48%" VALIGN="TOP"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2><BR>
By:</FONT></TD>
<TD WIDTH="48%"><FONT SIZE=2><BR>
&nbsp;&nbsp;&nbsp;&nbsp;</FONT><HR NOSHADE></TD>
<TD WIDTH="48%"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="48%"><FONT SIZE=2>Name:</FONT></TD>
<TD WIDTH="48%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD WIDTH="5%"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="48%"><FONT SIZE=2>Title:</FONT></TD>
<TD WIDTH="48%"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2>[SIGNATURE
PAGE TO [</FONT><FONT SIZE=2><B>COPYRIGHT</B></FONT><FONT SIZE=2>] [</FONT><FONT SIZE=2><B>PATENT</B></FONT><FONT SIZE=2>]
[</FONT><FONT SIZE=2><B>TRADEMARK</B></FONT><FONT SIZE=2>] SECURITY AGREEMENT] </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>A3-3</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=34,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="21",CHK=877494,FOLIO='A3-3',FILE='DISK130:[07ZBA2.07ZBA76602]RP76602A.;3',USER='MBRADT',CD=';4-APR-2007;13:31' -->
<A NAME="page_rp76602_1_4"> </A>
<P ALIGN="CENTER"><FONT SIZE=2>ACKNOWLEDGMENT
OF GRANTOR </FONT></P>

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<TABLE WIDTH="77%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="BOTTOM">
<TD WIDTH="25%" VALIGN="TOP"><FONT SIZE=2>STATE OF TEXAS</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="67%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="25%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="67%" VALIGN="TOP"><FONT SIZE=2>ss.</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD WIDTH="25%" VALIGN="TOP"><FONT SIZE=2>COUNTY OF HARRIS</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" ALIGN="RIGHT" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH="3%" VALIGN="TOP"><FONT SIZE=2>)</FONT></TD>
<TD WIDTH="67%" VALIGN="TOP"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE>
<!-- end of user-specified TAGGED TABLE -->


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
this&nbsp;&nbsp;&nbsp;&nbsp;day of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2007 before me personally appeared Charles H. Murphy, proved to me on
the basis of satisfactory evidence to be the person who executed the
foregoing instrument on behalf of PROS Revenue Management, L.P., who being by me duly sworn did depose and say that he is an authorized officer of said entity, that the said instrument was signed on
behalf of said entity as authorized by its Board of Directors and that he acknowledged said instrument to be the free act and deed of said corporation. </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE WIDTH="25%" BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR VALIGN="TOP">
<TD WIDTH="100%"><HR NOSHADE><FONT SIZE=2> Notary Public</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->

<P ALIGN="CENTER"><FONT SIZE=2>[ACKNOWLEDGEMENT
OF GRANTOR FOR [</FONT><FONT SIZE=2><B>COPYRIGHT</B></FONT><FONT SIZE=2>]
[</FONT><FONT SIZE=2><B>PATENT</B></FONT><FONT SIZE=2>] [</FONT><FONT SIZE=2><B>TRADEMARK</B></FONT><FONT SIZE=2>] SECURITY AGREEMENT] </FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2>A3-4</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=35,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="21",CHK=628061,FOLIO='A3-4',FILE='DISK130:[07ZBA2.07ZBA76602]RP76602A.;3',USER='MBRADT',CD=';4-APR-2007;13:31' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<P ALIGN="CENTER"><FONT SIZE=2>
SCHEDULE I<BR>
TO<BR>
[</FONT><FONT SIZE=2><B>COPYRIGHT</B></FONT><FONT SIZE=2>] [</FONT><FONT SIZE=2><B>PATENT</B></FONT><FONT SIZE=2>]
[</FONT><FONT SIZE=2><B>TRADEMARK</B></FONT><FONT SIZE=2>] SECURITY AGREEMENT<BR>
[</FONT><FONT SIZE=2><B><I>Copyright</I></B></FONT><FONT SIZE=2><I>] [</I></FONT><FONT SIZE=2><B><I>Patent</I></B></FONT><FONT SIZE=2><I>]
[</I></FONT><FONT SIZE=2><B><I>Trademark</I></B></FONT><FONT SIZE=2><I>] Registrations</I></FONT></P>

<DL compact>
<DT style='margin-bottom:-11pt;'><FONT SIZE=2>A.</FONT></DT><DD><FONT SIZE=2>REGISTERED
[</FONT><FONT SIZE=2><B>COPYRIGHTS</B></FONT><FONT SIZE=2>] [</FONT><FONT SIZE=2><B>PATENTS</B></FONT><FONT SIZE=2>]
[</FONT><FONT SIZE=2><B>TRADEMARKS</B></FONT><FONT SIZE=2>]<BR>
<BR>
<BR>
<BR>
<BR></FONT><P><FONT SIZE=2>[</FONT><FONT
SIZE=2><B>Include Registration Number and Date</B></FONT><FONT SIZE=2>] </FONT></P>

</DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>B.</FONT></DT><DD><FONT SIZE=2>[</FONT><FONT
SIZE=2><B>COPYRIGHT</B></FONT><FONT SIZE=2>] [</FONT><FONT SIZE=2><B>PATENT</B></FONT><FONT SIZE=2>]
[</FONT><FONT SIZE=2><B>TRADEMARK</B></FONT><FONT SIZE=2>] APPLICATIONS<BR>
<BR> </FONT><P><FONT SIZE=2>[</FONT><FONT
SIZE=2><B>Include Application Number and Date</B></FONT><FONT SIZE=2>] </FONT></P>

</DD><DT style='margin-bottom:-11pt;'><FONT SIZE=2>C.</FONT></DT><DD><FONT SIZE=2>IP
LICENSES<BR>
<BR> </FONT><P><FONT SIZE=2>[</FONT><FONT
SIZE=2><B>Include complete legal description of agreement (name of agreement, parties and date)</B></FONT><FONT SIZE=2>] </FONT></P>

</DD></DL>
<P ALIGN="CENTER"><FONT SIZE=2>A3-I</FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=36,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="21",CHK=797204,FOLIO='A3-I1',FILE='DISK130:[07ZBA2.07ZBA76602]RQ76602A.;3',USER='MBRADT',CD=';4-APR-2007;13:31' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<BR>
<P><br><A NAME="07ZBA76601_21">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_rc76602_1">TABLE OF CONTENTS</A></FONT><BR>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21.1
<SEQUENCE>22
<FILENAME>a2176970zex-21_1.htm
<DESCRIPTION>EXHIBIT 21.1
<TEXT>
<HTML>
<HEAD>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
<BR>
<FONT SIZE=3 ><A HREF="#07ZBA76601_22">QuickLinks</A></FONT>
<font size=3> -- Click here to rapidly navigate through this document</font>
<!-- TOC_END -->
<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit&nbsp;21.1  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="ly76602_pros_holdings,_inc._list_of_subsidiaries"> </A>
<A NAME="toc_ly76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>PROS Holdings,&nbsp;Inc.<BR>  List of Subsidiaries    <BR>    </B></FONT></P>

<P><FONT SIZE=2>PROS
Revenue I, LLC&#151;Delaware<BR>
PROS Revenue II, LLC&#151;Delaware<BR>
PROS Revenue Management, L.P.&#151;Delaware </FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=1,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="22",CHK=154656,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]LY76602A.;3',USER='MBRADT',CD=';4-APR-2007;13:35' -->
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<BR>
<P><br><A NAME="07ZBA76601_22">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_ly76602_1">PROS Holdings, Inc. List of Subsidiaries</A></FONT><BR>
<!-- SEQ=,FILE='QUICKLINK',USER=MTRAN,SEQ=,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="22" -->
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</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>23
<FILENAME>a2176970zex-23_1.htm
<DESCRIPTION>EXHIBIT 23.1
<TEXT>
<HTML>
<HEAD>
</HEAD>
<BODY BGCOLOR="#FFFFFF" LINK=BLUE  VLINK=PURPLE>
<BR>
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<P ALIGN="RIGHT"><FONT SIZE=2><B>Exhibit&nbsp;23.1  </B></FONT></P>

<P ALIGN="CENTER"><FONT SIZE=2><A
NAME="sa76602_consent_of_independent__sa702325"> </A>
<A NAME="toc_sa76602_1"> </A>
<BR></FONT><FONT SIZE=2><B>CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM    <BR>    </B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We hereby consent to the use in this Registration Statement on Form&nbsp;S-1 of our report dated January&nbsp;26, 2007, except for Note&nbsp;3
as to which the date is April&nbsp;3, 2007, relating to the financial statements and financial statement schedule of PROS Holdings,&nbsp;Inc., which appear in such Registration Statement. We also
consent to the reference to us under the heading "Experts" in such Registration Statement. </FONT></P>


<P><FONT SIZE=2>/s/
PricewaterhouseCoopers LLP </FONT></P>

<P><FONT SIZE=2>Houston,
Texas<BR>
April&nbsp;3, 2007 </FONT></P>

<HR NOSHADE>
<P style='page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=1,EFW="2176970",CP="PROS HOLDINGS, INC.",DN="23",CHK=92449,FOLIO='blank',FILE='DISK130:[07ZBA2.07ZBA76602]SA76602A.;4',USER='KBLACKW',CD=';3-APR-2007;13:30' -->
<!-- THIS IS THE END OF A COMPOSITION COMPONENT -->
<BR>
<P><br><A NAME="07ZBA76601_23">QuickLinks</A><br></P><!-- TOC_BEGIN -->
<FONT SIZE=2><A HREF="#toc_sa76602_1">CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</A></FONT><BR>
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