AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 26, 1998

REGISTRATION NO. 333-


SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

CONCUR TECHNOLOGIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

            DELAWARE                           7372                          91-1608052
(STATE OR OTHER JURISDICTION OF    (PRIMARY STANDARD INDUSTRIAL           (I.R.S. EMPLOYER
 INCORPORATION OR ORGANIZATION)    CLASSIFICATION CODE NUMBER)          IDENTIFICATION NO.)

6222 185TH AVENUE NE
REDMOND, WASHINGTON 98052
(425) 702-8808
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

S. STEVEN SINGH
PRESIDENT AND CHIEF EXECUTIVE OFFICER
6222 185TH AVENUE NE
REDMOND, WASHINGTON 98052
(425) 702-8808
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

COPIES TO:

  MATTHEW P. QUILTER, ESQ.                        THOMAS A. BEVILACQUA, ESQ.
    HORACE L. NASH, ESQ.                              CURTIS L. MO, ESQ.
  KRISTINA R. WILKEN, ESQ.                       PATRICIA MONTALVO TIMM, ESQ.
    KEVIN S. CHOU, ESQ.                        BROBECK, PHLEGER & HARRISON LLP
     FENWICK & WEST LLP                             TWO EMBARCADERO PLACE
    TWO PALO ALTO SQUARE                                2200 GENG ROAD
PALO ALTO, CALIFORNIA 94306                      PALO ALTO, CALIFORNIA 94303
       (650) 494-0600                                   (650) 424-0160

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:

As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. [ ]

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) 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. [ ]

If this form is a post-effective amendment filed pursuant to Rule 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. [ ]

If this form is a post-effective amendment filed pursuant to Rule 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. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ]

CALCULATION OF REGISTRATION FEE

------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
            TITLE OF SECURITIES                       PROPOSED MAXIMUM                      AMOUNT OF
              TO BE REGISTERED                  AGGREGATE OFFERING PRICE(1)              REGISTRATION FEE
------------------------------------------------------------------------------------------------------------------
Common Stock,
    par value $.001 per share...............            $37,000,000                          $10,915
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------

(1) Estimated pursuant to Rule 457(o) solely for the purpose of calculating the amount of the registration fee.

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 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.



INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED AUGUST 26, 1998

LOGO

SHARES

COMMON STOCK

Of the shares of Common Stock offered hereby, shares are being sold by Concur Technologies, Inc. ("Concur" or the "Company") and shares are being sold by the Selling Stockholders. See "Principal and Selling Stockholders." The Company will not receive any of the proceeds from the sale of shares by the Selling Stockholders. Prior to the Offering, there has been no public market for the Common Stock of the Company. See "Underwriting" for information relating to the method of determining the initial public offering price. The Company has applied for quotation of the Common Stock on the Nasdaq National Market under the symbol "CNQR."

THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 6.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE

ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS

A CRIMINAL OFFENSE.

------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
                                                       UNDERWRITING
                                                       DISCOUNTS AND         PROCEEDS TO          PROCEEDS TO
                                 PRICE TO PUBLIC        COMMISSIONS          COMPANY(1)       SELLING STOCKHOLDERS
------------------------------------------------------------------------------------------------------------------
Per Share....................           $                    $                    $                    $
------------------------------------------------------------------------------------------------------------------
Total(2).....................           $                    $                    $                    $
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------

(1) Before deducting expenses payable by the Company, estimated at $ .

(2) The Company has granted to the Underwriters a 30-day option to purchase up to an additional shares of Common Stock solely to cover over-allotments, if any. See "Underwriting." If such option is exercised in full, the total Price to Public, Underwriting Discounts and Commissions and Proceeds to Company will be $ , $ , and $ , respectively.

The Common Stock is offered by the Underwriters as stated herein, subject to receipt and acceptance by them and subject to their right to reject any order in whole or in part. It is expected that the delivery of such shares will be made through the offices of BancAmerica Robertson Stephens, San Francisco, California, on or about , 1998.

BANCAMERICA ROBERTSON STEPHENS

HAMBRECHT & QUIST

PIPER JAFFRAY INC.

THE DATE OF THIS PROSPECTUS IS , 1998



CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK, INCLUDING STABILIZING BIDS, SYNDICATE COVERING TRANSACTIONS AND THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

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No dealer, sales representative or other person has been authorized to give any information or to make any representations in connection with the Offering other than those contained in this Prospectus, and, if given or made, such information or representations must not be relied upon as having been authorized by the Company, by any Selling Stockholder or by any Underwriter. This Prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities other than the registered securities to which it relates, or an offer to, or the solicitation of, any person in any jurisdiction where such an offer or solicitation would be unlawful. Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances, create an implication that there has been no change in the affairs of the Company since the date hereof or that the information contained herein is correct as of any time subsequent to the date hereof.

UNTIL , 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT PARTICIPATING IN THE OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN

ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

TABLE OF CONTENTS

                                                              PAGE
                                                              ----
Summary.....................................................    4
Risk Factors................................................    6
Use of Proceeds.............................................   22
Dividend Policy.............................................   22
Capitalization..............................................   23
Dilution....................................................   24
Selected Consolidated Financial Data........................   26
Management's Discussion and Analysis of Financial Condition
  and Results of Operations.................................   27
Business....................................................   37
Management..................................................   52
Certain Transactions........................................   62
Principal and Selling Stockholders..........................   64
Description of Capital Stock................................   67
Shares Eligible for Future Sale.............................   70
Underwriting................................................   72
Legal Matters...............................................   73
Experts.....................................................   73
Additional Information......................................   74
Index to Consolidated Financial Statements..................  F-1

The Company intends to furnish to its stockholders annual reports containing audited consolidated financial statements examined by its independent auditors. Quarterly reports containing unaudited consolidated financial statements for the first three quarters of each fiscal year will be available upon request.

Concur, Concur Technologies, Xpense Management Solution, XMS, CompanyStore, Employee Desktop, and the Company's logo are trademarks of the Company. QuickXpense(R) is a registered trademark of the Company. Trade names, service marks or trademarks of other companies appearing in this Prospectus are the property of their respective holders. Information contained on the Company's Web site does not constitute a prospectus or part of this Prospectus.

The Company was incorporated in Washington in August 1993 under the name Moorea Software Corporation and commenced operations in 1994. The Company changed its name to Portable Software Corporation in 1994 and to Concur Technologies, Inc. in 1998, and is expected to be reincorporated in Delaware in September 1998. Unless the context otherwise requires, references in this Prospectus to "Concur," "Concur Technologies" and the "Company" refer to Concur Technologies, Inc., a Delaware corporation, its predecessors, 7Software, Inc., its wholly-owned California subsidiary, and XMS (UK) Ltd., its wholly-owned subsidiary located in the United Kingdom, collectively. The Company's principal executive offices are located at 6222 185th Avenue NE, Redmond, Washington 98052 and its telephone number is (425) 702-8808.

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SUMMARY

The following summary is qualified in its entirety by the more detailed information, including "Risk Factors" and the Consolidated Financial Statements and Notes thereto appearing elsewhere in this Prospectus. This Prospectus contains forward-looking statements that involve risks and uncertainties. The Company's actual results could differ materially from those discussed in the forward-looking statements. Factors that might cause a difference include, but are not limited to, those discussed in "Risk Factors" and elsewhere in this Prospectus.

THE COMPANY

Concur is a leading provider of Intranet-based employee-facing applications that extend automation to employees throughout the enterprise and to partners, vendors and service providers in the extended enterprise. The Company's Xpense Management Solution ("XMS") and CompanyStore products automate the preparation, approval, processing and data analysis of travel and entertainment ("T&E") expense reports and front-office procurement requisitions. Concur believes it is the leading provider of T&E expense management solutions and, since the introduction of XMS in 1996, the Company has licensed its products to over 125 enterprise customers with over 450,000 end users. Through its June 1998 acquisition of 7Software, Inc., the Company added the CompanyStore front-office procurement application to its product suite. By automating manual, paper-based processes, the Company's products reduce processing costs and enable customers to consolidate purchases with preferred vendors and negotiate vendor discounts.

In response to increasingly competitive conditions worldwide, businesses are seeking cost savings and productivity gains by using enterprise applications to automate business processes. While these applications have traditionally targeted discrete functional or department level business processes involving relatively few employees, businesses are now seeking similar applications for "employee-facing" business processes including T&E expense management, front-office procurement, human resources self-service, time and billing, and facilities management. The emergence of the Internet and corporate Intranets has made it possible to deploy applications that reach all employees in the enterprise and connect the enterprise to corporate partners, vendors and service providers. In addition, in contrast to traditional client-server applications, Intranet-based applications can be deployed rapidly throughout the enterprise and on a cost-effective basis.

Customers employing the Company's products can realize significant operating cost savings through reduced processing costs, consolidated purchases with preferred vendors and negotiated vendor discounts. Based on the results of the 1997 American Express T&E Management Process Study, businesses using best-in-class automation that process 1,000 to 5,000 T&E expense reports per month can achieve savings from $300,000 to $1.5 million per year in processing costs alone. The Company believes its customers can achieve these cost savings rapidly because the products are designed to minimize burdens on IT professionals and to maximize employees' ease of use. Because the Company's Intranet-based products are designed to deploy rapidly, scale enterprise-wide and integrate easily with an organization's existing IT infrastructure, a customer's IT personnel can deliver and support solutions quickly and cost-effectively. For example, one Concur customer recently deployed XMS to over 25,000 employees within 90 days after the customer began its rollout. Employees readily adopt the Company's solutions because they are easy to use, reduce time spent preparing expense reports and supply requisitions, and accelerate reimbursement and fulfillment process cycles. The Company believes that as a result of the substantial potential savings from processing cost reductions and vendor management, coupled with the emergence of Intranet technologies, strong demand exists for employee-facing applications.

Concur's objective is to be the leading provider of Intranet-based employee-facing applications. In order to meet this goal, the Company's strategy is to extend and leverage its leadership in T&E expense management and front-office procurement applications, expand and integrate its product suite, enhance the functionality of its products, increase its international presence, develop new relationships with strategic third-parties, and offer its solutions as an outsourced enterprise service provider.

The Company sells its products primarily through its direct sales organization and has developed a number of strategic referral relationships. In particular, American Express refers its corporate charge card customers that seek a T&E expense management solution to Concur. American Express also recently completed an equity investment in the Company. In addition to its Intranet-based product lines in T&E expense management and front-office procurement, the Company offers a client-server based T&E expense management solution for those clients who lack an Intranet infrastructure. Given the broad applicability of its products, Concur has licensed its applications to numerous customers in a wide range of industries. The Company's customers include American Airlines, Anheuser-Busch, Case Corporation, Computer Sciences Corporation, DuPont, Exxon, Gillette, Guardian Industries, Hewlett-Packard, J.C. Penney, Lehman Brothers, Levi Strauss, Monsanto, The New York Times, Northrop Grumman, Pharmacia & Upjohn, Seagate Technology, Solutia, Sprint, Texaco, Texas Instruments and Visio.

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THE OFFERING

Common Stock offered by the Company.........                shares
Common Stock offered by the Selling
Stockholders................................                shares
Common Stock to be outstanding after the
Offering(1).................................                shares
Use of Proceeds.............................    For general corporate purposes,
                                                including working capital. See
                                                "Use of Proceeds."
Proposed Nasdaq National Market Symbol......    CNQR

SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                                                                 NINE MONTHS ENDED
                                                          YEAR ENDED SEPTEMBER 30,                   JUNE 30,
                                                  -----------------------------------------   -----------------------
                                                     1994        1995      1996      1997        1997          1998
                                                  -----------   -------   -------   -------   -----------    --------
                                                  (UNAUDITED)                                 (UNAUDITED)
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
  Revenues......................................  $        --   $ 2,128   $ 1,959   $ 8,270     $ 5,205      $ 11,715
  Operating loss(2).............................         (602)   (2,895)   (4,958)   (5,505)     (3,695)      (12,781)
  Net loss......................................         (602)   (2,890)   (4,953)   (5,524)     (3,681)      (13,095)
  Pro forma basic and diluted net loss per
    share(3)....................................                                    $ (0.23)                 $  (0.48)
  Shares used to compute pro forma basic and
    diluted net loss per share(3)...............                                     24,408                    27,509

                                                                            JUNE 30, 1998
                                                              ------------------------------------------
                                                               ACTUAL     PRO FORMA(4)    AS ADJUSTED(5)
                                                              --------    ------------    --------------
                                                                                   (UNAUDITED)
CONSOLIDATED BALANCE SHEET DATA:
  Working capital...........................................  $  9,469      $ 9,469           $
  Total assets..............................................    23,319       23,319
  Long-term obligations, net of current portion.............     8,652        8,652            8,652
  Redeemable convertible preferred stock and warrants.......    25,113           --               --
  Total stockholders' equity (deficit)......................   (21,360)       3,753


(1) Based on shares outstanding as of August 15, 1998. Does not include: (i) 3,520,113 shares of Common Stock issuable upon the exercise of outstanding options granted under the Company's 1994 Stock Option Plan (the "1994 Plan") with a weighted average per share exercise price of $0.32; (ii) 951,645 shares of Common Stock available for future grant as of August 15, 1998 under the 1994 Plan; (iii) 275,764 shares of Common Stock issuable upon exercise of outstanding options granted under the 1997 Stock Option Plan (the "7Software Plan") of 7Software, Inc. ("7Software") and 34,045 shares of Common Stock issuable upon exercise of outstanding options granted by 7Software outside the 7Software Plan, in each case assumed by the Company in connection with the Company's June 1998 acquisition of 7Software, with a weighted average per share exercise price of $0.01; and (iv) 5,823,949 shares of Common Stock issuable upon the exercise of warrants to purchase shares of preferred stock. See "Management--Employee Benefit Plans" and Notes 3, 9 and 11 of Notes to Consolidated Financial Statements.

(2) In June 1998, the Company acquired 7Software, resulting in a charge for acquired in-process technology. See Note 3 of Notes to Consolidated Financial Statements. The Financial Statements of 7Software are included elsewhere herein.

(3) See Note 13 of Notes to Consolidated Financial Statements for an explanation of the determination of the number of shares used in computing pro forma net loss per share.

(4) Pro forma to give effect to (i) the conversion of all outstanding shares of preferred stock into 23,921,023 shares of Common Stock and (ii) the conversion of all outstanding warrants to purchase preferred stock into warrants to purchase 448,949 shares of Common Stock. Excludes 1,612,903 shares of preferred stock and a warrant held by an affiliate of American Express Company to purchase 5,375,000 shares of preferred stock (the "TRS Warrant") issued by the Company after June 30, 1998. See "Certain Transactions."

(5) Pro forma amounts as adjusted to reflect: (i) the sale of the shares of Common Stock offered by the Company hereby at an assumed initial public offering price per share of $ and the application of the net proceeds therefrom, after deducting the underwriting discount and estimated offering expenses; (ii) the issuance of 1,612,903 shares of redeemable convertible preferred stock in August 1998 for $4,999,999 and the conversion of all such shares of redeemable convertible preferred stock into 1,612,903 shares of Common Stock; (iii) the exercise of warrants to purchase 448,949 shares of Common Stock with an average exercise price of $1.99 per share; and (iv) the exercise of a warrant to purchase 562,500 shares of Common Stock (representing a portion of the TRS Warrant) at an assumed exercise price of $ per share. See "Capitalization," "Use of Proceeds" and "Certain Transactions."
Unless otherwise indicated or the context otherwise requires, all information in this Prospectus (i) reflects the conversion of all outstanding shares of preferred stock of the Company into shares of Common Stock upon the consummation of the Offering, (ii) assumes that the Underwriters' over-allotment option will not be exercised and (iii) gives effect to the Company's reincorporation in Delaware, which will occur prior to the completion of the Offering. The Company anticipates that it will effect a reverse split of its Common Stock of an undetermined magnitude prior to the Offering; the numbers included in this Prospectus do not reflect such reverse split of the Company's Common Stock.

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RISK FACTORS

This Prospectus contains forward-looking statements which involve risks and uncertainties. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth in the following risk factors and elsewhere in this Prospectus. In addition to the other information in this Prospectus, the following risk factors should be considered carefully in evaluating the Company and its business before purchasing the Common Stock offered by this Prospectus.

LIMITED OPERATING HISTORY; FUTURE OPERATING RESULTS UNCERTAIN; HISTORY OF LOSSES

An investment in the Company should be viewed in light of the risks and uncertainties inherent to a software company in the early stages of development, particularly in light of the evolving and highly competitive market in which the Company competes. Concur was incorporated in 1993 and has incurred net losses in each quarter since its incorporation. The Company shipped its first product in fiscal 1995, and since fiscal 1997 has derived substantially all of its revenues from licenses of XMS and related services. To compete effectively, the Company believes that it will be necessary to devote substantial resources to expanding its sales and marketing, professional services and research and development organizations and that it will make significant investments in these areas without assurance of any related income. The Company incurred net losses of $2.9 million, $5.0 million and $5.5 million for fiscal 1995, 1996 and 1997, respectively, and $13.1 million for the nine months ended June 30, 1998. As of June 30, 1998, the Company had an accumulated deficit of $27.1 million. The Company anticipates that it will incur net losses for the foreseeable future. In particular, the Company's professional services organization is newly established and has been unprofitable since it was organized. There can be no assurance that the professional services organization will ever become profitable. Although the Company's revenues have increased in recent years, there can be no assurance that any of the Company's business strategies will be successful or that the Company's revenues will increase in future periods, that they will grow at rates similar to those in the past, or that the Company will become profitable, if at all, on a quarterly or annual basis in the future or that any such profitability can be sustained.

As of June 30, 1998, the Company had deferred tax assets totaling approximately $7.3 million, which included the after-tax amount of approximately $15.7 million of net operating loss carryforwards and $262,000 of tax credit carryforwards and which expire at various dates through 2013. The Internal Revenue Code of 1986, as amended (the "Code"), contains provisions that may limit the use in any future period of net operating loss and credit carryforwards upon the occurrence of certain events, including a significant change in ownership interests. A valuation allowance has been recorded for the entire deferred tax asset as a result of uncertainties regarding the realization of the asset balance. See "--Potential Fluctuations in Quarterly Results; Seasonality," "Selected Consolidated Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

POTENTIAL FLUCTUATIONS IN QUARTERLY RESULTS; SEASONALITY

The Company's quarterly operating results have fluctuated significantly in the past, and will continue to fluctuate in the future, as a result of a number of factors, many of which are outside the Company's control. These factors include: demand for the Company's products and services; size and timing of specific sales; level of product and price competition; timing and market acceptance of new product introductions and product enhancements by the Company and its competitors; changes in pricing policies by the Company or its competitors; the Company's ability to hire, train and retain sales and consulting personnel to meet the demand, if any, for XMS and CompanyStore; the length of sales cycles; the Company's ability to establish and maintain relationships with third-party implementation services providers and strategic partners; delay of customer purchases caused by announcement of new hardware or enterprise resource planning ("ERP") platforms or otherwise; mix of products and services sold, including an anticipated shift to providing services as an enterprise service provider ("ESP"); mix of distribution channels through which products are sold; mix of international and domestic revenues; changes in the Company's sales force incentives; software defects and other product quality problems; personnel changes; changes in the Company's strategy, including the planned

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development of an ESP strategy; general domestic and international economic and political conditions; and budgeting cycles of the Company's customers. The Company has in the past experienced delays in the release dates of new software products or upgrades, and has discovered software defects in new products after their introduction. There can be no assurance that new products or upgrades will be released according to schedule, or that when released they will not contain defects. Either of these situations could result in adverse publicity, loss of revenues, delay in market acceptance or claims by customers brought against the Company, any of which could have a material adverse effect on the Company's business, results of operations and financial condition. In addition, the timing of individual sales has been difficult for the Company to predict, and large individual sales have, in some cases, occurred in quarters subsequent to those anticipated by the Company. There can be no assurance that the loss or deferral of one or more significant sales will not have a material adverse effect on the Company's quarterly operating results.

The Company's software products are typically shipped when orders are received, and consequently, license backlog at the beginning of any quarter has in the past represented only a small portion of that quarter's expected license revenues. As a result, license revenues in any quarter are difficult to forecast because they are substantially dependent on orders booked and shipped in that quarter. Moreover, the Company typically recognizes a substantial amount of its revenues in the last month of the quarter, frequently in the last week or even days of the quarter. Since the Company's expenses are generally relatively fixed in the near term, any shortfall from anticipated revenues or any delay in the recognition of revenues could result in significant variations in operating results from quarter to quarter. Quarterly license revenues are also difficult to forecast because the Company's sales cycle, from initial evaluation to delivery of software, are generally lengthy and vary substantially from customer to customer. If revenues fall below the Company's expectations in a particular quarter, the Company's business, results of operations and financial condition would be materially adversely affected. See "--Lengthy Sales Cycle."

The Company has experienced, and expects to continue to experience, a high degree of seasonality, with a disproportionately greater amount of the Company's license revenues for any fiscal year being recognized in its fourth fiscal quarter. For example, in fiscal 1997, 37% of total revenues, 36% of license revenues and 42% of service revenues were recognized in the fourth fiscal quarter. The Company believes that such seasonality is primarily the result of the efforts of the Company's direct sales force to meet or exceed fiscal year-end sales quotas. In addition, the Company's license revenues in its first fiscal quarter have historically been lower than those of the immediately preceding fourth quarter. For example, license revenues in the first quarter of fiscal 1998 decreased 10% from the fourth quarter of fiscal 1997. In future periods, the Company expects these seasonal trends may cause first quarter revenues to be significantly lower than the level achieved in the preceding fourth quarter.

Concur's products involve relatively large expenditures by enterprise customers, and XMS tends to be more expensive than competing applications. In addition, the purchase of the Company's products is typically a discretionary matter for such customers and from time to time customers' priorities may shift to other investments, such as correcting Year 2000 problems associated with their other systems. Accordingly, demand for the Company's products may be particularly volatile and unpredictable.

Based on the foregoing and the other risk factors identified herein, the Company believes that future revenues, expenses and operating results are likely to vary significantly from quarter to quarter. In particular, as the Company expands its sales force, professional services and research and development staff, operating expenses will continue to rise. As a result, quarter-to-quarter comparisons of operating results are not necessarily meaningful or indicative of future performance. Further, the Company believes it is likely that in some future quarter the Company's operating results will not meet or exceed the expectations of public market analysts or investors. In such event, or in the event that adverse conditions prevail, or are perceived to prevail, with respect to the Company's business or generally, the market price of the Company's Common Stock would be materially adversely affected. See "Selected Consolidated Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

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EMERGING MARKET FOR EMPLOYEE-FACING APPLICATIONS; MARKET ACCEPTANCE

The market for employee-facing applications is newly emerging. Enterprises have historically performed the processes addressed by employee-facing applications themselves, whether through manual processes or internal development of applications. Accordingly, the Company's future success will depend upon, among other factors, the extent to which companies adopt third-party employee-facing applications, particularly T&E expense management and front-office procurement solutions, and the extent to which companies purchase products or utilize the services of third-party providers, such as the Company, for such solutions. In addition, companies that have already invested substantial resources in other methods of automating enterprise processes may be reluctant to adopt a new strategy that may limit or compete with their existing investments. Even if companies implement employee-facing applications, they may still choose to design, develop or manage all or part of their process automation internally. There can be no assurance that the use of employee- facing applications will increase significantly in the future or that the Company's products or services will achieve commercial success. Any failure of employee-facing applications, and in particular T&E expense management and front-office procurement applications, to gain market acceptance would have a material adverse effect on the Company's business, results of operations and financial condition. See "Business--Industry Background."

PRODUCT CONCENTRATION

To date, the Company has generated substantially all of its revenues from licenses and services related to XMS. Although the Company is now also selling CompanyStore, the Company's recently acquired front-office procurement application, the Company believes that licenses of XMS, together with related services, will continue to account for a substantial majority of its revenues for the foreseeable future. The Company's future financial performance is dependent, in significant part, upon the successful development, introduction and customer acceptance of new and enhanced versions of XMS, CompanyStore and any new products or services that the Company may develop or acquire. There can be no assurance that the Company will be successful in upgrading and continuing to market XMS or CompanyStore, or that any new products or services the Company may develop or acquire will achieve market acceptance. Consequently, factors affecting the pricing of and demand for XMS or CompanyStore, such as competition, technological changes, failure of the market for T&E expense management or front-office procurement software to develop as the Company anticipates, or lack of customer acceptance of XMS or CompanyStore, could have a material adverse effect on the Company's business, results of operations and financial condition. See "Management's Discussion and Analysis of Financial Condition and Results of Operations."

RISKS ASSOCIATED WITH EXPANSION INTO NEW MARKETS

The Company recently added the CompanyStore front-office procurement application to its product line. This initial version of CompanyStore has been licensed to only two customers. The Company's future revenue growth is substantially dependent upon current development efforts to integrate this recently acquired technology with the Company's technology platform, market acceptance of CompanyStore, and the ability of the Company to license CompanyStore to new customers and its existing base of XMS customers. Potential and existing customers may not purchase CompanyStore for a number of reasons, including: an absence of required or desired functionality; the cost and length of implementation; the failure of CompanyStore to be competitive with other front-office procurement applications; possible software defects; a customer's lack of the necessary hardware, software or Intranet infrastructure; and any failure by the Company or its products to meet customer expectations for other reasons. In addition, the Company plans to target its existing and potential XMS customers as potential customers for the enhanced version of CompanyStore that is currently under development, but there can be no assurance that such customers will purchase CompanyStore. Further, the Company must overcome certain significant obstacles in its expansion into the front-office procurement automation market, including: new competitors that have more experience and better name recognition than the Company; the limited experience of the Company's sales and consulting personnel in the front-office procurement automation market; and the Company's limited existing reference accounts in the front-office procurement automation market. If, for any reason, the Company is unable to complete the development

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efforts necessary to integrate the recently acquired CompanyStore technology with its technology platform and to market CompanyStore successfully, such failure would have a material adverse effect on the Company's business, results of operations and financial condition. Moreover, if the Company fails to meet the expectations of market analysts or investors with regard to sales of CompanyStore to new and existing customers, the market price of its Common Stock would be materially adversely affected. See "--Risks Associated with Internet Strategy and Enterprise Service Provider Model."

RISKS ASSOCIATED WITH NEW VERSIONS AND NEW PRODUCTS; RAPID TECHNOLOGICAL CHANGE

The market for the Company's products is characterized by rapid technological change, evolving industry standards in computer hardware and software technology, changes in customer requirements and frequent new product introductions and enhancements. The introduction of products embodying new technologies and the emergence of new industry standards can render existing products obsolete and unmarketable, and in the markets in which the Company competes, it is often necessary for its products to be compatible with new technologies as soon as such technologies are available. As a result, the Company's future success will depend, in significant part, upon its ability to continue to enhance existing products and to develop and introduce in a timely manner new products that keep pace with technological developments, satisfy customer requirements and achieve market acceptance. There can be no assurance that the Company will successfully identify new product opportunities, develop and bring to market new products or adopt or incorporate new technology in a timely and cost-effective manner. Nor can there be any assurance that products, capabilities or technologies developed by others will not render the Company's products or technologies obsolete or noncompetitive or shorten the life cycles of the Company's products.

The Company expects to develop or acquire new employee-facing applications. Its product development efforts also include plans to add functionality to XMS such as localized versions for foreign countries and integration of XMS with on-line travel booking applications, and to enhance CompanyStore by adding features, support for additional databases and ERP platforms, and enhanced catalog support. The Company has in the past experienced delays in the planned release dates of new software products or upgrades, and has discovered software defects in new products after their introduction. There can be no assurance that new products or upgrades will be released according to schedule, or that when released they will not contain defects. Either of these situations could result in adverse publicity, loss of revenues, delay in market acceptance or claims by customers brought against the Company, all of which could have a material adverse effect on the Company's business, results of operations and financial condition. Although the Company has addressed the need to develop new products and enhancements primarily through its internal development efforts, the Company has also addressed this need through the licensing of third-party technology and the acquisition of 7Software. If the Company is unable to develop or acquire new software products or enhancements to existing products on a timely and cost-effective basis, or if such new products or enhancements do not achieve market acceptance, the Company's business, results of operations and financial condition will be materially adversely affected. See "--Limited Protection of Proprietary Technology; Risks of Infringement," "--Competition" and "--Risks Associated with Acquisitions."

RISKS ASSOCIATED WITH INTERNET STRATEGY AND ENTERPRISE SERVICE PROVIDER MODEL

In addition to licensing its software, the Company plans to offer its solutions as an Internet-based ESP on a per-transaction pricing basis to companies seeking to outsource their employee-facing business applications. This business model is unproven and represents a significant departure from the strategies traditionally employed by enterprise software vendors and historically employed by the Company. The Company has no experience selling products or services as an ESP and any such ESP business may significantly divert Company revenues and management time and attention from its existing business. The Company may at any time discontinue its plans to provide products or services as an enterprise service provider. In connection with its planned ESP business model, the Company will engage, for an indeterminate period, third-party service providers to perform many of the services related to such business as independent contractors, and will be responsible for monitoring the performance of such service providers. The Company has not outsourced any of its services or other important business functions in the past, and there can be no assurance that such

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independent contractors will perform those services adequately. In the event that any service provider provides inadequate support or service to the Company's customers, the Company's reputation could be seriously damaged or the Company could suffer a material adverse effect on the Company's business, results of operations and financial condition. There can be no assurance that the Company's ESP strategy will be effective, or even if it is implemented effectively, that it will not have a materially adverse effect on the Company's business, results of operations and financial condition. If customers determine that the Company's products are not scalable, do not provide adequate security for the dissemination of information over the Internet, or are otherwise inadequate for Internet-based use, or if for any other reason customers fail to accept the Company's products for use on the Internet or on a per-transaction basis, the Company's business, results of operations and financial condition will be materially adversely affected. In particular, as an outsourced ESP provider, the Company will regularly receive large amounts of confidential information (including credit card, travel booking, and other financial and accounting data) and in light of the lack of the Company's experience administering this information under its planned ESP model, there can be no assurance that this information will not be subject to computer break-ins and other disruptions that jeopardize the security of information for which the Company is responsible. Even if the Company's strategy of offering its products to customers over the Internet is successful, certain customers or potential customers that would otherwise acquire software and services through the Company's licensing arrangements may elect to utilize the Company's applications through the Internet-based ESP. Any such shift in potential license revenues to the ESP, which is an unproven and potentially less profitable or unprofitable business model, could have a material adverse effect on the Company's business, results of operations and financial condition.

In addition, the success of the Company's products will depend, in large part, on the continued broad acceptance of the Internet itself as a viable commercial marketplace. It is difficult to predict with any assurance whether the Internet will continue to be considered a viable commercial marketplace or whether the demand for Internet-related products and services will increase or decrease in the future. The Internet may cease to be considered a viable commercial marketplace for several reasons, including potentially inadequate development of necessary infrastructure as use of the Internet grows, such as a reliable network backbone with the necessary speed, data capability and security, or failure of enabling technologies to be developed in a timely manner. There can be no assurance that the Internet infrastructure will continue to be able to support the demands placed on it by continued growth in use and bandwidth requirements of users. In addition, the Internet could lose its viability due to delays in the development or adoption of new standards and protocols to handle increased levels of Internet activity or due to increased governmental regulation. Moreover, critical issues concerning the commercial use of the Internet (including security, reliability, data corruption, cost, ease of use, accessibility and quality of service) remain unresolved and may negatively affect commerce and communication on the Internet. Changes in, or insufficient availability of, telecommunications services to support the Internet could also result in slower response times and could adversely affect the use of the Internet generally. If critical issues concerning the commercial use of the Internet are not favorably resolved, if the necessary infrastructure and complementary products are not developed on a timely basis, or if use of the Internet experiences a significant decline, the Company's business, results of operations and financial condition would be materially and adversely affected. The increased commercial use of the Internet could require substantial modification and customization of the Company's products and services and the introduction of new products and services, and there can be no assurance that the Company would be able to modify its products as the Internet might require. See "--Risks of Software Defects or Security Breaches; Possible Product Liability Issues" and "Business--Products and Technology."

LIMITED EXPERIENCE WITH LARGE-SCALE DEPLOYMENT

Although the Company believes that XMS and CompanyStore can accommodate thousands of users, to date the Company has had only a limited number of customers that have deployed XMS in such environments, and no customer that has deployed CompanyStore on such a large scale. If the Company's customers cannot successfully implement large-scale deployments or determine for any other reason that the Company's products cannot accommodate large-scale deployments, or that such products are not appropriate for such widespread use, the Company's business, results of operations and financial condition would be materially adversely affected.

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MANAGEMENT OF GROWTH

The Company is currently in the midst of a period of significant expansion. The Company's historical growth has placed, and any further growth is likely to continue to place, a significant strain on the Company's managerial, operational, financial and other resources. The Company has grown from 43 employees as of September 30, 1995 to 179 employees as of June 30, 1998, and the Company recently expanded its operations through the acquisition of 7Software. The Company's future success will depend, in part, upon the ability of its senior management to manage growth effectively. This will require the Company to implement additional management information systems, to develop further its operating, administrative, financial and accounting systems and controls, to hire additional personnel, to develop additional levels of management within the Company, to locate additional office space in the United States and internationally, and to maintain close coordination among its development, accounting, finance, marketing, sales, customer support and professional services organizations. In particular, the Company expects to need additional office space as soon as the first half of calendar 1999. The real estate market in the Seattle area, where the Company's headquarters is located, is extremely competitive, and the Company may find it difficult to locate suitable space on terms acceptable to the Company. In addition, each customer for the Company's products generally purchases consulting and implementation services in connection with licenses of those products. The Company believes that it is currently the only provider of such services for its products. It is difficult and expensive to recruit, train and retain qualified personnel to perform such services, and the Company may from time to time have inadequate levels of staffing to perform required services. As a result, the Company's growth could be limited due to its lack of capacity to provide such services, or the Company could experience deterioration in service levels or decreased customer satisfaction, any of which would have a material adverse effect on the Company's business, results of operations and financial condition. The failure of the Company to manage its historic and future growth successfully would have a material adverse effect on the Company's business, results of operations and financial condition. See "--Risks Associated with Acquisitions," "--Need to Attract and Retain Qualified Personnel" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

COMPETITION

The market for the Company's products is intensely competitive, subject to rapid change and significantly affected by new product introductions and other market activities of industry participants. The Company's primary source of direct competition comes from independent software vendors in both the T&E expense management and front-office procurement applications. The Company also faces indirect competition from potential customers' internal development efforts and from potential customers' reluctance to move away from existing paper-based systems.

The Company's major competitors in the T&E expense management field include Captura Software, Inc., Extensity, Inc., International Business Machines Corporation and Necho Systems Corporation. In addition, several major ERP vendors such as SAP AG ("SAP"), Oracle Corporation ("Oracle"), and PeopleSoft, Inc. ("PeopleSoft") have already developed T&E expense management products and have begun to sell these products along with their application suites. The Company's major competitors in the front-office procurement field include Ariba Technologies, Inc., Commerce One, Inc., ELEKOM Corporation, Harbinger Corporation, Netscape Communications Corporation and TRADE'ex Electronic Commerce Systems, Inc. In addition to its current competitors, the Company expects to face competition from new entrants including those ERP providers that do not already market a T&E expense management product. Most of the major ERP providers have a significant installed customer base and have the opportunity to offer additional products to those customers as additional components of their respective application suites.

The Company believes that the principal competitive factors considered in selecting T&E expense management and front-office procurement applications are functionality, interoperability with existing IT infrastructure, price and an installed referenceable base of customers. Many of the Company's competitors in both the T&E expense management and front-office procurement markets have longer operating histories, significantly greater financial, technical, marketing and other resources, significantly greater name recognition and a larger installed base of customers than the Company. Moreover, a number of the Company's

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competitors, particularly major ERP vendors, have well-established relationships with current and potential customers of the Company as well as with systems integrators and other vendors and service providers. In addition, these competitors may be able to respond more quickly to new or emerging technologies and changes in customer requirements, or to devote greater resources to the development, promotion and sale of their products, than can the Company.

It is also possible that new competitors or alliances among competitors or third parties may emerge and rapidly acquire significant market share. The Company expects that competition in its markets will increase as a result of consolidation and the formation of alliances in the industry. Increased competition may result in price reductions, reduced gross margins and loss of market share, any of which could materially adversely affect the Company's business, results of operations and financial condition. There can be no assurance that the Company will be able to compete successfully against current or future competitors or that competitive pressures faced by the Company will not materially and adversely affect its business, results of operations and financial condition.

NEED TO ESTABLISH AND MAINTAIN STRATEGIC RELATIONSHIPS; DEPENDENCE ON KEY

BUSINESS RELATIONSHIPS

An important business strategy of the Company is to enter into strategic relationships to offer products and services to a larger customer base than can be reached through direct sales, telesales and internal marketing efforts. The Company has established a significant strategic marketing relationship with American Express Company ("American Express") under which American Express refers to the Company its corporate charge card customers that seek a T&E expense management solution and will market a co-branded ESP version of XMS containing special features. Since entering into this relationship, a significant number of the Company's new sales have come through referrals from American Express. In August 1998, American Express Travel Related Services Company, Inc. ("TRS"), a subsidiary of American Express, purchased 1,612,903 shares of the Company's Series E Preferred Stock for $4,999,999, and a warrant to purchase up to 6,000,000 shares of Series E Preferred Stock at prices ranging from the price to public in the Offering less 7% to $34.00, and expiring in four tranches through January 2002. The Company has also established strategic relationships with a number of other partners, including Citibank, N.A., Citicorp Diners Club Inc. and Geac Computer Corporation Ltd. There can be no assurance that the Company will be able to enter into additional strategic relationships or to maintain its existing strategic relationships on commercially reasonable terms, if at all. If the Company were unable to maintain its existing strategic relationships or enter into additional strategic relationships, it would be required to devote substantially more resources to the distribution, sale and marketing of its products and services than it plans to do and would not receive the customer introductions and co-marketing benefits from strategic relationships that it expects. As a result of the Company's emphasis on strategic relationships, the Company's success will depend both on the ultimate success of the other parties to such relationships, and on the ability of these parties to market the Company's products and services successfully. Failure of one or more of the entities with which the Company has a strategic relationship to promote the Company's products or services could have a material adverse effect on the Company's business, results of operations and financial condition. See "Certain Transactions."

The Company's existing strategic relationships do not, and any future strategic relationships may not, afford the Company any exclusive marketing or distribution rights. Many of the Company's strategic partners have multiple strategic relationships, and there can be no assurance that the Company's strategic partners regard their relationships with the Company as significant for their own businesses or that they will not reduce their commitment to the Company at any time in the future. In addition, there can be no assurance that such parties will not pursue other partnerships or relationships, or attempt to develop or acquire products or services that compete with the Company's products or services either on their own or in collaboration with others, including the Company's competitors. Further, the Company's existing strategic relationships may interfere with its ability to enter into other desirable strategic relationships. Any future inability of the Company to maintain its strategic relationships or to enter into additional strategic relationships will have a material adverse effect on the Company's business, results of operations and financial condition. See "--Competition," "Business--Strategy," "--Sales" and "--Marketing."

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RISKS ASSOCIATED WITH ACQUISITIONS

In June 1998, the Company acquired 7Software, a privately-held front-office procurement software development company and the developer of CompanyStore. The Company is currently in the process of integrating the 7Software business with the Company's business, including product development efforts focused on integrating CompanyStore with XMS in a suite of employee-facing applications. Such integration is subject to risks commonly encountered in making such acquisitions, including, among others, loss of key personnel of the acquired company, difficulties associated with assimilating the personnel and operations of the acquired company, potential disruption of the Company's ongoing business, and the ability of the Company's sales force, consultants and development staff to adapt to the new product line. There can be no assurance that the Company will be successful in overcoming these risks or any other problems encountered in connection with its acquisition of 7Software.

While the Company has no current agreements or negotiations underway with respect to any acquisition, in order to remain competitive in the future, the Company may find it necessary to acquire additional businesses, products or technologies that could complement or expand the Company's business. In the event that the Company identifies an appropriate acquisition candidate, there can be no assurance that the Company would be able to negotiate the terms of any such acquisition successfully, finance such acquisition, or integrate such acquired business, products or technologies into the Company's existing business and operations. The Company has completed only one acquisition to date, the acquisition of 7Software. There can be no assurance that the Company will be able to successfully manage or absorb any other acquisitions, particularly any future acquisitions of a larger or publicly held company, or multiple simultaneous acquisitions. Further, the negotiation of potential acquisitions, as well as the integration of an acquired business, would cause significant diversions of management time and resources. There can be no assurance that a given acquisition, whether or not consummated, would not materially adversely affect the Company's business, results of operations and financial condition. If the Company were to proceed with one or more significant acquisitions in which the consideration included cash, the Company could be required to use a substantial portion of the Company's available cash (including proceeds of the Offering) to consummate any such acquisition. If the Company consummates one or more significant acquisitions in which the consideration consists of stock or other securities, stockholders of the Company could suffer significant dilution of their interests in the Company. See "--Management of Growth," "Broad Discretion over Use of Proceeds" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

LENGTHY SALES CYCLE

Sales of the Company's software products generally require the Company to engage in a lengthy sales effort. Because of the costs involved, customers for enterprise products such as the Company's typically commit significant resources to an evaluation of available software applications and require the Company to expend substantial time, effort and money educating them about the value of the Company's products and services. The Company's sales cycle typically ranges between six and nine months. Sales of the Company's products require an extensive sales effort throughout a customer's organization because decisions to license and deploy such software generally involve the evaluation of the software by a significant number of customer personnel in various functional areas, each often having specific and conflicting requirements. A variety of factors, including many over which the Company has little or no control, such as customers' investments in Year 2000 systems compliance, may cause potential customers to favor competing products or to delay or forego a purchase. As a result of the length of its sales cycle, the Company has a limited ability to forecast the timing and amount of specific sales. The delay or failure to complete one or more sales in a particular quarter or fiscal year could have a material adverse effect on the Company's business, results of operations and financial condition and could cause the Company's operating results to vary significantly from quarter to quarter. See "--Potential Fluctuations in Quarterly Results; Seasonality" and "--Year 2000 Compliance."

DEPENDENCE ON KEY EMPLOYEES

The Company's success depends on the performance of the Company's senior management, particularly S. Steven Singh, who is not bound by an employment agreement. The loss of the services of Mr. Singh would

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have a material adverse effect on the Company's business, results of operations and financial condition. If one or more members of the Company's senior management or any of the Company's key employees were to resign from the Company, particularly to join a competitor or to form a competitor of the Company, the loss of such personnel and any resulting loss of existing or potential customers to any such competitor would have a material adverse effect on the Company's business, results of operations and financial condition. In addition, there can be no assurance that, in such an event, the Company would be able to recruit personnel to replace such senior management on terms that are acceptable to the Company. In the event of the loss of any key personnel, there can be no assurance that the Company would be able to prevent the unauthorized disclosure or use of its technical knowledge, practices, procedures or customer lists by a former employee or that such disclosure or use would not have a material adverse effect on the Company's business, results of operations and financial condition. See "Business--Employees" and "Management."

NEED TO ATTRACT AND RETAIN QUALIFIED PERSONNEL

The Company's success depends to a significant degree on its ability to attract and retain qualified, experienced employees. There is currently, and the Company expects there will continue to be, substantial competition for experienced engineering, sales and consulting personnel, particularly in the market segments in which the Company competes. Many of the companies with which the Company competes for experienced personnel have greater financial and other resources than the Company. In particular, the Company competes for product development personnel with Microsoft Corporation, which is located in the same geographic area as the Company's headquarters and which hires significant numbers of software engineers each year. The Company also competes for personnel with major ERP and other independent software vendors which hire substantial numbers of sales and consulting personnel, and with consulting and professional services companies (such as Andersen Consulting and other systems integration and consulting divisions of major accounting firms), which recruit a significant portion of the pool of available and qualified consulting personnel. The Company may in the future experience difficulty in recruiting and retaining sufficient numbers of qualified personnel to meet its needs, and the costs associated with such hirings, such as bonuses and recruiting expenses, may have a material adverse effect on the Company's business, results of operations and financial condition. See "Business--Employees."

DEPENDENCE ON DIRECT SALES MODEL

The Company has sold, and intends to continue to sell, its products primarily through its direct sales force. The Company's financial success will depend in large part on the ability of the Company's direct sales force to increase sales to levels necessary to attain and sustain profitability. As a consequence of this strategy, the Company's ability to achieve significant revenue growth in the future will depend in large part on its success in recruiting, training and retaining additional direct sales personnel and on the continued success of the direct sales force. The Company believes that there is a shortage of, and significant competition for, direct sales personnel with the advanced sales skills and technical knowledge necessary to sell the Company's products. The Company's inability to hire competent sales personnel, or its failure to retain them, would have a material adverse effect on the Company's business, results of operations and financial condition. See "--Need to Attract and Retain Qualified Personnel" and "--Dependence on Key Employees."

In addition, by relying primarily on a direct sales model, the Company may miss sales opportunities that might be available through other sales distribution channels, such as domestic and international resellers and value-added resellers. In the future, the Company intends to develop indirect distribution channels through third-party distribution arrangements, but there can be no assurance that the Company will be successful in establishing such arrangements, or that any such expansion of the Company's indirect distribution channels will result in increased revenues. The failure to develop such indirect channels may place the Company at a significant competitive disadvantage. See "--Competition" and "Business--Sales."

DEPENDENCE ON SERVICE REVENUES

The Company licenses software and provides related consulting, maintenance and training services. Total license and service revenues have increased from year to year, and service revenues have increased each year

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as a percentage of total revenues. Service revenues represented 1.1%, 12.4% and 23.3% of total revenues for fiscal 1995, 1996 and 1997, respectively, and 21.5% and 31.4% for the nine months ended June 30, 1997 and 1998, respectively. Maintenance constitutes a significant proportion of service revenues. The Company anticipates that service revenues will continue to represent a significant percentage of total revenues. To a large extent, the level of service revenues is dependent upon the ongoing renewals of maintenance contracts by the Company's growing installed customer base, and there can be no assurance that such maintenance contracts will be renewed. In addition, if third-party organizations such as systems integrators become proficient in installing or servicing the Company's products, consulting revenues as a percentage of total revenues could decline. If service revenues are lower than anticipated, the Company's business, results of operations and financial condition could be materially adversely affected. The Company's ability to increase its service revenues will depend in large part on its ability to increase the scale of its services organization, including its ability to successfully recruit and train a sufficient number of qualified services personnel. There can be no assurance that the Company will be able to successfully expand its professional services organization in this way. See "--Management of Growth," "--Need to Attract and Retain Qualified Personnel," "--Dependence on Key Employees" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

INTERNATIONAL OPERATIONS

Revenues from XMS licenses and services to customers outside the United States, primarily in the United Kingdom, Canada and Europe, were insignificant prior to fiscal 1997, and represented approximately $1.3 million and $455,000 in fiscal 1997 and for the nine months ended June 30, 1998, respectively. As a key component of its business strategy, the Company intends to expand its sales and support operations internationally. The Company operates sales offices in Toronto and London. In order to increase international sales, the Company must establish additional international sales offices, expand the management, sales and support organizations, and enter into relationships with additional international remarketers where appropriate. The Company is in the early stages of developing its indirect distribution channels in certain markets outside the United States. There can be no assurance that the Company will be able to attract remarketers that will be able to market the Company's products effectively or will be qualified to provide timely and cost-effective customer support and service.

The Company must also customize its products for local markets. For example, the Company's ability to expand into the European market will depend on the Company's ability to develop a T&E expense management solution that incorporates the tax laws and accounting practices followed in Germany and other European countries, and to develop employee-facing applications that support the Euro, the new currency expected to be introduced for certain members of the European Community in January 1999. Further, the differing employment policies of countries outside the United States potentially reduce the Company's flexibility in managing staffing levels and, in turn, managing personnel-related expenses. To the extent that the Company is unable to address the risks associated with these international sales in a timely and cost-effective manner, the Company's sales growth internationally, if any, will be limited, operating margins could be reduced by increases in personnel-related expenses without corresponding increases in revenues, and the Company's business, results of operations and financial condition could be materially adversely affected. Even if the Company is able to expand its international operations successfully, there can be no assurance that the Company will be able to maintain or increase international market demand for its products. See "Business--Sales."

The Company's international operations are generally subject to a number of risks, including costs of customizing products for foreign countries, protectionist laws and business practices favoring local competition, dependence on local vendors, compliance with multiple, conflicting and changing governmental laws and regulations, longer sales cycles, greater difficulty or delay in accounts receivable collection, import and export restrictions and tariffs, difficulties in staffing and managing foreign operations, foreign currency exchange rate fluctuations, multiple and conflicting tax laws and regulations and political and economic instability. While the Company invoices its customers in local currency, to date a significant majority of the Company's revenues have been denominated in U.S. dollars. However, the Company believes that in the future, an increasing

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portion of the Company's revenues will be denominated in foreign currencies. In particular, the Company expects that following the introduction of the Euro in 1999, an increasing portion of the Company's international sales may be Euro-denominated. The Euro is an untested currency and may be subject to economic risks that are not currently contemplated. There can be no assurance that fluctuations in the value of the Euro or other foreign currencies will not have a material adverse effect on the Company's business, results of operations and financial condition. The Company currently does not engage in foreign exchange hedging activities and international revenues are currently subject to the risks of foreign currency fluctuations. In addition, the Company expects that some of its products will not support Euro-denominated transactions until at least the second half of 1999, which could materially adversely affect demand for such products and, as a result, the Company's business, results of operations and financial condition. See "--Potential Fluctuations in Quarterly Results; Seasonality" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

LIMITED INTEROPERABILITY

The Company's products are designed to operate on a variety of hardware and software platforms employed by its customers. The Company must continually modify and enhance its products to keep pace with changes in hardware and software platforms and database technology. As a result, uncertainties related to the timing and nature of new product announcements, introductions or modifications by vendors of operating systems (particularly Microsoft), by vendors of back-office applications (particularly SAP, Oracle and PeopleSoft) and by vendors of browsers and other Internet-related applications (particularly Netscape and Microsoft) could materially adversely affect the Company's business, results of operations and financial condition. In addition, the Company's products are not currently based upon the Java programming language ("Java"), an increasingly widely-used language for developing Internet applications. The Company has made a strategic decision not to develop a fully Java-based product at this time. There can be no assurance that future versions of the Company's products will be developed in Java. Accordingly, certain features available to products written in Java may not be available in the Company's products. The failure of the Company's products to operate effectively across the various existing and evolving versions of hardware and software platforms, programming languages, database environments, and ERP and accounting systems employed by customers would have a material adverse effect on the Company's business, results of operations and financial condition.

RELIANCE ON THIRD-PARTY SOFTWARE

The Company relies upon the licensing of certain software from third parties, including security technologies from RSA Data Security, Inc. (a subsidiary of Security Dynamics), ODBC drivers from Intersolv, Inc., and Internet translation applications from Chili!Soft, Inc. There can be no assurance that the Company's third-party technology licenses will continue to be available to the Company on commercially reasonable terms, if at all. The loss or inability to maintain any of these technology licenses could result in delays in the sale of the Company's products and services until equivalent technology, if available, is identified, licensed and integrated, which could have a material adverse effect on the Company's business, results of operations and financial condition.

RISKS OF SOFTWARE DEFECTS OR SECURITY BREACHES; POSSIBLE PRODUCT LIABILITY ISSUES

Products as complex as those offered by the Company frequently contain defects or failures that may be detected at any point in the product's life. There can be no assurance that defects or errors will not occur in existing or new products, despite testing by the Company and potential customers. Further, the Company often renders implementation, consulting and other technical services in connection with licensing of the Company's products. The performance of these services typically involves working with sophisticated software, computing and networking systems, and the Company could fail to meet project milestones in a timely manner or meet customer expectations for services as a result of any such defects. Although the Company's products contain security features, the Company's software products may be vulnerable to break-ins and similar disruptive problems. Such computer break-ins and other disruptions may jeopardize the security of information stored in and transmitted through the computer systems of the Company's customers. Break-ins often

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involve hackers bypassing fire walls and misappropriating confidential information. Problems caused by failure to meet project milestones for services, product defects or security breaches could result in loss of or delay in revenues, loss of market share, failure to achieve market acceptance, diversion of development resources, harm to the Company's reputation, increased insurance costs or increased service and warranty costs. Addressing these problems may require significant expenditures of capital and resources by the Company, which would have a material adverse effect on the Company's business, results of operations and financial condition.

Because customers rely on the Company's products for certain business-critical processes, any significant defects or errors in the Company's products or services, or in the products of third parties that are embedded in or bundled with the Company's products, might discourage such third parties or other customers from utilizing the Company's products and services or result in tort or warranty claims against the Company, which could have a material adverse effect on the Company's business, results of operations and financial condition. Although the Company's license agreements with its customers typically contain provisions designed to limit the Company's exposure to potential liability for damages arising out of use of or defects in the Company's products, it is possible that such limitation of liability provisions may not be effective as a result of existing or future federal, state or local laws or ordinances or unfavorable judicial decisions. Although the Company has not experienced any such product liability claims to date, there can be no assurance that the Company will not be subject to such claims in the future. Further, although the Company maintains errors and omissions insurance, there can be no assurance that such insurance coverage will adequately cover the Company for such claims or that such other measures will be effective in limiting the Company's liability. A successful product liability claim brought against the Company could have a material adverse effect on the Company's business, results of operations and financial condition. Moreover, defending such a suit, regardless of its merits, could entail substantial expense and require the time and attention of key management personnel, either of which could have a material adverse effect on the Company's business, results of operations and financial condition.

LIMITED PROTECTION OF PROPRIETARY TECHNOLOGY; RISKS OF INFRINGEMENT

The Company relies primarily on a combination of copyright and trademark laws, trade secrets, confidentiality procedures and contractual provisions to protect its proprietary technology. For example, the Company licenses rather than sells its software to customers and requires licensees to enter into license agreements that impose certain restrictions on licensees' ability to utilize the software. Although the Company has taken steps to avoid disclosure of its trade secrets, including adopting a corporate policy on confidentiality that applies to all employees, requiring non-employees with access to proprietary information to enter into written confidentiality agreements with the Company, and contractually restricting customer access to the Company's source code, the Company believes that this policy has not been strictly followed. The Company presently has no patents or patent applications pending. Despite the Company's efforts to protect its proprietary rights, unauthorized parties may attempt to copy aspects of the Company's products or to obtain and use information that the Company regards as proprietary. Policing unauthorized use of the Company's products is difficult, particularly because the global nature of the Internet makes it difficult to control the ultimate destination and security of software or other data transmitted and, while the Company is unable to determine the extent to which unauthorized use of its software products exists, such unauthorized use can be expected to be a persistent problem. In addition, the laws of some foreign countries do not protect the Company's proprietary rights to as great an extent as do the laws of the United States, and the Company expects that it will become more difficult to monitor use of the Company's products as the Company increases its international presence. For example, in certain foreign countries where the Company has licensed XMS, software is commonly copied and distributed on an unauthorized basis. There can be no assurance that the Company's means of protecting its proprietary rights, even if followed, will be adequate, nor that the Company's competitors will not independently develop similar technology.

The Company has not been notified that the Company's products infringe the proprietary rights of third parties. There can be no assurance, however, that third parties will not claim infringement by the Company with respect to current or future products. Further, the Company expects that software product developers will increasingly be subject to infringement claims as the number of products and competitors in the Company's industry segment grows and the functionality of products in different industry segments overlaps. From time to

17

time, the Company hires or retains employees or consultants (including through acquisition) who have worked for independent software vendors or other companies developing products similar to those offered by the Company. There can be no assurance that such prior employers will not claim that the Company's products are based on their products and that the Company has misappropriated their intellectual property. Any such claims, with or without merit, could cause a significant diversion of management attention, result in costly and prolonged litigation, cause product shipment delays or require the Company to enter into royalty or licensing agreements. Such royalty or licensing agreements, if required, may not be available on terms acceptable to the Company or at all, which would have a material adverse effect upon the Company's business, results of operations and financial condition.

RISK RELATED TO REVENUE RECOGNITION POLICY

The Company recognizes revenues in accordance with the American Institute of Certified Public Accountants ("AICPA") Statement of Position 91-1 ("SOP 91-1"). Software license revenues are recognized when a non-cancelable license agreement has been signed with a customer, the software is shipped, no significant post delivery vendor obligations remain and collection is deemed probable. Maintenance revenues are recognized ratably over the contract term, typically one year. Revenues for consulting services are recognized as such services are performed. Statement of Position 97-2 ("SOP 97-2"), "Software Revenue Recognition" was issued in October 1997 by the American Institute of Certified Public Accountants and amended by Statement of Position 98-4 ("SOP 98-4"). The Company will adopt SOP 97-2 beginning in fiscal 1999. Based upon its interpretation of SOP 97-2 and SOP 98-4, the Company believes its current revenue recognition policies and practices are materially consistent with SOP 97-2 and SOP 98-4. However, full implementation guidelines for this standard have not yet been issued. Once available, such implementation guidance could lead to unanticipated changes in the Company's current revenue accounting practices, and such changes could materially adversely affect the Company's future revenues and earnings. Such implementation guidance may necessitate significant changes in the Company's business practices in order for the Company to continue to recognize license revenues upon delivery of its software products. See "Management's Discussion and Analysis of Financial Condition and Results of Operation--Overview."

YEAR 2000 COMPLIANCE

Many currently installed computer systems are not capable of distinguishing 21st century dates from 20th century dates. As a result, in less than two years, computer systems and software used by many companies and organizations in a wide variety of industries (including technology, transportation, utilities, finance, telecommunications, among others) will experience operating difficulties unless they are modified or upgraded to process information related to the century change adequately. Significant uncertainty exists in the software and other industries concerning the scope and magnitude of problems associated with the century change. The Company recognizes the need to ensure its operations will not be adversely affected by Year 2000 software failures. The Company is assessing the potential overall impact of the impending century change on the Company's business, results of operations and financial condition.

Based on the Company's assessment to date, the Company believes the current versions of its software products and services are "Year 2000 compliant"-- that is, they are capable of adequately distinguishing 21st century dates from 20th century dates. However, the Company's products are generally integrated into enterprise systems involving sophisticated hardware and complex software products, which may not be Year 2000 compliant. The Company may in the future be subject to claims based on Year 2000 problems in others' products, or issues arising from the integration of multiple products within an overall system. Although the Company has not been a party to any litigation or arbitration proceeding to date involving its products or services and related to Year 2000 compliance issues, there can be no assurance that the Company will not in the future be required to defend its products or services in such proceedings, or to negotiate resolutions of claims based on Year 2000 issues. The costs of defending and resolving Year 2000-related disputes, regardless of the merits of such disputes, and any liability of the Company for Year 2000-related damages, including consequential damages, could have a material adverse effect on the Company's business, results of operations and financial condition. In addition, the Company believes that purchasing patterns of customers and potential

18

customers may be affected by Year 2000 issues as companies expend significant resources to correct or upgrade their current software systems for Year 2000 compliance. These expenditures may result in reduced funds available to purchase software products such as those offered by the Company. To the extent Year 2000 issues cause significant delay in, or cancellation of, decisions to purchase the Company's products or services, the Company's business, results of operations and financial condition would be materially adversely affected.

The Company is reviewing its internal management information and other systems in order to identify and modify any products, services or systems that are not Year 2000 compliant. To date, the Company has not encountered any material Year 2000 problems with its computer systems or any other equipment which might be subject to such problems. The Company's plan for the Year 2000 calls for compliance verification of external vendors supplying software and information systems to the Company and communication with significant suppliers to determine the readiness of third parties' remediation of their own Year 2000 issues. As part of its assessment, the Company is evaluating the level of validation it will require of third parties to ensure their Year 2000 readiness. In the event that any such third parties cannot timely provide the Company with products, services or systems that meet the Year 2000 requirements on a timely basis, the Company's business, results of operations and financial condition could be materially adversely affected. The total cost of these Year 2000 compliance activities has not been, and is not anticipated to be, material to the Company's business, results of operations and financial condition. These costs and the timing in which the Company plans to complete its Year 2000 modification and testing processes are based on management's estimates. However, there can be no assurance that the Company will timely identify and remediate all significant Year 2000 problems, that remediation efforts will not involve significant time and expense, or that such problems will not have a material adverse effect on the Company's business, results of operations and financial condition.

RISKS ASSOCIATED WITH NAME CHANGE

In July 1998, the Company changed its name from Portable Software Corporation to Concur Technologies, Inc. The Company believes that developing and strengthening the Concur brand is important to its marketing efforts, particularly to convey the fact that the Company's business strategy involves products beyond its original T&E expense management applications. Concur believes that it had developed significant market identification between its T&E expense management applications and its former name. There can be no assurance that the change of name will not have a material adverse effect on the Company's name recognition within its existing target market. Moreover, while the Company has expended substantial resources in establishing brand recognition of its name, there can be no assurance that such efforts will be successful or that the Company will be able to enforce rights related to the Concur name, that it will be free to use that name in all jurisdictions, or that it will not be required to expend significant resources in defending the use of that name.

NO PRIOR PUBLIC MARKET FOR COMMON STOCK; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to the Offering there has been no public market for the Common Stock, and there can be no assurance that an active public market for the Common Stock will develop or be sustained after the Offering. The initial public offering price will be determined by negotiation among the Company and the representatives of the underwriters based upon several factors and may not be indicative of the market price of the Common Stock following the Offering. The market price of the Company's Common Stock is likely to be highly volatile and could be subject to wide fluctuations in response to quarterly variations in operating results, announcements of technological innovations or new products by the Company or its competitors, market conditions in the enterprise software industry, changes in financial estimates by securities analysts, failure of the Company to meet or exceed analyst estimates, and other events or factors, many of which are beyond the Company's control. In addition, the stock market has experienced significant price and volume fluctuations that have particularly affected the market prices of equity securities of many software companies and that often have been unrelated to the operating performance of such companies. A number of publicly-traded software companies trade below their initial public offering price. These broad market fluctuations may adversely affect the market price of the Company's Common Stock. In the past, following periods of volatility in the marketplace for a company's securities, securities class action litigation often has been instituted. Any such

19

litigation against the Company could result in substantial costs and a diversion of management attention and resources, which would have a material adverse effect on the Company's business, results of operations and financial condition.

CONTROL BY EXISTING STOCKHOLDERS

Immediately after the closing of the Offering (based on shares outstanding as of August 15, 1998), % of the outstanding Common Stock ( % if the underwriters' over-allotment option is exercised in full) will be beneficially owned by the directors and executive officers of the Company, together with certain entities affiliated with them, assuming no exercise of outstanding stock options. If all options owned by the directors and executive officers of the Company as of August 15, 1998 were to be exercised, the directors and executive officers of the Company, together with certain entities affiliated with them, would own 26,477,659 shares of Common Stock, or % of the outstanding Common Stock of the Company following the Offering. As a result, these stockholders, if acting together, would be able to control substantially all matters requiring approval by the stockholders of the Company, including the election of all directors and approval of significant corporate transactions. In addition, upon completion of the Offering, TRS will hold a warrant to purchase up to 5,375,000 shares of the Company's Common Stock at prices ranging from the price to public in the Offering less 7% to $34.00, and expiring in four tranches through January 2002. See "Principal and Selling Stockholders" and "Certain Transactions."

ANTI-TAKEOVER EFFECTS OF CERTIFICATE OF INCORPORATION, BYLAWS AND DELAWARE LAW

Certain provisions of the Company's Certificate of Incorporation and Bylaws and certain provisions of Delaware law could delay or make difficult a merger, tender offer or proxy contest involving the Company. The authorized but unissued capital stock of the Company immediately following the Offering will include 5,000,000 shares of preferred stock. The Board of Directors is authorized to provide for the issuance of such preferred stock in one or more series and to fix the designations, preferences, powers and relative, participating, optional or other rights and restrictions thereof. Accordingly, the Company may in the future issue a series of preferred stock, without further stockholder approval, that will have preference over the Common Stock with respect to the payment of dividends and upon liquidation, dissolution or winding-up of the Company. Certain other provisions of the Company's Certification of Incorporation and Bylaws, including provisions that divide the Board of Directors into three classes to serve staggered three-year terms, prohibit the stockholders from taking action by written consent and restrict the ability of stockholders to call special meetings, may also make it more difficult for a third party to acquire a majority of the Company's voting stock or effect a change in control of the Company. In addition, Section 203 of the General Corporation Law of the State of Delaware, which is applicable to the Company, prohibits certain business combinations with certain stockholders for a period of three years after they acquire 15% or more of the outstanding voting stock of a corporation. Any of the foregoing could adversely affect holders of the Common Stock or discourage or make difficult any attempt to obtain control of the Company. See "Description of Capital Stock."

SHARES ELIGIBLE FOR FUTURE SALE ON MARKET PRICE OF THE COMMON STOCK

Sales of a substantial number of shares of Common Stock after the Offering could adversely affect the market price of the Common Stock and could impair the Company's ability to raise capital through the sale of equity securities. Upon completion of the Offering, the Company will have outstanding shares of Common Stock ( shares if the underwriters' over-allotment option is exercised in full), assuming no exercise of options after August 15, 1998. Of these shares, the shares offered hereby ( shares if the underwriters' over-allotment option is exercised in full) will be freely tradable without restriction or further registration under the Securities Act of 1933, as amended (the "Securities Act"), unless purchased by "affiliates" of the Company as that term is defined in Rule 144 under the Securities Act ("Rule 144"). The remaining 32,806,470 shares of Common Stock outstanding upon completion of the Offering are "restricted securities" as that term is defined in Rule 144.

20

Upon the expiration of lock-up agreements between certain of the Company's stockholders and the underwriters (the "Lock-Up Agreements") beginning 180 days after the date of this Prospectus, 478,172 shares will become eligible for sale pursuant to Rule 701 under the Securities Act ("Rule 701") and 26,434,320 shares held by certain affiliates of the Company will become eligible for sale pursuant to the volume, manner of sale and notice requirements of Rule 144. The remaining 5,893,978 shares outstanding will become eligible for sale from time to time more than 180 days after the date of this Prospectus. In addition to the foregoing, as of August 15, 1998, there were outstanding options to purchase an aggregate of 3,829,922 shares of Common Stock which will be eligible for sale in the public market from time to time, subject to vesting and the expiration of Lock-Up Agreements. The representatives of the underwriters have informed the Company that the underwriters have no current intention to release shares from the Lock-Up Agreements, prior to expiration of the 180-day term of such agreements. Any request for release would be evaluated by the representatives of the underwriters, and the decision whether or not to permit early release of shares would be made dependent upon the facts and circumstances existing at the time of the request. See "Shares Eligible for Future Sale."

IMMEDIATE AND SUBSTANTIAL DILUTION

Purchasers of Common Stock in the Offering will experience an immediate dilution of $ per share in the pro forma net tangible book value of their Common Stock from the initial public offering price of $ per share. To the extent outstanding warrants or options are exercised, there will be further dilution. See "Dilution."

BROAD DISCRETION OVER USE OF PROCEEDS

The net proceeds to the Company from the Offering will be used for working capital and general corporate purposes, as well as for possible acquisitions of additional businesses and technologies or the establishment of joint ventures that are complementary to the current or future business of the Company, as determined by management in its sole discretion. The Company has not determined the specific allocation of net proceeds among the various uses described above. Accordingly, investors in the Offering will rely upon the judgment of the Company's management with respect to the use of proceeds, with only limited information concerning management's specific intentions. See "Use of Proceeds."

21

USE OF PROCEEDS

The net proceeds to the Company from the sale of the shares of Common Stock offered by the Company hereby are estimated to be approximately $ ($ million if the Underwriters' over-allotment option is exercised in full), after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. The Company will not receive any proceeds from the sale of Common Stock by the Selling Stockholders. The primary purposes of the Offering are to increase the Company's equity capital, to create a public market for the Company's Common Stock and to facilitate future access by the Company to public equity markets.

The Company intends to use the net proceeds of the Offering for working capital and general corporate purposes, including capital expenditures made in the ordinary course of business, as well as for possible acquisitions of businesses, products and technologies that are complementary to those of the Company. Although the Company has not identified any specific businesses, products or technologies that it may acquire, and there are no current agreements or negotiations with respect to any such transactions, the Company does from time to time evaluate such opportunities. Pending such uses, the net proceeds of the Offering will be invested in short-term, investment-grade, interest-bearing instruments.

DIVIDEND POLICY

The Company has never declared or paid any cash dividends on its capital stock and does not expect to do so in the foreseeable future. The Company anticipates that all future earnings, if any, generated from operations will be retained by the Company to develop and expand its business. Any future determination with respect to the payment of dividends will be at the discretion of the Board of Directors and will depend upon, among other things, the Company's operating results, financial condition and capital requirements, the terms of then-existing indebtedness, general business conditions and such other factors as the Board of Directors deems relevant. In addition, the terms of certain of the Company's credit facilities prohibit the payment of cash dividends without the lender's consent. See "Management's Discussion and Analysis of Financial Condition and Results of Operations--Liquidity and Capital Resources."

22

CAPITALIZATION

The following table sets forth, as of June 30, 1998, (i) the actual capitalization of the Company, (ii) the pro forma capitalization of the Company after giving effect to the conversion of all outstanding shares of redeemable convertible preferred stock into Common Stock and the conversion of all preferred stock warrants into warrants to purchase common stock, and (iii) such pro forma capitalization as adjusted to give effect to (a) the sale of the shares of Common Stock offered hereby at an assumed initial public offering price of $ per share (after deducting estimated underwriting discounts and commissions and offering expenses) and the application of the estimated net proceeds therefrom, (b) the exercise of warrants to purchase 448,949 shares of Common Stock with an average exercise price of $1.99 per share, (c) the exercise of a portion of the TRS Warrant to purchase 562,500 shares of Common Stock at an assumed exercise price of $ per share, and (d) the sale of redeemable convertible preferred stock in August 1998 for $4,999,999 and related conversion of such preferred stock into 1,612,903 shares of Common Stock.

                                                                      JUNE 30, 1998
                                                              ------------------------------
                                                                           PRO         AS
                                                               ACTUAL     FORMA     ADJUSTED
                                                              --------   --------   --------
                                                                      (IN THOUSANDS)
Long-term obligations, net of current portion...............  $  8,652   $  8,652   $  8,652
Redeemable convertible preferred stock, 23,921,023 shares
  authorized, issued and outstanding, actual; no shares
  authorized, issued or outstanding, pro forma or as
  adjusted..................................................    25,041         --         --
Redeemable convertible preferred stock warrants.............        72         --         --
Stockholders' equity (deficit):
  Preferred Stock, $.001 par value, no shares authorized,
     issued and outstanding, actual or pro forma; 5,000,000
     shares authorized, no shares issued or outstanding, as
     adjusted...............................................        --         --         --
  Common Stock, $.001 par value; 60,000,000 shares
     authorized; 7,601,251 shares issued and outstanding,
     actual; 31,522,274 shares issued and outstanding, pro
     forma; and           shares issued and outstanding, as
     adjusted(1)............................................     6,268     31,381
  Deferred stock compensation...............................      (564)      (564)      (564)
  Accumulated deficit.......................................   (27,064)   (27,064)   (27,064)
                                                              --------   --------   --------
     Total stockholders' equity (deficit)...................   (21,360)     3,753
                                                              --------   --------   --------
          Total capitalization..............................  $ 12,405   $ 12,405   $
                                                              ========   ========   ========


(1) Excludes: (i) 3,597,714 shares of Common Stock issuable upon the exercise of stock options outstanding (of which options to purchase 1,175,599 shares were exercisable) under the Company's 1994 Stock Option Plan at a weighted average exercise price of $0.30 per share; (ii) 9,500,000 shares of Common Stock reserved for future grant or issuance immediately after the Offering under the Company's 1998 Equity Incentive Plan (the "1998 Plan"), the 1998 Directors Stock Option Plan (the "Directors Plan") and the 1998 Employee Stock Purchase Plan (the "Purchase Plan"); (iii) 973,337 shares of Common Stock available for future grant under the 1994 Plan; (iv) 275,764 shares of Common Stock issuable upon exercise of outstanding options (of which options to purchase 65,432 shares were exercisable) granted under the 7Software Plan and 34,045 shares of Common Stock issuable upon exercise of outstanding options granted by 7Software outside the 7Software Plan, in each case assumed by the Company in connection with the acquisition of 7Software, at a weighted average exercise price of $0.01 per share; and (v) 4,812,500 shares of Common Stock issuable upon the exercise of the TRS Warrant at prices ranging from $13.50 to $34.00, expiring in three tranches through January 2002. No further options will be granted under the 7Software Plan. Upon effectiveness of the Offering, no further options will be granted under the 1994 Plan. See "Management--Director Compensation," "--Employee Benefit Plans" and "Certain Transactions" and Note 9 of Notes to Consolidated Financial Statements.

23

DILUTION

The pro forma net tangible book value of the Company as of June 30, 1998, giving effect to the conversion of all outstanding shares of preferred stock into Common Stock, the conversion of outstanding warrants to purchase preferred stock into warrants to purchase Common Stock with an average exercise price of $1.99 per share and the exercise of such warrants to purchase 448,949 shares of Common Stock upon or prior to the completion of the Offering, the conversion of the TRS Warrant to purchase preferred stock into a warrant to purchase 5,375,000 shares of Common Stock and the exercise of a portion of such warrant to purchase 562,500 shares of Common Stock at an assumed exercise price of $ per share upon or prior to the completion of the Offering, and the sale of redeemable convertible preferred stock in August 1998 for $4,999,999 and the related conversion of such preferred stock into 1,612,903 shares of Common Stock was $ , or approximately $ per share. Pro forma net tangible book value per share represents the amount of total tangible assets of the Company less total liabilities, divided by the number of shares of Common Stock outstanding on an as-if-converted basis as adjusted for the proceeds and incremental shares from the exercise of warrants referred to above and the sale of redeemable convertible preferred stock in August 1998. Dilution per share represents the difference between the amount per share paid by purchasers of shares of Common Stock in the Offering made hereby and the pro forma net tangible book value per share of Common Stock immediately after the Offering.

After giving effect to the sale of shares of Common Stock offered by the Company hereby at an assumed initial public offering price of $ per share (after deducting the underwriting discount and estimated offering expenses payable by the Company) and the application of the estimated net proceeds therefrom, the pro forma net tangible book value of the Company as of June 30, 1998 would have been $ , or $ per share. This represents an immediate increase in pro forma net tangible book value of $ per share to existing stockholders and an immediate dilution of $ per share to purchasers of Common Stock in the Offering. The following table illustrates the per share dilution.

Assumed initial public offering price per share.............          $
  Pro forma net tangible book value per share as of June 30,
     1998...................................................  $
  Increase per share attributable to new investors..........
                                                              -----
Pro forma net tangible book value per share after the
  Offering..................................................
                                                                      -----
Dilution per share to new investors.........................          $
                                                                      =====

The following table summarizes, on a pro forma as adjusted basis as of June 30, 1998, the difference between the number of shares of Common Stock purchased from the Company, the total consideration paid and the average price per share paid by existing stockholders, including, on a pro forma basis, shares issued pursuant to the conversion and exercise of outstanding warrants to purchase preferred stock for 1,011,449 shares of Common Stock and shares issued pursuant to the conversion of 1,612,903 shares of preferred stock, as compared to the number of shares purchased, the total consideration paid and the average price paid by the new investors pursuant to this Offering, before deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by the Company at an assumed initial public offering price of $ per share.

                                                 SHARES PURCHASED   TOTAL CONSIDERATION
                                                 ----------------   --------------------   AVERAGE PRICE
                                                 NUMBER   PERCENT    AMOUNT     PERCENT      PER SHARE
                                                 ------   -------   --------   ---------   -------------
Existing stockholders(1).......................                 %     $                %       $
New investors(1)(2)............................
                                                 ------    -----      -----      ------
          Total................................            100.0%     $           100.0%
                                                 ======    =====      =====      ======


(1) Sales by the Selling Stockholders in this Offering will reduce the number of shares held by existing stockholders to , or % ( %) if the Underwriters' over-allotment option is exercised in full), and will increase the number of shares held by new investors to , or % ( %) if the Underwriters' over-allotment option is exercised in full), of the total number of shares of Common Stock outstanding after the Offering. See "Principal and Selling Stockholders."

24

(2) Excludes (i) 3,907,523 shares subject to outstanding options as of June 30, 1998 at a weighted average exercise price of $0.27 per share and (ii) 973,337 shares reserved for issuance under the 1994 Plan. Also excludes (i) 9,500,000 shares reserved for issuance under the 1998 Plan, the Directors Plan and the Purchase Plan and (ii) 4,812,500 shares issuable upon exercise of the TRS Warrant at prices ranging from $13.50 to $34.00, expiring in three tranches through January 2002. To the extent outstanding options or warrants are exercised, there will be further dilution to new investors. See "Management--1994 Stock Option Plan," "--1997 Stock Option Plan of 7Software," "--1998 Equity Incentive Plan," "--1998 Employee Stock Purchase Plan," "--Director Compensation" and "Certain Transactions."

25

SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial data is qualified by reference to and should be read in conjunction with the Company's Consolidated Financial Statements and related Notes thereto and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this Prospectus. The consolidated statement of operations data for the years ended September 30, 1995, 1996 and 1997, and for the nine months ended June 30, 1998, and the consolidated balance sheet data as of September 30, 1996 and 1997, and June 30, 1998, are derived from consolidated financial statements of the Company that have been audited by Ernst & Young LLP, independent auditors, which are included elsewhere in this Prospectus. The consolidated balance sheet data as of September 30, 1995 is derived from audited consolidated financial statements which are not included in this Prospectus. The consolidated statement of operations data for the year ended September 30, 1994, and the consolidated balance sheet data as of September 30, 1994 are derived from unaudited consolidated financial statements not included in this Prospectus. The consolidated statement of operations data for the nine months ended June 30, 1997 is derived from unaudited consolidated financial statements included in this Prospectus. The unaudited consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, that the Company considers necessary for a fair presentation of its financial position and results of operations for these periods. Operating results for the nine months ended June 30, 1998 are not necessarily indicative of the results that may be expected for the entire year. The historical results are not necessarily indicative of future results. See "Management's Discussion and Analysis of Financial Condition and Results of Operations--Quarterly Results of Operations."

                                                                                                            NINE MONTHS
                                                                    YEAR ENDED SEPTEMBER 30,              ENDED JUNE 30,
                                                             --------------------------------------   -----------------------
                                                              1994      1995      1996       1997       1997         1998
                                                             -------   -------   -------   --------   --------   ------------
                                                                          (IN THOUSANDS, EXCEPT PER SHARE DATA)
CONSOLIDATED STATEMENT OF OPERATIONS DATA
Revenues:
  Licenses.................................................  $    --   $ 2,104   $ 1,717   $  6,347   $  4,087     $  8,039
  Services.................................................       --        24       242      1,923      1,118        3,676
                                                             -------   -------   -------   --------   --------     --------
        Total revenues.....................................       --     2,128     1,959      8,270      5,205       11,715
                                                             -------   -------   -------   --------   --------     --------
Cost of revenues:
  Licenses.................................................       --       728       386        394        219          318
  Services.................................................       --       673       839      2,269      1,370        3,702
                                                             -------   -------   -------   --------   --------     --------
        Total cost of revenues.............................       --     1,401     1,225      2,663      1,589        4,020
                                                             -------   -------   -------   --------   --------     --------
Gross profit...............................................       --       727       734      5,607      3,616        7,695
                                                             -------   -------   -------   --------   --------     --------
Operating expenses:
  Sales and marketing......................................      111     2,363     2,936      5,896      3,873        7,886
  Research and development.................................      425       744     1,793      3,401      2,226        4,162
  General and administrative...............................       66       515       963      1,815      1,212        3,225
  Acquired in-process technology(1)........................       --        --        --         --         --        5,203
                                                             -------   -------   -------   --------   --------     --------
        Total operating expenses...........................      602     3,622     5,692     11,112      7,311       20,476
                                                             -------   -------   -------   --------   --------     --------
Operating loss.............................................     (602)   (2,895)   (4,958)    (5,505)    (3,695)     (12,781)
Other income (expense), net................................       --         5         5        (19)        14         (314)
                                                             -------   -------   -------   --------   --------     --------
Net loss...................................................  $  (602)  $(2,890)  $(4,953)  $ (5,524)  $ (3,681)    $(13,095)
                                                             =======   =======   =======   ========   ========     ========
Pro forma basic and diluted net loss per share(2)..........                                $  (0.23)               $  (0.48)
                                                                                           ========                ========
Shares used in pro forma basic and diluted per share
  computations(2)..........................................                                  24,408                  27,509
                                                                                           ========                ========

                                                                         SEPTEMBER 30,                     JUNE 30, 1998
                                                             --------------------------------------   -----------------------
                                                              1994      1995      1996       1997      ACTUAL    PRO FORMA(3)
                                                             -------   -------   -------   --------   --------   ------------
                                                                                      (IN THOUSANDS)
CONSOLIDATED BALANCE SHEET DATA
Cash and cash equivalents..................................  $   277   $ 2,541   $ 5,685   $  6,695   $ 15,604     $ 15,604
Working capital (deficit)..................................     (175)    1,839     4,073      6,183      9,469        9,469
Total assets...............................................      345     3,058     6,759     13,330     23,319       23,319
Long-term obligations, net of current portion..............      233       125       215      3,687      8,652        8,652
Redeemable convertible preferred stock and warrants........       --     4,903    12,386     17,322     25,113           --
Total stockholders' equity (deficit).......................     (353)   (3,234)   (8,186)   (13,710)   (21,360)       3,753


(1) In June 1998, the Company acquired 7Software, resulting in a charge for acquired in-process technology. See Note 3 of Notes to Consolidated Financial Statements. The Financial Statements of 7Software are included elsewhere herein.
(2) See Note 13 of Notes to Consolidated Financial Statements for information concerning the calculation of pro forma basic and diluted net loss per share.
(3) Reflects the assumed conversion of all outstanding shares of redeemable convertible preferred stock into Common Stock, and the conversion of all outstanding warrants to purchase redeemable convertible preferred stock into warrants to purchase Common Stock, upon completion of the Offering.

26

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto included elsewhere in this Prospectus. This discussion contains forward-looking statements which involve risks and uncertainties. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under "Risk Factors" and elsewhere in this Prospectus.

OVERVIEW

Concur is a leading provider of Intranet-based employee-facing applications that extend automation to employees throughout the enterprise and to partners, vendors and service providers in the extended enterprise. The Company's Xpense Management Solution ("XMS") and CompanyStore products automate the preparation, approval, processing and data analysis of travel and entertainment ("T&E") expense reports and front-office procurement requisitions. Concur believes it is the leading provider of T&E expense management solutions and, since the introduction of XMS in 1996, the Company has licensed its products to over 125 enterprise customers with over 450,000 end users. Through its June 1998 acquisition of 7Software, Inc., the Company added the CompanyStore front-office procurement application to its product suite. By automating manual, paper-based processes, the Company's products reduce processing costs and enable customers to consolidate purchases with preferred vendors and negotiate vendor discounts.

Concur was founded in 1993 and commenced operations in fiscal 1994, initially developing QuickXpense, a retail, shrink-wrapped application that automated T&E expense reporting for the individual. Concur first shipped QuickXpense in fiscal 1995 and sold QuickXpense through a combination of retail channels and direct marketing, utilizing a small sales force and no consulting or implementation staff. In response to inquiries from businesses seeking to automate the entire T&E expense reporting process, including back-office processing and integration to financial systems, the Company significantly expanded its product development efforts and released XMS, a client-server based enterprise T&E expense management solution in July 1996. In connection with that transition, the Company also replaced its retail and direct marketing programs with a direct sales force including sales representatives and sales engineers, built consulting services and customer training staffs, and redirected its marketing efforts to focus on enterprise sales. In March 1998, the Company shipped an intranet-based version of XMS. While the Company continues to sell the client-server version of XMS, the Company believes that the Intranet-based version currently accounts for a majority of XMS license revenues and the Company expects to continue to focus its product development efforts on the Intranet-based versions of its products.

On June 30, 1998, the Company acquired 7Software, a privately-held software company and the developer of CompanyStore. 7Software was founded in 1996 and commenced operations in 1997. 7Software was selling the initial version of its product through a single sales representative at the time Concur acquired it. Concur believes that the underlying product architecture and technology of CompanyStore are highly compatible with that of XMS. Concur's existing sales force and consulting services group sells and services both XMS and CompanyStore, and the Company's research and development activities will be expanded to develop a common technology platform for XMS and CompanyStore. In connection with the acquisition, the Company issued 1,772,302 shares of its Common Stock in exchange for all the outstanding shares of 7Software, converted all of 7Software's outstanding options into options to purchase up to 309,809 shares of the Company's Common Stock, and agreed to pay certain shareholders of 7Software $500,000, resulting in a total purchase price valued at $6.2 million, including acquisition expenses. The Company also entered into employment and bonus agreements with certain officers of 7Software. The acquisition was recorded under the purchase method of accounting and the results of operations of 7Software and the fair value of the assets acquired and liabilities assumed were included in Concur's consolidated financial statements beginning on the acquisition date. In connection with this acquisition, the Company recorded $5.2 million for in-process technology as an expense in the quarter ended June 30, 1998. In addition, the Company recorded capitalized technology and other intangible assets of $960,000 that will be amortized on a straight-line basis over the five years following the acquisition. The Company expects that for the foreseeable future the significant majority of

27

its revenues will be derived from its XMS product line and related services. See "Risk Factors--Product Concentration," "--Risks Associated With Expansion into New Markets" and "--Risks Associated with Acquisitions."

The Company's revenues, which consist of software license revenues and service revenues, totaled $2.1 million, $2.0 million and $8.3 million in fiscal 1995, 1996 and 1997, respectively, and were $5.2 million and $11.7 million for the nine months ended June 30, 1997 and 1998, respectively. In fiscal 1995 and the first nine months of fiscal 1996, the Company's revenues were derived from licenses of QuickXpense and related services. In July 1996, the Company released XMS, and substantially all of the Company's revenues in the fourth quarter of fiscal 1996 as well as in fiscal 1997 and the nine months ended June 30, 1998 were derived from licenses of XMS and related services. The Company's pricing is based on the number of users or employees of the purchasing enterprise. Service revenues consist of consulting, maintenance (including customer support and upgrades) and training. See "Risk Factors--Limited Operating History; Future Operating Results Uncertain; History of Losses" and "--Potential Fluctuations in Quarterly Results; Seasonality."

Concur markets its software and services primarily through its direct sales organization in the United States, Canada and the United Kingdom. Revenues from XMS licenses and services to customers outside the United States were insignificant prior to fiscal 1997, and represented approximately $1.3 million and $455,000 in fiscal 1997 and for the nine months ended June 30, 1998, respectively. Historically, as a result of the relatively small amount of international sales, fluctuations in foreign currency exchange rates have not had a material effect on the Company's business, results of operations and financial condition. See "Risk Factors--International Operations."

The Company recognizes revenues in accordance with the American Institute of Certified Public Accountants ("AICPA") Statement of Position 91-1 ("SOP 91-1"). Software license revenues are recognized when a non-cancelable license agreement has been signed with a customer, the software is shipped, no significant post delivery vendor obligations remain and collection is deemed probable. Maintenance revenues are recognized ratably over the contract term, typically one year. Revenues for consulting services are recognized as such services are performed. Statement of Position 97-2 ("SOP 97-2"), "Software Revenue Recognition" was issued in October 1997 by the American Institute of Certified Public Accountants and amended by Statement of Position 98-4 ("SOP 98-4"). The Company will adopt SOP 97-2 beginning in fiscal 1999. Based upon its interpretation of SOP 97-2 and SOP 98-4, the Company believes its current revenue recognition policies and practices are materially consistent with SOP 97-2 and SOP 98-4. It is not anticipated that there will be a material change to the Company's accounting for revenues as a result of the adoption of SOP 97-2. However, full implementation guidelines for this standard have not yet been issued. Once available, such implementation guidance could lead to unanticipated changes in the Company's current revenue accounting practices, and such changes could materially adversely affect the Company's future revenues and earnings. Such implementation guidance may necessitate significant changes in the Company's business practices in order for the Company to continue to recognize license revenues upon delivery of its software products.

Since its inception, the Company has incurred substantial research and development costs and has invested heavily in the expansion of its sales, marketing and professional services organizations to build an infrastructure to support its long-term growth strategy. The number of the Company's employees increased from 43 as of September 30, 1995 to 65 as of September 30, 1996 and 133 as of September 30, 1997, representing increases of 51% and 105%, respectively. The number of employees increased from 108 as of June 30, 1997 to 179 as of June 30, 1998, an increase of 66%. As a result of investments in the Company's infrastructure, the Company has incurred net losses in each fiscal quarter since inception, and as of June 30, 1998, had an accumulated deficit of $27.1 million. The Company anticipates that its operating expenses will increase substantially for the foreseeable future as it expands its product development, sales and marketing, and professional services staff. Accordingly, the Company expects to incur additional losses for the foreseeable future.

The Company has recorded aggregate deferred stock compensation of $861,000, of which $297,000 was recognized in the nine months ended June 30, 1998. Deferred stock compensation is amortized over the life of the options, generally four years.

28

The Company believes that period-to-period comparisons of its operating results are not meaningful and should not be relied upon as indicative of future performance. The Company's prospects must be considered in light of risks, expenses and difficulties frequently encountered by companies in early stages of development, particularly companies in new and rapidly evolving markets. There can be no assurance the Company will be successful in addressing such risks and difficulties. In addition, although Concur has experienced significant revenue growth recently, there can be no assurance that such revenue growth will continue or that the Company will achieve or maintain profitability in the future. See "Risk Factors --Limited Operating History; Future Operating Results Uncertain; History of Losses" and "--Potential Fluctuations in Quarterly Results; Seasonality."

RESULTS OF OPERATIONS

The following table sets forth certain statement of operations data as a percentage of total revenues for the periods indicated:

                                                                                NINE MONTHS
                                                                                   ENDED
                                                 YEAR ENDED SEPTEMBER 30,         JUNE 30,
                                                --------------------------    ----------------
                                                 1995      1996      1997      1997      1998
                                                ------    ------    ------    ------    ------
Revenues:
  Licenses....................................    98.9%     87.6%     76.7%     78.5%     68.6%
  Services....................................     1.1      12.4      23.3      21.5      31.4
                                                ------    ------    ------    ------    ------
          Total revenues......................   100.0     100.0     100.0     100.0     100.0
                                                ------    ------    ------    ------    ------
Cost of revenues:
  Licenses....................................    34.2      19.7       4.8       4.2       2.7
  Services....................................    31.6      42.8      27.4      26.3      31.6
                                                ------    ------    ------    ------    ------
          Total cost of revenues..............    65.8      62.5      32.2      30.5      34.3
                                                ------    ------    ------    ------    ------
Gross margin..................................    34.2      37.5      67.8      69.5      65.7
                                                ------    ------    ------    ------    ------
Operating expenses:
  Sales and marketing.........................   111.0     149.9      71.3      74.4      67.3
  Research and development....................    35.0      91.5      41.1      42.8      35.5
  General and administrative..................    24.2      49.2      21.9      23.3      27.5
  Acquired in-process technology..............      --        --        --        --      44.4
                                                ------    ------    ------    ------    ------
          Total operating expenses............   170.2     290.6     134.3     140.5     174.7
                                                ------    ------    ------    ------    ------
Operating loss................................  (136.0)   (253.1)    (66.5)    (71.0)   (109.0)
Other income (expense), net...................     0.2       0.3      (0.2)      0.3      (2.7)
                                                ------    ------    ------    ------    ------
Net loss......................................  (135.8)%  (252.8)%   (66.7)%   (70.7)%  (111.7)%
                                                ======    ======    ======    ======    ======

Revenues

The Company's revenues are derived from software licenses and related services. The Company's revenues were $2.1 million, $2.0 million and $8.3 million in fiscal 1995, 1996 and 1997, respectively, representing a decrease of $169,000, or 8%, from fiscal 1995 to fiscal 1996 and an increase of $6.3 million, or 322%, from fiscal 1996 to fiscal 1997. The Company's revenues were $5.2 million and $11.7 million for the nine months ended June 30, 1997 and 1998, respectively, representing an increase of $6.5 million, or 125%. The Company had no customer that accounted for more than 10% of its revenues in fiscal 1995, 1996 or 1997.

The Company's license revenues were $2.1 million, $1.7 million and $6.3 million in fiscal 1995, 1996 and 1997, respectively, representing a decrease of $387,000, or 18%, from fiscal 1995 to fiscal 1996 and an increase of $4.6 million, or 271%, from fiscal 1996 to fiscal 1997. The Company's license revenues were $4.1 million and $8.0 million for the nine months ended June 30, 1997 and 1998, respectively, representing an increase of $4.0 million, or 97%. The increase in the Company's license revenues from fiscal 1996 to fiscal 1997 was due to increased market acceptance of the client-server version of XMS and increases in both the size and

29

productivity of the sales force. The increase in license revenues for the nine months ended June 30, 1998 compared to the nine months ended June 30, 1997 was a result of the continued impact of those same factors, as well as the release of the intranet version of XMS and the strategic alliance agreement signed with American Express in December 1997. The decrease in the license revenues from fiscal 1995 to fiscal 1996 resulted from the Company's redirection of its sales efforts from QuickXpense to XMS.

The Company's service revenues were $24,000, $242,000 and $1.9 million in fiscal 1995, 1996 and 1997, respectively, representing increases of $218,000 from fiscal 1995 to fiscal 1996 and $1.7 million from fiscal 1996 to fiscal 1997. The Company's service revenues were $1.1 million and $3.7 million for the nine months ended June 30, 1997 and 1998, respectively, representing an increase of $2.6 million, or 229%. Prior to fiscal 1997, service revenues consisted primarily of customizing electronic versions of expense report forms in connection with sales of QuickXpense. From fiscal 1997 through June 30, 1998, service revenues consisted primarily of consulting and implementation service fees, maintenance and, to a lesser extent, training services, associated with the increasing license revenues during this period. Service revenues represented 1.1%, 12.4% and 23.3% of the Company's total revenues in fiscal 1995, 1996 and 1997, respectively, and 21.5% and 31.4% of total revenues for the nine months ended June 30, 1997 and 1998, respectively. The increase in service revenues from the nine months ended June 30, 1997 to the nine months ended June 30, 1998, reflects increasing sales of XMS as well as service revenues recognized with respect to licenses entered into in prior periods. The Company believes that the percentage of total revenues represented by service revenues in prior fiscal years is not indicative of levels to be expected in future periods. Due to its limited experience selling CompanyStore, the Company is uncertain how recognition of service revenues associated with such sales will affect its results of operations in the future. In addition, the Company expects that its proportion of service revenues to total revenues will fluctuate in the future, depending in part on the Company's use of third-party consulting and implementation service providers as well as on the market reception to the Company's outsourced ESP solution.

Cost of Revenues

Cost of License Revenues. Cost of license revenues includes license fees for third-party software, product media, product duplication and manuals. The cost of license revenues were $728,000, $386,000 and $394,000, in fiscal 1995, 1996 and 1997, respectively, representing a decrease of $342,000, or 47%, from fiscal 1995 to fiscal 1996 and an increase of $8,000, or 2%, from fiscal 1996 to fiscal 1997. The cost of license revenues were $219,000 and $318,000 for the nine months ended June 30, 1997 and 1998, respectively, representing an increase of $99,000, or 45%. The decrease from fiscal 1995 to fiscal 1996 was expected as QuickXpense, a shrink-wrapped application, carried a higher cost of sales than XMS. In fiscal 1995, all license revenues were attributable to QuickXpense whereas in fiscal 1996, the Company sold a mix of XMS and QuickXpense. Cost of license revenues remained relatively constant from fiscal 1996 to fiscal 1997 as a result of the shift of the mix of revenues from QuickXpense to XMS. The increase for the nine months ended June 30, 1997, to the nine months ended June 30, 1998, was a result of increased expenses associated with sub-licensing of third party software due to increased sales of XMS and the costs of production, manuals and other media associated with the release of the Intranet version of XMS in March 1998. Cost of licenses as a percentage of license revenues were 34.6%, 22.5% and 6.2% for fiscal 1995, 1996 and 1997, respectively, and 5.4% and 4.0% for the nine months ended June 30, 1997 and 1998, respectively. A portion of the capitalized technology and other intangible assets recorded in connection with the acquisition of 7Software will be amortized on a straight-line basis over five years as cost of license revenues. The Company expects that the cost of license revenues as a percentage of total revenues and license revenues may increase significantly upon the introduction of the Company's outsourced ESP solution and will fluctuate in the future depending in part on the demand for the Company's current products and its outsourced ESP solution.

Cost of Service Revenues. Cost of service revenues includes personnel and other costs related to consulting services, technical support, expense report forms development and training. The cost of service revenues were $673,000, $839,000 and $2.3 million, in fiscal 1995, 1996 and 1997, respectively, representing an increase of $166,000, or 24.7%, from fiscal 1995 to fiscal 1996 and an increase of $1.4 million, or 170%, from fiscal 1996 to fiscal 1997. Cost of service revenues were $1.4 million and $3.7 million for the nine months

30

ended June 30, 1997 and 1998, respectively, representing an increase of $2.3 million, or 170%. The increase from fiscal 1995 to fiscal 1997 was a result of hiring and training a consulting organization to implement XMS and retraining existing personnel, in connection with the shift in the Company's product line from QuickXpense to XMS. The increase from the nine months ended June 30, 1997, to the nine months ended June 30, 1998, was primarily due to the increase in professional services personnel to support the Company's growing XMS customer base. Cost of service revenues as a percentage of service revenues was 2,804.0%, 346.7% and 118.0% for fiscal 1995, 1996 and 1997, respectively, and 122.5% and 100.7% for the nine months ended June 30, 1997 and 1998, respectively. The decrease in cost of service revenues as a percentage of service revenues from fiscal 1995 through the nine months ended June 30, 1998, was primarily due to economies of scale realized as a result of a higher level of consulting services activity and increased experience of the professional services personnel. The cost of service revenues as a percentage of service revenues may vary between periods due to the mix of services provided by the Company and the resources used to provide such services.

Costs and Expenses

Sales and Marketing. Sales and marketing expenses consist primarily of salaries, commissions and bonuses earned by sales and marketing personnel, lead referral fees, travel and entertainment and promotional expenses. Sales and marketing expenses were $2.4 million, $2.9 million and $5.9 million in fiscal 1995, 1996 and 1997, respectively, representing an increase of $573,000, or 24%, from fiscal 1995 to fiscal 1996 and $3.0 million, or 101%, from fiscal 1996 to fiscal 1997. Sales and marketing expenses were $3.9 million and $7.9 million for the nine months ended June 30, 1997 and 1998, respectively, representing an increase of $4.0 million, or 104%. The increases from fiscal 1995 through the nine months ended June 30, 1998, primarily reflect the Company's investment in its sales and marketing infrastructure, which included significant personnel-related expenses such as salaries, benefits and commissions, recruiting fees, travel and entertainment expenses, and related costs of hiring sales management, sales representatives, sales engineers and marketing personnel. Sales and marketing employees totaled 11, 21 and 42 as of September 30, 1995, 1996 and 1997, respectively, representing increases of 91% and 100%, respectively, and totaled 36 and 54 employees as of June 30, 1997 and 1998, respectively, representing an increase of 50%. The increase in sales and marketing costs from the nine months ended June 30, 1997 to the nine months ended June 30, 1998, also reflects increased hiring rates to replace and support promoted regional sales managers, public relations and trade show expenses, and sales referral fees made under the Company's agreement with its referral partners, principally American Express. Sales and marketing expenses represented 111.0%, 149.9% and 71.3% of the Company's total revenues for fiscal 1995, 1996 and 1997, respectively, and 74.4% and 67.3% of total revenues for the nine months ended June 30, 1997 and 1998, respectively. The decrease in sales and marketing expenses as a percentage of total revenues from fiscal 1996 to date primarily reflects the more rapid growth of revenues compared to the growth of sales and marketing expenses in this period. The Company believes that a significant increase in its sales and marketing efforts is essential for it to maintain its market position and further increase acceptance of its products. Accordingly, the Company anticipates it will continue to invest heavily in sales and marketing for the foreseeable future, and sales and marketing expenses are likely to increase in future periods.

Research and Development. Research and development expenses consist primarily of salaries and benefits for software developers, product management and quality assurance personnel and payments to outside contractors. Research and development expenses were $744,000, $1.8 million and $3.4 million in fiscal 1995, 1996 and 1997, respectively, representing increases of $1.0 million, or 141%, from fiscal 1995 to fiscal 1996 and $1.6 million, or 90%, from fiscal 1996 to fiscal 1997. Research and development expenses were $2.2 million and $4.2 million for the nine months ended June 30, 1997 and 1998, respectively, representing an increase of $2.0 million, or 87%. The increases from fiscal 1995 through the nine months ended June 30, 1998, were primarily related to the increase in the number of development and quality assurance personnel and outside contractors to support the Company's product development and testing activities related to the development and release of both the client-server and Intranet versions of XMS. The Company's research and development employees totaled 12, 22 and 38 as of September 30, 1995, 1996 and 1997, respectively, representing increases of 83% and 73%, respectively, and totaled 34 and 51 employees as of June 30, 1997 and

31

1998, respectively, representing an increase of 50%. Research and development costs represented 35.0%, 91.5% and 41.1% of the Company's total revenues in fiscal 1995, 1996 and 1997, respectively, and 42.8% and 35.5% of total revenues for the nine months ended June 30, 1997 and 1998, respectively. The Company believes that a significant increase in its research and development investment is essential for it to maintain its market position, to continue to expand its product line and to develop a common technology platform for its suite of products. Accordingly, the Company anticipates it will continue to invest heavily in product research and development for the foreseeable future, and research and development expenses are likely to increase in future periods. In the development of the Company's new products and enhancements of existing products, the technological feasibility of the software is not established until substantially all product development is complete. Accordingly, software development costs that were eligible for capitalization were insignificant, and all costs related to internal research and development have been expensed as incurred.

General and Administrative. General and administrative expenses consist primarily of salaries, benefits and related costs for the Company's executive, finance, administrative and information services personnel. General and administrative expenses were $515,000, $963,000 and $1.8 million in fiscal 1995, 1996 and 1997, respectively, representing increases of $448,000, or 87%, from fiscal 1995 to fiscal 1996 and an increase of $852,000, or 88%, from fiscal 1996 to 1997. General and administrative expenses were $1.2 million and $3.2 million for the nine months ended June 30, 1997 and 1998, respectively, representing an increase of $2.0 million, or 166%. The increases from fiscal 1995 through the nine months ended June 30, 1998, were primarily the result of additional finance, executive management and administration personnel to support the growth of the Company's business during these periods. In addition to increased compensation and related expenses, the increase in general and administrative expenses from the nine months ended June 30, 1997 to the nine months ended June 30, 1998, reflects an increase in the provision for bad debt reserve related to the Company's increase in revenues, and stock compensation expense, during the period. During the nine months ended June 30, 1998, the Company recorded deferred stock compensation for the differences between the exercise price and the deemed fair value of the Company's Common Stock with respect to certain options, and recorded stock compensation expense of $297,000. General and administrative costs represented 24.2%, 49.2% and 21.9% of the Company's total revenues in fiscal 1995, 1996 and 1997, respectively, and 23.3% and 27.5% of total revenues for the nine months ended June 30, 1997 and 1998, respectively. The Company believes that its general and administrative expenses will continue to increase as a result of the continued expansion of the Company's administrative staff and facilities to support growing operations and the expenses associated with becoming a public company, including but not limited to annual and other public reporting costs, directors' and officers' liability insurance, investor relations programs and professional services fees.

Income Taxes. As of June 30, 1998, the Company had net operating loss carryforwards for federal and state income tax reporting purposes of approximately $15.7 million which expire at various dates through 2013. In addition, as of June 30, 1998, the Company had tax credit carryforwards of approximately $262,000 which expire at various dates through 2013. The Code contains provisions that may limit the use in any future period of net operating loss and credit carryforwards upon the occurrence of certain events, including a significant change in ownership interests. The Company had deferred tax assets, including its net operating loss carryforwards and tax credits, totaling approximately $7.3 million as of June 30, 1998. A valuation allowance has been recorded for the entire deferred tax asset as a result of uncertainties regarding the realization of the asset balance. See Note 8 of Notes to Consolidated Financial Statements.

32

QUARTERLY RESULTS OF OPERATIONS

The following table sets forth certain unaudited consolidated statement of operations data for the seven quarters ended June 30, 1998, as well as such data expressed as a percentage of the Company's total revenues for the respective periods indicated. This data has been derived from unaudited Consolidated Financial Statements that have been prepared on the same basis as the audited Consolidated Financial Statements and, in the opinion of management, include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the information when read in conjunction with the Consolidated Financial Statements and Notes thereto. The Company's quarterly results have been in the past and may in the future be subject to significant fluctuations. As a result, the Company believes that results of operations for interim periods should not be relied upon as any indication of the results to be expected in any future period. See "Risk Factors--Potential Fluctuations in Quarterly Results; Seasonality."

                                                                            QUARTER ENDED
                                     --------------------------------------------------------------------------------------------
                                     DECEMBER 31,    MARCH 31,    JUNE 30,   SEPTEMBER 30,   DECEMBER 31,   MARCH 31,    JUNE 30,
                                         1996          1997         1997         1997            1997         1998         1998
                                     ------------    ---------    --------   -------------   ------------   ---------    --------
                                                                (IN THOUSANDS, EXCEPT PERCENTAGE DATA)
STATEMENT OF OPERATIONS
Revenues:
  Licenses.........................    $   923        $ 1,335     $ 1,829       $ 2,260        $ 2,036       $ 2,818     $ 3,185
  Services.........................        218            336         564           805          1,079         1,141       1,456
                                       -------        -------     -------       -------        -------       -------     -------
        Total revenues.............      1,141          1,671       2,393         3,065          3,115         3,959       4,641
Cost of revenues:
  Licenses.........................         40             80          99           175             82            90         146
  Services.........................        317            468         585           899          1,097         1,115       1,490
                                       -------        -------     -------       -------        -------       -------     -------
        Total cost of revenues.....        357            548         684         1,074          1,179         1,205       1,636
                                       -------        -------     -------       -------        -------       -------     -------
Gross profit.......................        784          1,123       1,709         1,991          1,936         2,754       3,005
                                       -------        -------     -------       -------        -------       -------     -------
Operating expenses:
  Sales and marketing..............      1,061          1,378       1,434         2,023          2,206         2,400       3,280
  Research and development.........        603            787         836         1,175          1,083         1,195       1,884
  General and administrative.......        322            450         440           603            837           836       1,552
  Acquired in-process technology...         --             --          --            --             --            --       5,203
                                       -------        -------     -------       -------        -------       -------     -------
        Total operating expenses...      1,986          2,615       2,710         3,801          4,126         4,431      11,919
                                       -------        -------     -------       -------        -------       -------     -------
Operating loss.....................     (1,202)        (1,492)     (1,001)       (1,810)        (2,190)       (1,677)     (8,914)
Other income (expense), net........         17             11         (14)          (33)           (93)         (103)       (118)
                                       -------        -------     -------       -------        -------       -------     -------
Net loss...........................    $(1,185)       $(1,481)    $(1,015)      $(1,843)       $(2,283)      $(1,780)    $(9,032)
                                       =======        =======     =======       =======        =======       =======     =======
AS A PERCENTAGE OF TOTAL REVENUES
Revenues:
  Licenses.........................       80.9%          79.9%       76.4%         73.7%          65.4%         71.2%       68.6%
  Services.........................       19.1           20.1        23.6          26.3           34.6          28.8        31.4
                                       -------        -------     -------       -------        -------       -------     -------
        Total revenues.............      100.0          100.0       100.0         100.0          100.0         100.0       100.0
Cost of revenues:
  Licenses.........................        3.5            4.8         4.1           5.7            2.6           2.3         3.1
  Services.........................       27.8           28.0        24.4          29.3           35.3          28.2        32.1
                                       -------        -------     -------       -------        -------       -------     -------
        Total cost of revenues.....       31.3           32.8        28.5          35.0           37.9          30.5        35.2
                                       -------        -------     -------       -------        -------       -------     -------
Gross margin.......................       68.7           67.2        71.5          65.0           62.1          69.5        64.8
                                       -------        -------     -------       -------        -------       -------     -------
Operating expenses:
  Sales and marketing..............       93.0           82.4        59.9          66.0           70.8          60.6        70.6
  Research and development.........       52.8           47.1        34.9          38.3           34.8          30.2        40.6
  General and administrative.......       28.2           26.9        18.4          19.7           26.9          21.1        33.4
  Acquired in-process technology...         --             --          --            --             --            --       112.1
                                       -------        -------     -------       -------        -------       -------     -------
        Total operating expenses...      174.0          156.4       113.2         124.0          132.5         111.9       256.7
                                       -------        -------     -------       -------        -------       -------     -------
Operating loss.....................     (105.3)         (89.2)      (41.7)        (59.0)         (70.4)        (42.4)     (191.9)
Other income (expense), net........        1.4            0.7        (0.6)         (1.1)          (2.9)         (2.6)       (2.5)
                                       -------        -------     -------       -------        -------       -------     -------
Net loss...........................     (103.9)%        (88.5)%     (42.3)%       (60.1)%        (73.3)%       (45.0)%    (194.4)%
                                       =======        =======     =======       =======        =======       =======     =======

The trends discussed in the annual comparisons of operating results from fiscal 1995 through fiscal 1997, and the nine months ended June 30, 1997 to the nine months ended June 30, 1998, are generally applicable to the comparison of results of operations for the seven quarterly periods ended June 30, 1998, adjusted for the

33

seasonality the Company has experienced as referred to below. In addition, the Company's operating expenses for the three months ended June 30, 1998, exceeded levels the Company has historically experienced, due to acquired in-process technology recorded in connection with the acquisition of 7Software, and increased (i) T&E expenses associated with larger personnel levels, (ii) use of independent contractors and other outside services for continued development of XMS and localization of XMS, (iii) recruiting and related hiring expenses for additional senior management in the professional services, research and development, administrative, marketing and sales organizations, (iv) provision for bad debt reserves due to the Company's revenue growth in fiscal 1998 and (v) stock compensation expense.

The Company's quarterly operating results have fluctuated significantly in the past, and will continue to fluctuate in the future, as a result of a number of factors, many of which are outside the Company's control. These factors include: demand for the Company's products and services; size and timing of specific sales; level of product and price competition; timing and market acceptance of new product introductions and product enhancements by Concur and its competitors; changes in pricing policies by Concur or its competitors; Concur's ability to hire, train and retain sales and consulting personnel to meet the demand, if any, for XMS and CompanyStore; the length of sales cycles; Concur's ability to establish and maintain relationships with third-party implementation services providers and strategic partners; delay of customer purchases caused by announcement of new hardware or ERP platforms or otherwise; the mix of products and services sold, including an anticipated shift to providing its solutions as an ESP; mix of distribution channels through which products are sold; mix of international and domestic revenues; changes in the Company's sales force incentives; software defects and other product quality problems; personnel changes; changes in the Company's strategy, including the anticipated development of an ESP strategy; general domestic and international economic and political conditions; and budgeting cycles of the Company's customers. The Company has in the past experienced delays in the planned release dates of new software products or upgrades, and has discovered software defects in new products after their introduction. There can be no assurance that new products or upgrades will be released according to schedule, or that when released they will not contain defects. Either of these situations could result in adverse publicity, loss of revenues, delay in market acceptance or claims by customers brought against the Company, any of which could have a material adverse effect on the Company's business, results of operations and financial condition. In addition, the timing of individual sales has been difficult for the Company to predict, and large individual sales have, in some cases, occurred in quarters subsequent to those anticipated by the Company. There can be no assurance that the loss or deferral of one or more significant sales will not have a material adverse effect on the Company's quarterly operating results.

The Company has experienced, and expects to continue to experience, a high degree of seasonality, with a disproportionately greater amount of the Company's license revenues for any fiscal year being recognized in its fourth fiscal quarter. For example, in fiscal 1997, 37% of total revenues, 36% of license revenues and 42% of service revenues were recognized in the fourth fiscal quarter. The Company believes that such seasonality is primarily the result of the efforts of the Company's direct sales force to meet or exceed fiscal year end sales quotas. In addition, the Company's license revenues in its first fiscal quarter have historically been lower than those of the immediately preceding fourth quarter. For example, license revenues in the first quarter of fiscal 1998 decreased 10% from the fourth quarter of fiscal 1997. The Company expects this trend to continue in fiscal 1999.

LIQUIDITY AND CAPITAL RESOURCES

Since inception, the Company has funded its operations primarily through private sales of equity securities and the use of long-term debt and equipment leases. As of June 30, 1998, the Company had raised approximately $25.0 million, net of offering costs from the issuance of preferred stock, approximately $8.0 million from the issuance of long-term debt, and has financed equipment purchases totaling approximately $3.1 million. The Company's sources of liquidity as of June 30, 1998 consisted principally of cash and cash equivalents of $15.6 million, and approximately $1.5 million of available borrowings under a line of credit.

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Net cash used in operating activities was $2.3 million, $4.1 million and $6.6 million in fiscal 1995, 1996 and 1997, respectively, and $4.0 million for the nine months ended June 30, 1998. For such periods, net cash used by operating activities was primarily a result of funding ongoing operations.

Since 1995 the Company's investing activities have consisted primarily of purchases of property and equipment. Capital expenditures, including those under capital leases, totaled $220,000, $420,000 and $1.0 million in 1995, 1996, and 1997, respectively, and $1.1 million for the nine months ended June 30, 1998. Capital leases are used to finance the acquisition of property and equipment, primarily computer hardware and software, for the Company's increasing employee base, as well as for the Company's management information systems. Management anticipates that it will experience an increase in its capital expenditures and lease commitments consistent with its anticipated growth in operations, infrastructure and personnel. As of June 30, 1998, the Company had commitments for capital expenditures totaling approximately $333,000 that will be financed through leasing arrangements not to exceed five years. The Company does not expect to incur significant costs to make its products or internal information systems Year 2000 compliant because it believes such products and information systems are designed to properly function through and beyond the year 2000. See "Risk Factors--Year 2000 Compliance."

The Company's financing activities provided $4.8 million, $7.7 million and $8.6 million in fiscal 1995, 1996 and 1997, respectively, and $12.9 million for the nine months ended June 30, 1998. In 1995, cash provided by financing activities was comprised primarily of $4.9 million received in connection with the sale of Series A and Series B redeemable convertible preferred stock and $187,000 in proceeds from line of credit borrowings partially offset by principal payments totaling $300,000. In fiscal 1996, cash provided by financing activities was comprised primarily of $7.5 million received in connection with the sale of Series C redeemable convertible preferred stock and $563,000 in proceeds from long-term debt borrowings partially offset by principal payments on long-term debt totaling $380,000. In fiscal 1997, the cash provided by financing activities was comprised primarily of $4.6 million received in connection with the sale of Series D redeemable convertible preferred stock, $3.1 million in proceeds from long-term debt, and $1.9 million in proceeds from sales leaseback transactions and capital lease financing offset by principal payments on long-term debt of $925,000. For the nine months ended June 30, 1998, cash provided by financing activities consisted primarily of $7.8 million received in connection with the sale of Series E redeemable convertible preferred stock and $5.5 million in proceeds from long-term borrowings offset by principal payments on long term debt of $248,000 and $308,000 in payments on capital lease obligations.

The Company has a line of credit with a bank for $2.0 million, which bears interest at the lending bank's prime rate plus 1.5%. Borrowings are limited to the lesser of 80% of eligible accounts receivable or $2.0 million and are secured by substantially all of the Company's non-leased assets. As of June 30, 1998, the Company has not borrowed under the line of credit, however, there were $455,000 in standby letters of credit outstanding. Total borrowings available under this line were approximately $1.5 million as of June 30, 1998. This credit facility contains certain restrictions and covenants, including a restriction on dividend payments. This credit facility expires in September 1998 and the Company expects to extend or replace such credit facility under substantially similar terms.

In September 1997, the Company entered into a $1.0 million senior term loan facility with a bank pursuant to the terms of a Security and Loan Agreement (the "Loan Agreement"). In April 1998, the Loan Agreement was amended to allow for additional borrowings up to a total of $3.0 million. The facility, which bears interest at the lending bank's prime rate less 1.0%, matures on February 15, 2001. Payments are interest only through February 1999, at which time the facility will be termed out with 24 equal monthly principal payments plus interest. The Company's Loan Agreement contains certain financial restrictions and covenants that include a minimum liquidity ratio, minimum quarterly net sales, and restrictions on dividend payments. The Company is currently in compliance with such covenants and restrictions. The Company has granted a perfected senior security interest in all non-leased assets of the Company as security for its obligations under the Loan Agreement. As of June 30, 1998, the outstanding indebtedness under the Loan Agreement was $3.0 million.

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In July 1997, the Company entered into a Subordinated Loan and Security Agreement with an equipment lessor in the principal amount of $1.5 million which bears interest at an annual rate of 8.5% (the "Subordinated Loan Agreement"). In May 1998, the Subordinated Loan Agreement was amended to allow for additional borrowings of $5.0 million bearing interest at an annual rate of 11% on the first $3.5 million and 12.5% on the remaining $1.5 million. The notes are due in varying monthly installments through April 2002. The Subordinated Loan Agreement contains certain restrictions and covenants, including restrictions on dividend payments. As of June 30, 1998, the outstanding indebtedness under the Subordinated Loan Agreement was $4.8 million.

On August 11, 1998 the Company issued a warrant to TRS and its assignees to purchase an additional 6,000,000 shares of Series E Preferred Stock (the "TRS Warrant"). If all of the shares of Series E Preferred Stock are converted into shares of Common Stock in connection with a registration of the Company's Common Stock under the Securities Act, then this warrant shall automatically become exercisable for 6,000,000 shares of the Company's Common Stock. The warrant is exercisable in four tranches as follows: 750,000 shares may be acquired at the time of the Offering at a cash purchase price equal to the price to the public in the Offering less 7%; 1,750,000 shares may be acquired at any time on or before October 15, 1999 at a cash purchase price of $13.50 per share; 1,750,000 shares may be acquired at any time on or before January 15, 2001 at a cash purchase price of $20.25 per share; and the remaining 1,750,000 shares may be acquired at any time on or before January 15, 2002 at a cash purchase price of $34.00 per share. Pursuant to this warrant, if determined to be appropriate by the Board of Directors within 60 days of the date of the warrant, 25% of the shares that may be acquired under the warrant at the time of the Offering or on or before October 15, 1999 may be cancelled. The Board of Directors has made such a determination; thus, 562,500 shares may be acquired at the time of the Offering, and 1,312,500 shares may be acquired on or before October 15, 1999.

The Company currently intends to use the net proceeds of the Offering for working capital and general corporate purposes, including capital expenditures made in the ordinary course of business, as well as for possible acquisitions of businesses, products and technologies that are complementary to those of the Company. Although the Company has not identified any specific businesses, products or technologies that it may acquire, and there are no current agreements or negotiations with respect to any such transactions, the Company does from time to time evaluate such opportunities. Pending such uses, the net proceeds of the Offering will be invested in short-term, investment-grade, interest-bearing instruments.

The Company currently anticipates that it will continue to experience significant growth in its operating expenses for the foreseeable future related to entering new markets for the Company's products and services, increasing research and development spending, increasing its sales and marketing operations, developing new distribution channels, improving its operational and financial systems and broadening its professional service capabilities. Such operating expenses will be a material use of the Company's cash resources, including a portion of the net proceeds of the Offering. The Company believes that the net proceeds of the Offering, together with its existing cash and cash equivalents and available bank borrowings, will be sufficient to meet its anticipated cash needs for working capital and capital expenditures for at least the next 12 months. Thereafter, the Company may require additional funds to support its working capital requirements or for other purposes and may seek to raise such additional funds through public or private equity financing or from other sources. There can be no assurance that such sources will be adequate, will be obtainable on terms favorable to the Company or will not be dilutive.

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BUSINESS

The following description contains forward-looking statements that involve risks and uncertainties. The Company's actual results may differ significantly from the results discussed in the forward-looking statements. Factors that may cause such results to differ include but are not limited to those discussed in "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

OVERVIEW

Concur is a leading provider of Intranet-based employee-facing applications that extend automation to employees throughout the enterprise and to partners, vendors and service providers in the extended enterprise. The Company's Xpense Management Solution ("XMS") and CompanyStore products automate the preparation, approval, processing and data analysis of travel and entertainment ("T&E") expense reports and front-office procurement requisitions. Concur believes it is the leading provider of T&E expense management solutions and, since the introduction of XMS in 1996, the Company has licensed its products to over 125 enterprise customers with over 450,000 end users. Through its June 1998 acquisition of 7Software, Inc., the Company added the CompanyStore front-office procurement application to its product suite. By automating manual, paper-based processes, the Company's products reduce processing costs and enable customers to consolidate purchases with preferred vendors and negotiate vendor discounts.

INDUSTRY BACKGROUND

In response to increasingly competitive conditions worldwide, businesses are seeking cost savings and productivity gains through business process automation. Rather than internally developing applications to automate business processes, companies are increasingly turning to independent software vendors for solutions in areas such as finance and accounting, manufacturing, human resources, supply chain management, customer support and sales force automation. These solutions have traditionally targeted discrete functional or department level business processes involving relatively few employees.

Businesses are now seeking similar applications for manual, paper-based processes involving the vast majority of employees throughout the enterprise. Such "employee-facing" business processes include T&E expense management, front-office procurement, human resources self-service, time and billing, and facilities management. Typically, these processes are characterized by extensive corporate policies, detailed forms, manual data entry, multiple approvals, manual review and audit, manual financial system posting and cumbersome interactions with third-party suppliers and service providers.

The emergence of the Internet and corporate Intranets has made it possible to deploy applications that reach all employees in the enterprise and to connect the enterprise to corporate partners, vendors and service providers. In addition, in contrast to traditional client-server applications, Intranet-based applications can be deployed rapidly throughout the enterprise and on a cost-effective basis. The Internet also allows a software vendor to act as an outsourced enterprise service provider ("ESP"), delivering employee-facing applications through the Internet to reduce customers' up-front costs and IT infrastructure commitments.

Companies automating employee-facing business processes can realize significant operating cost savings through reduced processing costs, consolidated purchases with preferred vendors and negotiated vendor discounts. For example, according to the 1997 American Express T&E Management Process Study (the "American Express Study"), corporations spend on average $36 per T&E expense report processed, but can reduce such costs on average to as little as $8 through best-in-class automation. Savings of this magnitude on a per transaction basis are significant for enterprises with large numbers of such transactions. For example, based on the savings suggested by the American Express Study, businesses that process from 1,000 to 5,000 T&E expense reports per month might achieve savings ranging from $300,000 to $1.5 million per year. Similar savings can be achieved by automating front-office procurement. According to industry estimates, companies typically spend in excess of $100 to process each requisition, which the Company believes can be reduced to approximately $25 using best-in-class automation. Not only can automation lower the cost of processing expense reports and procurement requisitions, it can also provide information that can be used to negotiate discounts from vendors and service providers. Based on the amounts spent on T&E and front-office procurement, even a small percentage improvement in vendor rates can result in significant savings. For

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example, the American Express Study reported that U.S. businesses spent $156 billion in 1996 on direct T&E expenses such as airfare, hotel stays and car rentals.

The Company believes that as a result of the substantial potential savings from processing cost reductions and vendor discounts, coupled with the emergence of Intranet technologies, strong demand exists for employee-facing applications. The Company further believes that the most successful applications will improve the efficiency of T&E expense management, front-office procurement and other similar business processes and will be (i) based on Internet technologies, (ii) rapidly deployable and highly scalable, (iii) offered as part of an integrated suite of related applications, (iv) integrated with enterprises' existing IT infrastructures and (v) capable of linking businesses with their corporate partners, vendors and service providers through the Internet. Successful providers of such employee-facing applications will be able to deliver cost savings and other tangible benefits to corporate management, meet the needs of enterprise IT professionals and reduce burdens on employees.

THE CONCUR SOLUTION

Concur is a leading provider of Intranet-based employee-facing applications that extend automation to employees throughout the enterprise and to partners, vendors and service providers in the extended enterprise. The Company's XMS and CompanyStore products automate the preparation, approval, processing and data analysis of T&E expense reports and front-office procurement requisitions. Concur believes it is the leading provider of T&E expense management solutions and, since the introduction of XMS in 1996, the Company has licensed its products to over 125 enterprise customers with over 450,000 end users. Through its June 1998 acquisition of 7Software, the Company added the CompanyStore front-office procurement application to its product suite. The Company's products benefit a number of constituencies within the enterprise, including corporate management, IT professionals and employees, in the following ways.

Benefits for Corporate Management

Reduced Processing Costs. XMS and CompanyStore can significantly reduce the amount of labor associated with manual, paper-based T&E expense management and front-office procurement systems, by automating the process of preparation, approval, processing and data analysis. Concur believes that companies using its solutions as part of best-in-class processes can achieve significant cost savings. According to the American Express Study, corporations spend on average $36 per T&E expense report processed, but can reduce such costs on average to as little as $8 through best-in-class automation. Similarly, industry estimates indicate that companies typically spend in excess of $100 to process each requisition for front-office goods and services, and the Company believes that enterprises using best-in-class automation for such processes can reduce that cost to approximately $25.

Improved Supplier Management. Concur's products enable customers to collect and analyze data on T&E expense and front-office procurement. As a result, customers can use this data to help consolidate purchases with preferred vendors, negotiate vendor discounts and monitor compliance with pre-negotiated rates. The Company believes that the savings from improved supplier management can be substantial. For example, one XMS customer informed the Company that after implementing XMS, it was able to reduce its annual spending on air travel by 5% to 10%.

Improved Cash Management. Concur's products enable customers to improve their cash management positions by controlling the timing of payments to T&E and front-office suppliers and vendors, and to improve their cash forecasting abilities.

Improved Policy-Making and Monitoring. Concur's products facilitate improved budgeting, policy-making and trend analysis, and better monitoring of compliance with corporate policy.

Benefits for IT Professionals

Rapid Deployment. Concur's Intranet-based products are designed to be rapidly deployed within today's existing corporate IT infrastructures without requiring modification of customer systems. Concur offers applications configured to customer requirements rather than solutions customized on a customer-by-customer basis. Once installed on a customer's Intranet servers, Concur's products can reach employees

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enterprise-wide. For example, one Concur customer recently deployed XMS to over 25,000 employees within 90 days after the customer began its rollout, and another customer deployed CompanyStore within five weeks.

Enterprise-Wide Scalability. Concur's Intranet-based products are designed to reach employee desktops throughout the enterprise, regardless of the organization's size. The Company has licensed its products to customers seeking to deploy to as few as 100 employees and as many as 80,000 employees, with the largest current installation to date being a site with over 25,000 employees.

Leverage of Existing IT Infrastructure. Because most businesses operate in a heterogeneous computing environment, XMS is designed to interact and interoperate with a broad range of software platforms and products, including multiple operating systems, browsers, databases, accounting packages and major ERP programs such as SAP, PeopleSoft, and Oracle. CompanyStore currently supports SAP R/3 and Microsoft SQL server, and the Company intends to enhance CompanyStore to support other major platforms.

Connectivity to Third Parties. The Company's Intranet-based products are designed to enable enterprises to link their systems with those of their corporate partners, vendors and service providers, including corporate charge card providers such as American Express, travel booking applications, and suppliers such as Corporate Express, Inc.

Benefits for Employees

Faster Reimbursement and Order Fulfillment. Concur's solutions enable businesses to reduce the time required to reimburse employees for incurred T&E expenses and to fulfill front-office requisitions. Features that expedite the process include automated electronic approval routing, links to automatic deposit systems, links with approved vendors, on-line status updates and automatic posting to ERP and financial programs. The American Express Study reported that the time from submission of an expense report to reimbursement could be reduced from an average of 22 days to as little as three days using best-in-class automation processes.

Ease of Use. Concur's products contain easy-to-use features and functions that reduce the time users spend preparing T&E expense reports and front-office requisitions. XMS uses corporate credit card transactions to "prepopulate" a user's expense report automatically. Both XMS and CompanyStore also "prepopulate" expense reports and requisition forms based on past experience and preferences. In addition, corporate policies and preferred vendors can be integrated into the applications, and detailed explanations of corporate policies are available on-line. These features reduce errors, save user time and effort, and improve expense reconciliation.

STRATEGY

Concur's objective is to be the leading provider of Intranet-based employee-facing applications that extend automation to employees throughout the enterprise and to partners, vendors and service providers in the extended enterprise. Key elements of the Company's strategy include:

Extend Leadership Position. Concur intends to extend its leadership position in T&E expense management solutions and to leverage that position to sell CompanyStore. In order to accommodate anticipated future demand for its products, the Company intends to increase the size of its direct sales and telesales organizations significantly. Concur believes this expanded sales and marketing organization will enhance its ability to sell its products to new customers globally. The Company also believes this expanded sales force will allow it to sell CompanyStore and future applications to its current customers.

Expand Product Functionality. Concur plans to continue its innovation and development of advanced features and functionality for its T&E expense management and front-office procurement solutions. The Company plans to add functionality to XMS, including features such as localized versions for additional foreign countries and enhanced integration with on-line travel booking applications such as American Express Interactive. Concur also plans to enhance CompanyStore by expanding its features and functionality, adding support for additional databases and ERP platforms, enhancing catalog support and integrating CompanyStore into its product suite through the Concur Common Platform, the Company's common technology platform for its application suite.

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Extend and Integrate Product Suite. The Company plans to extend its employee-facing application suite by acquisition and internal development. Concur expects to target additional employee-facing applications that can offer compelling benefits to the enterprise such as human resources self-service, time and billing, and facilities management applications. To create an integrated suite of applications, the Company is pursuing development of a common user interface and a common technology platform. The common user interface, known as Employee Desktop, is a personalized Web page on the corporate Intranet that provides a centralized location for all employee-facing applications. The technology platform, known as the Concur Common Platform, will standardize the software architecture underlying all applications in the suite. The Company believes that the benefits of an integrated suite include ease of use and reduced IT burden as a result of common technology.

Expand International Presence. Concur believes that considerable untapped demand exists for its products outside of the United States. For the nine months ended June 30, 1998, international revenues accounted for less than five percent of total revenues. The Company intends to accelerate its investment in international sales and marketing to increase sales of its employee-facing applications worldwide. It also plans to add new features and functionality to XMS and CompanyStore to accommodate accounting, customs, currency and tax requirements of foreign jurisdictions.

Extend Relationships With Strategic Third Parties. Concur intends to expand its relationships with strategic referral partners and to develop additional relationships with providers of complementary third-party applications and products. The Company has developed strong lead generation relationships with leading corporate charge card providers such as American Express, Diners Club, and Citibank, N.A., and intends to establish similar relationships with purchasing card providers and systems integration and consulting firms. The Company intends to integrate XMS with automated travel booking applications to provide its customers with an end-to-end travel booking solution that encompasses booking, reporting and analysis, and to integrate CompanyStore with leading front-office supply vendors to provide its customers with greater access to those vendors.

Offer Enterprise Service Provider Solutions. In addition to licensing its software, Concur plans to offer its solutions as an Internet-based ESP on a per-transaction pricing basis to companies seeking to outsource their employee-facing business applications. The Company expects that this opportunity will be particularly attractive to middle-market customers (100-750 licensed end users), which typically have limited IT staffing and budgets. Concur's ESP services are currently expected to be available in the second half of calendar 1999.

The Company's strategy involves substantial risk. There can be no assurance that the Company will be successful in implementing its strategy or that it will lead to achievement of the Company's objectives. If the Company is unable to implement its strategy effectively, the Company's business, results of operations and financial condition would be materially adversely affected.

PRODUCTS AND TECHNOLOGY

The Company's current product line consists of XMS, its market-leading T&E expense management application, and CompanyStore, its newly-acquired front-office procurement application. The Company shipped an enterprise-wide, client-server based version of XMS in July 1996, and shipped the Intranet-based version of XMS in March 1998. For customers without corporate Intranets or for users not connected to the Internet, the Company provides a disconnected Windows-based version of XMS, which is interoperable with the Intranet version of XMS. Concur has licensed XMS to over 450,000 end users at over 125 companies. Through its June 1998 acquisition of 7Software, the Company added CompanyStore to its product suite. The Company generally offers licenses for its software based on the number of users or employees at a given enterprise. The typical order size for the Company's products and services ranges from $50,000 to $500,000, with certain transactions that have been greater than $1 million.

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Xpense Management Solution

XMS automates the T&E expense management process, including preparation, approval, processing and data analysis.

Report Preparation. XMS includes a number of features that facilitate report preparation for the end-user. The application uses corporate credit card information to prepopulate a user's expense report with transaction data covering a variety of the information required for the expense report, including transaction date, type of expense, vendor, location, method of payment, currency amount and foreign currency conversion. Using a graphical user interface, the employee supplies additional expense-related information by means of pull-down menus or filling in blanks. To eliminate the task of sorting receipts, XMS allows the user to enter data in any order. The HotelXpert feature of the program automates the complicated process of itemizing hotel receipts. With each use of XMS, the application retains commonly incurred expense information and uses this information to help complete the next expense report. Other ease of use features include simple "checkbook" style input screens, ability to create "attendees" lists, mileage reimbursement tracking, and automatic flagging of non-compliant and incomplete entries.

Report Approval. XMS allows the enterprise to determine how expense reports should be processed, whether by submission to a manager for approval before processing or submission to the accounting department for immediate review and payment. Once the report is submitted, the approver receives an e-mail message containing an Intranet link to XMS, where all reports awaiting approval are listed. XMS can be configured to route the report for approval based on cost center, dollar limit or other criteria. Items that do not comply with corporate policy can be automatically flagged for review, allowing approvers to focus on problematic items. Approvers can reject individual line items, while allowing the rest of the report to continue in the approval process. Once approved, the report is automatically forwarded to the next phase in the process or to the enterprise's accounting department, and the user is notified of the action.

Report Processing. XMS streamlines back-office processing of expense reports in a number of ways. Because all expense reports are prepared electronically, the processing department no longer has to check the arithmetic of each report manually. Moreover, businesses can greatly reduce the time spent auditing reports by choosing to audit only those reports flagged by XMS as not compliant with corporate T&E expense policies. In addition, XMS reduces the number of status inquiries between employees and processing departments by automatically updating the status of reports in the database, and alerting employees via e-mail to the status of their reports. XMS allows significant time savings by automatically posting expense report information to the enterprise's ERP or accounting package, eliminating the manual re-entry of this data. XMS further simplifies processing by producing bar-coded receipt submission cover pages to validate delivery of receipts associated with expense reports. XMS also helps companies claim reimbursement of tax credits by tracking VAT, GST and other international taxes.

Data Analysis. XMS utilizes business intelligence software to analyze expense data. This information can be presented graphically in various display formats and allows travel managers to determine total spending according to vendor, location or other user-defined criteria. Informed by this data, managers can analyze trends and determine methods for controlling costs or negotiating more favorable terms with vendors. Managers can also analyze the data to monitor compliance with vendor commitments corporate travel policies and determine if policy modifications are appropriate.

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The following table describes significant features and potential benefits of XMS:

--------------------------------------------------------------------------------------------
                                     REPORT PREPARATION
--------------------------------------------------------------------------------------------

  FEATURES                                     BENEFITS

  Prepopulates report with corporate credit    Speeds report preparation time
  card transactions
                                               Reduces input mistakes
  Retains commonly incurred expense
  information                                  Reduces queries and dependence on accounting
                                               department
  Simplifies receipt entry
                                               Ensures submission of all applicable expenses
  Itemizes hotel receipts automatically
                                               Increases employee use of corporate credit
  Prevents submission of incomplete reports    card
  Built-in attendee lists, mileage
  reimbursement tracking, foreign currency
  translation
--------------------------------------------------------------------------------------------
                                      REPORT APPROVAL
--------------------------------------------------------------------------------------------

FEATURES                                       BENEFITS

  Automatic routing of reports                 Speeds approval time
  Flags non-compliant expenses                 Increases compliance with corporate policies
  Line-item approval of reimbursement data     More efficient use of management resources
  Approver notification
--------------------------------------------------------------------------------------------
                                     REPORT PROCESSING
--------------------------------------------------------------------------------------------

FEATURES                                       BENEFITS

  Integrates travel expense data with          More efficient use of processing resources
  back-office systems
                                               Speeds report processing and employee
  Flags non-compliant expenses                 reimbursement
  Provides automatic status updates            Reduces human error
  Bar-codes receipt submissions                Reduces queries and dependence on accounting
                                               department
  Tracks VAT, GST and other foreign taxes
                                               Identifies tax credits
  Verifies arithmetic
--------------------------------------------------------------------------------------------
                                       DATA ANALYSIS
--------------------------------------------------------------------------------------------

FEATURES                                       BENEFITS

  Presents travel expense data graphically     Supplies data needed for vendor rate
                                               negotiation
  Allows customer to sort data by employee,
  vendor and type of expense                   Facilitates vendor consolidation
  Drill-down capability                        Identifies trends and problem areas
                                               Allows monitoring of compliance with vendor
                                               commitments and corporate travel policies
--------------------------------------------------------------------------------------------

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CompanyStore

CompanyStore automates the front-office procurement process, including preparation, approval, processing and data analysis.

Order Preparation. CompanyStore utilizes a customer-specific electronic catalog of preferred vendors and commonly requested goods and services such as office supplies, computers and other equipment. Using a graphical user interface, requisitioners browse the catalog to select and order items and place them in an electronic "shopping basket." Catalog materials can be updated by either the enterprise or the vendor. CompanyStore contains links to vendor Web sites, allowing the requisitioner to obtain detailed product information. To make the ordering process easier, CompanyStore retains information about the user, including name, employee identification, shipping address, accounting information and frequently ordered products. To reduce delays and unnecessary processing iterations, CompanyStore prevents submission of incomplete orders.

Order Approval. CompanyStore allows the enterprise to determine how requisitions should be processed, whether by submission to a manager for approval before processing or submission to the purchasing department for immediate processing. Once the order is submitted, an e-mail notification of the order is automatically sent to the specified approver. The e-mail contains a link to a personalized "approval" Web page, which lists all purchase requisitions that are awaiting approval by the particular approver. Using the Web page, the approver specifies which requisitions to approve in each order. CompanyStore enables the customer to configure approval rules based on cost center, dollar limit, material type or other criteria. CompanyStore enables authorization of orders based on digital signatures and prohibits the release of orders without required approval.

Order Processing. CompanyStore streamlines processing of front-office requisitions in a number of ways. The customer's purchasing department selects the items and vendors to be included in the CompanyStore electronic catalog. After approval, orders are sent to the purchasing department to be processed and progress reports are delivered to the requisitioner automatically, reducing the number of status inquiries between the requisitioner and the purchasing department. CompanyStore can be integrated into the customer's accounting package so that the order can be entered into the purchasing system automatically, allowing significant time savings. CompanyStore allows approved requisitions to be sent directly to vendors via fax, e-mail or electronic data interchange.

Data Analysis. CompanyStore consolidates purchasing data, allowing managers to determine spending according to cost center, time period, employee and supplier. This data allows managers to determine how best to control costs, negotiate more favorable supplier arrangements, and consolidate vendors. Managers can analyze the data to monitor compliance with corporate purchasing policies and vendor commitments.

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The following table describes significant features and potential benefits of CompanyStore:

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                                     ORDER PREPARATION
--------------------------------------------------------------------------------------------

 FEATURES                                      BENEFITS

 Simple point-and-click ordering               Speeds order time
 Customer-specific electronic catalog stores   Directs orders to preferred vendors
 preferred vendors and commonly requested
 goods and services                            Reduces errors
 Retains user information, including shipping  Detailed product descriptions available
 information, frequently ordered products and
 purchasing card information                   Reduces queries and dependence on purchasing
                                               department
 Prevents submission of incomplete orders
 Internet links to vendor Web sites
--------------------------------------------------------------------------------------------
                                       ORDER APPROVAL
--------------------------------------------------------------------------------------------

FEATURES                                       BENEFITS

 Automatically e-mails order to designated     Speeds approval time
 approver
                                               Reduces errors
 Digital signatures for order authorization
                                               Decreases maverick purchasing
 Automated approval controls based on user
 signing authority                             More efficient use of management resources
                                               Increases compliance with corporate policies
--------------------------------------------------------------------------------------------
                                      ORDER PROCESSING
--------------------------------------------------------------------------------------------

FEATURES                                       BENEFITS

 Integrates purchasing data with back-office   Speeds fulfillment time
 systems
                                               Reduces lost orders
 Sends approved requisitions directly to
 vendor or to enterprise's purchasing system   More efficient use of processing resources
 Updates requisitioner on order progress       Greater consistency of items ordered
 Purchasing department determines items        Vendor consolidation
 available in catalog
 Prohibits release of orders without required
 approval
--------------------------------------------------------------------------------------------
                                       DATA ANALYSIS
--------------------------------------------------------------------------------------------

FEATURES                                       BENEFITS

 Allows customers to track spending by         Identifies trends and problem areas
 multiple factors, including cost center,
 time period, employee and supplier            Supplies data needed for vendor rate
                                               negotiation
                                               Allows monitoring of compliance with vendor
                                               commitments
                                               Facilitates vendor consolidation
--------------------------------------------------------------------------------------------

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Product Architecture

The following diagram illustrates the key features of the Company's product architecture:

PRODARCH CHART

The Company's applications operate on advanced IT platforms and are fully scalable and configurable. XMS and CompanyStore are built on a multi-tiered architecture. XMS has a separate client, application server and database server built using a COM-based architecture. CompanyStore currently has separate client and server layers and is migrating to the COM model. In addition, a common application server model is being built for both applications which contains all common business logic, including workflow, user management, security, business rules, business intelligence and messaging.

The XMS application server layer contains all of the business logic and is COM based, and built using Microsoft Visual C++. The CompanyStore application server and the common business logic layer are being built using the same technologies. The application server layer can be extended using off-the-shelf tools such as Microsoft Visual Basic. The application server operates on Windows NT 4.0 and, for the browser-based clients, supports both the Microsoft Internet Information Server and the Netscape Enterprise Server.

The XMS application server supports Oracle, Sybase or Microsoft SQL server databases and integrates with multiple ERP systems, including SAP, PeopleSoft, Oracle, or existing legacy systems. The CompanyStore application server supports the Microsoft SQL server database and integrates with SAP R/3, and the Company intends to integrate the CompanyStore application server with other database and ERP systems in the future.

The browser-based clients run on versions of Microsoft Internet Explorer 3.02 and above and Netscape Navigator 3.0 and above, utilizing primarily HTML and JavaScript via Microsoft's Active Server Pages technology. Operating systems supported include Microsoft Windows 3.11, Windows 95, Windows 98 and Windows NT
4.0. The Windows-based XMS client is written utilizing Microsoft Visual C++, and is fully functional in a disconnected environment.

SERVICES

The Company's professional services organization was formed in 1996 to offer consulting, customer support and training in connection with licenses of XMS. The Company believes that services are an important part of its success and its professional services organization has expanded to offer similar services in connection with licenses of CompanyStore.

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Consulting. The Company offers a variety of consulting services in connection with licenses of XMS and CompanyStore. Concur's consulting staff meets with customers prior to product implementation to review the customer's existing business processes and IT infrastructure, and to provide advice on ways to improve these processes using industry best practices. Thereafter, Concur's consultants install, configure and test the application and integrate it with the customer's existing ERP and employee reimbursement systems. Concur's consultants also help customers implement bar-coding processes and develop a strategy for the customer's enterprise-wide deployment of the application.

Customer Support. The Company provides product upgrades and customer support through its "CustomerOne" maintenance program. Customers generally purchase the first year of the CustomerOne program at the time they license an application; thereafter, support is available on an annual renewal basis. Customer support staff are available 24 hours a day, seven days a week. The Company also offers Internet-based support that features an on-line knowledge base.

Training. The Company offers a variety of training programs for XMS and CompanyStore. These classes are tailored to particular user groups, such as end users, help desk personnel and trainers. Training classes are typically offered at customer sites and also at the Company's headquarters in Redmond, Washington. The Company plans to begin providing training classes for third-party service providers, such as systems integrators, as it expands its relationships with such parties.

CUSTOMERS

Given the broad applicability of its products, the Company has licensed its applications to over 125 enterprise customers in a wide range of industries. The following table lists certain of the Company's significant customers in fiscal 1996, 1997 and the nine months ended June 30, 1998:

CONSUMER                                     PHARMACEUTICAL/HEALTH CARE
Anheuser-Busch Companies Inc.                Columbia/HCA Healthcare Corporation
Avon Products, Inc.                          Merck, Sharpe & Dohme Limited
The Gillette Company                         Pharmacia & Upjohn & Co.
J.C. Penney Company, Inc.                    Tenet Healthcare Corporation
Levi Strauss & Co.                           TECHNOLOGY/TELECOMMUNICATIONS/MEDIA
Maytag Corporation                           American Management Systems, Inc.
FINANCIAL SERVICES                           Computer Sciences Corporation
Bear Stearns & Co. Inc.                      Hewlett-Packard Company
Dresdner Kleinwort Benson                    The New York Times Company
J & H Marsh & McLennan, Inc.                 Seagate Technology, Inc.
Lehman Brothers Inc.                         Sprint Corporation
Royal Insurance                              Texas Instruments Incorporated
INDUSTRIAL/MANUFACTURING                     The Times Mirror Company
Case Corporation                             Tivoli Systems, Inc.
E.I. du Pont de Nemours and Company          Visio Corporation
Guardian Industries Corporation              OTHER
Northrop Grumman Corporation                 American Airlines, Inc.
Monsanto Company                             J. Walter Thompson
Solutia, Inc.                                Harvard College
                                             Ontario Ministry of Labour
                                             Exxon Corporation
                                             Texaco Inc.

In fiscal 1995, 1996 and 1997, no customer accounted for 10% or more of the Company's total revenues.

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The following case studies, which are based solely on information supplied by the respective subject companies, illustrate how selected companies have used Concur products and services to address their T&E expense management and front-office procurement needs:

Guardian Industries Corp. ("Guardian"). A leading manufacturer and fabricator of architectural and automotive glass and plastics. Guardian operates over 40 production facilities around the world and has approximately 1,000 business travelers in transit at any one time. Historically, business travelers filed expense reports manually after each business trip. This paper-based process led to processing delays, significant employee time invested in filling out expense reports, and a lack of visibility into enterprise-wide T&E spending. Guardian implemented Concur's XMS application to address these issues, and realized significant advantages and cost savings as a result. For example, XMS saves employee time by decreasing time spent filling out reports and allows management to analyze enterprise-wide T&E spending to formulate more effective travel policies, evaluate the performance of travel vendors and negotiate reduced costs with vendors. In fact, Guardian reduced its annual spending on air travel by 5% to 10% after implementing XMS.

Case Corporation ("Case"). A leading designer, manufacturer and distributor of agricultural and construction equipment and provider of a broad array of financial services, Case has over 13,000 employees worldwide with 4,000 business travelers. Before implementing XMS, Case received as many as 5,000 T&E expense reports per month in a variety of formats, from handwritten reports to spreadsheets. This practice resulted in costly delivery methods (such as overnight delivery or facsimile), high processing costs, delays in reimbursement, and reports not in compliance with corporate policies. To address these problems, Case automated its T&E expense reporting process with XMS. Within nine months after deploying XMS on an enterprise-wide basis, the vast majority of Case's travelers were using XMS and receiving reimbursements through their regular paychecks. As a result, Case has significantly reduced travel expense reimbursement related costs. In addition, Case now reimburses employees and analyzes spending more effectively.

Solutia, Inc. ("Solutia"). Solutia is a global company that applies its expertise in chemistry to the consumer, household, automotive and industrial products industries through 24 manufacturing sites worldwide. Solutia's nearly 9,000 employees include approximately 3,000 who are business travelers. At the time Solutia decided to reengineer its T&E expense management processes, it had 15 processing centers handling approximately 25,000 expense reports per year. Using XMS as the cornerstone of its reengineering effort, Solutia streamlined the preparation, approval and processing of expense reports, consolidated its 15 processing centers into one shared services center, and cut processing costs by over 50%.

Visio Corporation ("Visio"). Through a worldwide network of offices, Visio develops, markets and sells drawing and diagramming software for PCs. After implementing SAP R/3, Visio sought an Intranet front-office procurement system to eliminate inefficiencies in its paper-based ordering and manual routing of front-office procurement requisitions. Visio required a system that was easy to use and would seamlessly integrate with SAP. After selecting CompanyStore, Visio implemented the application in only five weeks and immediately realized efficiencies in purchase order processing and product delivery. CompanyStore allows purchasing and procurement personnel to spend less time processing transactions and more time on vendor evaluations and pricing strategies. Visio estimates it will achieve approximately $1 million in savings in the first year of implementation, from such improvements as decreased requisition processing costs, decreased non-compliant spending, decreased time needed to process payables, and decreased time spent by budget managers gathering financial data.

SALES

The Company sells its software primarily through its direct sales organization, with sales professionals located in Atlanta, Boston, Chicago, Columbus, Dallas, Detroit, Los Angeles, Minneapolis, New York, Newark, Philadelphia, Redmond, San Francisco and Washington, D.C. The Company also has offices in Toronto and London. The field sales force is complemented by direct telesales and telemarketing representatives based at the Company's headquarters in Redmond, Washington. Technical sales support is provided by sales engineers located in several of the field offices. The Company currently intends to add a significant number of sales representatives and sales engineers in other domestic and international locations. The

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Company uses a remarketer in New Zealand and plans to expand its remarketer channel to other international markets. The remarketer receives a referral fee from the Company for marketing the Company's products, and provides post-sale implementation and support of the Company's products.

The Company's direct sales force sells both XMS and CompanyStore. Since Concur's products affect employees throughout the enterprise, the sales effort involves multiple decision makers and frequently includes the chief financial officer, vice president of finance, controller and vice president of purchasing. While the average sales cycle varies substantially from customer to customer, for initial sales it has generally ranged from six to nine months.

Strategic Alliances

The Company has developed a number of referral relationships with strategic partners. Under an arrangement with American Express, the largest corporate charge card issuer in the United States, American Express refers its corporate charge card customers that seek a T&E expense management software solution to Concur. In addition, American Express recently agreed to be a strategic remarketer for the ESP version of XMS. In connection with this relationship, Edward Gilligan, President, Corporate Services of American Express, has agreed to serve on the Company's Board of Directors following completion of the Offering. The Company believes that this relationship helps American Express to differentiate its corporate charge card, and, prospectively, to realize incremental revenue through referral and remarketing fees for XMS. In August 1998, American Express, through its subsidiary TRS, completed a $5 million equity investment in the Company and the Company granted TRS a warrant to purchase up to 5,375,000 shares of the Company's Series E Preferred Stock, at prices ranging from the price to public in the Offering less 7% to $34.00, expiring in four tranches through January 2002. Other key relationships include Citibank, N.A., Citicorp Diners Club Inc., and Geac Computer Corporation Ltd.

The Company's existing strategic relationships do not, and any future strategic relationships may not, afford the Company any exclusive marketing or distribution rights. Many of the Company's strategic partners have multiple strategic relationships, and there can be no assurance that the Company's strategic partners view their relationships with the Company as significant for their own businesses or that they will not reduce their commitment to the Company at any time in the future. In addition, there can be no assurance that such parties will not pursue other partnerships or relationships or attempt to develop or acquire products or services that compete with the Company's products or services either on their own or in collaboration with others, including the Company's competitors. Further, the Company's existing strategic relationships may interfere with its ability to enter into other desirable strategic relationships. Any future inability of the Company to maintain its strategic relationships or to enter into additional strategic relationships will have a material adverse effect on the Company's business, results of operations and financial condition. See "Risk Factors--Need to Establish and Maintain Strategic Relationships; Dependence on Key Business Relationships" and "Certain Transactions."

MARKETING

The Company's marketing efforts are directed at extending the Company's leadership position in T&E expense management applications and increasing its market share for other employee-facing applications. Targeted at accounting, finance, purchasing and travel executives, the Company's marketing programs are focused on creating awareness of, and generating interest in, the Company's products.

Concur engages in a variety of marketing activities, including developing and executing co-advertising and co-marketing strategies designed to leverage its existing strategic relationships, targeting additional strategic relationships, managing and maintaining the Company's Web site, issuing newsletters and direct mailings, creating and placing advertisements, conducting public relations campaigns, and establishing and maintaining close relationships with recognized industry analysts. The Company is an active participant in technology-related conferences and demonstrates its products at trade shows targeted at accounting, finance, purchasing and travel executives.

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The Company believes that demand is increasing, and will continue to increase, for employee-facing applications such as those sold by the Company. There can be no assurance that the Company will be able to expand its sales and marketing staff, either domestically or internationally, to take advantage of any increase in demand for employee-facing applications. The failure of the Company to expand its sales and marketing organization or other distribution channels could materially and adversely affect the Company's business, results of operations and financial condition. See "Risk Factors--Management of Growth," "--Need to Attract and Retain Qualified Personnel" and "--Dependence on Key Employees."

PRODUCT DEVELOPMENT

The Company has been an innovator and leader in the development of employee-facing enterprise applications. The Company believes that it was one of the first to introduce a commercially successful T&E expense reporting application and that it pioneered a number of features that are now common throughout the T&E expense reporting field, such as prepopulation with corporate credit card transactions and automatic itemization of hotel bills. Concur's software development staff is responsible for enhancing the Company's existing products and expanding its product line. The Company believes that a technically skilled, quality oriented and highly productive software development organization will be a key component to the continued success of new product offerings. The Company expects that it will increase its product development expenditures substantially in the future.

Concur's current product development activities focus on product enhancements to XMS and CompanyStore, development of the Concur Common Platform technology that will standardize the software architecture underlying all applications in the suite, and development of Employee Desktop, a personalized Web page on the corporate Intranet that will provide a centralized location for all employee-facing applications. Concur expects XMS enhancements to include features such as localized versions of XMS for foreign countries, and enhanced integration of XMS with on-line travel booking applications. Concur plans to enhance CompanyStore by expanding its features and functionality, adding support for additional databases and ERP platforms and enhancing catalog support. The Company plans to offer its applications through the Internet as an outsourced ESP starting with XMS in the second half of calendar 1999 and to provide CompanyStore as an ESP offering in fiscal 2000.

There can be no assurance that these development efforts will be completed within the Company's anticipated schedules or that, if completed, they will have the features necessary to make them successful in the marketplace. Future delays or problems in the development or marketing of product enhancements or new products could result in a material adverse effect on the Company's business, results of operations and financial condition. See "Risk Factors--Risks Associated with New Versions and New Products; Rapid Technological Change."

COMPETITION

The market for the Company's products is intensely competitive, subject to rapid change and significantly affected by new product introductions and other market activities of industry participants. The Company's primary source of direct competition comes from independent software vendors in both the T&E expense management and front-office procurement applications. The Company also faces indirect competition from potential customers' internal development efforts and from potential customers' reluctance to move away from existing paper-based systems.

The Company's major competitors in the T&E expense management field include Captura Software, Inc., Extensity, Inc., IBM and Necho Systems Corporation. In addition, several major ERP vendors such as SAP, Oracle, and PeopleSoft have already developed T&E expense management products and have begun to sell these products along with their application suites. The Company's major competitors in the front-office procurement field include Ariba Technologies, Inc., Commerce One, Inc., ELEKOM Corporation, Harbinger Corporation, Netscape Communications Corporation and TRADE'ex Electronic Commerce Systems, Inc. In addition to its current competitors, the Company expects to face competition from new entrants including those ERP providers that do not already market a T&E expense management product. Most of the major ERP

49

providers have a significant installed customer base and have the opportunity to offer additional products to those customers as additional components of their respective application suites.

The Company believes that the principal competitive factors considered in selecting T&E expense management and front-office procurement applications are functionality, interoperability with existing IT infrastructure, price and an installed referenceable base of customers. Many of the Company's competitors in both the T&E expense management and front-office procurement markets have longer operating histories, significantly greater financial, technical, marketing and other resources, significantly greater name recognition and a larger installed base of customers than the Company. Moreover, a number of the Company's competitors, particularly major ERP vendors, have well-established relationships with current and potential customers of the Company as well as with systems integrators and other vendors and service providers. In addition, these competitors may be able to respond more quickly to new or emerging technologies and changes in customer requirements, or to devote greater resources to the development, promotion and sale of their products, than can the Company.

It is also possible that new competitors or alliances among competitors or third parties may emerge and rapidly acquire significant market share. The Company expects that competition in its markets will increase as a result of consolidation and the formation of alliances in the industry. Increased competition may result in price reductions, reduced gross margins and loss of market share, any of which could materially adversely affect the Company's business, results of operations and financial condition. There can be no assurance that the Company will be able to compete successfully against current or future competitors or that competitive pressures faced by the Company will not materially and adversely affect its business, results of operations and financial condition. See "Risk Factors--Competition."

INTELLECTUAL PROPERTY AND OTHER PROPRIETARY RIGHTS

The Company's success is heavily dependent upon its proprietary technology. The Company relies primarily on a combination of copyright, trade secret and trademark laws, confidentiality procedures, contractual provisions and other similar measures to protect its proprietary information. The Company currently holds no patents and does not have any patent applications pending. There can be no assurance that any copyrights or trademarks held by the Company will not be challenged and invalidated. In addition, existing copyright and trademark laws afford only limited protection. Further, the Company believes that factors such as the technical and creative skills of its personnel, new product development, product enhancements, and reliable product maintenance are more essential to developing and maintaining its technology leadership position than the legal protection of its technology.

As part of its confidentiality procedures, the Company enters into non-disclosure agreements with certain of its employees, consultants, corporate partners, customers and prospective customers. The Company also enters into license agreements with respect to its technology, documentation and other proprietary information. Such licenses are generally non-transferable and have a perpetual term. Despite the Company's efforts to protect its proprietary rights, unauthorized parties may attempt to copy or otherwise obtain and use the Company's products or technology that the Company considers proprietary and third parties may attempt to develop similar technology independently. In particular, the Company provides its licensees with access to object code versions of its software, and to other proprietary information underlying the Company's licensed software. Policing unauthorized use of the Company's products is difficult, particularly because the global nature of the Internet makes it difficult to control the ultimate destination or security of software or other data transmitted and, while the Company is unable to determine the extent to which piracy of its software products exists, software piracy can be expected to be a persistent problem. In addition, effective protection of intellectual property rights may be unavailable or limited in certain countries. The laws of some foreign countries do not protect the Company's proprietary rights to the same extent as do the laws of the United States. There can be no assurance that the Company's protection of its proprietary rights will be adequate or that the Company's competitors will not independently develop similar technology.

The Company is not aware that its products, trademarks, copyrights or other proprietary rights infringe the proprietary rights of third parties. There can be no assurance that third parties will not assert infringement

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claims against the Company in the future with respect to current or future products or that any such assertion will not require the Company to enter into royalty arrangements or result in costly litigation. Any such infringement claims, with or without merit, could be time consuming and expensive to defend. See "Risk Factors--Limited Protection of Proprietary Technology; Risks of Infringement."

EMPLOYEES

As of June 30, 1998, the Company had approximately 179 full-time employees, five of whom were based in the United Kingdom. These included 51 engaged in research and development, 54 in sales and marketing, 49 in consulting, training and technical support and 25 in administration and finance. No employees are known by the Company to be represented by a collective bargaining agreement and the Company has never experienced a strike or similar work stoppage. The Company considers its relations with its employees to be good. The Company's ability to achieve its financial and operational objectives depends in large part upon its continuing ability to attract, integrate, retain and motivate highly qualified sales, technical and managerial personnel. Competition for such qualified personnel in the Company's industry is intense, particularly in the Seattle area in which the Company's headquarters is located and particularly with respect to software development and management personnel. In addition, competitors may attempt to recruit the Company's key employees. There can be no assurance that the Company will be able to attract or retain employees in the future. The Company is a party to employment agreements with certain of its employees. See "Risk Factors--Need to Attract and Retain Qualified Personnel" and "--Dependence on Key Employees."

FACILITIES

The Company's principal administrative, sales, marketing and research and development facility is located in Redmond, Washington, consisting of approximately 43,000 square feet of office space held under a lease that expires in January 2003. As of June 30, 1998, the Company also leased sales offices in Chicago, Dallas, Los Angeles, New York and in London. For a discussion of certain risks associated with the Company's anticipated need for additional office space, see "Risk Factors--Management of Growth."

LEGAL PROCEEDINGS

There are no material legal proceedings currently pending to which the Company is a party.

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MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information regarding the executive officers and directors of the Company:

             NAME                 AGE                     POSITION
             ----                 ---                     --------
S. Steven Singh...............    37     President, Chief Executive Officer and
                                         Director
Michael W. Hilton.............    34     Chairman of the Board of Directors and
                                         Chief
                                         Technical Officer
Jon T. Matsuo.................    38     Executive Vice President of Worldwide Sales
Sterling R. Wilson............    40     Chief Financial Officer and Vice President
                                         of
                                         Operations
Rajeev Singh..................    30     Vice President of Products
Frederick L. Ingham...........    31     Vice President of Business Development
John P. Russo, Jr.............    38     Vice President of Internet Application
                                         Services
Michael Watson................    51     Vice President of Professional Services
John A. Prumatico.............    50     Vice President of Human Resources
Jeffrey D. Brody(1)...........    38     Director
Norman A. Fogelsong(1)........    47     Director
Michael J. Levinthal(2).......    43     Director
James D. Robinson III(2)......    62     Director


(1) Member of the Compensation Committee.

(2) Member of the Audit Committee.

S. Steven Singh has served as the Company's President and Chief Executive Officer since February 1996. Mr. Singh served as the Chairman of the Board of Directors from the Company's inception until 1996. Prior to joining the Company as an officer, Mr. Singh was General Manager of the Contact Management Division at Symantec Corporation ("Symantec") from June 1993 to February 1996. From February 1992 to June 1993, Mr. Singh was Vice President of Development for Contact Software International ("CSI"), a personal computer software publisher, before it was acquired by Symantec in June 1993. Prior to joining CSI, Mr. Singh co-founded Eshani Corporation ("Eshani"), where he was President and Chief Executive Officer. Mr. Singh holds a B.S. in Electrical Engineering from the University of Michigan.

Michael W. Hilton co-founded the Company in August 1993 and has served as the Company's Chief Technical Officer since 1996. Mr. Hilton has served as a member of the Company's Board of Directors since its founding, and as Chairman of the Board since 1996. Before co-founding the Company, Mr. Hilton served as Senior Development Manager at Symantec during 1993. Prior to his employment at Symantec, Mr. Hilton served as Director of Product Development for CSI's California office. Mr. Hilton also was a co-founder of Eshani, where he was Vice President of Product Development. Mr. Hilton holds a B.A. in Computer and Information Sciences and a B.S. in Mathematics from the University of California at Santa Cruz.

Jon T. Matsuo joined the Company in July 1994 and currently serves as the Company's Executive Vice President of Worldwide Sales. Prior to joining the Company, Mr. Matsuo served as General Manager, Consumer Software Division of Delrina Corporation from June 1993 to July 1994. Mr. Matsuo's experience also includes senior marketing positions with CSI and Bluebird Systems, as well as eight years of experience with Deloitte Haskins & Sells in auditing, consulting and product management. Mr. Matsuo graduated with a B.B.A. in Accounting from the University of San Diego and is a Certified Public Accountant.

Sterling R. Wilson joined the Company in May 1994 and currently serves as the Company's Chief Financial Officer and Vice President of Operations. Prior to joining the Company, Mr. Wilson served as Vice President of Operations and Chief Financial Officer at IntelliQuest, Inc., a leading provider of market research information from July 1993 to May 1994. Mr. Wilson also served as Chief Financial Officer at CSI from 1992

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to 1993. Mr. Wilson graduated with a B.B.A. in Accounting from California State University at Bakersfield (formerly California State College at Bakersfield) and is a Certified Public Accountant.

Rajeev Singh co-founded the Company in August 1993 and currently serves as the Company's Vice President of Products. Previously, Mr. Singh acted as Director of Product Management of the Company. Prior to co-founding the Company, Mr. Singh served as a Software and Manufacturing Engineer at General Motors Corporation from July 1986 to January 1990, and from January 1991 to March 1993 he served as a Software Project Manager for the development of complex computer simulations at Ford Motor Company. Mr. Singh holds a B.S. in Mechanical Engineering from Kettering University (formerly GMI Engineering and Management Institute). Mr. Singh is the brother of S. Steven Singh, the Company's President and Chief Executive Officer.

Frederick L. Ingham joined the Company in January 1997 and currently serves as the Company's Vice President of Business Development. Prior to joining the Company, Mr. Ingham was Director of Business Development at Symantec from January 1995 to December 1996. From September 1992 to December 1994, Mr. Ingham worked as a Product Manager and Product Planner at Xerox Corporation. Mr. Ingham holds a B.A. in Economics from Yale University and an M.B.A. from the Wharton School of the University of Pennsylvania.

John P. Russo, Jr. joined the Company in April 1996 and currently serves as the Company's Vice President of Internet Application Services. From September 1988 to April 1996, Mr. Russo was employed by Symantec, including as Director of Product Management from September 1994 to April 1996, and assisted with the integration of company acquisitions for Symantec's Productivity Applications Group. Mr. Russo holds a B.S. in Marketing from San Jose State University.

Michael Watson joined the Company in August 1998 and currently serves as the Company's Vice President of Professional Services. Prior to joining the Company, Mr. Watson was Vice President of Consulting Services from June 1995 to August 1998 at Hyperion Software, where he also held various roles in the sales organization from October 1990 to June 1995. Mr. Watson also served as the National Director of Price Waterhouse's Applied Technology Center from 1986 to 1990. Mr. Watson holds a B.A. in Business Studies from Lanchester University (U.K.) and an M.B.A. from the Babcock Graduate School of Management at Wake Forest University.

John A. Prumatico joined the Company in July 1998 and currently serves as the Company's Vice President of Human Resources. Prior to joining the Company, Mr. Prumatico was managing principal for John Prumatico & Associates, a consulting firm specializing in human resources leadership and organization development, which he founded in 1992. From April 1987 to October 1992, Mr. Prumatico was employed by Microsoft Corporation as the Director of Human Resources Development and Administration. Mr. Prumatico holds a B.S. in Management and Organization Development from the University of West Florida.

Jeffrey D. Brody has served as a member of the Company's Board of Directors since October 1994. Since April 1994, Mr. Brody has been employed by Brentwood Venture Capital ("Brentwood"), a venture capital firm, and has been a General Partner of Brentwood since October 1995. From 1988 to April 1994, Mr. Brody was Senior Vice President of Comdisco Ventures, a venture leasing company. Mr. Brody holds a B.S. in Engineering from the University of California at Berkeley and an M.B.A. from the Graduate School of Business at Stanford University. Mr. Brody is a member of the boards of directors of several private technology companies.

Norman A. Fogelsong has served as a member of the Company's Board of Directors since July 1996. Since March 1989, Mr. Fogelsong has been a General Partner of Institutional Venture Partners, a venture capital firm. Between March 1980 and February 1989, Mr. Fogelsong was a General Partner of Mayfield Fund, a venture capital firm. Mr. Fogelsong holds a B.S. in Industrial Engineering from Stanford University, an M.B.A. from Harvard Business School and a J.D. from Harvard Law School. Mr. Fogelsong is a member of the boards of directors of Aspect Telecommunications Corporation as well as several private technology companies.

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Michael J. Levinthal has served as a member of the Company's Board of Directors since April 1998. Since 1984, Mr. Levinthal has been a General Partner or managing director of various entities associated with Mayfield Fund, a venture capital firm. Mr. Levinthal holds a B.S. in Engineering, an M.S. in Industrial Engineering and an M.B.A. from the Graduate School of Business at Stanford University. Mr. Levinthal is a member of the boards of directors of Focal, Inc., InControl, Inc. and Symphonix Devices, Inc., as well as several private technology companies.

James D. Robinson III has served as a member of the Company's Board of Directors since July 1998. Since 1994, Mr. Robinson has been the Chairman and Chief Executive Officer of RRE Investors, LLC, a private information technology venture investment firm. From 1977 to 1993, Mr. Robinson served as Chairman and Chief Executive Officer of American Express Company. Mr. Robinson holds a B.S. in Industrial Management from the Georgia Institute of Technology and an M.B.A. from Harvard Business School. Mr. Robinson is a member of the boards of directors of The Coca-Cola Company, Bristol-Myers Squibb Company, Cambridge Technology Partners and First Data Corporation as well as several private companies.

The Company's Bylaws, which will be in effect upon the completion of the Offering, will provide for the division of the Board into three classes as nearly equal in size as possible with staggered three-year terms. The classification of the Board could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from acquiring, control of the Company.

COMMITTEES OF THE BOARD OF DIRECTORS

The Compensation Committee of the Board of Directors consists of Mr. Brody and Mr. Fogelsong. The Compensation Committee makes decisions regarding all forms of salary and bonus and stock compensation provided to executive officers of the Company, the long-term strategy of employee compensation and the types of stock and other compensation plans to be used by the Company and the shares and amounts reserved thereunder, and any other compensation matters as from time to time directed by the Board.

The Audit Committee of the Board of Directors consists of Mr. Levinthal and Mr. Robinson. The Audit Committee meets with the Company's independent auditors to review the adequacy of the Company's internal control systems and financial reporting procedures, reviews the general scope of annual audit and the fees charged by the independent accountants, as well as the performance of non-audit services by the Company's auditors, and reviews and makes recommendations to the Board regarding the fairness of any proposed transaction between the Company and any officer, director or other affiliate of the Company.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

None of the members of the Compensation Committee of the Board of Directors was at any time since the formation of the Company an officer or employee of the Company. No executive officer of the Company serves as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on the Board of Directors of the Company or the Compensation Committee of the Board of Directors.

DIRECTOR COMPENSATION

Directors of the Company do not receive any cash compensation for their services as directors but are reimbursed for their reasonable travel expenses in attending meetings of the Board of Directors.

The Company adopted the 1998 Directors Stock Option Plan (the "Directors Plan") on August 21, 1998 and reserved a total of 600,000 shares of the Company's Common Stock for issuance thereunder to be effective upon the effective date of the Registration Statement for this Offering (the "Effective Date"). The Directors Plan requires that the Company's stockholders approve the Directors Plan within 12 months following its adoption by the Board of Directors. Such approval is anticipated prior to effectiveness of the Offering. Members of the Board of Directors who are not employees of the Company or any parent, subsidiary or affiliate of the Company are eligible to participate in the Directors Plan. The option grants under the

54

Directors Plan are automatic and nondiscretionary, and the exercise price of the options must be 100% of the fair market value of the Common Stock on the date of grant. Each eligible director who is or becomes a member of the Board of Directors on or after the effective date of the Directors Plan will automatically be granted an option for 50,000 shares of the Company's Common Stock on the later of the Effective Date and the date such director first becomes a member of the Board of Directors (an "Initial Grant"). On the date of each Annual Meeting of Stockholders following the Effective Date, each eligible director who has served continuously as a member of the Board of Directors since the date of such director's Initial Grant will automatically be granted an option for 20,000 shares of the Company's Common Stock (a "Succeeding Grant"). Options granted under the Directors Plan generally become exercisable as they vest, although the Compensation Committee may provide that options are exercisable immediately subject to repurchase. Initial Grants and Succeeding Grants vest as to 25% of the shares on the first anniversary of the date of grant and as to an additional 2.0833% of the shares each monthly anniversary of the date of grant thereafter. Options cease to vest once the individual ceases to provide services to the Company, or any parent or subsidiary of the Company, as a director or a consultant. Once the individual ceases providing such services, he or she will have seven months in which to exercise his or her vested options, or 12 months if the cessation of services resulted from the individual's death or disability. In the event of a merger or consolidation in which the Company is not the surviving corporation, the sale of all or substantially all of the Company's assets, or other corporate transaction as set forth in the Directors Plan, the vesting of all options granted under the Directors Plan will accelerate and the options will become exercisable in full. Any options not exercised within seven months of the corporate transaction will expire. Options may be granted pursuant to the Directors Plan from time to time within a period of ten years from the Effective Date. The Board may at any time terminate or amend the Directors Plan or any outstanding option, provided that the Board may not terminate or amend the terms of any outstanding option without the consent of the optionee. In any case, no amendment of the Directors Plan may adversely affect any then outstanding options or any unexercised portions thereof without the written consent of the optionee. The Directors Plan is administered by the full Board of Directors or by the Compensation Committee.

EXECUTIVE COMPENSATION

The following table sets forth information concerning the compensation awarded to, earned by, or paid for services rendered to, the Company in all capacities during the year ended September 30, 1997 and as estimated for the year ended September 30, 1998 by (i) the Company's Chief Executive Officer and
(ii) the Company's four other most highly compensated executive officers who were serving as executive officers as of September 30, 1997 and whose compensation was in excess of $100,000 (collectively, the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

                                                                                     LONG-TERM
                                                                                    COMPENSATION
                                                     ANNUAL COMPENSATION               AWARDS
                                                -----------------------------    ------------------
                                                FISCAL                               SECURITIES
         NAME AND PRINCIPAL POSITION             YEAR      SALARY      BONUS     UNDERLYING OPTIONS
         ---------------------------            ------    --------    -------    ------------------
S. Steven Singh...............................   1997     $200,000    $66,950              --
  President and Chief Executive Officer          1998*     200,000     75,000         500,000
Sterling R. Wilson............................   1997      140,874     52,354          26,000
  Chief Financial Officer and Vice President     1998*     150,000     50,000         130,000
  of Operations
Jon T. Matsuo.................................   1997      131,566     91,700          26,000
  Executive Vice President of Worldwide Sales    1998*     150,000    100,000         130,000
Michael W. Hilton.............................   1997      133,000     49,700               -
  Chairman of the Board of Directors and Chief   1998*     132,000     40,000         130,000
  Technical Officer
Rajeev Singh..................................   1997       92,282     44,169          25,000
  Vice President of Products                     1998*     115,000     60,000         130,000


* Amounts for fiscal 1998 are estimated.
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OPTION GRANTS IN FISCAL 1997 AND FISCAL 1998

The following table sets forth information regarding the stock option grants during fiscal 1997 and as estimated during fiscal 1998 to each of the Named Executive Officers. No stock appreciation rights were granted to these individuals during such years.

                                                       INDIVIDUAL GRANTS                        POTENTIAL REALIZABLE
                                   ---------------------------------------------------------   VALUE AT ASSUMED ANNUAL
                                   NUMBER OF                                                    RATES OF STOCK PRICE
                                   SECURITIES   PERCENTAGE OF                                  APPRECIATION FOR OPTION
                                   UNDERLYING   TOTAL OPTIONS                                          TERM(4)
                          FISCAL    OPTIONS       GRANTED TO     EXERCISE PRICE   EXPIRATION   -----------------------
          NAME             YEAR    GRANTED(1)    EMPLOYEES(2)     PER SHARE(3)       DATE          5%          10%
          ----            ------   ----------   --------------   --------------   ----------   ----------   ----------
S. Steven Singh.........   1997          --            --%           $  --               --    $      --    $      --
                           1998*    500,000          27.2             0.15         10/22/07       47,167      119,531
Sterling R. Wilson......   1997      26,000           5.3             0.08         10/23/06        1,308        3,315
                           1998*    130,000           7.1             0.15         10/22/07       12,263       31,078
Jon T. Matsuo...........   1997      26,000           5.3             0.08         10/23/06        1,308        3,315
                           1998*    130,000           7.1             0.15         10/22/07       12,263       31,078
Michael W. Hilton.......   1997          --            --               --               --           --           --
                           1998*    130,000           7.1             0.15         10/22/07       12,263       31,078
Rajeev Singh............   1997      25,000           5.1             0.08         10/23/06        1,258        3,187
                           1998*    130,000           7.1             0.15         10/22/07       12,263       31,078


* Amounts for fiscal 1998 are estimated.

(1) Unless otherwise indicated below, all options granted in fiscal 1997 and fiscal 1998 were granted pursuant to the 1994 Plan and become exercisable with respect to 25% of the shares covered by the option on the first anniversary date of grant and with respect to an additional 2.0833% of these shares each month thereafter, subject to acceleration upon certain changes in control of the Company. See "--Employee Benefit Plans."

(2) Based on a total of 491,450 options granted to all employees during fiscal 1997 and an estimated 1,840,000 options granted to all employees during fiscal 1998.

(3) Options were granted at an exercise price equal to the fair market value of the Company's Common Stock at the time of grant.

(4) The potential realizable value is calculated based upon the term of the option at its time of grant and is calculated by assuming that the stock price on the date of grant appreciates at the indicated annual rate compounded annually for the entire term of the option and that the option is exercised and sold on the last day of its term for the appreciated price. The 5% and 10% assumed annual compound rates of stock price appreciation are mandated by the rules of the Securities and Exchange Commission and do not represent the Company's estimates or projection of future Common Stock prices. There can be no assurance that the Common Stock will appreciate at any particular rate or at all in future years.

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AGGREGATE OPTION EXERCISES IN FISCAL 1997 AND FISCAL YEAR-END VALUES

The following table sets forth information concerning unexercised options held at September 30, 1997 and estimated to be held at September 30, 1998 with respect to each of the Named Executive Officers. No options or SARs were exercised by the Named Executive Officers during fiscal 1997.

                                                   NUMBER OF SECURITIES            VALUE OF UNEXERCISED
                                                  UNDERLYING UNEXERCISED           IN-THE-MONEY OPTIONS
                                                OPTIONS AT FISCAL YEAR-END       AT FISCAL YEAR-END($)(1)
                                     FISCAL    ----------------------------    ----------------------------
               NAME                   YEAR     EXERCISABLE    UNEXERCISABLE    EXERCISABLE    UNEXERCISABLE
               ----                  ------    -----------    -------------    -----------    -------------
S. Steven Singh....................   1997       178,125         271,875         $15,319         $23,381
                                      1998*      290,625         659,375            n.a.            n.a.
Sterling R. Wilson.................   1997            --          26,000              --           1,820
                                      1998*       12,458         143,542            n.a.            n.a.
Jon T. Matsuo......................   1997       450,000          26,000          49,500           2,860
                                      1998*      442,458         143,542            n.a.            n.a.
Michael W. Hilton..................   1997            --              --              --              --
                                      1998*           --         130,000            n.a.            n.a.
Rajeev Singh.......................   1997            --          25,000              --           1,750
                                      1998*       11,979         143,021            n.a.            n.a.


* Amounts for fiscal 1998 are estimated.

(1) Based on the fair market value of the option shares at September 30, 1997 ($0.15 as determined by the Board of Directors) less the exercise price.

EMPLOYMENT AGREEMENTS

The Company and Mr. Matsuo are parties to a letter agreement dated June 20, 1994 governing his employment with the Company. The agreement sets forth Mr. Matsuo's compensation level and eligibility for salary increases, bonuses and option grants under the Company's 1994 Plan. Mr. Matsuo's employment is voluntary and may be terminated by the Company or Mr. Matsuo at any time with or without cause or notice.

The Company and Mr. Wilson are parties to a letter agreement dated April 21, 1994 governing his employment with the Company. The agreement sets forth Mr. Wilson's compensation level and eligibility for salary increases, bonuses, benefits and option grants under the 1994 Plan. In addition, the Company agreed to pay Mr. Wilson's reasonable costs to relocate to Seattle. Mr. Wilson's employment is voluntary and may be terminated by the Company or Mr. Wilson at any time with or without cause or notice.

The Company and Mr. Ingham are parties to a letter agreement dated December 5, 1996 governing his employment with the Company. The agreement sets forth Mr. Ingham's compensation level and eligibility for salary increases, bonuses, benefits and option grants under the 1994 Plan. In addition, the Company agreed to provide for certain specified relocation expenses. Mr. Ingham's employment is voluntary and may be terminated by the Company or Mr. Ingham at any time with or without notice.

The Company and Mr. Russo are parties to a letter agreement dated April 1, 1996 governing his employment with the Company. The agreement sets forth Mr. Russo's compensation level and eligibility for benefits and option grants under the 1994 Plan. In addition, the Company agreed to pay Mr. Russo's reasonable costs to relocate to Seattle. Mr. Russo's employment is voluntary and may be terminated by the Company or Mr. Russo at any time with or without notice.

EMPLOYEE BENEFIT PLANS

1994 Stock Option Plan

The Company's 1994 Stock Option Plan (the "1994 Plan"), was adopted by the Board in January 1994 and approved by the Company's stockholders in January 1994. As originally adopted, 375,000 shares of

57

Common Stock were reserved for issuance under the 1994 Plan. This reserve has been increased several times, and there are currently 6,900,000 shares reserved for issuance under the 1994 Plan. The 1994 Plan provides for the grant of both incentive stock options ("ISOs") that may qualify under Section 422 of the Code and non-qualified stock options ("NQSOs") on terms determined by the Board, subject to certain statutory and other limitations in the 1994 Plan (including limitations on the vesting schedule thereof and the exercise price, which for ISOs to comply with Section 422 of the Code may not be less than 100% of the fair market value of the Company's Common Stock on the date of grant and for NQSOs may not be less than 85% of the fair market value of the Company's Common Stock on the date of grant). The 1994 Plan will terminate upon the effective date of the Registration Statement for the Offering, when the 1998 Equity Incentive Plan will become effective. As a result, no further options may be granted under the 1994 Plan following the effective date of the Offering. However, termination will not affect any options outstanding as of such date, which options will remain effective until exercised or until they terminate or expire in accordance with their terms. As of August 15, 1998, options to purchase 3,520,113 shares of Common Stock were outstanding under the 1994 Plan and 951,645 shares were available for future option grants.

1997 Stock Option Plan of 7Software

In connection with the Company's June 1998 acquisition of 7Software, the Company assumed 7Software's 1997 Stock Option Plan (the "7Software Plan") and all options outstanding under the 7Software Plan at the closing of the Company's acquisition of 7Software, which options will remain effective until exercised for the Company's Common Stock or until they terminate or expire in accordance with their terms. The 7Software Plan provides for the grant of both ISOs that may qualify under Section 422 of the Code and NQSOs on terms determined by the board of directors, subject to certain statutory and other limitations in the 7Software Plan (including limitations on the vesting schedule thereof and the exercise price, which for ISOs to comply with Section 422 of the Code may not be less than 100% of the fair market value of the Company's Common Stock on the date of grant and for NQSOs may not be less than 85% of the fair market value of the company's common stock on the date of grant). No options will be granted in the future under the 7Software Plan. As of August 15, 1998, options to purchase 275,764 shares of Common Stock were outstanding under the 7Software Plan. In addition to assuming the 7Software Plan in connection with its acquisition of 7Software, the Company also assumed the option granted by 7Software to one employee outside of the 7Software Plan, which became an option to purchase 34,045 shares of the Company's Common Stock.

1998 Equity Incentive Plan

On August 21, 1998, the Board adopted the 1998 Equity Incentive Plan (the "1998 Plan") and reserved 8,100,000 shares of the Company's Common Stock for issuance thereunder. The Company's stockholders are expected to approve the 1998 Plan in September 1998. The 1998 Plan will become effective on the Effective Date and will serve as the successor to the 1994 Plan. Options granted under the 1994 Plan before their termination will remain outstanding according to their terms, but no further options will be granted under the 1994 Plan after the Effective Date. Shares that (a) are subject to issuance upon exercise of an option granted under the 1998 Plan that cease to be subject to such option for any reason other than exercise of such option, (b) have been issued pursuant to the exercise of an option granted under the 1998 Plan that are subsequently forfeited or repurchased by the Company at the original purchase price, (c) are subject to an award granted pursuant to restricted stock purchase agreement under the 1998 Plan that are subsequently forfeited or repurchased by the Company at the original issue price, or (d) are subject to stock bonuses granted under the 1998 Plan that otherwise terminate without shares being issued, will again be available for grant and issuance under the 1998 Plan. In addition, any authorized shares not issued or subject to outstanding grants under the 1994 Plan on the Effective Date and any shares issued under the 1994 Plan that are forfeited or repurchased by the Company or that are issuable upon exercise of options granted pursuant to the 1994 Plan that expire or become unexercisable for any reason without having been exercised in full, will no longer be available for grant and issuance under the 1994 Plan but will be available for grant and issuance under the 1998 Plan. The 1998 Plan will terminate in August 2008, unless sooner terminated in accordance with the terms of the 1998 Plan.

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The 1998 Plan authorizes the award of options, restricted stock awards and stock bonuses (each an "Award"). No person will be eligible to receive more than 2,400,000 shares in any calendar year pursuant to Awards under the 1998 Plan other than a new employee of the Company who will be eligible to receive no more than 3,000,000 shares in the calendar year in which such employee commences employment. Over the term of the 1998 Plan, no more than 25,000,000 shares may be issued under the 1998 Plan upon exercise of incentive stock options. The 1998 Plan is administered by the Compensation Committee, which currently consists of Mr. Brody and Mr. Fogelsong, both of whom are "non-employee directors" under applicable federal securities laws and "outside directors" as defined under applicable federal tax laws. The Compensation Committee has the authority to construe and interpret the 1998 Plan and any agreement made thereunder, grant Awards and make all other determinations necessary or advisable for the administration of the 1998 Plan.

The 1998 Plan provides for the grant of both ISOs that qualify under
Section 422 of the Code and NQSOs. ISOs may be granted only to employees of the Company or of a parent or subsidiary of the Company. NQSOs (and all other Awards other than ISOs) may be granted to employees, officers, directors, consultants, independent contractors and advisors of the Company or any parent or subsidiary of the Company, provided such consultants, independent contractors and advisors render bona fide services not in connection with the offer and sale of securities in a capital-raising transaction. The exercise price of ISOs must be at least equal to the fair market value of the Company's Common Stock on the date of grant. (The exercise price of ISOs granted to 10% stockholders must be at least equal to 110% of that value.) The exercise price of NQSOs must be at least equal to 85% of the fair market value of the Company's Common Stock on the date of grant. The maximum term of options granted under the 1998 Plan is ten years. In addition to, or in tandem with, awards of stock options, the Compensation Committee may grant participants restricted stock awards to purchase the Company's Common Stock for not less than 85% of its fair market value at the time of grant. The other terms of such restricted stock awards may be determined by the Compensation Committee. The Compensation Committee may also grant stock bonus awards of the Company's Common Stock either in addition to, or in tandem with, other awards under the 1998 Plan under such terms, conditions and restrictions as the Compensation Committee may determine. Under the 1998 Plan, stock bonuses may be awarded for the satisfaction of performance goals established in advance. At the discretion of the Compensation Committee, payment for Awards may be made: in cash; by cancellation of indebtedness of the Company to the participant; by surrender of shares that either have been owned by the participant for more than six months and have been paid for within the meaning of SEC Rule 144 or were obtained by the participant in the public market; by tender of a full recourse promissory note; by waiver of compensation due or accrued to the participant for services rendered; or, with respect only to purchases upon exercise of an option, through a "same day sale" or a "margin" commitment. Awards granted under the 1998 Plan may not be transferred in any manner other than by will or by the laws of descent and distribution and may be exercised during the lifetime of the optionee only by the optionee (unless otherwise determined by the Compensation Committee and set forth in the Award agreement with respect to Awards that are not ISOs). Options granted under the 1998 Plan generally expire three months after the termination of the optionee's service to the Company or a parent or subsidiary of the Company, except in the case of death or disability, in which case the options generally may be exercised up to 12 months following the date of death or termination of service. Options will generally terminate ten days after termination for cause. In the event of the Company's dissolution or liquidation or a "change in control" transaction, outstanding Awards may be assumed or substituted by the successor corporation (if any). In the discretion of the Compensation Committee, the vesting of such Awards may accelerate upon such transaction.

1998 Employee Stock Purchase Plan

On August 21, 1998, the Board adopted the Purchase Plan and reserved a total of 800,000 shares of the Company's Common Stock for issuance thereunder. In addition, on each January 1, the aggregate number of shares reserved for issuance under the Purchase Plan shall be increased automatically by a number of shares equal to 1% of the total outstanding shares of the Company as of the immediately preceding December 31. Such annual increase shall not exceed 800,000 shares per year. The stockholders of the Company are expected to approve the Purchase Plan in September 1998. The Purchase Plan will be administered by the Compensation Committee. The Compensation Committee will have the authority to construe and interpret

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the Purchase Plan and its decision in such capacity will be final and binding. The Purchase Plan will become effective on the first business day on which price quotations for the Company's Common Stock are available on the Nasdaq National Market. Employees generally will be eligible to participate in the Purchase Plan if they are customarily employed by the Company (or its parent or any subsidiaries that the Company designates) for more than 20 hours per week and more than five months in a calendar year and are not (and would not become as a result of being granted an option under the Purchase Plan) 5% stockholders of the Company (or its designated parent or subsidiaries).

Under the Purchase Plan, eligible employees will be permitted to acquire shares of the Company's Common Stock through payroll deductions. Eligible employees may select a rate of payroll deduction between 2% and 15% of their W-2 cash compensation and are subject to certain maximum purchase limitations described in the Purchase Plan. A participant may change the rate of payroll deductions or withdraw from an Offering Period by notifying the Company in writing. Participation in the Purchase Plan will end automatically upon termination of employment for any reason.

Except for the First Offering Period, each Offering Period under the Purchase Plan will be for two years and consist of four six-month Purchase Periods. The first Offering Period is expected to begin on the first business day on which price quotations for the Company's Common Stock are available on the Nasdaq National Market. The First Offering Period shall consist of no more than five and no fewer than three Purchase Periods, any of which may be greater or less than six months as determined by the Compensation Committee. Offering Periods and Purchase Periods thereafter will begin on May 1 and November 1. The purchase price for the Company's Common Stock purchased under the Purchase Plan is 85% of the lesser of the fair market value of the Company's Common Stock on the first day of the applicable Offering Period or the last day of each Purchase Period. The Compensation Committee will have the power to change the duration of Offering Periods without stockholder approval, if such change is announced at least 15 days prior to the beginning of the Offering Period to be affected. The Purchase Plan is intended to qualify as an "employee stock purchase plan" under
Section 423 of the Code. Rights granted under the Purchase Plan will not be transferable by a participant other than by will or the laws of descent and distribution. The Purchase Plan provides that in the event of the proposed dissolution or liquidation of the Company, the Offering Period will terminate immediately prior to the proposed action, unless otherwise provided by the Compensation Committee. The Compensation Committee may, in the exercise of its sole discretion in such instances, declare that the Purchase Plan shall terminate as of a date fixed by the Compensation Committee and give each participant the right to purchase shares prior to such termination. In the event of a "change in control" transaction, the Purchase Plan will continue for the duration of each Offering Period that commenced prior to the closing of such proposed transaction and stock will be purchased on the purchase dates based on the fair market value of the surviving corporation's stock; unless otherwise provided by the Compensation Committee consistent with pooling of interests accounting treatment.

The Purchase Plan will terminate in August 2008 unless earlier terminated pursuant to its terms. The Board will have the authority to amend, terminate or extend the term of the Purchase Plan, except that no such action may adversely affect any outstanding options previously granted under the Purchase Plan and stockholder approval is required to increase the number of shares that may be issued or to change the terms of eligibility under the Purchase Plan. Notwithstanding the foregoing, the Board may make such amendments to the Purchase Plan as the Board determines to be advisable if the financial accounting treatment for the Purchase Plan is different than the financial accounting treatment in effect on the date the Purchase Plan was adopted by the Board.

401(k) Plan

The Company maintains the Concur Technologies, Inc. 401(k) Profit Sharing and Trust Plan (the "401(k) Plan"), a defined contribution plan intended to qualify under Section 401 of the Code. All employees are eligible to participate in the 401(k) Plan. An eligible employee of the Company may begin to participate in the 401(k) Plan on the first day of January, April, July or October of the plan year following the date on which such employee meets the eligibility requirements. A participating employee may make pre-tax contributions of a percentage of his or her eligible compensation, subject to limitations under the federal tax

60

laws. Employee contributions and the investment earnings thereon are fully vested at all times. The Company does not make matching or profit-sharing contributions.

INDEMNIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS AND LIMITATION OF LIABILITY

As permitted by Section 145 of the Delaware General Corporation Law (the "DGCL"), the Bylaws of the Company provide that (i) the Company is required to indemnify its directors and executive officers to the fullest extent permitted by the DGCL, (ii) the Company may indemnify its other officers, employees and agents as set forth in the DGCL, (iii) to the fullest extent permitted by the DGCL, the Company is required to advance expenses, as incurred, to its directors and executive officers in connection with a legal proceeding (subject to certain exceptions), (iv) the rights conferred in the Bylaws are not exclusive and (v) the Company is authorized to enter into indemnification agreements with its directors, officers, employees and agents.

The Company intends to enter into Indemnity Agreements with each of its current directors and executive officers to give such directors and officers additional contractual assurances regarding the scope of the indemnification set forth in the Company's Bylaws and to provide additional procedural protections. At present, there is no pending litigation or proceeding involving a director, officer or employee of the Company regarding which indemnification is sought, nor is the Company aware of any threatened litigation that may result in claims for indemnification.

As permitted by the DGCL, the Company'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
(i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL or (iv) for any transaction from which the director derived an improper personal benefit.

As authorized by the Company's Bylaws, the Company, with approval of the Board of Directors, has applied for, and expects to obtain, directors and officers liability insurance with a per claim and annual aggregate coverage limit of $5 million.

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CERTAIN TRANSACTIONS

Since October 1, 1994, there has not been, nor is there currently proposed, any transaction or series of similar transactions to which the Company or any of its subsidiaries was or is to be a party in which the amount involved exceeded or will exceed $60,000 and in which any director, executive officer, holder of more than 5% of the Common Stock of the Company 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 (i) compensation agreements and other arrangements, which are described where required in "Management" and (ii) the transactions described below.

Loan Repayment. On September 21, 1994, the Company entered into a Repayment Agreement with S. Steven Singh, the Company's President, Chief Executive Officer and a director, and Michael W. Hilton, the Company's Chairman of the Board and Chief Technical Officer. Pursuant to the Repayment Agreement, the Company agreed to repay loans previously made to the Company by Mr. Singh and Mr. Hilton in the amounts of $111,500 and $121,500, respectively. Under the terms of the Repayment Agreement, the Company agreed to repay the loans on the date two years following the Commencement Date (as defined in the Repayment Agreement) at an interest rate of 7% per annum. On March 22, 1997, in consideration for the cancellation of indebtedness under the Repayment Agreement, the Company issued 161,326 shares of its Series C Preferred Stock to Mr. Singh and 175,975 shares of its Series C Preferred Stock to Mr. Hilton, at a purchase price of $0.80 per share.

Preferred Stock Financings. From October 1, 1994 through August 15, 1998, the Company sold 3,824,092 shares of its Series A Preferred Stock at a price of $0.523 per share, 4,687,500 shares of its Series B Preferred Stock at a price of $0.64 per share, 9,712,301 shares of its Series C Preferred Stock at a price of $0.80 per share, 3,188,357 shares of its Series D Preferred Stock at a price of $1.46 per share, and 4,121,676 shares of its Series E Preferred Stock at a price of $3.10 per share, in a series of private financings. The Company sold these securities pursuant to preferred stock purchase agreements and an investors' rights agreement on substantially similar terms (except for terms relating to date and price), under which the Company made standard representations, warranties and covenants, and which provided the purchasers thereunder with registration rights, information rights, and rights of first refusal, among other provisions standard in venture capital financings. Each share of preferred stock will convert into one share of Common Stock upon the completion of the Offering. The purchasers of the preferred stock included, among others, the following holders of 5% or more of the Company's Common Stock, directors and entities associated with directors:

                                                       SHARES OF PREFERRED STOCK PURCHASED
                                            ---------------------------------------------------------
                 INVESTOR                   SERIES A    SERIES B    SERIES C    SERIES D    SERIES E
                 --------                   ---------   ---------   ---------   ---------   ---------
American Express Travel Related Services
  Company, Inc............................         --          --          --          --   1,612,903
Brentwood Associates VI, L.P. and
  affiliates(1)...........................  3,824,092     781,250     625,000     338,447     186,762
Institutional Venture Partners VII, L.P.
  and affiliates(2).......................         --          --   5,000,000     325,486     180,228
Mayfield VIII and affiliates(3)...........         --          --   3,125,000   2,018,273     174,683
RRE Investors, L.P. and affiliates(4).....         --          --          --          --   1,612,903
US Venture Partners IV L.P. and
  affiliates(5)...........................         --   3,906,250     625,000     399,986          --
Michael W. Hilton(6)......................         --          --     175,975          --       9,678
S. Steven Singh(7)........................         --          --     161,326          --       9,678


(1) Jeffrey D. Brody, a director of the Company, is the Managing Member of Brentwood VIII Ventures LLC, the General Partner of Brentwood Associates VI, L.P. and Brentwood Affiliates Fund II, L.P.

(2) Norman A. Fogelsong, a director of the Company, is a General Partner of Institutional Venture Management VII, L.P., the General Partner of Institutional Venture Partners VII, L.P. and IVP Founders Fund I, L.P.

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(3) Michael J. Levinthal, a director of the Company, is a Managing Member of Mayfield VIII Management, L.L.C., the General Partner of Mayfield VIII and Mayfield Associates Fund III.

(4) James D. Robinson III, a director of the Company, is a member of RRE Investors II, LLC, which indirectly exercises exclusive control over RRE Investors, L.P. and RRE Investors Fund, L.P.

(5) US Venture Partners IV L.P.'s affiliates who are holders of the Company's Preferred Stock are USVP Entrepreneur Partners II, L.P. and Second Ventures II, L.P.

(6) Michael W. Hilton is Chairman of the Board of Directors and Chief Technical Officer of the Company.

(7) S. Steven Singh is the President, Chief Executive Officer and a director of the Company.

Transactions with American Express. In August 1998, the Company sold an aggregate of 1,612,903 shares of its Series E Preferred Stock to TRS, an affiliate of American Express, at a cash purchase price of $3.10 per share, and issued a warrant to TRS exercisable for an aggregate of 6,000,000 shares of the Company's Series E Preferred Stock (the "TRS Warrant"). If all of the shares of the Company's Series E Preferred Stock are converted into shares of Common Stock in connection with a registration of the Company's Common Stock under the Securities Act, then the TRS Warrant shall automatically become exercisable for 6,000,000 shares of the Company's Common Stock (such shares underlying the TRS Warrant are referred to as the "Warrant Shares"). 750,000 of the Warrant Shares may be acquired at the time of the Offering at a cash purchase price equal to the Offering price less 7%; 1,750,000 of the Warrant Shares may be acquired at any time on or before October 15, 1999 at a cash purchase price of $13.50 per share; 1,750,000 of the Warrant Shares may be acquired at any time on or before January 15, 2001 at a cash purchase price of $20.25 per share; and the remaining 1,750,000 of the Warrant Shares may be acquired at any time on or before January 15, 2002 at a cash purchase price of $34.00 per share. Pursuant to the TRS Warrant, if determined to be appropriate by the Company's Board of Directors within 60 days of the date of the TRS Warrant, 25% of the shares that may be acquired under the TRS Warrant at the time of the Offering or on or before October 15, 1999 may be cancelled. The Company's Board of Directors has made such a determination; thus, 562,500 of the Warrant Shares may be acquired at the time of the Offering, and 1,312,500 additional Warrant Shares may be acquired on or before October 15, 1999. In connection with the purchase of Series E Preferred Stock by TRS, the Company and the other holders of its Series E Preferred Stock entered into an amended Voting Agreement, pursuant to which TRS was given the right to designate Edward Gilligan, or some other person reasonably acceptable to the Company's Board of Directors, as a member of the Company's Board of Directors. The Voting Agreement, as amended, will terminate upon the completion of the Offering.

The Company's agreements with TRS prohibit TRS, together with its majority-owned subsidiaries, from purchasing additional shares of the Company's capital stock if such purchase would result in TRS owning more than 17% of the Company's capital stock (including Warrant Shares issuable upon exercise of the TRS Warrant).

Employment Agreements. The Company has entered into employment agreements with Messrs. Wilson, Matsuo, Russo and Ingham. See "Management--Employment Agreements."

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PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information known to the Company with respect to beneficial ownership of the Company's Common Stock as of August 15, 1998 and as adjusted to reflect the sale of the shares offered hereby, by
(i) each stockholder known by the Company to be the beneficial owner of more than 5% of the Company's Common Stock, (ii) each director of the Company, (iii) each of the Named Executive Officers and (iv) all current executive officers and directors as a group.

                                         SHARES BENEFICIALLY OWNED                  SHARES BENEFICIALLY OWNED
                                             PRIOR TO OFFERING        NUMBER OF          AFTER OFFERING
                                         -------------------------   SHARES BEING   -------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER(1)    NUMBER      PERCENT(2)      OFFERED        NUMBER      PERCENT(2)
---------------------------------------  ----------    -----------   ------------   -----------   -----------
American Express Company(3)............  6,987,903        18.10%            --       6,987,903           %
Brentwood Associates VI, L.P. and
  affiliates(4)........................  5,755,551        17.32%            --       5,755,551
Institutional Venture Partners VII,
  L.P. and affiliates(5)...............  5,505,714        16.57             --       5,505,714
Mayfield VIII and affiliates(6)........  5,317,956        16.00             --       5,317,956
US Venture Partners IV, L.P. and
  affiliates(7)........................  4,931,236        14.84             --       4,931,236
RRE Investors, L.P. and
  affiliates(8)........................  1,612,903         4.85             --       1,612,903
Jeffrey D. Brody(4)....................  5,755,551        17.32             --       5,755,551
Norman A. Fogelsong(5).................  5,505,714        16.57             --       5,505,714
Michael W. Hilton(9)...................  2,468,153         7.42        100,000       2,368,153
Michael J. Levinthal(6)................  5,317,956        16.00             --       5,317,956
James D. Robinson III(8)...............  1,612,903         4.85             --       1,612,903
S. Steven Singh(10)....................  2,596,004         7.71        160,000       2,436,004
Frederick L. Ingham(11)................     42,285        *                 --          42,285          *
Jon T. Matsuo(12)......................    701,410         2.08         66,000         635,410
John A. Prumatico(13)..................         --           --             --              --         --
John P. Russo, Jr.(14).................     48,583        *                 --          48,583          *
Rajeev Singh(15).......................    500,931         1.51         46,000         454,931
Michael Watson(16).....................         --           --             --              --         --
Sterling R. Wilson(17).................    601,480         1.81         56,000         545,480
Imperial Bank(18)......................    138,281        *                                 --         --
All current executive officers and
  directors as a group(19).............  6,968,524        20.29%       428,000       6,540,524           %


* Represents beneficial ownership of less than 1% of the outstanding shares of Common Stock.

(1) Unless otherwise indicated, the address for each listed stockholder is c/o Concur Technologies, Inc., 6222 185th Avenue NE, Redmond, Washington 98052.

(2) Percentage ownership is based on 33,234,470 shares outstanding as of August 15, 1998 and shares outstanding after the Offering. Unless otherwise indicated below, the persons and entities named in the table have sole voting and sole investment power with respect to all shares beneficially owned, subject to community property laws where applicable. Shares of Common Stock subject to options or warrants that are currently exercisable or exercisable within 60 days of August 15, 1998 are deemed to be outstanding and to be beneficially owned by the person holding such options or warrants for the purpose of computing the percentage ownership of such person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

(3) Represents (i) 1,612,903 shares held of record by TRS, a subsidiary of American Express, and (ii) 5,375,000 shares subject to a warrant exercisable within 60 days of August 15, 1998 held by TRS at cash purchase prices ranging from the price to public in the Offering less 7% to $34.00, expiring in four tranches through January 2002. The address for American Express and TRS is American Express Tower, World Financial Center, New York, New York 10285. See "Certain Transactions."

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(4) Represents (i) 5,537,539 shares held of record by Brentwood Associates VI, L.P., (ii) 170,632 shares held of record by Brentwood Affiliates Fund II, L.P., (iii) 9,678 shares held of record by Jeffrey D. Brody, (iv) 31,250 shares held of record by The Schuster Revocable Trust dated February 10, 1995, (v) 3,226 shares held of record by Eric Chiu and (vi) 3,226 shares held of record by James Mongiello. Mr. Brody, a director of the Company, is the Managing Member of Brentwood VIII Ventures, LLC, the General Partner of Brentwood Associates VI, L.P. and Brentwood Affiliates Fund II, L.P. Mr. Brody disclaims beneficial ownership of the shares held by Brentwood Associates VI, L.P. and Brentwood Affiliates Fund II, L.P. The address for Mr. Brody, Brentwood Associates VI, L.P., Brentwood Affiliates Fund II, L.P., The Schuster Revocable Trust dated February 10, 1995, Mr. Chiu and Mr. Mongiello is c/o Brentwood Venture Capital, 3000 Sand Hill Road, Building 1, Suite 260, Menlo Park, California 94025.

(5) Represents (i) 5,232,405 shares held of record by Institutional Venture Partners VII, L.P., (ii) 188,194 shares held of record by IVP Founders Fund I, L.P. and (iii) 85,115 shares held of record by Institutional Venture Management VII, L.P. Norman A. Fogelsong, a director of the Company, is the General Partner of Institutional Venture Management VII, L.P., the General Partner of Institutional Venture Partners VII, L.P. and IVP Founders Fund I, L.P. Mr. Fogelsong disclaims beneficial ownership of the shares held by Institutional Venture Partners VII, L.P., IVP Founders Fund I, L.P. and Institutional Venture Management VII, L.P. The address for Mr. Fogelsong, Institutional Venture Partners VII, L.P., IVP Founders Fund I, L.P. and Institutional Venture Management VII, L.P. is c/o Institutional Venture Management VII, L.P., 3000 Sand Hill Road, Building 2, Suite 290, Menlo Park, California 94025.

(6) Represents (i) 5,052,058 shares held of record by Mayfield VIII and (ii) 265,898 shares held of record by Mayfield Associates Fund III. Michael J. Levinthal, a director of the Company, is the Managing Member of Mayfield VIII Management, L.L.C., the General Partner of Mayfield VIII and Mayfield Associates Fund III. Mr. Levinthal disclaims beneficial ownership of the shares held by Mayfield VIII and Mayfield Associates Fund III. The address for Mr. Levinthal, Mayfield VIII and Mayfield Associates Fund III is c/o Mayfield Fund, 2800 Sand Hill Road, Suite 250, Menlo Park, California 94025.

(7) Represents (i) 4,265,518 shares held of record by U.S. Venture Partners IV, L.P., (ii) 147,938 shares held of record by USVP Entrepreneur Partners II, L.P. and (iii) 517,780 shares held of record by Second Ventures II, L.P. The address for U.S. Venture Partners IV, L.P., USVP Entrepreneur Partners II, L.P. and Second Ventures II, L.P. is c/o Presidio Management Group IV, L.P., 2180 Sand Hill Road, Suite 300, Menlo Park, California 94025.

(8) Represents (i) 1,040,218 shares held of record by RRE Investors, L.P. and
(ii) 572,685 shares held of record by RRE Investors Fund, L.P. James D. Robinson III, a director of the Company, is a member of RRE Investors II, LLC, which indirectly exercises exclusive control over RRE Investors, L.P. and RRE Investors Fund, L.P. Mr. Robinson disclaims beneficial ownership of the shares held by RRE Investors, L.P. and RRE Investors Fund, L.P. The address for Mr. Robinson, RRE Investors, L.P. and RRE Investors Fund, L.P. is 126 East 56th Street, 22nd Floor, New York, New York 10022.

(9) Represents (i) 2,435,653 shares held of record by Michael W. Hilton and
(ii) 32,500 shares subject to options exercisable within 60 days of August 15, 1998 held by Mr. Hilton. Mr. Hilton is the Chairman of the Board of Directors and Chief Technical Officer of the Company.

(10) Represents (i) 2,171,004 shares held of record by S. Steven Singh and (ii) 425,000 shares subject to options exercisable within 60 days of August 15, 1998 held by Mr. Singh. Mr. Singh is the President, Chief Executive Officer and a director of the Company.

(11) Represents (i) 6,452 shares held of record by Frederick L. Ingham and (ii) 35,833 shares subject to options exercisable within 60 days of August 15, 1998 held by Mr. Ingham. Mr. Ingham is the Vice President of Business Development of the Company.

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(12) Represents (i) 226,452 shares held of record by Jon T. Matsuo and (ii) 474,958 shares subject to options exercisable within 60 days of August 15, 1998 held by Mr. Matsuo. Mr. Matsuo is the Executive Vice President of Worldwide Sales of the Company.

(13) John A. Prumatico does not own any shares of the Company's capital stock or any options exercisable within 60 days of August 15, 1998. Mr. Prumatico is the Vice President of Human Resources of the Company.

(14) Represents 48,583 shares subject to options exercisable within 60 days of August 15, 1998 held by John P. Russo, Jr. Mr. Russo is the Vice President of Internet Application Services of the Company.

(15) Represents (i) 456,452 shares held of record by Rajeev Singh and (ii) 44,479 shares subject to options exercisable within 60 days of August 15, 1998 held by Mr. Singh. Mr. Singh is the Vice President of Products of the Company.

(16) Michael Watson does not own any shares of the Company's capital stock or any options exercisable within 60 days of August 15, 1998. Mr. Watson is the Vice President of Professional Services of the Company.

(17) Represents (i) 556,522 shares held of record by Sterling R. Wilson and (ii) 44,958 shares subject to options exercisable within 60 days of August 15, 1998 held by Mr. Wilson. Mr. Wilson is the Chief Financial Officer of the Company.

(18) Represents 138,281 shares subject to warrants exercisable within 60 days of August 15, 1998 held by Imperial Bank. Imperial Bank has notified the Company that it will exercise such warrants and acquire shares on a net exercise basis at an assumed exercise price of $ per share, all of which will be offered in the Offering. The address for Imperial Bank is Emerging Growth Industries Group -- Menlo Park, 226 Airport Parkway, San Jose, California 95110-1024.

(19) Represents (i) 5,862,213 shares held of record by current executive officers and directors as a group and (ii) 1,106,311 shares subject to options exercisable within 60 days of August 15, 1998 held by current executive officers and directors as a group.

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DESCRIPTION OF CAPITAL STOCK

Upon the closing of the Offering, the authorized capital stock of the Company will consist of 60,000,000 shares of Common Stock, $0.001 par value per share, and 5,000,000 shares of Preferred Stock, $0.001 par value per share.

COMMON STOCK

As of August 15, 1998, assuming the conversion of all outstanding shares of Preferred Stock into Common Stock, there were 33,234,470 shares of Common Stock outstanding, held of record by 71 stockholders. Subject to preferences that may be applicable to any Preferred Stock outstanding at the time, the holders of outstanding shares of Common Stock are entitled to receive dividends out of assets legally available therefor at such times and in such amounts as the Board of Directors may from time to time determine. Each stockholder is entitled to one vote for each share of Common Stock held on all matters submitted to a vote of stockholders. See "Dividend Policy." Cumulative voting for the election of directors is not provided for in the Company's Certificate of Incorporation, which means that the holders of a majority of the shares voted can elect all of the directors then standing for election. The Common Stock is not entitled to preemptive rights and is not subject to conversion or redemption. Upon liquidation, dissolution or winding-up of the Company, the assets legally available for distribution to stockholders are distributable ratably among the holders of the Common Stock and any participating Preferred Stock outstanding at that time after payment of liquidation preferences, if any, on any outstanding Preferred Stock and payment of other claims of creditors. Each outstanding share of Common Stock is, and all shares of Common Stock to be outstanding upon completion of the Offering will be, fully paid and nonassessable.

PREFERRED STOCK

Upon the closing of the Offering, 5,000,000 shares of Preferred Stock will be authorized and no shares will be outstanding. The Board of Directors is authorized, subject to any limitations prescribed by Delaware law, to issue the 5,000,000 shares of Preferred Stock in one or more series, to establish from time to time the number of shares to be included in each such series, to fix the rights, preferences and privileges of the shares of each wholly unissued series and to designate any qualifications, limitations or restrictions thereon, and to decrease the number of shares of any such series (but not below the number of shares of such series then outstanding), without any further vote or action by the stockholders. The Board of Directors may authorize the issuance of Preferred Stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of Common Stock. Thus, the issuance of Preferred Stock may have the effect of delaying, deferring or preventing a change in control of the Company. The Company has no current plan to issue any shares of Preferred Stock.

WARRANTS

As of August 15, 1998, the Company had outstanding warrants to purchase an aggregate of 70,313 shares of Series C Preferred Stock, 204,539 shares of Series D Preferred Stock, and 5,549,097 shares of Series E Preferred Stock. Imperial Bank, the holder of outstanding warrants to purchase 138,281 shares of preferred stock, has indicated that it will exercise its warrants in full to purchase shares, assuming the net exercise of its warrants at an assumed exercise price of $ per share, immediately prior to the Offering. Any warrants to purchase shares of Series C Preferred Stock, Series D Preferred Stock or Series E Preferred Stock that are not exercised prior to the closing of the Offering will automatically be converted into warrants to purchase a like number of shares of Common Stock. Warrants to purchase 5,685,668 shares of Common Stock are expected to be outstanding following the closing of the Offering.

ANTI-TAKEOVER PROVISIONS

Section 203 ("Section 203") of the DGCL is applicable to corporate takeovers of Delaware corporations. Subject to certain exceptions set forth therein, Section 203 provides that a corporation shall not engage in any business combination with any "interested stockholder" for a three-year period following the date that such

67

stockholder becomes an interested stockholder unless (a) prior to such date, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder, (b) upon consummation of the transaction which 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, excluding for purposes of determining the number of shares outstanding those shares owned by (i) persons who are directors and also officers and (ii) by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer or (c) on or subsequent to such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, and by the affirmative votes of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder. Except as specified in Section 203, an interested stockholder is generally defined to include any person that is the owner of 15% or more of the outstanding voting stock of the corporation, or is an affiliate or associate of the corporation and was the owner of 15% or more of the outstanding voting stock of the corporation, or is an affiliate or associate of the corporation and was the owner of 15% or more of the outstanding voting stock of the corporation any time within three years immediately prior to the relevant date, and the affiliates and associates of such person. Under certain circumstances, Section 203 makes it more difficult for an interested stockholder to effect various business combinations with a corporation for a three-year period, although the stockholders may, by adopting an amendment to the corporation's certificate of incorporation or bylaws, elect not to be governed by this section, effective 12 months after adoption. The Company's Certificate of Incorporation and Bylaws do not exclude the Company from the restrictions imposed under Section 203. It is anticipated that the provisions of Section 203 may encourage companies interested in acquiring the Company to negotiate in advance with the Board of Directors of the Company since the stockholder approval requirement would be avoided if a majority of the directors then in office approve either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder. These provisions may have the effect of deterring hostile takeovers or delaying changes in control of the Company, which could depress the market price of the Common Stock and which could deprive the stockholders of opportunities to realize a premium on shares of the Common Stock held by them.

The Company's Bylaws, which will be in effect upon the completion of the Offering, will provide for the division of the Board into three classes as nearly equal in size as possible with staggered three-year terms. The classification of the Board could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from acquiring, control of the Company.

REGISTRATION RIGHTS

Beginning one year after the date of the Offering, the holders of 30,791,594 shares of Common Stock (assuming the exercise of warrants to purchase 5,823,949 shares of Common Stock held by holders of registration rights) (the "Registrable Securities") will have certain rights with respect to the registration of such shares under the Securities Act. If requested by holders of 40% or more of the Registrable Securities, the Company must file a registration statement under the Securities Act on a form other than Form S-3 covering all Registrable Securities requested to be included by all holders of such Registrable Securities, provided that at least 25% of the then outstanding Registrable Securities (or any lesser percent if the reasonably anticipated aggregate proceeds of such offering exceeds $10,000,000) will be offered in such offering. In addition, if requested by a holder or holders of outstanding Registrable Securities, the Company must file a registration statement under the Securities Act on Form S-3 covering such Registrable Securities, provided that the reasonably anticipated aggregate proceeds of such offering, net of underwriting discounts and commissions, exceeds $2,000,000. The Company may be required to effect two such registrations. In addition to the foregoing, if the Company proposes to register any of its Common Stock, the holders of the Registrable Securities may include all or a portion of their shares in such registration, subject to certain rights of the underwriter's representatives in an underwritten offering to limit the number of shares in any such offering. All expenses incurred in connection with such registrations (including underwriting discounts and commissions) will be borne by the Company. Such registration rights terminate following the expiration of five years

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following the closing of the Offering or in the event that the Registrable Securities held by the relevant rights holder is less than 1% of the outstanding Registrable Securities.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Company's Common Stock is Norwest Bank Minnesota, National Association.

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SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have shares of Common Stock outstanding. Of this amount, the shares offered hereby will be available for immediate sale in the public market as of the date of this Prospectus. An additional 458,172 shares are not subject to an 180-day lockup and will be available for sale in the public market 90 days following the date of this Prospectus pursuant to Rule 701. Approximately 26,454,320 additional shares will be available for sale in the public market following the expiration of 180-day lockup agreements with the Representatives of the Underwriters or the Company, subject in some cases to compliance with the volume and other limitations of Rule 144.

      DAYS AFTER THE DATE OF            APPROXIMATE SHARES
          THIS PROSPECTUS            ELIGIBLE FOR FUTURE SALE                  COMMENT
      ----------------------         ------------------------    -----------------------------------
Upon Effectiveness.................                              Freely tradable shares sold in
                                                                 Offering and shares salable under
                                                                   Rule 144(k) that are not subject
                                                                   to 180-day lockup
90 days............................            458,172           Shares salable under Rule 144,
                                                                 144(k) or 701 that are not subject
                                                                   to 180-day lockup.
180 days...........................         26,454,320           Lockup released; shares salable
                                                                 under Rule 144, 144(k) or 701
Over 180 days......................          5,893,978           Restricted securities held for one
                                                                 year or less

In general, under Rule 144 as currently in effect, a person (or persons whose shares are aggregated) who has beneficially owned shares for at least one year is entitled to sell within any three-month period commencing 90 days after the date of this Prospectus a number of shares that does not exceed the greater of (i) 1% of the then outstanding shares of Common Stock (approximately shares immediately after the Offering) or (ii) the average weekly trading volume during the four calendar weeks preceding such sale, subject to the filing of a Form 144 with respect to such sale. A person (or persons whose shares are aggregated) who is not deemed to have been an affiliate of the Company at any time during the 90 days immediately preceding the sale who has beneficially owned his or her shares for at least two years is entitled to sell such shares pursuant to Rule 144(k) without regard to the limitations described above. Persons deemed to be affiliates must always sell pursuant to Rule 144, even after the applicable holding periods have been satisfied.

The Company is unable to estimate the number of shares that will be sold under Rule 144, since this will depend on the market price for the Common Stock of the Company, the personal circumstances of the sellers and other factors. Prior to the Offering, there has been no public market for the Common Stock, and there can be no assurance that a significant public market for the Common Stock will develop or be sustained after the Offering. Any future sale of substantial amounts of the Common Stock in the open market may adversely affect the market price of the Common Stock offered hereby.

The Company, its directors, executive officers, stockholders with registration rights and certain other stockholders and optionholders have agreed pursuant to the Underwriting Agreement and other agreements that they will not sell any Common Stock without the prior written consent of BancAmerica Robertson Stephens for a period of 180 days from the date of this Prospectus (the "180-day Lockup Period") except that the Company may, without such consent, grant options and sell shares pursuant to the Company's stock plans.

Any employee or consultant to the Company who purchased his or her shares pursuant to a written compensatory plan or contract is entitled to rely on the resale provisions of Rule 701, which permits nonaffiliates to sell their Rule 701 shares without having to comply with the public information, holding period, volume limitation or notice provisions of Rule 144 and permits affiliates to sell their Rule 701 shares without having to comply with the Rule 144 holding period restrictions, in each case commencing 90 days after the date of this Prospectus. As of August 15, 1998, the holders of options to purchase approximately 1,864,991 shares of Common Stock will be eligible to sell their shares upon the expiration of the 180-day Lockup Period, subject in certain cases to vesting of such options.

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The Company intends to file a registration statement on Form S-8 under the Securities Act within 180 days after the completion of the Offering to register 14,781,567 shares of Common Stock subject to outstanding stock options or reserved for issuance under the 1998 Plan, the Directors Plan and the Purchase Plan, thus permitting the resale of such shares by nonaffiliates in the public market without restriction under the Securities Act.

In addition, after the Offering, the holders of approximately 30,791,594 shares of Common Stock (assuming the exercise of warrants to purchase 5,823,949 shares of Common Stock held by holders of registration rights) will have certain rights with respect to registration of such shares under the Securities Act. Registration of such shares under the Securities Act would result in such shares becoming freely tradable without restriction under the Securities Act (except for shares purchased by affiliates of the Company) immediately upon the effectiveness of such registration. See "Description of Capital Stock--Registration Rights."

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UNDERWRITING

The Underwriters named below, acting through their representatives, BancAmerica Robertson Stephens, Hambrecht & Quist LLC and Piper Jaffray Inc. (the "Representatives"), have severally agreed with the Company and the Selling Stockholders, subject to the terms and conditions of the Underwriting Agreement, to purchase the number of shares of Common Stock set forth opposite their respective names below. The underwriters are committed to purchase and pay for all such shares if any are purchased.

                                                               NUMBER
                        UNDERWRITER                           OF SHARES
                        -----------                           ---------
BancAmerica Robertson Stephens..............................
Hambrecht & Quist LLC.......................................
Piper Jaffray Inc...........................................
                                                              ---------
          Total.............................................
                                                              =========

The Representatives have advised the Company and the Selling Stockholders that the Underwriters propose to offer the shares of Common Stock to the public at the public offering price set forth on the cover page of this Prospectus and to certain dealers at such price less a concession of not in excess of $ per share, of which $ may be reallowed to other dealers. After the Offering, the public offering price, concession and reallowance to dealers may be reduced by the Representatives. No such reduction shall change the amount of proceeds to be received by the Company and the Selling Stockholders as set forth on the cover page of this Prospectus.

The Company has granted to the Underwriters an option, exercisable during the 30-day period after the date of this Prospectus for the Offering, to purchase up to additional shares of Common Stock at the same price per share as the Company and the Selling Stockholders will receive for the shares that the Underwriters have agreed to purchase. To the extent that the Underwriters exercise such option, each of the Underwriters will have a firm commitment, subject to certain conditions, to purchase approximately the same percentage of such additional shares that the number of shares of Common Stock to be purchased by it shown in the above table represents as a percentage of the shares offered hereby. If purchased, such additional shares will be sold by the Underwriters on the same terms as those on which the shares are being sold.

The Underwriting Agreement contains covenants of indemnity among the Underwriters, the Company and the Selling Stockholders against certain civil liabilities, including liabilities under the Securities Act and liabilities arising from breaches of representation and warranties contained in the Underwriting Agreement.

Each officer and director and certain security holders of the Company have agreed with the Representatives for a period of 180 days after the effective date of this Prospectus that they will not, subject to certain exceptions, directly or indirectly offer to sell, contract to sell, or otherwise sell, dispose of, loan, pledge or grant any rights with respect to, any shares of Common Stock, or any securities convertible into or exchangeable for shares of Common Stock, now owned or hereafter acquired directly by such holders or with respect to which they have the power of disposition, without the prior written consent of BancAmerica Robertson Stephens, which may, in its sole discretion and at any time without notice, release all or any portion of the securities subject to lock-up agreements. In addition, the Company has agreed that during the 180 days following the effective date of this Prospectus, the Company will not, without the prior written consent of BancAmerica Robertson Stephens, subject to certain exceptions, offer, issue, sell, contract to sell, or otherwise dispose of any shares of Common Stock, any options or warrants to purchase any shares of Common Stock , or any securities convertible into, exercisable for or exchangeable for shares of Common Stock other than the Company's sales of shares in the Offering, the issuance of Common Stock upon the exercise of outstanding options and the Company's issuance of options under existing employee stock option and stock purchase plans. See "Shares Eligible for Future Sale."

The Underwriters do not intend to confirm sales to any accounts over which they exercise discretionary authority.

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Prior to the Offering, there has been no public market for the Common Stock of the Company. Consequently, the initial public offering price for the Common Stock offered hereby has been determined through negotiations among the Company and the Representatives. Among the factors considered in such negotiations were prevailing market conditions, certain financial information of the Company, market valuations of other companies that the Company and the Representatives believe to be comparable to the Company, estimates of the business potential of the Company and the industry in which it competes, an assessment of the Company's management, its past and present operations, the prospects for, and timing of, future revenues of the Company, the present state of the Company's development and other factors deemed relevant.

Certain persons and entities affiliated with Hambrecht & Quist LLC own an aggregate of 63,066 shares of the Company's Series E Preferred Stock. Such affiliates are subject to the 180-day lock-up that applies to other stockholders as described above. Hambrecht & Quist LLC and its affiliates (other than such holders described above) will be permitted to engage in stabilization, brokerage and ordinary course of business transactions. See "Shares Eligible for Future Sale."

The Representatives have advised the Company that, pursuant to Regulation M under the Securities Act, certain persons participating in the Offering may engage in transactions, including stabilizing bids, syndicate covering transactions or the imposition of penalty bids which may have the effect of stabilizing or maintaining the market price of the Common Stock at a level above that which might otherwise prevail in the open market. A "stabilizing bid" is a bid for or the purchase of the Common Stock on behalf of the underwriters for the purpose of fixing or maintaining the price of the Common Stock. A "syndicate covering transaction" is the bid for or the purchase of the Common Stock on behalf of the Underwriters to reduce a short position incurred by the Underwriters in connection with the offering. A "penalty bid" is an arrangement permitting the Representatives to reclaim the selling concession otherwise accruing to an Underwriter or syndicate member in connection with the offering if the Common Stock originally sold by such Underwriter or syndicate member is purchased by the Representatives in a syndicate covering transaction and has therefore not been effectively placed by such underwriter or syndicate member. The Representatives have advised the Company that such transitions may be effected on the Nasdaq National Market or otherwise and, if commenced, may be discontinued at any time.

The Underwriters have reserved for sale, at the initial public offering price, up to 5% of the Common Stock offered hereby for certain individuals designated by the Company who have expressed an interest in purchasing such shares of Common Stock in the Offering. The number of shares available for sale to the general public will be reduced to the extent such persons purchase such reserved shares. Any reserved shares not so purchased will be offered by the Underwriters to the general public on the same basis as other shares offered hereby.

LEGAL MATTERS

The validity of the issuance of the shares of Common Stock offered hereby will be passed upon for the Company by Fenwick & West LLP, Palo Alto, California. Certain legal matters in connection with the Offering will be passed upon for the underwriters by Brobeck, Phleger & Harrison LLP, Palo Alto, California. Matthew P. Quilter, a member of Fenwick & West LLP, owns an aggregate of 3,226 shares of Series E Preferred Stock of the Company and is the Secretary of the Company.

EXPERTS

The consolidated financial statements and the related financial statement schedule of Concur as of September 30, 1996 and 1997, and June 30, 1998 and for each of the three years in the period ended September 30, 1997 and for the nine months ended June 30, 1998 and the financial statements of 7Software as of December 31, 1997 and for the period then ended appearing in this Prospectus and the Registration Statement have been audited by Ernst & Young LLP, independent auditors, as set forth in their reports

73

thereon appearing elsewhere herein, and are included in reliance upon such reports, given upon the authority of such firm as experts in accounting and auditing.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the "Commission") a Registration Statement on Form S-1 under the Securities Act with respect to the shares of Common Stock offered hereby. This Prospectus does not contain all of the information set forth in the Registration Statement and the exhibits and schedules thereto. For further information with respect to the Company and the Common Stock offered hereby, reference is made to the Registration Statement and the exhibits and schedules filed therewith. Statements contained in this Prospectus regarding the contents of any contract or any other document to which reference is made are not necessarily complete, and in each instance reference is made to the copy of such contract or other document filed as an exhibit to the Registration Statement, each such statement being qualified in all respects by such reference. A copy of the Registration Statement and the exhibits and schedules thereto may be inspected without charge at the public reference facilities maintained by the Commission located at Room 1024, 450 Fifth Street, Washington, D.C. 20549 and at the Commission's regional offices located at the Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and Seven World Trade Center, 13th Floor, New York, New York 10048, and copies of all or any part of the Registration Statement may be obtained from such offices upon the payment of the fees prescribed by the Commission. The Commission maintains a World Wide Web site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding registrants, such as the Company, that file electronically with the Commission. Information concerning the registrant is also available for inspection at the offices of the Nasdaq National Market, Reports Section, 1735 K Street, N.W., Washington, D.C.

74

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

CONCUR TECHNOLOGIES, INC. (FORMERLY PORTABLE SOFTWARE CORPORATION)

Report of Ernst & Young LLP, Independent Auditors...........   F-2
Consolidated Balance Sheets as of September 30, 1996,
  September 30, 1997, and June 30, 1998.....................   F-3
Consolidated Statements of Operations for the Years Ended
  September 30, 1995, 1996, and 1997 and the Nine Months
  Ended June 30, 1997 and 1998..............................   F-4
Consolidated Statements of Stockholders' Equity (Deficit)
  for the Years Ended September 30, 1995, 1996, and 1997 and
  the Nine Months Ended June 30, 1998.......................   F-5
Consolidated Statements of Cash Flows for the Years Ended
  September 30, 1995, 1996, and 1997 and the Nine Months
  Ended June 30, 1997 and 1998..............................   F-6

Notes to Consolidated Financial Statements..................   F-7

7SOFTWARE, INC. (A DEVELOPMENT STAGE COMPANY)

Report of Ernst & Young LLP, Independent Auditors...........  F-23
Balance Sheet as of December 31, 1997.......................  F-24
Statement of Income for the Period May 30, 1997 (Date of
  Incorporation) to December 31, 1997.......................  F-25
Statement of Shareholders' Equity for the Period May 30,
  1997 (Date of Incorporation) to December 31, 1997.........  F-26
Statement of Cash Flows for the Period May 30, 1997 (Date of
  Incorporation) to December 31, 1997.......................  F-27

Notes to Financial Statements...............................  F-28

PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

Pro Forma Consolidated Financial Statements (Unaudited).....  F-31
Pro Forma Consolidated Statements of Operations for the Nine
  Months ended June 30, 1998 (Unaudited)....................  F-32
Pro Forma Consolidated Statements of Operations for the Year
  Ended September 30, 1997 (Unaudited)......................  F-33
Notes to Pro Forma Consolidated Financial Statements
  (Unaudited)...............................................  F-34

F-1

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

The Board of Directors
Concur Technologies, Inc.
(Formerly Portable Software Corporation)

We have audited the accompanying consolidated balance sheets of Concur Technologies, Inc. (the Company) as of September 30, 1996 and 1997, and June 30, 1998 and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for each of the three years in the period ended September 30, 1997 and the nine months ended June 30, 1998. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards. 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Concur Technologies, Inc. at September 30, 1996 and 1997 and June 30, 1998, and the consolidated results of their operations and their cash flows for each of the three years in the period ended September 30, 1997 and the nine months ended June 30, 1998, in conformity with generally accepted accounting principles.

ERNST & YOUNG LLP

                                          /s/ ERNST & YOUNG LLP

Seattle, Washington
August 14, 1998, except for Note 17, as to which the date is August 21, 1998

F-2

CONCUR TECHNOLOGIES, INC.
(FORMERLY PORTABLE SOFTWARE CORPORATION)

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

ASSETS

                                                                                          PRO FORMA
                                                                                        STOCKHOLDERS'
                                                        SEPTEMBER 30,                       EQUITY
                                                     -------------------    JUNE 30,       JUNE 30,
                                                      1996        1997        1998           1998
                                                     -------    --------    --------    --------------
                                                                                         (UNAUDITED)
Current assets:
  Cash and cash equivalents........................  $ 5,685    $  6,695    $ 15,604
  Accounts receivable, net of allowance for
    doubtful accounts of $125, $170, and $473 in
    1996, 1997, and 1998, respectively.............      509       4,365       3,572
  Prepaid expenses and other current assets........       90         165         398
                                                     -------    --------    --------
         Total current assets......................    6,284      11,225      19,574
Equipment and furniture, net.......................      455       2,077       2,652
Deposits...........................................       20          28         133
Capitalized technology and other intangible
  assets...........................................       --          --         960
                                                     -------    --------    --------
         Total assets..............................  $ 6,759    $ 13,330    $ 23,319
                                                     =======    ========    ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
  Accounts payable.................................  $   628    $  1,082    $    705
  Accrued liabilities..............................      777       1,294       3,500
  Accrued commissions..............................       99         509         750
  Current portion of accrued payment to
    stockholders...................................                              167
  Current portion of long-term debt................      123         329       1,427
  Current portion of capital lease obligations.....       --         351         819
  Current portion of notes payable to
    stockholders...................................      133          --          --
  Deferred revenues................................      451       1,477       2,737
                                                     -------    --------    --------
         Total current liabilities.................    2,211       5,042      10,105
Accrued payment to stockholders, net of current
  portion..........................................                              333
Long-term debt, net of current portion.............      215       2,171       6,325
Capital lease obligations, net of current
  portion..........................................       --       1,516       1,994
Notes payable to stockholders, net of current
  portion..........................................      133          --          --
Deferred gain on leased equipment..................       --         989         809
Redeemable convertible preferred stock:
  Authorized shares--23,921,023
  Issued and outstanding shares --
    17,886,592, 21,412,250, and 23,921,023 in 1996,
       1997, and 1998, respectively, liquidation
       value of $25,202 (Note 11)..................   12,381      17,264      25,041
Redeemable convertible preferred stock warrants....        5          58          72
Commitments
Stockholders' equity (deficit):
  Common stock, no par value:
    Authorized shares -- 60,000,000
    Issued and outstanding shares -- 5,720,617,
       5,723,741, and 7,601,251 in 1996, 1997, and
       1998, respectively; 31,522,274 shares pro
       forma.......................................      259         259       6,268       $ 31,381
  Deferred stock compensation......................       --          --        (564)          (564)
  Accumulated deficit..............................   (8,445)    (13,969)    (27,064)       (27,064)
                                                     -------    --------    --------       --------
         Total stockholders' equity (deficit)......   (8,186)    (13,710)    (21,360)      $  3,753
                                                     -------    --------    --------       ========
         Total liabilities and stockholders' equity
           (deficit)...............................  $ 6,759    $ 13,330    $ 23,319
                                                     =======    ========    ========

See accompanying notes.

F-3

CONCUR TECHNOLOGIES, INC.
(FORMERLY PORTABLE SOFTWARE CORPORATION)

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

                                              YEAR ENDED SEPTEMBER 30,     NINE MONTHS ENDED JUNE 30,
                                             ---------------------------   --------------------------
                                              1995      1996      1997         1997           1998
                                             -------   -------   -------   -------------    ---------
                                                                            (UNAUDITED)
Revenues, net:
  Licenses.................................  $ 2,104   $ 1,717   $ 6,347      $ 4,087       $  8,039
  Services.................................       24       242     1,923        1,118          3,676
                                             -------   -------   -------      -------       --------
                                               2,128     1,959     8,270        5,205         11,715
Cost of revenues:
  Licenses.................................      728       386       394          219            318
  Services.................................      673       839     2,269        1,370          3,702
                                             -------   -------   -------      -------       --------
                                               1,401     1,225     2,663        1,589          4,020

Gross profit...............................      727       734     5,607        3,616          7,695
Operating expenses:
  Sales and marketing......................    2,363     2,936     5,896        3,873          7,886
  Research and development.................      744     1,793     3,401        2,226          4,162
  General and administrative...............      515       963     1,815        1,212          3,225
  Acquired in-process technology (Note
     3)....................................       --        --        --           --          5,203
                                             -------   -------   -------      -------       --------

Total operating expenses...................    3,622     5,692    11,112        7,311         20,476
                                             -------   -------   -------      -------       --------
Loss from operations.......................   (2,895)   (4,958)   (5,505)      (3,695)       (12,781)
Interest income............................       68        92       130           92            134
Interest expense...........................      (34)      (43)      (88)         (44)          (327)
Other expense, net.........................      (29)      (44)      (61)         (34)          (121)
                                             -------   -------   -------      -------       --------

Net loss...................................  $(2,890)  $(4,953)  $(5,524)     $(3,681)      $(13,095)
                                             =======   =======   =======      =======       ========
Pro forma basic and diluted net loss per
  share (unaudited)........................                      $ (0.23)                   $  (0.48)
                                                                 =======                    ========
Shares used in calculation of pro forma
  basic and diluted net loss per share
  (unaudited)..............................                       24,408                      27,509
                                                                 =======                    ========

See accompanying notes.

F-4

CONCUR TECHNOLOGIES, INC.
(FORMERLY PORTABLE SOFTWARE CORPORATION)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS, EXCEPT SHARE DATA)

                                                              DEFERRED
                                                                STOCK
                                                            COMPENSATION                      TOTAL
                                         COMMON STOCK        RELATED TO                   STOCKHOLDERS'
                                     --------------------     GRANT OF      ACCUMULATED      EQUITY
                                       SHARES     AMOUNT    STOCK OPTIONS     DEFICIT       (DEFICIT)
                                     ----------   -------   -------------   -----------   -------------
Balance at October 1, 1995.........   5,700,070   $   258       $  --        $ (3,492)      $ (3,234)
  Issuance of common stock from
     exercise of stock options.....      20,547         1          --              --              1
  Net loss.........................          --        --          --          (4,953)        (4,953)
                                     ----------   -------       -----        --------       --------
Balance at September 30, 1996......   5,720,617       259          --          (8,445)        (8,186)
  Issuance of common stock from
     exercise of stock options.....       3,124        --          --              --             --
  Net loss.........................          --        --          --          (5,524)        (5,524)
                                     ----------   -------       -----        --------       --------
Balance at September 30, 1997......   5,723,741       259          --         (13,969)       (13,710)
  Issuance of common stock from
     exercise of stock options.....     105,208         5          --              --              5
  Deferred stock compensation......          --       861        (861)             --             --
  Amortization of stock
     compensation..................          --        --         297              --            297
  Issuance of common stock in
     connection with acquisition
     (Note 3)......................   1,772,302     4,378          --              --          4,378
  Assumption of stock options in
     connection with acquisition
     (Note 3)......................          --       765          --              --            765
  Net loss.........................          --        --          --         (13,095)       (13,095)
                                     ----------   -------       -----        --------       --------
Balance at June 30, 1998...........   7,601,251   $ 6,268       $(564)       $(27,064)      $(21,360)
                                     ==========   =======       =====        ========       ========

See accompanying notes.

F-5

CONCUR TECHNOLOGIES, INC.
(FORMERLY PORTABLE SOFTWARE CORPORATION)

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

                                                  YEAR ENDED SEPTEMBER 30,       NINE MONTHS ENDED JUNE 30,
                                                -----------------------------    --------------------------
                                                 1995       1996       1997          1997           1998
                                                -------    -------    -------    -------------    ---------
                                                                                  (UNAUDITED)
OPERATING ACTIVITIES
Net loss......................................  $(2,890)   $(4,953)   $(5,524)      $(3,681)      $(13,095)
Adjustments to reconcile net loss to net cash
  used in operating activities:
    Acquired in-process technology............       --         --         --            --          5,203
    Amortization of deferred stock
      compensation............................       --         --         --            --            297
    Warrant expense...........................       --          5         53            --             14
    Depreciation and amortization.............       71        144        393           275            341
    Other.....................................       --         17         --            --             --
    Changes in operating assets and
      liabilities:
      Accounts receivable.....................     (149)      (360)    (3,856)       (1,381)           699
      Prepaid expenses and other assets.......     (150)        63        (84)          (73)          (361)
      Accounts payable........................      553        (24)       454          (151)          (377)
      Accrued liabilities.....................      214        597        927           569          2,033
      Deferred revenues.......................       37        412      1,026           156          1,260
                                                -------    -------    -------       -------       --------
Net cash used in operating activities.........   (2,314)    (4,099)    (6,611)       (4,286)        (3,986)
                                                -------    -------    -------       -------       --------
INVESTING ACTIVITIES
Purchases of equipment and furniture..........     (220)      (420)    (1,020)         (737)           (23)
                                                -------    -------    -------       -------       --------
FINANCING ACTIVITIES
Proceeds from sales leaseback transaction.....       --         --      1,800            --            192
Proceeds from capital lease financing.........       --         --         67            --             --
Proceeds from borrowings......................      187        563      3,087           587          5,500
Payments on borrowings........................     (300)      (380)      (925)          (87)          (248)
Payment on capital leases.....................       --         --         --            --           (308)
Issuance of common stock......................        8          1         --            --              5
Issuance of redeemable convertible preferred
  stock.......................................    4,903      7,479      4,612            --          7,777
                                                -------    -------    -------       -------       --------
Net cash provided by financing activities.....    4,798      7,663      8,641           500         12,918
                                                -------    -------    -------       -------       --------
Net increase (decrease) in cash and cash
  equivalents.................................    2,264      3,144      1,010        (4,523)         8,909
Cash and cash equivalents at beginning of
  year........................................      277      2,541      5,685         5,685          6,695
                                                -------    -------    -------       -------       --------
Cash and cash equivalents at end of year......  $ 2,541    $ 5,685    $ 6,695       $ 1,162       $ 15,604
                                                =======    =======    =======       =======       ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATION
Cash paid for interest........................  $    --    $    27    $    76       $    40       $    258
                                                =======    =======    =======       =======       ========
Issuance of redeemable convertible preferred
  stock in exchange for cancellation of notes
  payable.....................................       --         --    $   267       $   267       $     --
Issuance of common stock and assumption of
  stock options in connection with acquisition
  of 7Software (Note 3).......................       --         --         --            --          5,143
Liabilities (net of assets) assumed and
  incurred in acquisition of 7Software (Note
  3)..........................................       --         --         --            --             60
Equipment and furniture obtained through
  capital leases..............................       --         --         --            --          1,062

See accompanying notes.

F-6

CONCUR TECHNOLOGIES, INC.
(FORMERLY PORTABLE SOFTWARE CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION FOR THE NINE MONTHS ENDED JUNE 30, 1997 IS UNAUDITED)

1. DESCRIPTION OF THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of the Company

Concur Technologies, Inc. (the "Company", formerly Portable Software Corporation) is a leading provider of Intranet-based employee-facing applications that extend automation to employees throughout the enterprise and to partners, vendors and service providers in the extended enterprise. The Company's Xpense Management Solution ("XMS") and CompanyStore products automate the preparation, approval, processing and data analysis of travel and entertainment ("T&E") expense reports and front-office procurement requisitions. The Company was originally incorporated in the State of Washington on August 19, 1993. Operations commenced during 1994.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, XMS (UK) Ltd. and 7Software, Inc. ("7Software"). All significant intercompany accounts and transactions are eliminated in consolidation.

Unaudited Interim Financial Information

The financial information for the nine months ended June 30, 1997 is unaudited but includes all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for a fair presentation of the financial position at such date and the operating results and cash flows for that period. Operating results for the nine months ended June 30, 1998 are not necessarily indicative of results that may be expected for the entire year.

Revenue Recognition Policy

The Company generates revenues from licensing the rights to use its software products directly to end users. The Company also generates revenues from sales of maintenance contracts and integration services performed for customers who license the software.

The Company recognizes revenue in accordance with Statement of Position No. 91-1, "Software Revenue Recognition." Software license revenues are recognized when a non-cancelable license agreement has been signed with a customer, the software is shipped, no significant post-delivery vendor obligations remain, and collection is deemed probable. Maintenance revenues are recognized ratably over the term of the maintenance contract, typically one year. Revenues for consulting services and other post-sales revenues are recognized when the services are performed.

In October 1997, the American Institute of Certified Public Accountants issued Statement of Position 97-2, "Software Revenue Recognition" ("SOP 97-2"). The Company will adopt SOP 97-2 beginning in fiscal 1999. SOP 97-2 generally requires revenues earned on software arrangements involving multiple elements such as software products, upgrades, enhancements, postcontract customer support, installation and training to be allocated to each element based on the relative fair values of the elements. The fair value of an element must be based on evidence which is specific to the vendor. Evidence of the fair value of each element is based on the price charged when the element is sold separately, or if the element is not being sold separately, the price for each element established by management having relevant authority. The revenues allocated to software products, including specified upgrades or enhancements, generally are recognized upon delivery of the products. The revenues allocated to unspecified upgrades, updates and other postcontract customer support generally are recognized ratably over the term of the contract. If evidence of the fair value for all

F-7

CONCUR TECHNOLOGIES, INC.
(FORMERLY PORTABLE SOFTWARE CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION FOR THE NINE MONTHS ENDED JUNE 30, 1997 IS UNAUDITED)

1. DESCRIPTION OF THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED) elements of the arrangement does not exist, all revenues from the arrangement are deferred until such evidence exists or until all elements are delivered. It is not anticipated that there will be a material change to the Company's accounting for revenues as a result of the adoption of SOP 97-2. However, full implementation guidelines for this standard have not yet been issued. Once available, such implementation guidance could lead to unanticipated changes in the Company's current revenue accounting practices, and such changes could materially adversely affect the Company's future revenues and earnings. Such implementation guidance may necessitate significant changes in the Company's business practices in order for the Company to continue to recognize license revenues upon delivery of its software products.

Cash and Cash Equivalents

All highly liquid financial instruments purchased with an original maturity of three months or less are reported as cash equivalents.

Fair Values of Financial Instruments

At June 30, 1998, the Company has the following financial instruments: cash and cash equivalents, accounts receivable, accounts payable, long-term debt and capital lease obligations, bank line of credit ("LOC"), and standby letters of credit. The carrying value of cash and cash equivalents, accounts receivable, and accounts payable approximates fair value based on the liquidity of these financial instruments or based on their short-term nature. The carrying value of long-term debt, LOC, standby letters of credit, and capital lease obligations approximates carrying value based on the market interest rates available to the Company for debt of similar risk and maturities.

Research and Development

Research and development costs are expensed as incurred and consist primarily of software development costs. Financial accounting standards require the capitalization of certain software development costs after technological feasibility of the software is established. In the development of the Company's new products and enhancements to existing products, the technological feasibility of the software is not established until substantially all product development is complete, including the development of a working model. Internal software development costs that were eligible for capitalization were insignificant and were charged to research and development expense in the accompanying statement of operations.

Advertising and Marketing Costs

Costs of marketing materials and advertising expenditures are charged to operations when the materials are used or the advertisement is first released. Advertising costs were $1,400,000, $711,000, and $569,000 in fiscal 1995, 1996, and 1997, respectively and $491,000 and $894,000 for the nine months ended June 30, 1997 and 1998, respectively.

Income Taxes

The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," which utilizes the liability method of accounting for income taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting. Valuation allowances are established when necessary to reduce deferred tax assets to amounts expected to be realized.

F-8

CONCUR TECHNOLOGIES, INC.
(FORMERLY PORTABLE SOFTWARE CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION FOR THE NINE MONTHS ENDED JUNE 30, 1997 IS UNAUDITED)

1. DESCRIPTION OF THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
Stock-Based Compensation

In fiscal 1997, the Company implemented the provisions of Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"). In accordance with the provisions of SFAS 123, the Company has elected to continue to account for stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" and related interpretations. Accordingly, compensation cost for stock options is measured as the excess, if any, of the market price of the Company's common stock at the date of grant over the stock option exercise price.

Equipment and Furniture

Equipment and furniture are carried at cost. The Company provides for depreciation and amortization using the straight-line method for financial reporting purposes over estimated useful lives ranging from two to five years. Depreciation expense includes amounts amortized for assets recorded under capital leases.

Pro Forma Net Loss per Share (unaudited)

Upon the completion of the Company's proposed initial public offering, all redeemable convertible preferred stock will automatically convert to common stock. Accordingly, pro forma net loss per share is computed using the weighted average number of shares of common stock outstanding and the weighted average redeemable convertible preferred stock outstanding as if such shares were converted to common stock at the time of issuance. Other common stock equivalents, including stock options and warrants, are excluded from the computation as their effect is antidilutive. See Note 13.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from these estimates.

Concentrations of Credit Risk

The Company's customer base is dispersed across many different geographic areas throughout the world in a variety of industries. No single customer accounted for more than 10% of the Company's sales in any of the periods presented. The Company does not require collateral or other security to support credit sales, but provides an allowance for bad debts based on historical experience and specific identification.

The Company is subject to concentrations of credit risk from its cash and cash equivalents. Under terms of certain of its debt agreements, the Company is required to maintain its cash and cash equivalents primarily at one financial institution.

Reclassifications

Certain prior year amounts have been reclassified to conform with the current year presentation.

Recently Issued Accounting Standards

In 1997, the following accounting standards were issued: SFAS No. 129, "Disclosure of Information About Capital Structure," requiring supplemental disclosure of capital structure, SFAS No. 130, "Reporting

F-9

CONCUR TECHNOLOGIES, INC.
(FORMERLY PORTABLE SOFTWARE CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION FOR THE NINE MONTHS ENDED JUNE 30, 1997 IS UNAUDITED)

1. DESCRIPTION OF THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED) Comprehensive Income," (this statement establishes standards for reporting and disclosure of comprehensive income and its components, including revenues, expenses, gains, and losses, in a full set of general-purpose financial statements), SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information," and SOP 97-2, "Software Revenue Recognition." Each of these standards will become effective for the Company on October 1, 1998. The adoption of these standards is not expected to have a significant impact upon the Company's financial statements or disclosures.

2. EQUIPMENT AND FURNITURE

Equipment and furniture consisted of the following:

                                                    SEPTEMBER 30,
                                                   ---------------    JUNE 30,
                                                   1996      1997       1998
                                                   -----    ------    --------
                                                         (IN THOUSANDS)
Computer hardware and software...................  $ 587    $  319     $   51
Furniture and equipment..........................     88        33         61
Leased equipment.................................     --     1,800      3,122
                                                   -----    ------     ------
                                                     675     2,152      3,234
Less accumulated depreciation and amortization...   (220)      (75)      (582)
                                                   -----    ------     ------
                                                   $ 455    $2,077     $2,652
                                                   =====    ======     ======

In July 1997, the Company entered into a Master Lease Agreement with Comdisco, Inc. ("Comdisco"), a preferred stockholder, under which Comdisco agreed to provide the Company lease financing, up to an aggregate purchase price of $2.5 million. In February 1998, the Company entered into a second Master Lease Agreement, whereby the total financing commitment extended by Comdisco was increased by an additional $1.0 million, to a total of $3.5 million. As of June 30, 1998, approximately $380,000 was available under this agreement. The Company accounts for its obligations under these Master Lease Agreements as capital leases.

In connection with the Master Lease Agreements, the Company entered into sale leaseback transactions with Comdisco totaling $1.8 million and $237,000 in September and October of 1997, respectively. The equipment that was sold and subsequently leased back had a net book value of $970,000. The resulting deferred gain of $1,067,000 is amortized over the four-year life of the leases. The gain recognized on the sale leaseback transactions during the nine months ended June 30, 1998 was $192,000. The gain was recorded against depreciation expense in the accompanying financial statements. The leased equipment is amortized over the lease term.

3. ACQUISITION

On June 30, 1998, the Company acquired 7Software, a privately-held software company and the developer of CompanyStore. The Company issued 1,772,302 shares of its common stock in exchange for all outstanding shares of 7Software. The Company also assumed all outstanding 7Software options, which were converted to options to purchase approximately 309,809 shares of the Company's common stock, and agreed to pay certain shareholders of 7Software $500,000, resulting in a total purchase price of $6.2 million (including direct costs of the acquisition). This amount is payable to such shareholders in the amount of $167,000 per year for three years. The acquisition was accounted for as a purchase. Therefore, the results of operations of 7Software and the fair value of the assets acquired and liabilities assumed were included in the Company's financial statements beginning on the acquisition date.

F-10

CONCUR TECHNOLOGIES, INC.
(FORMERLY PORTABLE SOFTWARE CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION FOR THE NINE MONTHS ENDED JUNE 30, 1997 IS UNAUDITED)

3. ACQUISITION (CONTINUED) In connection with the purchase of 7Software, the Company assumed 7Software's 1997 stock option plan. All outstanding options to purchase the stock of 7Software on the acquisition date were converted into options to purchase 309,809 shares of common stock of the Company. The outstanding options can be exercised at a price of approximately $0.01 per share, vest over 4 years, and are exercisable for a period not to exceed 10 years.

The allocation of the purchase price resulted in intangible assets (primarily developed software and the value of an acquired workforce) of $960,000 which has been capitalized and is being amortized on a straight line basis over 5 years. Acquired in-process technology has been valued using the income approach, resulting in a charge of $5,203,000.

Values assigned to acquired in-process research and development, developed technology, and trademarks and the acquired workforce were determined by independent appraisals using discounted cash flow analysis. To determine the value of the in-process research and development, the Company considered, among other factors, the state of development of each project, the time and cost needed to complete each project, expected income, and associated risks which included the inherent difficulties and uncertainties in completing the project and thereby achieving technological feasibility and risks related to the viability of and potential changes to future target markets. This analysis results in amounts assigned to in-process research and development projects that had not yet reached technological feasibility or do not have alternative future uses. To determine the value of the developed technology, the expected future cash flows of the existing technology product were discounted taking into account risks related to the characteristics and applications of each product, existing and future markets, and assessments of the life cycle stage of each product. Based on this analysis, the existing technology that had reached technological feasibility was capitalized.

The unaudited pro forma combined historical results, as if 7Software had been acquired at the beginning of each respective fiscal period excluding the non-recurring one-time charge for acquired in-process technology:

                                         YEAR ENDED                NINE MONTHS
                                     SEPTEMBER 30, 1997        ENDED JUNE 30, 1998
                                   -----------------------   ------------------------
                                   ACTUAL      PRO FORMA      ACTUAL      PRO FORMA
                                   -------   -------------   --------    ------------
                                                     (IN THOUSANDS)
                                              (UNAUDITED)                (UNAUDITED)
Total revenues, net..............  $ 8,270      $ 8,336      $ 11,715      $ 11,885
Net loss.........................   (5,524)      (5,713)      (13,095)       (8,195)
Pro forma net loss per share.....    (0.23)       (0.22)        (0.48)        (0.28)

The pro forma information does not purport to be indicative of the results that would have been obtained had these events occurred at the beginning of the periods presented and is not necessarily indicative of future results.

In connection with the purchase of 7Software, the Company also entered into separate employment agreements with certain former 7Software officers and shareholders. Under the terms of these arrangements, the Company is committed to loan $500,000 to these officers and shareholders. The notes receivable will be payable in aggregate annual installments of $167,000 plus interest at variable rates and will be secured by second mortgages on real property.

Approximately 310,000 shares of the Company's common stock issued in connection with the purchase of 7Software will be held in escrow until June 30, 1999 subject to resolution of any unresolved claims by the Company. The value of these shares was included in the 7Software purchase price. In addition, as of June 30,

F-11

CONCUR TECHNOLOGIES, INC.
(FORMERLY PORTABLE SOFTWARE CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION FOR THE NINE MONTHS ENDED JUNE 30, 1997 IS UNAUDITED)

3. ACQUISITION (CONTINUED) 1998, 851,131 shares of Common Stock issued to the founders in connection with the acquisition include restrictions entitling the Company to repurchase such shares in the event of termination. These restrictions lapse at various rates through June 2000.

4. LINE OF CREDIT

The Company has a $2.0 million line of credit for operating needs that expires September 2, 1998. Borrowings under the credit line bear interest at the lending bank's prime interest rate plus 1.5%, which can be reduced to the bank's prime rate plus 1.0% following the achievement and maintenance of after-tax operating profitability for two consecutive quarters. The line is limited to $500,000 for the issuance of standby and commercial letters of credit. The borrowing base for the line is to be monitored on a monthly basis and is to consist of the sum of up to 80% of eligible domestic accounts receivable and any letter of credit backed or insured by foreign accounts receivable; and up to 80% of approved eligible foreign accounts receivable with a limit of the aggregate funds advanced against such accounts, not to exceed $300,000. Interest is due monthly and principal is due upon maturity.

There were no outstanding borrowings under this line at June 30, 1998. The bank has issued standby letters of credit on behalf of the Company at June 30, 1998 in the amount of $455,000 and the amount available on the unused line of credit on that date is $1,545,000. The line is secured by all non-leased assets of the Company, including intellectual property. The line of credit agreement requires the Company to meet certain financial covenants, including limitations on the Company's ability to pay dividends. See Notes 11 and 17 for discussion of warrants issued in conjunction with the line of credit and other debt.

5. LONG-TERM DEBT

Long-term debt at June 30, 1998 consisted of: (i) a $3.0 million senior term loan facility; (ii) a $1.5 million subordinated promissory note; and (iii) a $3.5 million subordinated promissory note. The subordinated promissory notes are held by Comdisco. The proceeds from these obligations may be used for equipment purchases and general corporate purposes.

The senior term loan facility bears interest at the lending bank's prime rate less 1.0% and matures on February 15, 2001 (7.5% at June 30, 1998). Payments are interest only through February 15, 1999. At February 15, 1999, the outstanding balance under the facility may be termed out with 24 equal monthly principal payments, plus applicable interest. The loan is secured by a perfected senior security interest in all non-leased assets of the Company with specific filings for intellectual property (both the line of credit and senior term loan were issued by the same lender and include the same financial covenants and restrictions discussed above).

The subordinated promissory notes (subordinated to both the line of credit and senior term loan) are secured by the Company's receivables, equipment, general intangibles, inventory, and all other goods and personal property of the Company. The $1.5 million note bears interest at 8.5%, has principal and interest payments of approximately $38,000 due monthly, and matures August 2001. The $3.5 million note bears interest at 11.0%, has monthly principal and interest payments of approximately $101,000 beginning November 1998, and matures April 2002. The underlying debt agreement allows the Company to obtain additional long-term borrowings of up to $1.5 million, at an interest rate of 12.5%. This commitment by the lending institution expires December 31, 1998.

F-12

CONCUR TECHNOLOGIES, INC.
(FORMERLY PORTABLE SOFTWARE CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION FOR THE NINE MONTHS ENDED JUNE 30, 1997 IS UNAUDITED)

5. LONG-TERM DEBT (CONTINUED) Maturities of long-term debt are as follows:

                                                 (IN THOUSANDS)
                                                 --------------
Three months ended September 30, 1998..........      $   87
Fiscal year ending September 30:
  1999.........................................       1,658
  2000.........................................       3,232
  2001.........................................       2,094
  2002.........................................         681
                                                     ------
                                                     $7,752
                                                     ======

6. NOTES PAYABLE TO STOCKHOLDERS

In February 1997, the Company exchanged two notes payable to stockholders totaling $233,000, plus accrued interest, for 337,301 shares of Series C Preferred Stock. At the time of the conversion to Series C Preferred Stock, the outstanding balance of the notes plus accrued interest was $267,000.

7. COMMITMENTS

The Company leases office space and equipment under noncancelable operating leases and capital leases. In October 1997, the Company signed a five-year lease for new corporate headquarters in Redmond, Washington which commenced February 1998. The Company has the option to extend the lease for one additional five-year term. The Company is required to provide a $450,000 letter of credit as security for the lease. The letter of credit may be reduced by specified amounts in the lease agreement after 36 months or upon the Company achieving certain economic goals. In January and February 1998, the Company signed two-year subleases for its former corporate headquarters.

Future minimum rental payments under noncancelable leases, adjusted to include the new lease dated August 1998 and net of the future minimum rentals of $325,000 to be received under the subleases are as follows:

                                                              JUNE 30, 1998
                                                           --------------------
                                                           CAPITAL    OPERATING
                                                           LEASES      LEASES
                                                           -------    ---------
                                                              (IN THOUSANDS)
Three months ended September 30, 1998....................  $  248      $  223
Fiscal year ending September 30:
  1999...................................................   1,033         761
  2000...................................................   1,033         684
  2001...................................................     861         732
  2002...................................................      31         754
  2003...................................................      --         277
                                                           ------      ------
                                                            3,206      $3,431
                                                                       ======
Less amount representing interest........................    (393)
                                                           ------
Present value of net minimum capital lease obligations...   2,813
Less current portion.....................................    (819)
                                                           ------
Capital lease obligations, less current portion..........  $1,994
                                                           ======

F-13

CONCUR TECHNOLOGIES, INC.
(FORMERLY PORTABLE SOFTWARE CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION FOR THE NINE MONTHS ENDED JUNE 30, 1997 IS UNAUDITED)

7. COMMITMENTS (CONTINUED) Total rent expense for the years ended September 30, 1995, 1996, and 1997 was $105,000, $162,000, and $254,000, respectively and $170,000 and $558,000 for the nine months ended June 30, 1997 and 1998, respectively.

8. INCOME TAXES

The Company did not provide an income tax benefit for any period presented because it has experienced operating losses since inception. At June 30, 1998, the Company has net operating loss carryforwards of $15,739,000 and tax credit carryforwards of $262,000 respectively, all of which expire between 2009 and 2013.

As a result of prior equity financings the Company has incurred and will incur "ownership changes" pursuant to applicable regulations in effect under the Internal Revenue Code of 1986, as amended. Accordingly, the Company's use of net operating loss carryforwards incurred through the date of these ownership changes will be limited during the carryforward period. To the extent that any single year loss is not utilized to the full amount of the limitation, such unused loss is carried over to subsequent years until the earlier of its utilization or the expiration of the relevant carryforward period.

Significant components of the Company's deferred tax assets are as follows:

                                                          SEPTEMBER 30,
                                                        ------------------    JUNE 30,
                                                         1996       1997        1998
                                                        -------    -------    --------
                                                                (IN THOUSANDS)
Deferred tax assets:
  Net operating loss carryforwards....................  $ 2,315    $ 3,410    $ 5,351
  Tax credit carryforwards............................       23        152        262
  Deferred revenues...................................      219        502        930
  Expenses not currently deductible and other.........      131        630        786
                                                        -------    -------    -------
          Total deferred tax assets...................    2,688      4,694      7,329
Valuation allowance...................................   (2,688)    (4,694)    (7,329)
                                                        -------    -------    -------
                                                        $    --    $    --    $    --
                                                        =======    =======    =======

Since the Company's utilization of these deferred tax assets is dependent on future profits, which are not assured, a valuation allowance equal to the net deferred tax assets has been provided. The valuation allowance for deferred tax assets increased approximately $1,673,000, $2,006,000, and $2,635,000 during the years ended September 30, 1996 and 1997, and for the nine months ended June 30, 1998.

9. STOCK OPTION PLANS AND EMPLOYEE STOCK PURCHASE PLAN

The Company's 1994 Stock Option Plan (the "1994 Plan") provides for the issuance of options to acquire 6,900,000 shares of common stock. The 1994 Plan provides for the granting of incentive stock options to employees and nonqualified stock options to employees, directors and other eligible participants. Options granted under the 1994 Plan vest at variable rates, typically four years, determined by the Board of Directors, and remain exercisable for a period not to exceed 10 years. At June 30, 1998, 973,337 shares were available for future grant.

F-14

CONCUR TECHNOLOGIES, INC.
(FORMERLY PORTABLE SOFTWARE CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION FOR THE NINE MONTHS ENDED JUNE 30, 1997 IS UNAUDITED)

9. STOCK OPTION PLANS AND EMPLOYEE STOCK PURCHASE PLAN (CONTINUED) A summary of the Company's stock option activity and related weighted average exercise prices are as follows:

                                     SEPTEMBER 30, 1995      SEPTEMBER 30, 1996      SEPTEMBER 30, 1997         JUNE 30, 1998
                                   ----------------------   ---------------------   ---------------------   ---------------------
                                                 WEIGHTED                WEIGHTED                WEIGHTED                WEIGHTED
                                                 AVERAGE                 AVERAGE                 AVERAGE                 AVERAGE
                                                 EXERCISE                EXERCISE                EXERCISE                EXERCISE
                                     OPTIONS      PRICE      OPTIONS      PRICE      OPTIONS      PRICE      OPTIONS      PRICE
                                   -----------   --------   ----------   --------   ----------   --------   ----------   --------
Balance at beginning of period...    2,854,070     $0.04       810,250    $ 0.04     1,557,500    $ 0.06     1,986,443    $0.06
    Granted......................      157,750      0.04       901,000      0.08       490,450      0.09     1,771,335     0.54
    Exercised....................   (2,200,070)     0.04       (20,547)     0.05        (3,124)     0.07      (105,208)    0.05
    Canceled.....................       (1,500)     0.05      (133,203)     0.06       (58,383)     0.15       (54,856)    0.09
                                   -----------              ----------              ----------              ----------
Balance at end of year...........      810,250      0.04     1,557,500      0.06     1,986,443      0.06     3,597,714     0.30
                                   ===========              ==========              ==========              ==========
Exercisable at end of period.....      147,639     $0.04       497,886    $ 0.04       980,242    $ 0.05     1,175,599    $0.05
                                   ===========              ==========              ==========              ==========
Weighted average fair value of
  options granted during the
  period
    Granted at fair value........       $ 0.04                  $ 0.08                  $ 0.09                    $ --
    Granted at below fair
      value......................           --                      --                      --                    1.03

Information regarding the weighted average remaining contractual life and weighted average exercise price of options outstanding and options exercisable at June 30, 1998 for selected exercise price ranges is as follows:

                      OPTIONS OUTSTANDING       OPTIONS EXERCISABLE
                  ---------------------------   --------------------
                     WEIGHTED                               WEIGHTED
                      AVERAGE                               AVERAGE
   RANGE OF         CONTRACTUAL                             EXERCISE
EXERCISE PRICES   LIFE (IN YEARS)    SHARES      SHARES      PRICE
---------------   ---------------   ---------   ---------   --------
 $0.04 - 0.08          7.22         1,782,879   1,175,599    $0.05
         0.15          9.32         1,466,735          --       --
  0.16 - 2.25          9.97           348,100          --       --
 ------------          ----         ---------   ---------    -----
 $0.04 - 2.25          8.34         3,597,714   1,175,599    $0.05
                                    =========   =========

The Company uses the intrinsic value-based method to account for all its employee stock-based compensation arrangements. Accordingly, no compensation cost has been recognized for its stock options in the accompanying consolidated financial statements because the fair value of the underlying common stock equals or exceeds the exercise price of the stock options at the date of grant, except with respect to certain options granted during the nine months ended June 30, 1998. The Company has recorded deferred stock compensation expense of $861,000 relating to options granted in the nine months ended June 30, 1998. These amounts represent the difference between the exercise price and the fair value of the Company's common stock during the periods in which such options were granted. Amortization of deferred compensation of $297,000 was recognized during the nine months ended June 30, 1998.

The following pro forma information regarding stock-based compensation has been determined as if the Company had accounted for its employee stock options under the fair market value method of SFAS 123. The fair value of these options was estimated at the date of grant using a minimum value option pricing model with the following weighted average assumptions: risk-free interest rates range from 5.5% to 6.5% in 1996, 1997, and 1998; a dividend yield rate of 0% for all periods; and assuming that the options will be exercised one year after they vest.

F-15

CONCUR TECHNOLOGIES, INC.
(FORMERLY PORTABLE SOFTWARE CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION FOR THE NINE MONTHS ENDED JUNE 30, 1997 IS UNAUDITED)

9. STOCK OPTION PLANS AND EMPLOYEE STOCK PURCHASE PLAN (CONTINUED) For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the options' vesting period. The Company's pro forma information is as follows:

                                                                                        NINE MONTHS
                                                          YEAR ENDED SEPTEMBER 30,         ENDED
                                                          ------------------------       JUNE 30,
                                                            1996           1997            1998
                                                          ---------      ---------      -----------
                                                          (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Net loss as reported....................................   $(4,953)       $(5,524)       $(13,095)
Incremental pro forma compensation expense under SFAS
  123...................................................        (2)            (7)             (2)
                                                           -------        -------        --------
Pro forma net loss......................................   $(4,955)       $(5,531)       $(13,097)
                                                           =======        =======        ========
Pro forma loss per share................................   $ (0.87)       $ (0.97)       $  (2.26)
                                                           =======        =======        ========

Under SFAS 123, compensation expense representing the fair value of the option grant is recognized over the vesting period. The initial impact on pro forma net loss may not be representative of compensation expense in future years, when the effect of amortization of multiple awards would be reflected in pro forma earnings.

10. STOCKHOLDER NOTES RECEIVABLE

In October 1994, certain stockholders exercised options to purchase shares of common stock. In connection with the issuance, the Company accepted promissory notes totaling $80,000. These notes, which have been charged to common stock for financial statement presentation, are due in October 1999 and bear interest at 5%, payable annually. These notes are full recourse and are secured by common stock purchased with the proceeds thereof.

11. REDEEMABLE CONVERTIBLE PREFERRED STOCK AND WARRANTS

Redeemable Convertible Preferred Stock

In October 1994, the Company designated and issued 3,824,092 shares of Series A redeemable convertible preferred stock ("Series A Preferred Stock") through a private offering. Net proceeds from the financing amounted to $1,963,000.

In July 1995, the Company designated and issued 4,687,500 shares of Series B redeemable convertible preferred stock ("Series B Preferred Stock") through a private offering. Net proceeds from the financing amounted to $2,939,000.

In July 1996, the Company designated 9,774,801 shares and issued 9,375,000 shares of Series C redeemable convertible preferred stock ("Series C Preferred Stock") through a private offering. Net proceeds from the financing amounted to $7,478,000. An additional 337,301 shares of Series C were issued in February 1997 in exchange for the cancellation of notes payable totaling $267,000.

In July 1997, the Company designated 3,357,897 shares and issued 3,188,357 shares of Series D redeemable convertible preferred stock ("Series D Preferred Stock") through a private offering. Net proceeds from the offering amounted to $4,615,000.

In June 1998, the Company designated 4,500,000 shares and issued 2,508,773 shares of Series E redeemable convertible preferred stock ("Series E Preferred Stock") through a private offering. Net proceeds from the financing amounted to $7,777,000.

F-16

CONCUR TECHNOLOGIES, INC.
(FORMERLY PORTABLE SOFTWARE CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION FOR THE NINE MONTHS ENDED JUNE 30, 1997 IS UNAUDITED)

11. REDEEMABLE CONVERTIBLE PREFERRED STOCK AND WARRANTS (CONTINUED) Redeemable convertible preferred stock is convertible into common stock, at the option of the holder, currently at the rate of one-to-one, subject to antidilution provisions. An equivalent number of unissued shares of common stock are reserved for issuance in the event of full conversion of all redeemable convertible preferred stock. Each share of redeemable convertible preferred stock has voting rights equivalent to the number of common stock shares issuable if converted. Stockholders of each series of preferred stock have the right to elect one member to the Board of Directors while common stockholders may elect two members to the Board of Directors.

Subject to certain conditions, redeemable convertible preferred stock has mandatory conversion requirements in the event of a qualified initial public offering of the Company's common stock, or if 80% of the preferred stockholders, voting in a single class elects to convert to common stock. Each series of redeemable convertible preferred stock has dividend rights payable at various rates per share when and if declared. In the event of any distribution of assets upon liquidation of the Company, the order of preference to those assets will be provided to holders of Series E, Series D, Series C, Series B, and Series A Preferred Stock at the original offering price per share, plus any declared but unpaid dividends. Any remaining assets will be distributed ratably to all stockholders up to various maximum rates for the preferred stockholders.

Redeemable convertible preferred stock will be redeemed in four equal annual installments beginning in October 2001 unless waived in writing by more than 60% of the holders of such stock. Redemption amounts are based on the original offering price of the stock plus any declared but unpaid dividends. The order of preference in any such redemption effected shall be as follows: Series E, Series D, Series C, Series B and Series A Preferred Stock.

Following is a summary of terms and conditions for each series of redeemable convertible preferred stock as of June 30, 1998:

                                                                                ANNUAL
                                                               AGGREGATE       DIVIDEND
                                       SHARES       STATED    LIQUIDATION       RATE --
                                     OUTSTANDING    VALUE        VALUE       NONCUMULATIVE
                                     -----------    ------    -----------    -------------
Issues and outstanding:
  Series A.........................   3,824,092     $ 0.52    $ 2,000,000       $ 0.0366
  Series B.........................   4,687,500       0.64      3,000,000         0.0448
  Series C.........................   9,712,301       0.80      7,770,000         0.0560
  Series D.........................   3,188,357       1.46      4,655,000         0.1020
  Series E.........................   2,508,773       3.10      7,777,000         0.2170
                                     ----------               -----------
                                     23,921,023               $25,202,000
                                     ==========               ===========

Warrants to Purchase Preferred Stock

In May 1996, the Company issued warrants to purchase 70,313 shares of Series C Preferred Stock in conjunction with a renewal and increase in the bank line of credit (see Note 4). The warrants are immediately exercisable at a price of $0.80 per share, expiring May 2001. The estimated fair value of these warrants of $5,000 has been recorded as debt issuance costs.

In July 1997, the Company issued warrants to Comdisco to purchase 112,068 and 57,471 shares of Series D Preferred Stock in conjunction with its receipt of financing commitments relating to the promissory note and lease agreement, respectively. Each has a purchase price of $1.46 per share. The warrants become immediately exercisable on the effective date of the agreements and are exercisable for a period of five years;

F-17

CONCUR TECHNOLOGIES, INC.
(FORMERLY PORTABLE SOFTWARE CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION FOR THE NINE MONTHS ENDED JUNE 30, 1997 IS UNAUDITED)

11. REDEEMABLE CONVERTIBLE PREFERRED STOCK AND WARRANTS (CONTINUED) or two years from the effective date of the Company's initial public offering, whichever is longer, provided the offering is less than $15.0 million. Should the offering exceed $15.0 million, the right to purchase preferred stock as granted shall expire, if not previously exercised, immediately upon the closing of the issuance and sale of shares of common stock of the Company. The estimated fair value of these warrants of $30,000 and $16,000, respectively, has been recorded as debt issuance costs.

In September 1997, the Company issued warrants to purchase 35,000 shares of Series D Preferred Stock in conjunction with a new loan facility and an increase/renewal in the bank line of credit (see Note 4). The warrants have an initial exercise price of $1.46 per share, a five-year maturity inclusive of certain provisions to include, but not limited by, a net exercise provision, antidilution protection and a $30,000 put option. The right to exercise the put option expires two years from the issue date of the warrants. The estimated fair value of these warrants of $7,000 has been expensed as debt issuance costs.

In April 1998, the Company issued warrants to purchase 32,968 shares of Series E Preferred Stock in conjunction with the increase to the senior loan facility. The warrants have an initial exercise price of $3.10 per share. The warrants become immediately exercisable on the effective date of the agreements and are exercisable for a period of five years. Additionally, the agreement provides for a $75,000 put option which expires in April 2000. The estimated fair value of these warrants of $3,000 has been expensed as debt issuance costs.

In May 1998, the Company issued warrants to Comdisco to purchase 141,129 shares of Series E Preferred Stock in conjunction with the new subordinated promissory note. The warrants are immediately exercisable at a price of $3.10 per share and are exercisable for a period of five years; or two years from effective date of the Company's initial public offering, whichever is longer, provided the offering is less than $15.0 million. Should the offering exceed $15.0 million, the right to purchase preferred stock as granted shall expire, if not previously exercised, immediately upon the closing of the issuance and sale of shares of common stock of the Company. The estimated fair value of these warrants of $11,000 has been recorded as debt issuance costs. Under the terms of this subordinated debt agreement, the Company has an outstanding commitment to issue additional warrants to purchase as many as 67,742 shares of Series E Preferred Stock at an exercise price of $3.10 per share if it utilizes the $1.5 million additional financing available under the agreement.

All preferred stock warrants automatically convert to common stock warrants upon the closing of a qualified initial public offering of the Company's common stock.

F-18

CONCUR TECHNOLOGIES, INC.
(FORMERLY PORTABLE SOFTWARE CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION FOR THE NINE MONTHS ENDED JUNE 30, 1997 IS UNAUDITED)

12. STOCKHOLDERS' EQUITY

The Company has reserved shares of common stock for future issuance as follows:

                                                               JUNE 30,
                                                                 1998
                                                              ----------
1994 Employee Stock Option Plan.............................   6,900,000
1997 Stock Option Plan assumed in connection with
  acquisition of 7Software..................................     309,809
Conversion of redeemable convertible preferred stock:
     Series A...............................................   3,824,092
     Series B...............................................   4,687,500
     Series C...............................................   9,774,801
     Series D...............................................   3,357,897
     Series E...............................................   4,500,000
Warrants to purchase Series C Preferred Stock that are
  convertible to common stock...............................      70,313
Warrants to purchase Series D Preferred Stock that are
  convertible to common stock...............................     204,539
Warrants to purchase Series E Preferred Stock that are
  convertible to common stock...............................     174,097
                                                              ----------

          Total.............................................  33,803,048
                                                              ==========

13. NET LOSS PER SHARE

Basic and diluted loss per common share is calculated by dividing net loss by the weighted average number of common shares outstanding. Pro forma net loss per share is computed using the weighted average number of shares used for basic and diluted per share amounts and the weighted average convertible redeemable preferred stock outstanding as if such shares were converted to common stock at the time of issuance.

                                           YEAR ENDED SEPTEMBER 30,          NINE MONTHS ENDED JUNE 30,
                                     -------------------------------------   --------------------------
                                        1995         1996         1997          1997           1998
                                     ----------   ----------   -----------   -----------   ------------
                                                                             (UNAUDITED)
                                                     (IN THOUSANDS, EXCEPT SHARE DATA)
Net loss...........................  $   (2,890)  $   (4,953)  $    (5,524)  $   (3,681)   $   (13,095)
                                     ==========   ==========   ===========   ==========    ===========
Basic and diluted net loss per
  common share.....................  $    (0.52)  $    (0.87)  $     (0.97)  $    (0.64)   $     (2.26)
                                     ==========   ==========   ===========   ==========    ===========
Weighted average number of common
  shares used for basic and diluted
  per share amounts................   5,585,546    5,705,956     5,720,948    5,720,763      5,802,492
                                     ==========   ==========                 ==========
Weighted average common shares
  issuable upon pro forma
  conversion of preferred stock....                             18,686,768                  21,706,049
                                                               -----------                 -----------
Weighted average number of shares
  used for pro forma per share
  amounts..........................                             24,407,716                  27,508,541
                                                               ===========                 ===========
Pro forma net loss per share
  (unaudited)......................                            $     (0.23)                $     (0.48)
                                                               ===========                 ===========

F-19

CONCUR TECHNOLOGIES, INC.
(FORMERLY PORTABLE SOFTWARE CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION FOR THE NINE MONTHS ENDED JUNE 30, 1997 IS UNAUDITED)

14. RETIREMENT 401(k) PLAN

The Company sponsors a 401(k) Profit Sharing and Trust Plan which is available to substantially all employees. Each employee may elect to contribute up to 20% of his or her pre-tax gross earnings, subject to annual limits. The Company reserves the right to amend the Plan at any time. Employee contributions to the Plan are subject to statutory limitations regarding maximum contributions. There are no Company matching contributions.

15. INTERNATIONAL REVENUES

The Company licenses and markets its products primarily in the United States, and operates in a single industry segment. Information regarding revenues in different geographic regions is as follows:

                                                           REVENUES
                                    ------------------------------------------------------
                                                                     NINE          NINE
                                                                    MONTHS        MONTHS
                                                                     ENDED         ENDED
                                                                   JUNE 30,      JUNE 30,
             COUNTRY                 1995      1996      1997        1997          1998
             -------                ------    ------    ------    -----------    ---------
                                                                  (UNAUDITED)
                                                        (IN THOUSANDS)
United States.....................  $2,128    $1,959    $6,981      $4,369        $11,260
United Kingdom....................      --        --       612         512            312
Canada............................      --        --       677         324             31
Australia.........................      --        --        --          --            112
                                    ------    ------    ------      ------        -------
          Total...................  $2,128    $1,959    $8,270      $5,205        $11,715
                                    ======    ======    ======      ======        =======

From the inception of the Company to September 30, 1996, there were no significant export sales or operations in countries outside of the United States.

16. SIGNIFICANT AGREEMENTS

Strategic Marketing Alliance Agreement with American Express

In December 1997, the Company entered into a strategic alliance agreement with American Express Company ("American Express") under which American Express refers to the Company its corporate charge card customers that seek a T&E expense management software solution. Under the terms of the agreement, the Company will pay a fee for certain sales referred by American Express.

License Agreements

The Company has entered into various agreements that allow the Company to incorporate licensed technology into its products or which allow the Company the right to sell separately the licensed technology. The Company incurs royalty fees under these agreements which are determined based on a predetermined fee per license sold. Royalty costs incurred under these agreements are recognized as product is sold and are included in cost of product sales. These amounts totaled $203,000 for the year ended September 30, 1997, and $151,000 and $82,000 for the nine months ended June 30, 1998 and 1997, respectively. Amounts recognized in 1996 and 1995 were insignificant.

F-20

CONCUR TECHNOLOGIES, INC.
(FORMERLY PORTABLE SOFTWARE CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION FOR THE NINE MONTHS ENDED JUNE 30, 1997 IS UNAUDITED)

17. SUBSEQUENT EVENTS

In July 1998, the Company entered into a third Master Lease Agreement with Comdisco, Inc., whereby the total financing commitment extended by Comdisco was increased by an additional $1.5 million to a total of $5.0 million.

Purchase of Additional Series E Preferred Stock

On August 11, 1998, the Series E Preferred Stock Purchase Agreement (the "Purchase Agreement") was amended for the additional sale of 1,612,903 shares of the Company's Series E Preferred Stock for $4,999,999 to American Express Travel Related Services Company, Inc. ("TRS"). The additional shares of Series E Preferred Stock were purchased on the same terms and conditions set forth in the Purchase Agreement. The total number of shares of Series E Preferred Stock issued through August 11, 1998 was 4,121,676.

Co-Branded XMS Service Marketing Agreement

On August 11, 1998, the Company and American Express entered into a Co-Branded XMS Service Marketing Agreement, pursuant to which American Express agreed to be a strategic remarketer of an outsource version of XMS.

Warrants to Purchase Shares of Series E Preferred Stock

On August 11, 1998 the Company issued a warrant to TRS and its assignees to purchase an additional 6,000,000 shares of Series E Preferred Stock. If all of the shares of Series E Preferred Stock are converted into shares of common stock in connection with a registration of the Company's common stock under the Securities Act, then this warrant shall automatically become exercisable for 6,000,000 shares of the Company's common stock. The warrant is exercisable in four tranches as follows: 750,000 shares may be acquired at the time of the Company's initial public offering at a cash purchase price equal to the initial public offering price less 7%; 1,750,000 shares may be acquired at any time on or before October 15, 1999 at a cash purchase price of $13.50 per share; 1,750,000 shares may be acquired at any time on or before January 15, 2001 at a cash purchase price of $20.25 per share; and the remaining 1,750,000 shares may be acquired at any time on or before January 15, 2002 at a cash purchase price of $34.00 per share. Pursuant to this warrant, if determined to be appropriate by the Board of Directors within 60 days of the date of the warrant, 25% of the shares that may be acquired under the warrant at the time of the Company's initial public offering or on or before October 15, 1999 may be cancelled. The Board of Directors has made such a determination; thus, 562,500 shares may be acquired at the time of the Company's initial public offering, and 1,312,500 shares may be acquired on or before October 15, 1999.

On August 21, 1998, the Board of Directors authorized management to file a registration statement with the Securities and Exchange Commission to permit the Company to offer its common stock to the public. If the offering is consummated under terms presently anticipated each outstanding share of redeemable convertible preferred stock will convert into one share of common stock. Unaudited pro forma stockholders' equity reflects the assumed conversion of the redeemable convertible preferred stock into common stock and the assumed conversion of redeemable convertible preferred stock warrants into common stock warrants as of June 30, 1998.

F-21

CONCUR TECHNOLOGIES, INC.
(FORMERLY PORTABLE SOFTWARE CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(INFORMATION FOR THE NINE MONTHS ENDED JUNE 30, 1997 IS UNAUDITED)

17. SUBSEQUENT EVENTS (CONTINUED) On August 21, 1998, the Board adopted the 1998 Equity Incentive Plan, the Director Stock Option Plan and the Employee Stock Purchase Plan, subject to approval by the Company's stockholders. The Equity Incentive Plan authorized issuance of 8,100,000 shares of common stock upon the exercise of stock options or otherwise pursuant to the plan. The Director Stock Option Plan authorized the issuance of 600,000 shares of common stock upon the exercise of stock options that may be granted pursuant to the plan. The Employee Stock Option Plan authorized the issuance of 800,000 shares of Common Stock.

F-22

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

The Board of Directors
7Software, Inc.

We have audited the accompanying balance sheet of 7Software, Inc. (a development stage company) as of December 31, 1997 and the related statements of income, shareholders' equity, and cash flows for the period May 30, 1997 (date of incorporation) to December 31, 1997. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards. 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of 7Software, Inc. at December 31, 1997 and the results of its operations and its cash flows for the period May 30, 1997 (date of incorporation) to December 31, 1997 in conformity with generally accepted accounting principles.

Seattle, Washington                       ERNST & YOUNG LLP

                                          /s/ ERNST & YOUNG LLP
August 14, 1998

F-23

7SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEET
DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT SHARE DATA)

ASSETS

Current assets:
  Cash and cash equivalents.................................  $25
  Accounts receivable.......................................   12
                                                              ---
          Total current assets..............................   37
Furniture and equipment, net................................   21
                                                              ---
          Total assets......................................  $58
                                                              ===
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable..........................................  $ 6
  Accrued payroll liabilities...............................    4
                                                              ---
          Total current liabilities.........................   10
Convertible note payable....................................   25
Commitments
Shareholders' equity:
  Preferred stock, no par value:
     Authorized shares: 5,000,000
     No shares issued and outstanding.......................   --
  Common stock, no par value:
     Authorized shares: 10,000,000
     2,000,000 shares issued and outstanding................   20
  Retained earnings.........................................    3
                                                              ---
          Total shareholders' equity........................   23
                                                              ---
          Total liabilities and shareholders' equity........  $58
                                                              ===

See accompanying notes.

F-24

7SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF INCOME
FOR THE PERIOD MAY 30, 1997 (DATE OF INCORPORATION) TO DECEMBER 31, 1997
(IN THOUSANDS)

Revenues....................................................  $66
Cost of revenues............................................    5
                                                              ---
Gross profit................................................   61
Operating expenses:
  Research & development....................................   30
  Selling, general, and administration......................   27
                                                              ---
          Total operating expenses..........................   57
                                                              ---
Income before taxes.........................................    4
Provision for taxes.........................................    1
                                                              ---
          Net income........................................  $ 3
                                                              ===

See accompanying notes.

F-25

7SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE PERIOD MAY 30, 1997 (DATE OF INCORPORATION) TO DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                      COMMON STOCK                        TOTAL
                                                   -------------------    RETAINED    STOCKHOLDERS'
                                                    SHARES      AMOUNT    EARNINGS       EQUITY
                                                   ---------    ------    --------    -------------
Sale of common stock at $0.01 per share for cash
  on June 6, 1997................................    630,000     $ 6        $--            $ 6
  Issuance of common stock at $0.01 per share for
     furniture and equipment at cost on June 6,
     1997........................................    630,000       6         --              6
  Issuance of common stock at $0.01 per share for
     employee services on June 6, 1997...........    740,000       8         --              8
  Net income.....................................                             3              3
                                                   ---------     ---        ---            ---
Balance at December 31, 1997.....................  2,000,000     $20        $ 3            $23
                                                   =========     ===        ===            ===

See accompanying notes.

F-26

7SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF CASH FLOWS
FOR THE PERIOD MAY 30, 1997 (DATE OF INCORPORATION) TO DECEMBER 31, 1997
(IN THOUSANDS)

OPERATING ACTIVITIES
Net income..................................................  $  3
Adjustments to reconcile net income to net cash used in
  operating activities:
  Depreciation..............................................     1
  Stock compensation........................................     8
  Changes in assets and liabilities:
     Accounts receivable....................................   (12)
     Accounts payable and accrued payroll liabilities.......    10
                                                              ----
Net cash provided by operating activities...................    10
                                                              ----
INVESTING ACTIVITIES
Purchases of furniture and equipment........................   (16)
                                                              ----
FINANCING ACTIVITIES
Proceeds from issuance of common stock......................     6
Proceeds from convertible note payable......................    25
                                                              ----
Net cash provided by financing activities...................    31
                                                              ----
Net increase in cash and cash equivalents...................    25
Cash and cash equivalents at beginning of period............    --
                                                              ----
Cash and cash equivalents at end of period..................  $ 25
                                                              ====
NONCASH TRANSACTIONS AND SUPPLEMENTAL DISCLOSURES
Furniture and equipment contributed for common stock........  $  6
                                                              ====

See accompanying notes.

F-27

7SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD MAY 30, 1997 (DATE OF INCORPORATION) TO DECEMBER 31, 1997

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF ACTIVITIES

7Software, Inc. (the "Company") was incorporated in California on May 30, 1997. The Company performs consulting services for product development and developed a product called CompanyStore that automates the purchasing of nonproduction goods. CompanyStore runs on corporate intranets, providing access to company-specific information and making that information available on employee desktops throughout the enterprise. The Company is in the development stage.

REVENUE RECOGNITION

The Company generates revenues from performing computer programming consulting. Revenue is recognized by the Company based upon hours of consulting performed and billable, in accordance with the related consulting agreement.

CASH EQUIVALENTS

All short-term investments with maturities of three months or less at date of purchase are considered to be cash equivalents.

DEVELOPMENT COSTS

All software development costs are expensed until technological feasibility has been established. No software development costs were capitalized during the period ended December 31, 1997.

ADVERTISING AND MARKETING COSTS

Costs of marketing materials and advertising expenditures are charged to operations when the materials are used or the advertisement is first released. Advertising costs were $5,000 for the period ended December 31, 1997.

FEDERAL INCOME TAXES

The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes." Under Statement No. 109, deferred tax assets and liabilities are recorded using the liability method, which recognizes the effect of temporary differences between the reporting of revenues and expenses for financial statement and income tax return purposes. Temporary differences for the period were insignificant. Therefore, no deferred taxes have been provided.

STOCK-BASED COMPENSATION

The Company has elected to follow Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25") and related interpretations in accounting for its employee stock options. Under APB 25, no compensation expense is recorded when the exercise price of employee stock options equals the market price of the underlying stock on the date of grant. The Company has adopted the disclosure-only provisions of Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation."

F-28

7SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD MAY 30, 1997 (DATE OF INCORPORATION) TO DECEMBER 31, 1997

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from these estimates.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost and is depreciated on the straight-line method over the estimated useful lives of the assets, ranging from two to four years.

2. PROPERTY AND EQUIPMENT

Property and equipment consists of the following: (in thousands)

Computer equipment.....................................  $20
Furniture, fixtures, and equipment.....................    2
                                                         ---
                                                          22
Accumulated depreciation...............................   (1)
                                                         ---
                                                         $21
                                                         ===

3. CONVERTIBLE NOTES

On November 30, 1997 the Company entered into an agreement to receive $75,000 in consideration of a non-interest bearing convertible note. The terms of this agreement were such that the entire balance of the note was convertible into securities sold in the Company's first stock financing with outside investors after the date thereof. The Company received $25,000 of the $75,000 note in December 1997 and the remaining balance during the first quarter of 1998. Subsequent to December 31, 1997, but prior to the closing of the merger agreement between Concur Technologies, Inc. and the Company on June 30, 1998 (see Note 8), the Company entered into a new warrant agreement which entitled the note holder to purchase shares of the Company at the price per share agreed upon under the aforementioned merger agreement. For the ability to purchase these shares, the note holder forgave the $75,000 note.

4. SHAREHOLDERS' EQUITY

On June 6, 1997, the Company issued 2,000,000 shares of common stock to the founders of the Company. The shares were issued for $20,000 of consideration which included cash, furniture and equipment, and services rendered since the incorporation of the Company.

5. STOCK OPTION PLAN

The Company's 1997 Stock Option Plan has authorized the grant of options to employees, directors, and eligible participants for up to 500,000 shares of the Company's common stock. The term of options granted to certain significant stockholders cannot exceed five years while the term of all other options cannot exceed ten years. The options vest over periods defined in each option agreement as determined at the discretion of the Company's Board of Directors. Stock options that qualify as incentive stock options are exercisable at not less

F-29

7SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD MAY 30, 1997 (DATE OF INCORPORATION) TO DECEMBER 31, 1997

5. STOCK OPTION PLAN (CONTINUED) than the fair market value of the stock at the date of grant, and nonqualified stock options are exercisable at prices determined at the discretion of the Board of Directors, which shall not be less than 85% of the fair market value of the stock at the date of grant. No options had been granted under the plan as of December 31, 1997.

6. COMMITMENTS

The Company leased its facility under an operating lease that expired on June 30, 1998. Total rental expense for the period ended December 31, 1997 was $4,000.

7. SALES TO MAJOR CUSTOMERS

All revenues recognized by the Company for the period presented were made to SAP Technology for computer programming consulting.

8. SUBSEQUENT EVENT

On June 30, 1998, the Company merged with Concur Technologies, Inc. ("Concur"). The merger resulted in all shares of the Company's outstanding capital stock and stock options being converted into Concur common stock and stock options.

F-30

CONCUR TECHNOLOGIES, INC.
(FORMERLY PORTABLE SOFTWARE CORPORATION)

PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

The following financial statements present the Concur Technologies, Inc. ("Concur," formerly Portable Software Corporation) Pro Forma Consolidated Statements of Operations for the year ended September 30, 1997 and nine months ended June 30, 1998.

The Company's acquisition of 7Software, Inc. ("7Software") has been accounted for under the "purchase" method of accounting which requires the purchase price to be allocated to the acquired assets and liabilities of 7Software on the basis of their estimated fair values as of the date of acquisition. The following pro forma consolidated statements of operations for the year ended September 30, 1997 and the nine months ended June 30, 1998 give effect to the acquisition of 7Software as if it occurred on October 1, 1996 and October 1, 1997, respectively, and include adjustments directly attributable to the acquisition of 7Software and expected to have a continuing impact on the combined company (collectively, the "Pro Forma Financial Statements"). As the Pro Forma Financial Statements have been prepared based on estimated fair values, amounts actually recorded may change upon determination of the total purchase price (which may change based on future performance) and additional analysis of individual assets and liabilities assumed.

The pro forma information is based on historical financial statements. The assumptions give effect to the business combination with 7Software under the purchase method of accounting. The information has been prepared in accordance with the rules and regulations of the Commission and is provided for comparative purposes only. The pro forma information does not purport to be indicative of the results that actually would have occurred had the combination been effected at the beginning of the periods presented.

F-31

CONCUR TECHNOLOGIES, INC.

PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED JUNE 30, 1998
(UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                                        PURCHASE       PRO FORMA
                                            CONCUR       7SOFTWARE     ADJUSTMENTS    CONSOLIDATED
                                          -----------    ----------    -----------    ------------
Total revenues, net.....................  $    11,715    $      170      $    --      $    11,885
Cost of revenues........................        4,020            30          105            4,155
                                          -----------    ----------      -------      -----------
Gross profit............................        7,695           140         (105)           7,730

Sales and marketing.....................        7,886            --           --            7,886
Research and development................        4,162           239           20            4,421
General and administrative..............        3,225            60           19            3,304
Acquired in-process technology..........        5,203            --       (5,203)              --
                                          -----------    ----------      -------      -----------
          Total operating expense.......       20,476           299       (5,164)          15,611
                                          -----------    ----------      -------      -----------
Loss from operations....................      (12,781)         (159)       5,059           (7,881)
Other expense...........................          314            --           --              314
                                          -----------    ----------      -------      -----------
          Net loss......................  $   (13,095)   $     (159)     $ 5,059      $    (8,195)
                                          ===========    ==========      =======      ===========
Pro forma net loss per share............  $     (0.48)                                $     (0.28)
                                          ===========                                 ===========
Weighted average shares used in
  computation of basic and diluted net
  loss per share........................       27,509                                      29,231
                                          ===========                                 ===========

See accompanying notes.

F-32

CONCUR TECHNOLOGIES, INC.

PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1997
(UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                                         PURCHASE      PRO FORMA
                                               CONCUR      7SOFTWARE    ADJUSTMENTS   CONSOLIDATED
                                             -----------   ----------   -----------   ------------
Total revenues, net........................  $     8,270   $       66         --      $     8,336
Cost of revenues...........................        2,663            5        140            2,808
                                             -----------   ----------      -----      -----------
Gross profit...............................        5,607           61       (140)           5,528

Sales and marketing........................        5,896           --         --            5,896
Research and development...................        3,401           30         26            3,457
General and administrative.................        1,815           27         26            1,868
                                             -----------   ----------      -----      -----------
          Total operating expense..........       11,112           57         52           11,221
                                             -----------   ----------      -----      -----------
Income (loss) from operations..............       (5,505)           4       (192)          (5,693)
Other expense..............................           19           --         --               19
                                             -----------   ----------      -----      -----------
Income (loss) before income taxes..........       (5,524)           4       (192)          (5,712)
Income taxes...............................           --            1         --                1
                                             -----------   ----------      -----      -----------
          Net income (loss)................  $    (5,524)  $        3      $(192)     $    (5,713)
                                             ===========   ==========      =====      ===========
Pro forma basic and diluted net loss per
  share....................................  $     (0.23)                             $     (0.22)
                                             ===========                              ===========
Weighted average shares used in computation
  of basic and diluted net loss per
  share....................................       24,408                                   26,055
                                             ===========                              ===========

See accompanying notes.

F-33

CONCUR TECHNOLOGIES, INC.

NOTES TO PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

On June 30, 1998, the Company acquired 7Software, Inc. ("7Software"). 7Software was incorporated in May 1997 and focused on the development and licensing of Internet-based procurement solutions that bring purchasing to the desktops of employees of large corporations. Concurrent with this transaction, 7Software was merged into the Company.

The unaudited pro forma information presented is not necessarily indicative of future consolidated results of operations of Concur or the consolidated results of operations which would have resulted had the acquisition taken place during the periods presented. The unaudited pro forma consolidated statements of operations for the year ended September 30, 1997 and the nine months ended June 30, 1998 reflect the effects of the acquisition, assuming the related events occurred as of October 1, 1996 and October 1, 1997, respectively, for the purposes of the unaudited pro forma consolidated statement of operations.

2. UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL ADJUSTMENTS

The unaudited pro forma consolidated financial statements reflect the conversion of all the outstanding shares of 7Software common stock into approximately 1,772,302 shares and stock options to purchase 309,809 shares of Concur common stock pursuant to the acquisition. This consideration resulted in a total purchase price of $6.2 million (including acquisition expenses).

The allocation of the purchase price resulted in intangible assets, primarily capitalized technology and the value of an acquired workforce, of $960,000 which are being amortized on a straight line basis over five years. In-process research and development acquired and valued using the income approach in the amount of $5,203,000 was charged to expense. In-process research and development charges have not been reflected in the pro forma consolidated financial statements of operations for the year ended September 30, 1997, or the nine months ended June 30, 1998 as they are considered a nonrecurring charge.

In connection with the purchase of 7Software, the Company entered into employment agreements with certain former 7Software officers and shareholders. Under the terms of these arrangements, the Company agreed to pay a total of $500,000 to these officers and shareholders.

3. UNAUDITED PRO FORMA CONSOLIDATED NET LOSS PER SHARE

The net loss per share and shares used in computing the net loss per share for the year ended September 30, 1997 and the nine months ended June 30, 1998 are based upon the historical weighted average common shares outstanding adjusted to reflect the issuance, as of October 1, 1996 and October 1, 1997 of approximately 1,772,302 shares and stock options to purchase 309,809 shares of Concur common stock as described in Note 2 to these Notes to Unaudited Pro Forma Consolidated Financial Statements. Options to purchase approximately 364,000 shares of 7Software common stock were assumed by Concur pursuant to the acquisition and converted into options to purchase approximately 309,809 shares of Concur common stock. The Concur common stock issuable upon the exercise of the stock options have been excluded as the effect would be antidilutive. In addition to the shares used in computing the net income (loss) per share above, pro forma basic and diluted net loss per share is calculated using the weighted average convertible and redeemable preferred stock outstanding as if such shares were converted to common stock at the time of issuance.

4. PURCHASE ADJUSTMENTS

Pro forma adjustments have been prepared to reflect the elimination of the non-recurring one-time charge for acquired in-process technology and to reflect the amortization of capitalized technology and other intangible assets.

F-34

DESCRIPTION OF GRAPHICS

INSIDE FRONT COVER

Graphic:
Concur logo. A large Concur logo without the words "Concur-TM TECHNOLOGIES" and without the box in the center of the circle, which is replaced by the text below.

Text:
Concur Technologies is a leading provider of Web-based Employee-Facing Applications.

Envision a workplace where manual, paper-based processes are not only automated but also extend throughout the enterprise, to partners, vendors and to service providers. Concur Technologies provides travel and entertainment expense management and front-office procurement solutions that enable organizations to work more efficiently and increase employee productivity. The Company leverages Intranet technology to deploy such applications quickly and on an enterprise-wide basis. The Company also leverages the public Internet infrastructure to offer its solutions to a broad range of businesses.

Concur Technologies' mission is to be the dominant Web-based integrated solution provider of employee-facing business applications throughout the extended enterprise.

GATEFOLD

Graphic:
Box divided into 5 vertical sections. The top of the first is the Concur logo. The next four are headed by "Preparation," "Approval," "Processing" and "Data Analysis and Reporting," respectively. There are pictures of eight screen shots showing various stages of the software. The top four screen shots deal with XMS and the bottom four deal with CompanyStore.

Text:
Under Concur logo:

Concur products automate the preparation, approval, processing and data analysis of T & E expense reports and front-office procurement requisitions. By automating manual paper-based processes, costs are reduced and customers are enabled to collect and analyze data to consolidate purchases with preferred vendors.

Under "Preparation":

[XMS logo]

Expense Reports are easily prepared using a checkbook-style user interface and prepopulated with corporate charge card data.

[CompanyStore logo]

Using CompanyStore's simple user interface, orders are placed on-line through a customized electronic catalog.

Under "Approval":

XMS allows the enterprise to determine the approval process and automatically flags those reports that are not in compliance.

CompanyStore allows the enterprise to determine how the requisitions should be processed.

Under "Processing":

XMS integrates with existing and future corporate charge cards, financial, Intranet, e-mail and operating systems, allowing employees to be reimbursed more quickly.

CompanyStore saves time by integrating with the customer's ERP system, allowing orders to be entered into the purchasing system automatically and then forwarded electronically to the vendor.

Under "Data Analysis and Reporting":

Provides access to expense trends and data, allowing negotiation of better supplier rates.

Better data allows managers to determine how best to control costs, negotiate more favorable supplier arrangements and consolidate vendors.


PAGE 45

This graphic depicts the interconnection of various systems. A box with three divisions, captioned "Concur Applications," is on the top. The three divisions are the XMS logo, the CompanyStore logo and "Others" in text. A box with eight divisions, captioned "Concur Technology Platform," is below the "Concur Solutions" box. The eight divisions are "Prepopulation," "Workflow/Routing," "Business Intelligence," "Security," "Messaging," "Business Rules," "User Management," and "Database," as text. A box with five divisions, captioned "ERP Platforms," is below the "Concur Technology Platform" box. The five divisions are "SAP," "Oracle," "PeopleSoft," "Others" and "Legacy Systems" as text. A box with four divisions, captioned "E-Commerce," is to the right of the other three boxes. The three divisions are "Travel Services," "Corporate Charge Card Suppliers," "Vendors & Suppliers" and "Financial Institutions" as text. "Concur Technology Platform" and "Concur Applications" have three double-ended arrows pointing to each other. "Concur Technology Platform" and "E-Commerce" have a double-ended arrow pointing to each other. "Concur Technology Platform" and "ERP Platforms" have five double-ended arrows pointing to each other.

INSIDE BACK COVER

Graphic: Two screen shots, one of a CompanyStore page, and the other of an XMS page. Both the CompanyStore logo with the slogan "Business to Business Procurement: A Timely Solution" and XMS logos. A large Concur logo without the words "Concur-TM TECHNOLOGIES" and without the box in the center of the circle.

Text:
CompanyStore-TM is an Intranet application designed to support procurement of front-office goods and services.

The Xpense Management Solution-TM is a proven travel expense automation product that has been licensed to more than 125 companies for use by hundreds of thousands of employees around the world.

BACK COVER

Graphic:
Concur logo with shadow. Dark background.


(This page intentionally left blank.)


LOGO


PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the costs and expenses to be paid by the Company in connection with the sale of shares of Common Stock being registered hereby. All amounts are estimates except for the Securities and Exchange Commission fee, the NASD filing fee and the Nasdaq National Market filing fee.

Securities and Exchange Commission registration fee.........  $ 10,915
NASD filing fee.............................................     4,200
Nasdaq National Market filing fee...........................     *
Accounting fees and expenses................................   175,000
Legal fees and expenses.....................................   300,000
Printing and engraving expenses.............................   100,000
Road show expenses..........................................    30,000
Transfer agent and registrar fees and expenses..............     3,000
Custodian fees..............................................     *
Miscellaneous...............................................     *
                                                              --------
          Total.............................................  $  *
                                                              ========


* To be provided by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

As permitted by Section 145 of the Delaware General Corporation Law ("DGCL"), the Company's Certificate of Incorporation includes a provision that eliminates the personal liability of its directors to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) under section 174 of the DGCL or (iv) for any transaction from which the director derived an improper personal benefit. In addition, as permitted by Section 145 of the DGCL, the Bylaws of the Company provide that: (i) the Company is required to indemnify its directors and executive officers to the fullest extent permitted by the DGCL (except if such person is seeking indemnity in connection with a proceeding (or part thereof) initiated by such person and not authorized by the Board of Directors); (ii) the Company may, in its discretion, indemnify other officers, employees and agents as set forth in the DGCL; (iii) upon receipt of an undertaking to repay such advances if indemnification is determined to be unavailable, the Company is required to advance expenses, as incurred, to its directors and executive officers to the fullest extent permitted by the DGCL in connection with a proceeding (except if the expenses incurred by such person are incurred because the Company is directly bringing a claim, in a proceeding, against such person, alleging that such person has breached his or her duty of loyalty to the Company, committed an act or omission not in good faith or that involves intentional misconduct or a knowing violation of law, or derived an improper personal benefit from a transaction); (iv) the rights conferred in the Bylaws are not exclusive and the Company is authorized to enter into indemnification agreements with its directors, officers, employees and agents; and (v) the Company may not retroactively amend the Bylaw provisions relating to indemnity.

The Company's policy is to enter into indemnity agreements with each of its directors and executive officers. The indemnity agreements provide that directors and executive officers will be indemnified and held harmless to the fullest possible extent permitted by law including against all expenses (including attorneys' fees), judgments, fines and settlement amounts paid or reasonably incurred by them in any action, suit or proceeding, including any derivative action by or in the right of the Company, on account of their services as directors, officers, employees or agents of the Company or as directors, officers, employees or agents of any other company or enterprise when they are serving in such capacities at the request of the Company. The

II-1


Company will not be obligated pursuant to the agreements to indemnify or advance expenses to an indemnified party with respect to proceedings or claims (i) initiated by the indemnified party and not by way of defense, except with respect to a proceeding authorized by the Board of Directors and successful proceedings brought to enforce a right to indemnification under the indemnity agreements; (ii) for any amounts paid in settlement of a proceeding unless the Company consents to such settlement; (iii) on account of any suit in which judgment is rendered against the indemnified party for an accounting of profits made from the purchase or sale by the indemnified party of securities of the Company pursuant to the provisions of sec. 16(b) of the Securities Exchange Act of 1934 and related laws; (iv) on account of conduct by an indemnified party that is finally adjudged to have been in bad faith or conduct that the indemnified party did not reasonably believe to be in, or not opposed to, the best interests of the Company; (v) on account of any criminal action or proceeding arising out of conduct that the indemnified party had reasonable cause to believe was unlawful; or (vi) if a final decision by a court having jurisdiction in the matter shall determine that such indemnification is not lawful.

The indemnity agreement requires a director or executive officer to reimburse the Company for expenses advanced only to the extent it is ultimately determined that the director or executive officer is not entitled, under Delaware law, the Bylaws, his or her indemnity agreement or otherwise to be indemnified for such expenses. The indemnity agreement provides that it is not exclusive of any rights a director or executive officer may have under the Certificate of Incorporation, Bylaws, other agreements, any majority-in-interest vote of the stockholders or vote of disinterested directors, Delaware law, or otherwise.

The indemnification provision in the Bylaws, and the indemnity agreements entered into between the Company and its directors and executive officers, may be sufficiently broad to permit indemnification of the Company's directors and executive officers for liabilities arising under the Securities Act.

As authorized by the Company's Bylaws, the Company, with approval by the Company's Board of Directors, has applied for, and expects to obtain, directors and officers liability insurance with a per claim and annual aggregate coverage limit of $5 million.

Reference is made to the following documents filed as exhibits to this Registration Statement regarding relevant indemnification provisions described above and elsewhere herein:

                          DOCUMENT                            EXHIBIT NUMBER
                          --------                            --------------
Underwriting Agreement......................................       1.01
Company's Certificate of Incorporation......................       3.01
Company's Bylaws............................................       3.04
Form of Indemnification Agreement...........................      10.06

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ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

The following table sets forth information regarding all securities of the Company sold by the Company from August 15, 1995 to August 15, 1998. References to warrants below assume the full exercise of all warrants.

                                                                        NUMBER         AGGREGATE         FORM OF
CLASS OF PURCHASERS      DATE OF SALE        TITLE OF SECURITIES     OF SECURITIES   PURCHASE PRICE   CONSIDERATION
--------------------   -----------------   -----------------------   -------------   --------------   -------------
1 investor             May 15, 1996        Warrants to purchase               --      $        --               --(1)
                                           70,313 shares of Series
                                           C Preferred Stock
10 investors           July 10, 1996       Series C Preferred          9,375,000        7,500,000             Cash
                                           Stock
2 investors            May 22, 1997        Series C Preferred            337,301          269,697               --(2)
                                           Stock
1 investor             July 22, 1997       Warrants to purchase               --               --               --(3)
                                           169,539 shares of
                                           Series D Preferred
                                           Stock
10 investors           July 23, 1997       Series D Preferred          3,188,357        4,655,001             Cash
                                           Stock
1 investor             September 3, 1997   Warrants to purchase               --               --               --(4)
                                           35,000 shares of Series
                                           D Preferred Stock
1 investor             April 28, 1998      Warrants to purchase               --               --               --(5)
                                           32,968 shares of Series
                                           E Preferred Stock
1 investor             May 8, 1998         Warrants to purchase               --               --               --(6)
                                           141,129 shares of
                                           Series E Preferred
                                           Stock
8 shareholders         June 30, 1998       Common Stock                1,772,302               --     Exchange for(7)
                                                                                                      Common Stock
                                                                                                      of 7Software
                                                                                                       Corporation
25 investors           June 30, 1998 and   Series E Preferred          4,121,676       12,777,196             Cash
                       August 11, 1998     Stock
1 investor             August 11, 1998     Warrant to purchase                --               --               --(8)
                                           5,375,000 shares of
                                           Series E Preferred
                                           Stock
Officers, directors,   August 15, 1995     Exercise of Options to        228,172           12,837             Cash(9)
employees and          to August 15,       purchase Common Stock
eligible               1998
participants


* As part of the reincorporation of the Company into Delaware, the Company exchanged 7,700,544 shares of its Common Stock, 25,533,926 shares of its redeemable convertible preferred stock and warrants to purchase 5,823,949 shares of its redeemable convertible preferred stock for 7,700,544 shares of Common Stock, 25,533,926 shares of redeemable convertible preferred stock and warrants to purchase 5,823,949 shares of redeemable convertible preferred stock, respectively.

(1) Issued to Imperial Bank as additional consideration for a bank line of credit.

(2) In connection with the cancellation of previous indebtedness, 175,975 shares of Series C Preferred Stock were issued to Michael W. Hilton and 161,326 shares of Series C Preferred Stock were issued to S. Steven Singh.

(3) Issued to Comdisco, Inc. as additional consideration for a promissory note and an equipment lease.

(4) Issued to Imperial Bank as additional consideration for a bank line of credit and other financing.

(5) Issued to Imperial Bank as additional consideration for additional financing.

(6) Issued to Comdisco, Inc. as additional consideration for a promissory note.

(7) In connection with the Company's acquisition of 7Software, the Company exchanged 1,772,302 shares of Common Stock for 7Software's Common Stock.

(8) Issued to TRS in connection with TRS's purchase of Series E Preferred Stock.
See "Certain Transactions."

II-3


(9) With respect to the grant of stock options, exemption from registration under the Securities Act was unnecessary in that none of such transactions involved a "sale" of securities as such term is used in Section 2(3) of the Securities Act.

All sales of Common Stock made pursuant to the exercise of stock options granted under the stock option plans of the Company or its predecessors were made pursuant to the exemption from the registration requirements of the Securities Act afforded by Rule 701 promulgated under the Securities Act.

All other sales were made in reliance on Section 4(2) of the Securities Act and/or Regulation D promulgated under the Securities Act. The securities were sold to a limited number of people with no general solicitation or advertising. The purchasers were sophisticated investors with access to all relevant information necessary to evaluate the investment and who represented to the issuer that the shares were being acquired for investment.

II-4


ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) The following exhibits are filed herewith:

EXHIBIT
NUMBER                               EXHIBIT TITLE
-------                              -------------
 1.01    --   Form of Underwriting Agreement.*
 2.01    --   Form of Agreement and Plan of Merger between Company and
              Concur Technologies, Inc., a Washington corporation.
 2.02    --   Agreement and Plan of Reorganization between Company, PSC
              Merger Corp., 7Software, Inc., Andrew Dent and Melissa
              Widner dated June 30, 1998.
 3.01    --   Company's Certificate of Incorporation.
 3.02    --   Company's Certificate of Designation.*
 3.03    --   Form of Company's Amended and Restated Certificate of
              Incorporation to be filed with the Delaware Secretary of
              State immediately following the Offering.
 3.04    --   Company's Bylaws.
 4.01    --   Specimen Certificate for Company's Common Stock.*
 4.02    --   Second Amended and Restated Information and Registration
              Rights Agreement dated May 24, 1998.
 5.01    --   Opinion of Fenwick & West LLP regarding legality of the
              securities being issued.*
10.01    --   Company's Amended and Restated 1994 Stock Option Plan and
              related documents.
10.02    --   Company's 1998 Equity Incentive Plan and related documents.
10.03    --   Company's 1998 Employee Stock Purchase Plan and related
              documents.
10.04    --   Company's 1998 Directors Stock Option Plan and related
              documents.
10.05    --   Company's 401(k) Profit Sharing and Trust Plan.
10.06    --   Form of Indemnification Agreement entered into by Company
              with each of its directors and executive officers.
10.07    --   Series D Preferred Stock Purchase Agreement dated July 22,
              1997.
10.08    --   Series E Preferred Stock Purchase Agreement dated May 29,
              1998.
10.09    --   Strategic Marketing Alliance Agreement between Company and
              American Express Company dated December 17, 1997.**
10.10    --   Co-Branded XMS Service Marketing Agreement between Company
              and American Express Company dated August 11, 1998.**
10.11    --   Warrant to purchase shares of Company's Series E Preferred
              Stock issued by Company to American Express Travel Related
              Services Company, Inc. ("TRS") dated August 11, 1998.
10.12    --   Voting Agreement among Company and stockholders of Company
              identified therein dated May 29, 1998.
10.13    --   Amendment Agreement among Company and stockholders of
              Company identified therein dated July 30, 1998.
10.14    --   Facility Lease between Company and CarrAmerica Realty
              Corporation dated October 31, 1997, as amended on April 10,
              1998.
10.15    --   Letter Agreement between Company and Sterling R. Wilson
              dated April 21, 1994.
10.16    --   Letter Agreement between Company and Jon T. Matsuo dated
              June 20, 1994.
10.17    --   Letter Agreement between Company and Frederick L. Ingham
              dated December 5, 1996.
10.18    --   Letter Agreement between Company and John P. Russo, Jr.
              dated April 1, 1996.
10.19    --   Standstill Agreement between Company and TRS dated August
              10, 1998.

II-5


EXHIBIT
NUMBER                               EXHIBIT TITLE
-------                              -------------
21.01    --   List of Company's subsidiaries.
23.01    --   Consent of Fenwick & West LLP (included in Exhibit 5.01).*
23.02    --   Consent of Ernst & Young LLP, Independent Auditors.
24.01    --   Power of Attorney (included at Page II-7 of this
              Registration Statement).
27.01    --   Financial Data Schedule.
99.01    --   Report of Ernst & Young LLP, Independent Auditors, on
              Financial Statement Schedule.


* To be supplied by amendment.

** Confidential treatment is being sought with respect to certain portions of this agreement. Such portions have been omitted from this filing and have been filed separately with the Commission.

(b) The following financial statement schedule is filed herewith:

Schedule II -- Valuation and Qualifying Accounts

ITEM 17. UNDERTAKINGS.

The undersigned Company hereby undertakes to provide to the underwriters at the closing specified in the Underwriting Agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the provisions described under Item 14 above, or otherwise, the Company has been advised that in the opinion of the 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 the Company of expenses incurred or paid by a director, officer or controlling person of the Company 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, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question 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.

The undersigned Company hereby undertakes that:

(1) 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 430A and contained in a form of prospectus filed by the Company pursuant to Rule 424(b)(1) or (4) 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.

(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 the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-6


SIGNATURES

Pursuant to the requirements of the Securities Act, the Company has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Redmond, State of Washington, on the 25th day of August, 1998.

CONCUR TECHNOLOGIES, INC.

By: /s/ S. STEVEN SINGH
  ------------------------------------
  S. Steven Singh
  President, Chief Executive Officer
    and Director

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS that each individual whose signature appears below constitutes and appoints S. Steven Singh and Sterling R. Wilson, 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 462 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, 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 in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

                        NAME                                        TITLE                    DATE
                        ----                                        -----                    ----

                 /s/ S. STEVEN SINGH                   President, Chief Executive       August 25, 1998
-----------------------------------------------------  Officer and Director (principal
                   S. Steven Singh                     executive officer)

               /s/ STERLING R. WILSON                  Chief Financial Officer and      August 25, 1998
-----------------------------------------------------  Vice President of Operations
                 Sterling R. Wilson                    (principal financial officer
                                                       and principal accounting
                                                       officer)

                /s/ MICHAEL W. HILTON                  Chairman of the Board of         August 25, 1998
-----------------------------------------------------  Directors and Chief Technical
                  Michael W. Hilton                    Officer

                /s/ JEFFREY D. BRODY                   Director                         August 25, 1998
-----------------------------------------------------
                  Jeffrey D. Brody

               /s/ NORMAN A. FOGELSONG                 Director                         August 25, 1998
-----------------------------------------------------
                 Norman A. Fogelsong

II-7


                        NAME                                        TITLE                    DATE
                        ----                                        -----                    ----

              /s/ MICHAEL J. LEVINTHAL                 Director                         August 25, 1998
-----------------------------------------------------
                Michael J. Levinthal

              /s/ JAMES D. ROBINSON III                Director                         August 25, 1998
-----------------------------------------------------
                James D. Robinson III

II-8


SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

CONCUR TECHNOLOGIES, INC.
JUNE 30, 1998

               COLUMN A                   COLUMN B             COLUMN C             COLUMN D        COLUMN E
               --------                   --------     ------------------------   -------------   -------------
                                                              ADDITIONS
                                                       ------------------------
                                                                    CHARGED TO
                                         BALANCE AT    CHARGED TO      OTHER
                                        BEGINNING OF   COSTS AND    ACCOUNTS --   DEDUCTIONS --    BALANCE AT
             DESCRIPTION                   PERIOD       EXPENSES     DESCRIBE       DESCRIBE      END OF PERIOD
             -----------                ------------   ----------   -----------   -------------   -------------
Period June 30, 1998:
  Deducted from asset accounts:
     Allowance for doubtful               $170,000      $417,120     $              $114,462        $472,658
       accounts.......................
Year ended September 30, 1997:
  Deducted from asset accounts:
  Allowance for doubtful accounts.....     125,000        87,000                      42,000         170,000
Year ended September 30, 1996:
  Deducted from asset accounts:
     Allowance for doubtful                 18,000       108,197                       1,197         125,000
       accounts.......................
Year ended September 30, 1995:
  Deducted from asset accounts:
     Allowance for doubtful               $             $ 25,000     $              $  7,000        $ 18,000
       accounts.......................


(1) Uncollectible accounts written off, net of recoveries.

S-1

EXHIBIT INDEX

EXHIBIT
NUMBER                               EXHIBIT TITLE
-------                              -------------
 2.01    --   Form of Agreement and Plan of Merger between Company and
              Concur Technologies, Inc., a Washington corporation.
 2.02    --   Agreement and Plan of Reorganization between Company, PSC
              Merger Corp., 7Software, Inc., Andrew Dent and Melissa
              Widner dated June 30, 1998.
 3.01    --   Company's Certificate of Incorporation.
 3.03    --   Form of Company's Amended and Restated Certificate of
              Incorporation to be filed with the Delaware Secretary of
              State immediately following the Offering.
 3.04    --   Company's Bylaws.
 4.02    --   Second Amended and Restated Information and Registration
              Rights Agreement dated May 24, 1998.
10.01    --   Company's Amended and Restated 1994 Stock Option Plan and
              related documents.
10.02    --   Company's 1998 Equity Incentive Plan and related documents.
10.03    --   Company's 1998 Employee Stock Purchase Plan and related
              documents.
10.04    --   Company's 1998 Directors Stock Option Plan and related
              documents.
10.05    --   Company's 401(k) Profit Sharing and Trust Plan.
10.06    --   Form of Indemnification Agreement entered into by Company
              with each of its directors and executive officers.
10.07    --   Series D Preferred Stock Purchase Agreement dated July 22,
              1997.
10.08    --   Series E Preferred Stock Purchase Agreement dated May 29,
              1998.
10.09    --   Strategic Marketing Alliance Agreement between Company and
              American Express Company dated December 17, 1997.**
10.10    --   Co-Branded XMS Service Marketing Agreement between Company
              and American Express Company dated August 11, 1998.**
10.11    --   Warrant to purchase shares of Company's Series E Preferred
              Stock issued by Company to American Express Travel Related
              Services Company, Inc. ("TRS") dated August 11, 1998.
10.12    --   Voting Agreement among the Company and stockholders of
              Company identified therein dated May 29, 1998.
10.13    --   Amendment Agreement among the Company and stockholders of
              Company identified therein dated July 30, 1998.
10.14    --   Facility Lease between Company and CarrAmerica Realty
              Corporation dated October 31, 1997, as amended on April 10,
              1998.
10.15    --   Letter Agreement between Company and Sterling R. Wilson
              dated April 21, 1994.
10.16    --   Letter Agreement between Company and Jon T. Matsuo dated
              June 20, 1994.
10.17    --   Letter Agreement between Company and Frederick L. Ingham
              dated December 5, 1996.
10.18    --   Letter Agreement between Company and John P. Russo, Jr.
              dated April 1, 1996.
10.19    --   Standstill Agreement between Company and TRS dated August
              10, 1998.
21.01    --   List of Company's subsidiaries.
23.02    --   Consent of Ernst & Young LLP, Independent Auditors.
24.01    --   Power of Attorney (included at Page II-7 of this
              Registration Statement).
27.01    --   Financial Data Schedule.
99.01    --   Report of Ernst & Young LLP, Independent Auditors, on
              Financial Statement Schedule.


** Confidential treatment is being sought with respect to certain portions of this agreement. Such portions have been omitted from this filing and have been filed separately with the Commission.

EXHIBIT 2.01

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this "Merger Agreement") is made as of _________________, 1998 by and between Concur Technologies, Inc., a Washington corporation ("Concur Washington"), and Concur Technologies, Inc., a Delaware corporation ("Concur Delaware"). Concur Washington and Concur Delaware are hereinafter sometimes collectively referred to as the "Constituent Corporations."

R E C I T A L S

A. Concur Washington was incorporated on August 20, 1993. Its current authorized capital stock consists of: (1) 60,000,000 shares of Common Stock, no par value ("Concur Washington Common Stock"), of which 7,696,794 shares are issued and outstanding; and (2) 53,000,000 shares of Preferred Stock, no par value ("Concur Washington Preferred Stock"), of which 3,824,092 shares are designated as Series A Preferred Stock (the "Series A Stock"), of which 3,824,092 shares are outstanding, and of which 3,824,092 shares are designated as Series A1 Preferred Stock (the "Series A1 Preferred Stock"), none of which are outstanding, and of which 4,687,500 shares are designated as Series B Preferred Stock (the "Series B Stock"), of which 4,687,500 shares are outstanding, and of which 4,687,500 shares are designated as Series B1 Preferred Stock (the "Series B1 Preferred Stock"), none of which are outstanding, and of which 9,774,801 shares are designated as Series C Preferred Stock (the "Series C Preferred Stock"), of which 9,712,301 shares are outstanding, and of which 9,774,801 shares are designated as Series C1 Preferred Stock ("Series C1 Preferred Stock"), none of which are outstanding, and of which 3,357,897 shares are designated as Series D Preferred Stock (the "Series D Preferred Stock"), of which 3,188,357 shares are outstanding, and of which 3,357,897 shares are designated as Series D1 Preferred Stock (the "Series D1 Preferred Stock"), none of which are outstanding, and of which 4,500,000 shares are designated as Series E Preferred Stock (the "Series E Preferred Stock"), of which 4,121,676 shares are outstanding, and of which 4,500,000 shares are designated as Series E1 Preferred Stock (the "Series E1 Preferred Stock"), none of which are outstanding.

B. Concur Delaware was incorporated on August 5, 1998. Its authorized capital stock consists of: (1) 60,000,000 shares of Common Stock, par value $0.001 per share ("Concur Delaware Common Stock"), of which 1,000 shares are issued and outstanding; and (2) 53,000,000 shares of Preferred Stock, $0.001 par value ("Concur Delaware Preferred Stock"), none of which shares are issued and outstanding and of which 3,824,092 shares are designated as Series A Preferred Stock, 3,824,092 shares are designated as Series A1 Preferred Stock, 4,687,500 shares are designated as Series B Preferred Stock, 4,687,500 shares are designated as Series B1 Preferred Stock, 9,774,801 shares are designated as Series C Preferred Stock, 9,774,801 shares are designated as Series C1 Preferred Stock, 3,357,897 shares are designated as Series D Preferred Stock, 3,357,897 shares are designated as Series D1 Preferred Stock, 4,500,000 shares are designated as Series E Preferred Stock, and 4,500,000 shares are designated as Series E1 Preferred Stock.

C. The respective Boards of Directors of Concur Washington and Concur Delaware deem it advisable and to the advantage of each of the Constituent Corporations that Concur Washington merge with and into Concur Delaware upon the terms and subject to the conditions set forth in this Merger Agreement for the purpose of effecting a change of the state of incorporation of Concur Washington from Washington to Delaware.


Concur Technologies, Inc. Agreement and Plan of Merger

D. The Board of Directors of each of the Constituent Corporations has approved this Merger Agreement.

NOW, THEREFORE, the parties do hereby agree that Concur Washington shall merge with and into Concur Delaware on the following terms, conditions and other provisions:

1. MERGER AND EFFECTIVE TIME. At the Effective Time (as defined below), Concur Washington shall be merged with and into Concur Delaware (the "Merger"), and Concur Delaware shall be the surviving corporation of the Merger (the "Surviving Corporation"). The Merger shall become effective upon the close of business on the date when a duly executed copy of this Merger Agreement, along with all required officers' certificates, is filed with the Secretary of State of the State of Delaware (the "Effective Time").

2. EFFECT OF MERGER. At the Effective Time, the separate corporate existence of Concur Washington shall cease; the corporate identity, existence, powers, rights and immunities of Concur Delaware as the Surviving Corporation shall continue unimpaired by the Merger; and Concur Delaware shall succeed to and shall possess all the assets, properties, rights, privileges, powers, franchises, immunities and purposes, and be subject to all the debts, liabilities, obligations, restrictions and duties of Concur Washington, all without further act or deed.

3. GOVERNING DOCUMENTS. At the Effective Time, the Certificate of Incorporation of Concur Delaware in effect immediately prior to the Effective Time shall become the Certificate of Incorporation of the Surviving Corporation, and the Bylaws of Concur Delaware in effect immediately prior to the Effective Time, without amendment thereto, shall become the Bylaws of the Surviving Corporation.

4. DIRECTORS AND OFFICERS. At the Effective Time, the directors and officers of Concur Delaware shall be and become the directors and officers (holding the same titles and positions) of the Surviving Corporation and after the Effective Time shall serve in accordance with the Certificate of Incorporation and Bylaws of the Surviving Corporation.

5. CONVERSION OF SHARES OF CONCUR WASHINGTON. Subject to the terms and conditions of this Agreement, at the Effective Time and without any further action on the part of any shareholder of Concur Washington, each share of Concur Washington Common Stock outstanding immediately prior thereto (other than any shares held by persons exercising dissenters' rights in accordance with the Washington Business Corporation Act ("Dissenting Shares")) shall be automatically changed and converted into one fully paid and nonassessable, issued and outstanding share of Concur Delaware Common Stock. At the Effective Time: (a) each share of Concur Washington Series A Preferred Stock outstanding immediately prior thereto shall be automatically changed and converted into one fully paid and nonassessable, issued and outstanding share of Concur Delaware Series A Preferred Stock; (b) each share of Concur Washington Series B Preferred Stock outstanding immediately prior thereto shall be automatically changed and converted into one fully paid and nonassessable, issued and outstanding share of Concur Delaware Series B Preferred Stock; (c) each share of Concur Washington Series C Preferred Stock outstanding immediately prior thereto shall be automatically changed and converted into one fully paid and nonassessable, issued and outstanding share of Concur Delaware Series C Preferred Stock; (d) each share of Concur Washington Series D Preferred Stock outstanding immediately prior thereto shall be automatically changed and converted into one fully paid and nonassessable, issued and outstanding share of Concur Delaware Series D Preferred Stock; and (e) each share of Concur Washington Series E Preferred Stock outstanding immediately prior thereto shall be

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Concur Technologies, Inc. Agreement and Plan of Merger

automatically changed and converted into one fully paid and nonassessable, issued and outstanding share of Concur Delaware Series E Preferred Stock

6. CANCELLATION OF SHARES OF CONCUR DELAWARE. At the Effective Time, all of the previously issued and outstanding shares of Concur Delaware Common Stock that were issued and outstanding immediately prior to the Effective Time shall be automatically retired and canceled.

7. STOCK CERTIFICATES. At and after the Effective Time, all of the outstanding certificates that, prior to that date, represented shares of Concur Washington Common Stock shall be deemed for all purposes to evidence ownership of and to represent the number of shares of Concur Delaware Common Stock into which such shares of Concur Washington Common Stock are converted as provided herein. At and after the Effective Time, all of the outstanding certificates that, prior to that date, represented shares of a series of Concur Washington Preferred Stock shall be deemed for all purposes to evidence ownership of and to represent the number of shares of the series of Concur Delaware Preferred Stock into which such shares of Concur Washington Preferred Stock are converted as provided herein. The registered owner on the books and records of Concur Washington of any such outstanding stock certificate for Concur Washington Common Stock or Concur Washington Preferred Stock shall, until such certificate shall have been surrendered for transfer or otherwise accounted for to Concur Delaware or its transfer agent, be entitled to exercise any voting and other rights with respect to, and to receive any dividend and other distributions upon, the shares of Concur Delaware Common Stock or Concur Delaware Preferred Stock evidenced by such outstanding certificate as above provided.

8. CONVERSION OF OPTIONS OF CONCUR WASHINGTON. At the Effective Time, all outstanding and unexercised portions of all options to purchase shares of Concur Washington Common Stock under the Concur Washington 1994 Stock Option Plan (the "1994 Plan") shall become options to purchase the same number of shares of Concur Delaware Common Stock at the original exercise price per share and shall, to the extent permitted by law and otherwise reasonably practicable, have the same term, exercisability, vesting schedule, status as an "incentive stock option" under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), if applicable, and all other material terms and conditions (including but not limited to the terms and conditions applicable to such options by virtue of the 1994 Plan). In addition, at the Effective Time, all outstanding and unexercised portions of all options to purchase shares of Concur Washington Common Stock granted by 7Software, Inc. ("7Software") under the 1997 Stock Option Plan of 7Software and assumed by Concur Washington in connection with its acquisition of 7Software in June 1998 (such assumed 1997 Stock Option Plan of 7Software hereinafter referred to as the "7Software Plan") shall become options to purchase the same number of shares of Concur Delaware Common Stock at the original exercise price per share and shall, to the extent permitted by law and otherwise reasonably practicable, have the same term, exercisability, vesting schedule, status as an "incentive stock option" under Section 422 of the Code, if applicable, and all other material terms and conditions (including but not limited to the terms and conditions applicable to such options by virtue of the 7Software Plan). Additionally, at the Effective Time, all outstanding and unexercised portions of all options to purchase shares of Concur Washington Common Stock granted by 7Software outside of the 7Software Plan and assumed by Concur Washington in connection with its acquisition of 7Software in June 1998 shall become options to purchase the same number of shares of Concur Delaware Common Stock at the original exercise price per share and shall, to the extent permitted by law and otherwise reasonably practicable, have the same term, exercisability, vesting schedule, status as an "incentive stock option" under
Section 422 of the Code, if applicable, and all other material terms and conditions (including but not limited to the terms and conditions applicable to such options by virtue of the 7Software Plan). Continuous employment with 7Software and Concur Washington will be credited to an optionee for purposes of determining the vesting of the number of shares of Concur Delaware Common Stock under a converted Concur Washington option at the Effective

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Concur Technologies, Inc. Agreement and Plan of Merger

Time. At the Effective Time, Concur Delaware shall also adopt and assume the 1994 Plan and the 7Software Plan.

9. CONVERSION OF WARRANTS OF CONCUR WASHINGTON. At the Effective Time, all outstanding and unexercised portions of all warrants to purchase shares of Concur Washington Preferred Stock shall become warrants to purchase the same number of shares of Concur Delaware Preferred Stock at the original exercise price per share and shall, to the extent permitted by law and otherwise reasonably practicable, have the same material terms and conditions.

10. FRACTIONAL SHARES. Since all shares of Concur Washington Common Stock and Preferred Stock will be exchanged for a like number of shares of Concur Delaware Common Stock and Preferred Stock, no fractional shares of Concur Delaware Common Stock or Preferred Stock will be issued in connection with the Merger.

11. EMPLOYEE BENEFIT PLANS. At the Effective Time, the obligations of Concur Washington under or with respect to every plan, trust, program and benefit then in effect or administered by Concur Washington for the benefit of the directors, officers and employees of Concur Washington shall become the lawful obligations of Concur Delaware and shall be implemented and administered in the same manner and without interruption until the same are amended or otherwise lawfully altered or terminated. Effective at the Effective Time, Concur Delaware hereby expressly adopts and assumes all obligations of Concur Washington under such employee benefit plans.

12. FURTHER ASSURANCES. From time to time, as and when required by the Surviving Corporation or by its successors or assigns, there shall be executed and delivered on behalf of Concur Washington such deeds, assignments and other instruments, and there shall be taken or caused to be taken by it all such further action as shall be appropriate, advisable or necessary in order to vest, perfect or confirm, of record or otherwise, in the Surviving Corporation the title to and possession of all property, interests, assets, rights, privileges, immunities, powers, franchises and authority of Concur Washington, and otherwise to carry out the purposes of this Merger Agreement. The officers and directors of the Surviving Corporation are fully authorized in the name of and on behalf of Concur Washington, or otherwise, to take any and all such actions and to execute and deliver any and all such deeds and other instruments as may be necessary or appropriate to accomplish the foregoing.

13. CONDITION. The consummation of the Merger is subject to the approval of this Merger Agreement and the Merger contemplated hereby by the shareholders of Concur Washington and by the sole stockholder of Concur Delaware, prior to or at the Effective Time.

14. ABANDONMENT. At any time before the Effective Time, this Merger Agreement may be terminated and the Merger abandoned by the Board of Directors of Concur Washington or the Board of Directors of Concur Delaware, notwithstanding approval of this Merger Agreement by the Boards of Directors and shareholders of Concur Washington and Concur Delaware.

15. AMENDMENT. At any time before the Effective Time, this Merger Agreement may be amended, modified or supplemented by the Boards of Directors of the Constituent Corporations, notwithstanding approval of this Merger Agreement by the shareholders of Concur Washington and Concur Delaware; provided, however, that any amendment made subsequent to the adoption of this Agreement by the shareholders of Concur Washington or the sole stockholder of Concur Delaware shall not: (i) alter or change the amount or kind of shares, securities, cash, property and/or rights to be received in exchange for or upon conversion of any shares of any class or series of Concur Washington; (ii) alter or change any of the terms of the Certificate of Incorporation of the Surviving Corporation to be

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Concur Technologies, Inc. Agreement and Plan of Merger

effected by the Merger; or (iii) alter or change any of the terms or conditions of this Merger Agreement if such alteration or change would adversely affect the holders of any shares of any class or series of Concur Washington or Concur Delaware.

16. TAX-FREE REORGANIZATION. The Merger is intended to be a tax-free plan of reorganization within the meaning of Section 368(a)(1)(F) of the Code.

17. DISSENTERS' RIGHTS. Holders of Dissenting Shares who have complied with all the requirements for perfecting the rights of dissenting shareholders as set forth in the Washington Business Corporation Act shall be entitled to their rights under such law.

18. GOVERNING LAW. This Agreement shall be governed by and construed under the internal laws of the State of Washington as applied to agreements among Washington residents entered into and to be performed entirely within Washington, without reference to the principles of conflicts of law or choice of laws, except to the extent that the laws of the State of Delaware would apply in matters relating to the internal affairs of Concur Delaware and the Merger.

19. COUNTERPARTS. In order to facilitate the filing and recording of this Merger Agreement, it may be executed in any number of counterparts, each of which shall be deemed to be an original.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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Concur Technologies, Inc. Agreement and Plan of Merger

IN WITNESS WHEREOF, this Merger Agreement is hereby executed on behalf of each of the Constituent Corporations and attested by their respective officers hereunto duly authorized.

CONCUR TECHNOLOGIES, INC. CONCUR TECHNOLOGIES, INC.

a Washington corporation                    a Delaware corporation



By: _______________________________         By:  _______________________________
     S. Steven Singh                              S. Steven Singh
     Chief Executive Officer                      Chief Executive Officer

Attested By:                                Attested By:





___________________________________         ____________________________________
     Matthew P. Quilter                                Matthew P. Quilter
     Secretary                                         Secretary

[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER]

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EXHIBIT 2.02

AGREEMENT AND PLAN OF REORGANIZATION

THIS AGREEMENT AND PLAN OF REORGANIZATION (the "AGREEMENT") is entered into as of this 30th day of June, 1998, by and among Portable Software Corporation, A Washington corporation ("PORTABLE"), PSC Merger Corp., a Delaware corporation and a wholly-owned subsidiary of Portable ("PORTABLE SUBSIDIARY"), and 7Software, Inc., a California corporation ("SEVEN"), and Melissa Widner and Andrew Dent, the principal shareholders of Seven (the "PRINCIPAL SHAREHOLDERS").

RECITALS

A. The parties intend that, subject to the terms and conditions of this Agreement, Portable Subsidiary will merge with and into Seven in a reverse triangular merger with Seven to be the surviving corporation of the Merger, all pursuant to the terms and conditions of this Agreement and an Agreement of Merger substantially in the form of Exhibit A (the "AGREEMENT OF MERGER") and the applicable provisions of the laws of the States of Delaware and California. Upon the effectiveness of the Merger, all the outstanding capital stock of Seven will be converted into capital stock of Portable, and Portable will assume all outstanding options to purchase shares of capital stock of Seven, as provided in this Agreement and the Agreement of Merger.

B. The Merger is intended to be treated as a tax-free reorganization pursuant to the provisions of Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the "CODE"), by virtue of the provisions of Section 368(a)(2)(E) of the Code.

NOW, THEREFORE, the parties hereto hereby agree as follows:

1. CERTAIN DEFINITIONS

As used in this Agreement, the following terms will have the meanings set forth below:

1.1 The "MERGER" means the statutory merger of Portable Subsidiary with and into Seven to be effected pursuant to the terms and conditions of this Agreement.

1.2 The "EFFECTIVE TIME" means the time and date on which the Merger first becomes legally effective under the laws of the States of California and Delaware as a result of: (i) the filing with the California Secretary of State of the Agreement of


Merger and any required officers' certificates; and (ii) the filing with the Delaware Secretary of State of the Agreement of Merger and any required officers' certificates or, in lieu thereof at Portable's option, a Certificate of Merger (the "CERTIFICATE OF MERGER"), conforming to the requirements of
Section 252 of the Delaware General Corporation Law.

1.3 "PORTABLE COMMON STOCK" means Portable's Common Stock, no par value per share.

1.4 "SEVEN COMMON STOCK" means Seven's Common Stock, no par value per share.

1.5 "SEVEN OPTIONS" means, collectively, options to purchase shares of Seven Common Stock granted by Seven to Seven employees or consultants
(a) under the its 1997 Stock Option Plan (the "SEVEN OPTION PLAN") or (b) outside of its 1997 Stock Option Plan as disclosed in the Seven Disclosure Schedule.

1.6 "SEVEN DERIVATIVE SECURITIES" means, collectively: (a) any warrant, option, right or other security issued by Seven that entitles the holder thereof to purchase or otherwise acquire any shares of the capital stock of Seven (collectively, "SEVEN STOCK RIGHTS"); (b) any note, evidence of indebtedness, stock or other security of Seven that is convertible into or exchangeable for any shares of the capital stock of Seven or any Seven Stock Rights ("SEVEN CONVERTIBLE SECURITY"); and (c) any warrant, option, right, note, evidence of indebtedness, stock or other security issued by Seven that entitles the holder thereof to purchase or otherwise acquire any Seven Stock Rights or any Seven Convertible Security from Seven; provided, however, that the term "Seven Derivative Securities" does not include any of the Seven Options.

1.7 "NUMBER OF FULLY DILUTED SEVEN SHARES" means that number of shares of Seven Common Stock that is equal to the sum of: (a) the total number of shares of Seven Common Stock that are issued and outstanding immediately prior to the Effective Time; plus (b) the total number of shares of Seven Common Stock subject to or issuable under all Seven Options that are issued and outstanding immediately prior to the Effective Time; plus (c) the total number of shares of Seven Common Stock that, immediately prior to the Effective Time, are, directly or indirectly, ultimately or potentially issuable by Seven upon the exercise, conversion or exchange of all Seven Derivative Securities (if any) that are issued and outstanding immediately prior to the Effective Time.

1.8 "SEVEN SHAREHOLDERS" means those persons (each being individually referred to herein as a "SEVEN SHAREHOLDER") who, immediately prior to the Effective Time, hold the shares of Seven Common Stock that are outstanding immediately prior to the Effective Time; provided, however, that for purposes of Section 2.4 and Section 11 of this Agreement, the term "Seven Shareholders" means only those Seven Shareholders (as defined above in this Section) who are issued shares of Portable Common Stock in the Merger.

1.9 "SEVEN DISSENTING SHARES" means any shares of any capital stock of Seven that (i) are outstanding immediately prior to the Effective Time and qualify fully as "dissenting shares" within the meaning of Section 1300(b) of the California Corporations Code and (ii) with respect to which dissenter's rights to require the purchase of such dissenting shares

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for cash at their fair market value in accordance with Chapter 13 of the California Corporations Code have been duly and properly exercised and perfected in connection with the Merger.

1.10 "PORTABLE MERGER SHARES" means 2,082,118 shares of Portable Common Stock.

1.11 "CONVERSION RATIO" means the quotient obtained by dividing (a) the number of shares of Portable Common Stock constituting the Portable Merger Shares by (b) the Number of Fully Diluted Seven Shares. For example, if the Number of Fully Diluted Seven Shares is 2,446,294, then the Conversion Ratio will be 2,082,118 divided by 2,446,294, or approximately 0.851132.

1.12 "KNOWLEDGE," when used with reference to Seven or Seven Shareholders, means the collective actual knowledge of the Seven Shareholders, the President and/or Chief Executive Officer of Seven, the Chief Financial Officer of Seven and/or any Vice President of Seven.

2. PLAN OF REORGANIZATION

2.1 The Merger. Subject to the terms and conditions of this Agreement, Portable Subsidiary will be merged with and into Seven pursuant to this Agreement and the Agreement of Merger and in accordance with applicable provisions of the laws of the States of Delaware and California as follows:

2.1.1 Conversion of Subsidiary Stock. At the Effective Time, each share of the Common Stock of Portable Subsidiary that is issued and outstanding immediately prior to the Effective Time will, by virtue of the Merger and without the need for any further action on the part of the holder thereof, be converted into and become one share of Seven Common Stock that is issued and outstanding immediately after the Effective Time, and the shares of Seven Common Stock into which the shares of Portable Subsidiary are so converted in the Merger will be the only shares of capital stock of Seven that are issued and outstanding immediately after the Effective Time.

2.1.2 Conversion of Shares. Each share of Seven Common Stock, issued and outstanding immediately prior to the Effective Time other than shares, if any, for which dissenters rights have been or will be perfected in compliance with applicable law, will by virtue of the Merger and at the Effective Time, and without further action on the part of any holder thereof, be converted into a number of shares of Portable Common Stock that is equal to the Conversion Ratio, subject to the provisions of 2.2 regarding the elimination of fractional shares.

2.1.3 Adjustments for Capital Changes. If, prior to the Effective Time, Portable or Seven recapitalizes through a split-up of its outstanding shares into a greater number, or a combination of its outstanding shares into a lesser number, reorganizes, reclassifies or otherwise changes its outstanding shares into the same or a different number of shares of other classes (other than through a split-up or combination of shares provided for in the previous clause), or declares a dividend on its outstanding shares payable in shares or securities

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convertible into shares, the Conversion Ratio and the number of Portable Merger Shares will be adjusted appropriately so as to maintain the proportionate interests of the shareholders and optionholders of Portable and Seven in the outstanding equity of Portable immediately following the Merger as contemplated by this Agreement.

2.1.4 Dissenting Shares. Holders of shares of Seven Common Stock who have complied with all requirements for perfecting shareholders' rights of appraisal, as set forth in Section 1300 et seq of the California General Corporation Law (the "CALIFORNIA LAW"), shall be entitled to their rights under the California Law with respect to such shares.

2.2 Fractional Shares. No fractional shares of Portable Common Stock will be issued in connection with the Merger, but in lieu thereof each holder of Seven Common Stock who would otherwise be entitled to receive a fraction of a share of Portable Common Stock will receive from Portable, promptly after the Effective Time, an amount of cash (without interest) determined by multiplying such fraction by $1.00.

2.3 Seven Options. Each Seven Option that is outstanding immediately prior to the Effective Time shall, by virtue of the Merger at the Effective Time and without further action on the part of any holder thereof, be assumed by Portable and converted into an option (a "PORTABLE OPTION") to purchase after the Effective Time that number of shares of Portable Common Stock, determined by multiplying the number of shares of Seven Common Stock subject to such Seven Option immediately prior to the Effective Time by the Conversion Ratio, at an exercise price per share of Portable Common Stock equal to the exercise price per share of the Seven Option immediately prior to the Effective Time divided by the Conversion Ratio and rounded up to the nearest whole cent. If the foregoing calculation results in an assumed option being exercisable for a fraction of a share, then the number of shares of Portable Common Stock subject to such option will be rounded down to the nearest whole number with no cash being payable for such fractional share. The terms, exercisability, vesting schedule, status as an "incentive stock option" under
Section 422 of the Code, if applicable, and all other terms of the Seven Options will otherwise be unchanged. Continuous employment with Seven will be credited to an optionee for purposes of determining the number of shares subject to such optionee's Portable Option which may have become vested from time to time.

2.4 Escrow Agreement. At the closing of the Merger (the "CLOSING"), Portable will withhold seventeen and one-half percent (17 1/2%) of the Portable Merger Shares to be issued to each Seven Shareholder in accordance with Section 2.1 (rounded down to the nearest whole number of shares to be issued to each Seven Shareholder, and such that the shares to be withheld from the Principal Shareholders will be divided equally between vested and unvested shares as specified in the Escrow Agreement (as defined below)) and deliver such shares (the "ESCROW SHARES") to the State Street Bank & Trust Company of California, N.A. (the "ESCROW AGENT"), as escrow agent, to be held by Escrow Agent as collateral for the indemnification obligations of Seven and the Principal Shareholders under Section 11.2 and pursuant to the provisions of an escrow agreement (the "ESCROW AGREEMENT") in substantially the form of Exhibit
2.4. The Escrow Shares will be represented by a certificate or certificates issued in the name of the Escrow Agent and will be held by the Escrow Agent from the Closing until the one year

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anniversary of the Closing Date (the "ESCROW PERIOD"). In the event that the Merger is approved by the Seven Shareholders as provided herein, the Seven Shareholders shall, without any further act of any Seven Shareholder, be deemed to have consented to and approved (i) the use of the Escrow Shares as collateral for the indemnification obligations of Seven and the Principal Shareholders under Section 11.2 in the manner set forth in the Escrow Agreement, (ii) the appointment of Melissa Widner as the representative of the Seven Shareholders (the "REPRESENTATIVE") under the Escrow Agreement and as the attorney-in-fact and agent for and on behalf of each Seven Shareholder (other than holders of Seven Dissenting Shares), and the taking by the Representative of any and all actions and the making of any decisions required or permitted to be taken by her under the Escrow Agreement (including, without limitation, the exercise of the power to authorize delivery to Portable of Escrow Shares in satisfaction of claims by Portable; agree to, negotiate, enter into settlements and compromises of and demand arbitration and comply with orders of courts and awards of arbitrators with respect to such claims; resolve any claim made pursuant to
Section 11.2; and take all actions necessary in the judgment of the Representative for the accomplishment of the foregoing) and (iii) to all of the other terms, conditions and limitations in the Escrow Agreement. In the event that the Escrow Agent is unable or unwilling to serve as escrow agent, the parties agree that Fenwick & West LLP, or a third party mutually agreed upon between Portable and the Representative, may serve as escrow agent under the Escrow Agreement on substantially the same terms as the Escrow Agreement.

2.5 Effects of the Merger. At the Effective Time: (a) the separate existence of Portable Subsidiary will cease and Portable Subsidiary will be merged with and into Seven, and Seven will be the surviving corporation, pursuant to the terms of the Agreement of Merger, (b) the Articles of Incorporation and Bylaws of Seven will be amended to read as set forth in Exhibit 2.5 attached hereto, and will be the Articles of Incorporation and Bylaws of the surviving corporation, (c) each share of Portable Subsidiary Common Stock outstanding immediately prior to the Effective Time will continue to be an identical outstanding share of the surviving corporation, (d) each share of Seven Common Stock and each Seven Option outstanding immediately prior to the Effective Time will be converted as provide in Sections 2.1, 2.2 and 2.3;
(e) the officers and directors of the Surviving Corporation will be the officers and directors of Portable Subsidiary, and (f) the Merger will, from and after the Effective Time, have all of the effects provided by applicable law.

2.6 Further Assurances. Seven agrees that if, at any time before or after the Effective Time, Portable considers or is advised that any further deeds, assignments or assurances are reasonably necessary or desirable to vest, perfect or confirm in Portable title to any property or rights of Seven, Portable and its proper officers and directors may execute and deliver all such proper deeds, assignments and assurances and do all other things necessary or desirable to vest, perfect or confirm title to such property or rights in Portable and otherwise to carry out the purpose of this Agreement, in the name of Seven or otherwise.

2.7 Tax-Free Reorganization. The parties intend to adopt this Agreement as a tax-free plan of reorganization and to consummate the Merger in accordance with the provisions of Section 368(a)(1)(A) of the Code. The parties believe that the value of the Portable Common

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Stock to be received in the Merger is equal, in each instance, to the value of the Seven Common Stock to be surrendered in exchange therefor. The Portable Common Stock issued in the Merger will be issued solely in exchange for the Seven Common Stock, and no other transaction other than the Merger represents, provides for or is intended to be an adjustment to, the consideration paid for the Seven Common Stock. Except for cash paid in lieu of fractional shares or for Seven Dissenting Shares, no consideration that could constitute "other property" within the meaning of Section 356 of the Code is being paid by Portable for the Seven Common Stock in the Merger. The parties shall not take a position on any tax returns inconsistent with this Section 2.7. In addition, Portable represents now, and as of the Closing Date, that it presently intends to continue Seven's historic business or use a significant portion of Seven's business assets in a business.

2.8 Securities Laws Matters. Portable shall issue the shares of Portable Common Stock to be issued in the Merger pursuant to Section 2.1.2 of the Agreement and the Portable Options to be issued in the Merger pursuant to an exemption from registration under Section 4(2) and/or Regulation D promulgated under the 1933 Act and the exemption from qualification under Section 25120 of the California Corporation Code (the "CCC") provided by Section 25103(h) of the CCC, and shall make any requisite filings within the time prescribed by applicable law. In connection therewith, (a) each Seven Shareholder shall execute and deliver to Portable an Investment Representation letter in the form of Exhibit 2.8A hereto (the "INVESTMENT REPRESENTATION LETTER"); and (b) substantially all of the holders of outstanding Seven Options shall execute and deliver to Portable an Optionee Investment Representation Letter in the form of Exhibit 2.8B hereto (the "OPTIONEE INVESTMENT REPRESENTATION LETTER").

2.9 Purchase Accounting. The parties intend that the Merger be treated as a purchase for accounting purposes.

3. REPRESENTATIONS AND WARRANTIES OF SEVEN AND THE PRINCIPAL SHAREHOLDERS

As an inducement to Portable to enter into this Agreement, each of the Principal Shareholders and Seven hereby jointly and severally represents and warrants to Portable that, except as set forth on the Seven Disclosure Schedule delivered to Portable herewith as Exhibit 3.0 (the "SEVEN DISCLOSURE SCHEDULE").

3.1 Organization and Good Standing. Seven is a corporation duly organized, validly existing and in good standing under the laws of California, has the corporate power and authority to own, operate and lease its properties and to carry on its business as now conducted and as proposed to be conducted, and is qualified as a foreign corporation in each jurisdiction in which a failure to be so qualified could reasonably be expected to have a material adverse effect on its present or expected operations or financial condition.

3.2 Power, Authorization and Validity.

3.2.1 Seven has the right, power, legal capacity and authority to enter into and perform its obligations under this Agreement, and all agreements to which Seven is or will

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be a party that are required to be executed pursuant to this Agreement (the "SEVEN ANCILLARY AGREEMENTS") and Seven has all requisite corporate power and authority to consummate the Merger. The execution, delivery and performance of this Agreement and the Seven Ancillary Agreements have been duly and validly approved and authorized by Seven's Board of Directors. Each of the Principal Shareholders has the right, power, legal capacity, and authority to enter into, execute, deliver, and perform his or her respective obligations under this Agreement and each of the Ancillary Agreements to be executed and delivered by such Principal Shareholder (the "PRINCIPAL SHAREHOLDER ANCILLARY AGREEMENTS").

3.2.2 No filing, authorization or approval, governmental or otherwise, is necessary to enable Seven or any Principal Shareholder to enter into, and to perform its obligations under, this Agreement, the Seven Ancillary Agreements, and the Shareholder Ancillary Agreements except for (a) the filing of the Agreement of Merger with the California and Delaware Secretaries of State, and the filing of appropriate documents with the relevant authorities of other states in which Seven is qualified to do business, if any,
(b) such filings as may be required to comply with federal and state securities laws, and (c) the approval of the Seven Shareholders of the transactions contemplated hereby.

3.2.3 This Agreement and the Seven Ancillary Agreements are, or when executed by Seven will be, valid and binding obligations of Seven, except as to the effect, if any, of (a) applicable bankruptcy and other similar laws affecting the rights of creditors generally and (b) rules of law governing specific performance, injunctive relief and other equitable remedies; provided, however, that the Agreement of Merger will not be effective until filed with the Delaware and California Secretaries of State. This Agreement and each of the Principal Shareholder Ancillary Agreements are, or when executed by the each Principal Shareholder will be, valid and binding obligations of such Principal Shareholder enforceable in accordance with their respective terms, except as to the effect, if any, of (a) applicable bankruptcy and other similar laws affecting the rights of creditors generally and (b) rules of law governing specific performance, injunctive relief and other equitable remedies; provided, however, that the Agreement of Merger will not be effective until filed with the Delaware and California Secretaries of State.

3.3 Capitalization. The authorized capital stock of Seven consists of 10,000,000 shares of Common Stock, no par value, of which 2,082,294 shares are issued and outstanding, and 5,000,000 shares of Preferred Stock, none of which are issued or outstanding. Options to purchase a total of 366,000 shares of Seven Common Stock are outstanding. All issued and outstanding shares of Seven Common Stock have been duly authorized and validly issued, are fully paid and nonassessable, are not subject to any right of rescission, and have been offered, issued, sold and delivered by Seven in compliance with all registration or qualification requirements (or applicable exemptions therefrom) of applicable federal and state securities laws. A list of all holders of Seven Options, Seven Derivative Securities, the number of shares, options and warrants held by each is set forth on the Seven Disclosure Schedule. Except as set forth in this Section, there are no options, warrants, calls, commitments, conversion privileges or preemptive or other rights or agreements outstanding to purchase any of Seven's authorized but unissued capital stock or any securities convertible into or exchangeable for shares of Seven

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Common Stock or obligating Seven to grant, extend, or enter into any such option, warrant, call, right, commitment, conversion privilege or other right or agreement, and there is no liability for dividends accrued but unpaid. There are no voting agreements, rights of first refusal or other restrictions (other than normal restrictions on transfer under applicable federal and state securities laws) applicable to any of Seven's outstanding securities. Seven is not under any obligation to register under the Securities Act any of its presently outstanding securities or any securities that may be subsequently issued.

3.4 Subsidiaries. Seven does not have any subsidiaries or any interest, direct or indirect, in any corporation, partnership, joint venture or other business entity.

3.5 No Violation of Existing Agreements. Neither the execution and delivery of this Agreement nor any Seven Ancillary Agreement by Seven or any of the Principal Shareholders, nor the consummation of the transactions contemplated hereby, will conflict with, or (with or without notice or lapse of time, or both) result in a termination, breach, impairment or violation of (a) any provision of the Articles of Incorporation or Bylaws of Seven, as currently in effect, (b) in any material respect, any material instrument or contract, letter of intent or memorandum of understanding, or commitment to which Seven is a party or by which Seven is bound, or (c) any federal, state, local or foreign judgment, writ, decree, order, statute, rule or regulation applicable to Seven or its assets or properties. The consummation of the Merger in and of itself will not require the consent of any third party and will not have a material adverse effect upon any rights, licenses, franchises, leases or agreements of Seven pursuant to the terms of those agreements.

3.6 Litigation. There is no action, proceeding, claim or investigation pending against Seven before any court or administrative agency that if determined adversely to Seven may reasonably be expected to have a material adverse effect on the present or future operations or financial condition of Seven, nor, to the best of Seven's knowledge, has any such action, proceeding, claim or investigation been threatened. There is, to the best of Seven's knowledge, no reasonable basis for any shareholder or former shareholder of Seven, or any other person, firm, corporation, or entity, to assert a claim against Seven based upon: (a) ownership or rights to ownership of any shares of Seven Common Stock (except for dissenter's rights with respect to shares of Portable Common Stock issuable by virtue of the Merger), (b) any rights as a Seven shareholder, including any option or preemptive rights or rights to notice or to vote, (c) any rights under any agreement among Seven and its shareholders, or (d) Seven entering into this Agreement or any Seven Ancillary Agreement or any of the transactions contemplated hereby or thereby. There is no judgment, decree, injunction, rule, or order of any governmental entity or agency, court or arbitrator outstanding against Seven.

3.7 Taxes. Seven has filed all federal, state, local and foreign tax returns required to be filed, has paid all taxes required to be paid in respect of all periods for which returns have been filed, has established an adequate accrual or reserve for the payment of all taxes payable in respect of the periods subsequent to the periods covered by the most recent applicable tax returns, has made all necessary estimated tax payments, and has no material liability for taxes in excess of the amount so paid or accruals or reserves so established. Seven is

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not delinquent in the payment of any tax or in the filing of any tax returns, and no deficiencies for any tax have been threatened, claimed, proposed or assessed. No tax return of Seven has ever been audited by the Internal Revenue Service or any state taxing agency or authority. For the purposes of this Section, the terms "TAX" and "TAXES" include all federal, state, local and foreign income, gains, franchise, excise, property, sales, use, employment, license, payroll, occupation, recording, value added or transfer taxes, governmental charges, fees, levies or assessments (whether payable directly or by withholding), and, with respect to such taxes, any estimated tax, interest and penalties or additions to tax and interest on such penalties and additions to tax. To Seven's knowledge, all elections and notices required by Section 83(b) of the Code and any analogous provisions of applicable state tax laws have been timely filed by all individuals who have purchased shares of Seven Common Stock, and the Principal Shareholders expressly assume any liability for any failure to file any such elections and notices.

3.8 Seven Financial Statements. Seven has delivered to Portable as Exhibit 3.8 Seven's unaudited balance sheet as of June 1, 1998 (the "SEVEN BALANCE SHEET") and income statement for the six month period then ended (collectively, the "SEVEN FINANCIAL STATEMENTS"). The Seven Financial Statements
(a) are in accordance with the books and records of Seven, and (b) fairly present the financial condition of Seven at the date therein indicated and the results of operations for each period therein specified. Seven has no material debt, liability or obligation of any nature, whether accrued, absolute, contingent or otherwise, whether due or to become due, and which is required to be reflected in a financial statement prepared in accordance with generally accepted accounting principles, that is not reflected or reserved against in the Seven Financial Statements, except for those that may have been incurred after the date of the Seven Financial Statements in the ordinary course of its business, consistent with past practice and that are not material in amount either individually or collectively.

3.9 Title to Properties. Seven has good and marketable title to all of its assets as shown on the Seven Balance Sheet, free and clear of all liens, charges, restrictions or encumbrances (other than for taxes not yet due and payable). All machinery and equipment included in such properties is in good condition and repair, normal wear and tear excepted, and all leases of real or personal property to which Seven is a party are fully effective and afford Seven peaceful and undisturbed possession of the subject matter of the lease. Seven is not in violation of any zoning, building, safety or environmental ordinance, regulation or requirement or other law or regulation applicable to the operation of owned or leased properties (the violation of which would have a material adverse effect on its business), or has received any notice of violation with which it has not complied. Seven does not own any real property.

3.10 Absence of Certain Changes. Since the date of the Seven Balance Sheet, there has not been with respect to Seven any:

(a) material change in the financial condition, properties, assets, liabilities, business or operations thereof which change by itself or in conjunction with all other such changes, whether or not arising in the ordinary course of business, has had or will have a material adverse effect on Seven;

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(b) material contingent liability incurred by Seven as guarantor or otherwise with respect to the obligations of others;

(c) mortgage, encumbrance or lien placed on any of Seven's properties;

(d) material obligation or liability incurred by Seven other than obligations and liabilities incurred in the ordinary course of business;

(e) purchase, license or sale or other disposition, or any agreement or other arrangement for the purchase, license, sale or other disposition, of any of the properties or assets of Seven other than in the ordinary course of business;

(f) damage, destruction or loss, whether or not covered by insurance, materially and adversely affecting the properties, assets or business of Seven;

(g) declaration, setting aside or payment of any dividend on, or the making of any other distribution in respect of, the capital stock thereof, any split, combination or recapitalization of the capital stock thereof or any direct or indirect redemption, purchase or other acquisition of the capital stock of Seven;

(h) change in the compensation payable or to become payable to any of its officers, employees or agents, or any bonus payment or arrangement made to or with any of such officers, employees or agents;

(i) change with respect to the management, supervisory or other key personnel thereof;

(j) transfer or grant of a right under any Seven IP Rights (as such term is defined in Section 3.12 below) other than those transferred or granted in the ordinary course of its business consistent with past practice;

(k) issuance or sale of any debt or equity securities of Seven or any options or other rights to acquire from Seven, directly or indirectly, any debt or equity securities;

(l) payment or discharge of a material lien or liability thereof which lien was not either shown on the Seven Balance Sheet or incurred in the ordinary course of business thereafter; or

(m) obligation or liability incurred thereby to any of its officers, directors or shareholders or any loans or advances made thereby to any of its officers, directors or shareholders except normal compensation and expense allowances payable to officers.

3.11 Contracts and Commitments. The Seven Disclosure Schedule sets forth a list of each of the following written or oral contracts, agreements, or commitments to which Seven is a party or by which it or any of its assets or properties are bound: (i) any stock

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redemption or purchase agreement, financing agreement, license, lease or franchise, (ii) any contract providing for the development of software for Seven, or the license of software to Seven which is used or incorporated in any products currently distributed by Seven, (iii) license agreement as licensor or licensee (except for standard non-exclusive hardware and software licenses granted to end-user customers by Seven, and standard non-exclusive hardware and software licenses arising from the purchase of "off the shelf" or standard products by Seven, in the ordinary course of business); (iv) material agreement for the lease of real or personal property; (v) joint venture contract or arrangement or any other agreement that involves a sharing of profits with other persons; (vi) instrument evidencing or related in any way to indebtedness for borrowed money by way of direct loan, sale of debt securities, purchase money obligation, conditional sale, guarantee, or otherwise, except for trade indebtedness incurred in the ordinary course of business, and except as disclosed in the Seven Financial Statements; (vii) contract containing covenants purporting to limit Seven's freedom to compete in any line of business in any geographic area; (viii) contract involving a potential commitment or payment of $10,000 or more; (ix) contract for the sale, license, distribution, or manufacture of products or services which is not terminable upon ninety (90) days' or less notice without cost or other liability to Seven or in which Seven has granted or received manufacturing rights most favored customer pricing provisions or exclusive marketing rights relating to any product or services, groups of products or services, or territory; (x) contract or commitment for the employment of any officer, employee or consultant of Seven, or any other type of contract or understanding with any officer, employee, consultant or director that is not immediately terminable by Seven without liability; (xi) agreement or instrument governing any Seven IP Right; or (xii) any agreement relating to the sale, issuance, grant, exercise, award, purchase, repurchase, or redemption of any shares of capital stock or other securities of Seven or options, warrants, or other rights to acquire such capital stock or securities, or options, warrants or other rights therefor. A copy of each agreement or document listed on the Seven Disclosure Schedule identified to this Section 3.11 has been delivered to Portable's counsel. Seven is not nor to its knowledge is any other party in default in any material respect under any contract, obligation or commitment listed on the Seven Disclosure Schedule identified to this Section 3.11 or that is otherwise material to the business of Seven. Seven is not a party to any contract or arrangement which has had or could reasonably be expected to have a material adverse effect on its business or prospects. All agreements, contracts, plans, leases, instruments, arrangements, licenses and commitments listed on the Seven Disclosure Schedule identified to this Section 3.11 are valid and in full force and effect.

3.12 Intellectual Property. To Seven's knowledge, Seven owns, or has the right to use, sell or license all Intellectual Property Rights (as defined below) necessary or required for the conduct of its business as presently conducted (such Intellectual Property Rights being hereinafter collectively referred to as the "SEVEN IP RIGHTS") and such rights to use, sell or license are reasonably sufficient for the conduct of its business. As used herein, the term "INTELLECTUAL PROPERTY RIGHTS" shall mean all worldwide industrial and intellectual property rights, including, without limitation, patents, patent applications, patent rights, trademarks, trademark applications, trade names, service marks, service mark applications, copyright, copyright applications, franchises, licenses, inventories, know-how, trade secrets, customer lists, proprietary processes and formulae, all source and object code, algorithms, architecture, structure, display screens, layouts, inventions, development tools and all documentation and

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media constituting, describing or relating to the above, including, without limitation, manuals, memoranda and records.

(a) The Seven Disclosure Schedule lists (i) all patents, copyrights, trademarks, service marks, any renewal rights for any of the foregoing, and any applications and registrations for any of the foregoing which are included in the Seven IP Rights and owned by Seven; (ii) all hardware products, software products, and services that are currently published, offered or under development by Seven; and (iii) all licenses, sublicenses and other agreements to which Seven is a party either as licensor or licensee or pursuant to which Seven has rights substantially equivalent to those of a licensor or licensee (other than standard non-exclusive hardware and software licenses arising from the purchase of "off the shelf" or standard products by Seven). The disclosures described in (iii) hereof include the identities of the parties to the relevant agreements, a description of the nature and subject matter thereof (including without limitation a description of all exclusivity, rights of first refusal, and noncompetition provisions), and the applicable royalty or summary of formula or procedure for divorcing such royalty.

(b) All Seven IP Rights which consist of a license or another right to third party property are set forth on the Seven Disclosure Schedule. To Seven's knowledge, all other Seven IP Rights consists solely of items and rights which are either: (i) owned by Seven, or (ii) in the public domain. To Seven's knowledge, Seven has all rights in the Seven IP Rights necessary to carry out Seven's current, former and anticipated future activities, including without limitation rights to make, use, exclude others from using, reproduce, modify, adapt, create derivative works based on, translate, distribute (directly and indirectly), transmit, display and perform publicly, license, rent, lease, assign, and sell the Seven IP Rights in all geographic locations and fields of use, and to sublicense any or all such rights to third parties, including the right to grant further sublicenses.

(c) Seven is not, nor as a result of the execution or delivery of this Agreement, or performance of Seven's obligations hereunder, will Seven be, in violation of any license, sublicense or agreement to which Seven is a party or otherwise bound. Except as specifically described in the Seven Disclosure Schedule, Seven is not obligated to provide any consideration (whether financial or otherwise) to any third party, nor is any third party otherwise entitled to any consideration with respect to any exercise of rights by Seven or Portable in the Seven IP Rights.

(d) The use, manufacturing, distribution, licensing, sublicensing, sale, or any other exercise of rights in any product, work, technology or process as now used or offered or proposed for use, licensing or sale by Seven does not infringe on any copyright, trade secret, trademark, service mark, trade name, firm name, logo, trade dress, mask work or patent of any person; provided, however, that with respect to patent infringement, such representation is limited to Seven's knowledge. No claims (i) challenging the validity, effectiveness, or ownership by Seven of any of the Seven IP Rights, or
(ii) to the effect that the use, distribution, licensing, sublicensing, sale or any other exercise of rights in any product, work technology or process as now used or offered, proposed for use, licensing, sublicensing or sale, or under development by Seven infringes or will infringe on any Intellectual Property Right of any person have been

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asserted or, to the best knowledge of Seven and each of the Principal Shareholders, are threatened by any person nor are there any valid grounds for any bona fide claim of any such kind. All granted or issued patents and mask works and all registered trademarks listed on the Seven Disclosure Schedule and all copyright registrations held by Seven are valid, enforceable and subsisting. To the best knowledge of Seven and each of the Principal Shareholders, there is no unauthorized use, infringement or misappropriation of any of the Seven IP Rights by any third party, employee or former employer.

3.13 Compliance with Laws. Seven has complied, and is now and at the Closing Date will be in full compliance, in all material respects with all applicable laws, ordinances, regulations, and rules, and all orders, writs, injunctions, awards, judgments, and decrees applicable to it or to the assets, properties, and business thereof. Seven has received all permits and approvals from, and has made all filings with, third parties, including government agencies and authorities, that are necessary in connection with its present business, except to the extent the failure to obtain such permits and approvals and to make such filings would not have a material adverse effect on Seven's present or future operations or financial condition. To the best of Seven's knowledge, there are no legal or administrative proceedings or investigations pending or threatened, that, if enacted or determined adversely to Seven, would result in any material adverse change in its present or future operations or financial condition.

3.14 Certain Transactions and Agreements. None of the officers of Seven, nor any member of their immediate families, has any direct or indirect ownership interest in any firm or corporation that competes with Seven (except with respect to any interest in less than one percent of the stock of any corporation whose stock is publicly traded). None of said officers or directors, or any member of their immediate families, is directly or indirectly interested in any contract or informal arrangement with Seven, except for normal compensation for services as an officer, director or employee thereof. None of said officers or directors or family members has any interest in any property, real or personal, tangible or intangible, including inventions, patents, copyrights, trademarks or trade names or trade secrets, used in or pertaining to the business of Seven, except for the normal rights of a shareholder.

3.15. Employees, ERISA and Other Compliance.

3.15.1 Except as set forth in the Seven Disclosure Schedule, Seven does not have any employment contracts or consulting agreements currently in effect that are not terminable at will (other than agreements with the sole purpose of providing for the confidentiality of proprietary information or assignment of inventions). All officers, employees and consultants of Seven having access to proprietary information have executed and delivered to Seven an agreement regarding the protection of such proprietary information and the assignment of inventions to Seven; copies of the form of all such agreements have been delivered to Portable's counsel.

3.15.2 Seven (i) has never been and is not now subject to a union organizing effort, (ii) is not subject to any collective bargaining agreement with respect to any of its employees, (iii) is not subject to any other contract, written or oral, with any trade or labor union, employees' association or similar organization, or (iv) does not have any current labor disputes.

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Seven has good labor relations, and has no knowledge of any facts indicating that the consummation of the transactions contemplated hereby will have a material adverse effect on such labor relations, and has no knowledge that any of its key employees intends to leave its employ.

3.15.3 The Seven Disclosure Schedule identifies each "employee benefit plan" (each a "SEVEN EMPLOYEE PLAN") as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). To the knowledge of each of the Principal Shareholders and Seven, after reasonable inquiry with legal counsel, each Seven Employee Plan is in material compliance with ERISA and the Code.

3.15.4 The Seven Disclosure Schedule lists each employment, severance or other similar contract, arrangement or policy and each plan or arrangement (written or oral) providing for insurance coverage (including any self-insured arrangements), workers' benefits, vacation benefits, severance benefits, disability benefits, death benefits, hospitalization benefits, retirement benefits, deferred compensation, profit-sharing, bonuses, stock options, stock purchase, phantom stock, stock appreciation or other forms of incentive compensation or post-retirement insurance, compensation or benefits for employees, consultants or directors which (A) is not a Seven Employee Plan, (B) is entered into, maintained or contributed to, as the case may be, by Seven and (C) covers any employee or former employee of Seven (such contracts, plans and arrangements as are described in this Section 3.15.4 are herein referred to collectively as the "SEVEN BENEFIT ARRANGEMENTS"). Each Seven Benefit Arrangement has been maintained in substantial compliance in all material respects with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations which are applicable to such Seven Benefit Arrangement. Seven has delivered to Portable or its counsel a complete and correct copy or description of each Seven Benefit Arrangement.

3.15.5 No benefit payable or which may become payable by Seven pursuant to any Seven Employee Plan or any Seven Benefit Arrangement or as a result of or arising under this Agreement shall constitute an "excess parachute payment" (as defined in Section 280G(b)(1) of the Code) which is subject to the imposition of an excise tax under Section 4999 of the Code or which would not be deductible by reason of Section 280G of the Code.

3.15.6 Seven is in compliance in all material respects with all applicable laws, agreements and contracts relating to employment, employment practices, wages, hours, and terms and conditions of employment, including, but not limited to, employee compensation matters, but not including ERISA.

3.15.7 No employee of Seven is in violation of any term of any employment contract, patent disclosure agreement, noncompetition agreement, or any other contract or agreement, or any restrictive covenant relating to the right of any such employee to be employed thereby, or to use trade secrets or proprietary information of others, and the employment of such employees does not subject Seven to any liability.

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3.15.8 Seven has provided a list of all employees, officers and consultants of Seven and their current compensation to Portable.

3.15.9 Seven is not a party to any (a) agreement with any executive officer or other key employee thereof (i) the benefits of which are contingent, or the terms of which are materially altered, upon the occurrence of a transaction involving Seven in the nature of any of the transactions contemplated by this Agreement and the Agreement of Merger, (ii) providing any term of employment or compensation guarantee, or (iii) providing severance benefits or other benefits after the termination of employment of such employee regardless of the reason for such termination of employment, or (b) agreement or plan, including, without limitation, any stock option plan, stock appreciation rights plan or stock purchase plan, any of the benefits of which will be materially increased, or the vesting of benefits of which will be materially accelerated, by the occurrence of any of the transactions contemplated by this Agreement and the Agreement of Merger or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement and the Agreement of Merger.

3.16 Corporate Documents. Seven has made available to Portable for examination all documents and information listed in the Seven Disclosure Schedule or other exhibits called for by this Agreement which has been requested by Portable's legal counsel, including, without limitation, the following: (a) copies of Seven's Articles of Incorporation and Bylaws as currently in effect;
(b) its Minute Book containing all records of all proceedings, consents, actions, and meetings of the shareholders, the board of directors and any committees thereof; (c) its stock ledger and journal reflecting all stock issuances and transfers; and (d) all permits, orders, and consents issued by any regulatory agency with respect to Seven, or any securities of Seven, and all applications for such permits, orders, and consents.

3.17 No Brokers. Neither Seven nor any of the Seven Shareholders is obligated for the payment of fees or expenses of any investment banker, broker or finder in connection with the origin, negotiation or execution of this Agreement or the Agreement of Merger or in connection with any transaction contemplated hereby or thereby.

3.18 Disclosure. To Seven's knowledge, neither this Agreement, its exhibits and schedules, nor any of the certificates or documents to be delivered by Seven to Portable under this Agreement, taken together, contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements contained herein and therein, in light of the circumstances under which such statements were made, not misleading.

3.19 Books and Records. The books, records and accounts of Seven
(a) are in all material respects true, complete and correct, (b) have been maintained in accordance with good business practices on a basis consistent with prior years, (c) are stated in reasonable detail and accurately and fairly reflect the transactions and dispositions of the assets of Seven, and (d) accurately and fairly reflect the basis for the Seven Financial Statements.

3.20 Insurance. Seven maintains and at all times during the prior year has maintained fire and casualty, general liability, business interruption, product liability, and

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sprinkler and water damage insurance which it believes to be reasonably prudent for similarly sized and similarly situated businesses.

3.21 Environmental Matters.

To their knowledge:

3.21.1 During the period that Seven has leased or owned its properties or owned or operated any facilities, there have been no disposals, releases or threatened releases of Hazardous Materials (as defined below) on, from or under such properties or facilities. No knowledge of any presence, disposals, releases or threatened releases of Hazardous Materials on, from or under any of such properties or facilities, occurred prior to Seven having taken possession of any of such properties or facilities. For the purposes of this Agreement, the terms "disposal," "release," and "threatened release" shall have the definitions assigned thereto by the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
Section 9601 et seq., as amended ("CERCLA"). For the purposes of this Agreement "HAZARDOUS MATERIALS" shall mean any hazardous or toxic substance, material or waste which is or becomes prior to the Closing regulated under, or defined as a "hazardous substance," "pollutant," "contaminant," "toxic chemical," "hazardous materials," "toxic substance" or "hazardous chemical" under (1) CERCLA; (2) any similar federal, state or local law; or (3) regulations promulgated under any of the above laws or statutes.

3.21.2 None of the properties or facilities of Seven is in violation of any federal, state or local law, ordinance, regulation or order relating to industrial hygiene or to the environmental conditions on, under or about such properties or facilities, including, but not limited to, soil and ground water condition. During the time that Seven has owned or leased its respective properties and facilities, neither Seven nor, any third party, has used, generated, manufactured or stored on, under or about such properties or facilities or transported to or from such properties or facilities any Hazardous Materials.

3.21.3 During the time that Seven has owned or leased its respective properties and facilities, there has been no litigation brought or threatened against Seven by, or any settlement reached by Seven with, any party or parties alleging the presence, disposal, release or threatened release of any Hazardous Materials on, from or under any of such properties or facilities.

4. REPRESENTATIONS AND WARRANTIES OF PORTABLE AND PORTABLE SUBSIDIARY

As an inducement to Seven and the Principal Shareholders to enter into this Agreement, Portable and Portable Subsidiary, jointly and severally, hereby represent and warrant that, except as set forth on the Portable Disclosure Schedule delivered to Seven as Exhibit 4.0 (the "PORTABLE DISCLOSURE SCHEDULE"):

4.1 Organization and Good Standing. Portable is a corporation duly organized, validly existing and in good standing under the laws of the State of Washington, and has the

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corporate power and authority to own, operate and lease its properties and to carry on its business as now conducted and as proposed to be conducted. Portable Subsidiary is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the corporate power and authority to own, operate, and lease its properties and to carry on its business as proposed to be conducted. Portable Subsidiary was formed solely for the purpose of the Merger, and has not conducted any business other than related to such purpose.

4.2 Power, Authorization and Validity.

4.2.1 Portable has the right, power, legal capacity and authority to enter into and perform its obligations under this Agreement, and all agreements to which Portable is or will be a party that are required to be executed pursuant to this Agreement (the "PORTABLE ANCILLARY AGREEMENTS"). The execution, delivery and performance of this Agreement and the Portable Ancillary Agreements have been duly and validly approved and authorized by Portable's Board of Directors, and do not require the approval by Portable's shareholders. Portable Subsidiary has the right, power and authority to execute, deliver and perform its obligations under this Agreement, and upon approval of the Merger and the Agreement of Merger by Portable Subsidiary's sole stockholder, Portable Subsidiary will have the right, power and authority to execute, deliver and perform the Agreement of Merger and all agreements to which Portable Subsidiary is or will be a party that are required to be executed pursuant to this Agreement (the "PORTABLE SUBSIDIARY ANCILLARY AGREEMENTS"). The execution, delivery and performance of this Agreement, the Agreement of Merger and all other Portable Subsidiary Ancillary Agreements by Portable Subsidiary have been duly and validly approved and authorized by Portable Subsidiary's Board of Directors.

4.2.2 No filing, authorization or approval, governmental or otherwise, is necessary to enable Portable or Portable Subsidiary to enter into, and to perform their respective obligations under, this Agreement, the Portable Ancillary Agreements and the Portable Subsidiary Ancillary Agreements except for (a) the filing of the Agreement of Merger with the California and the Delaware Secretary of State, (b) the recording of the Agreement of Merger in the office of the Recorder of the Delaware county in which Portable Subsidiary's registered office is located, and (c) such filings as may be required to comply with federal and state securities laws.

4.2.3 This Agreement and the Portable Ancillary Agreements are, or when executed by Portable will be, valid and binding obligations of Portable enforceable in accordance with their respective terms, except as to the effect, if any, of (a) applicable bankruptcy and other similar laws affecting the rights of creditors generally, (b) rules of law governing specific performance, injunctive relief and other equitable remedies and (c) the enforceability of provisions requiring indemnification in connection with the offering, issuance or sale of securities; provided, however, that the Agreement of Merger will not be effective until filed with the Delaware and California Secretaries of State. This Agreement and the Portable Subsidiary Ancillary Agreements are, or when executed by Portable Subsidiary will be, valid and binding obligations of Portable Subsidiary, enforceable in accordance with their respective terms, except as to the effect, if any, of (a) applicable bankruptcy and other similar laws affecting the rights of

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creditors generally and (b) rules of law and equity governing specific performance, injunctive relief and other equitable remedies; provided, however, that the Agreement of Merger will not be effective until filed with the Delaware and California Secretaries of State.

4.3. Capitalization. At the close of business on May 17, 1998, there were outstanding, on a fully-diluted basis, 30,846,194 shares of Portable Common Stock (including shares issuable upon conversion of outstanding Preferred Stock or exercise of outstanding options and warrants, shares available for grant under the Portable's Stock Option Plan, and any other rights to, directly or indirectly, acquire shares or options or warrants to acquire shares of Portable capital stock). All of such outstanding shares of Portable Common Stock have been duly authorized and validly issued, are fully paid and nonassessable, are not subject to any right of rescission, and have been offered, issued, sold and delivered by Portable in compliance with all registration or qualification requirements (or applicable exemptions therefrom) of applicable federal and state securities laws. The Portable Merger Shares, when issued in accordance with this Agreement (and with respect to the Portable Merger Shares to be issued upon the exercise of Portable Options, when issued in accordance with the agreements governing such Portable Options), will be duly authorized, validly issued, fully paid and nonassessable, and will have been offered, issued, sold and delivered by Portable in compliance with all registration or qualification requirements (or applicable exemptions therefrom) of applicable federal and state securities laws.

4.4 No Violation of Existing Agreements. Neither the execution and delivery of this Agreement nor any Portable Ancillary Agreement, nor the consummation of the transactions contemplated hereby, will conflict with, or (with or without notice or lapse of time, or both) result in a termination, breach, impairment or violation of (a) any provision of the Certificate of Incorporation or Bylaws of Portable, as currently in effect, (b) in any material respect, any material instrument or contract to which Portable is a party or by which Portable is bound, or (c) any federal, state, local or foreign judgment, writ, decree, order, statute, rule or regulation applicable to Portable or its assets or properties.

4.5 Portable Financial Statements. Portable has delivered to Seven as Exhibit 4.5 Portable's unaudited balance sheet as of April 30, 1998 (the "PORTABLE BALANCE SHEET"), Portable's income statement for the period then ended and Portable's audited financial statements for the Portable's 1996 and 1997 fiscal years (collectively, the "PORTABLE FINANCIAL STATEMENTS"). The Portable Financial Statements (a) are in accordance with the books and records of Portable, and (b) fairly present the financial condition of Portable at the date therein indicated and the results of operations for each period therein specified. Portable has no material debt, liability or obligation of any nature, whether accrued, absolute, contingent or otherwise, whether due or to become due, and which is required to be reflected in a financial statement prepared in accordance with generally accepted accounting principles, that is not reflected or reserved against in the Portable Financial Statements, except for those that may have been incurred after the date of the Portable Financial Statements in the ordinary course of its business, consistent with past practice and that are not material in amount either individually or collectively.

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4.6 Absence of Certain Changes. Since the date of the Portable Balance Sheet, there has not been any change in the financial condition, properties, assets, liabilities, business or operations of Portable which change by itself or in conjunction with all other such changes, whether or not arising in the ordinary course of business, has had or will have a material adverse effect on Portable.

4.7 No Brokers. Portable is not obligated for the payment of fees or expenses of any investment banker, broker or finder in connection with the origin, negotiation or execution of this Agreement or the Agreement of Merger or in connection with any transaction contemplated hereby or thereby.

4.8 No Violation of Existing Agreements. Portable has not received notice from any third party that it is or would, with the passage of time, be (i) in material violation of any provision of the Articles of Incorporation or Bylaws; or (ii) in default or violation of any material term, condition or provision of (a) any material judgment, decree, order, injunction or stipulation applicable to Portable or (b) any currently effective material agreement, note, mortgage, indenture, contract, lease or instrument, permit, concession, franchise or license, which default or violation would have a material adverse effect on the business, operations or financial condition of Portable.

4.9 Litigation. There is no action, claim, suit, arbitration, proceeding, claim or investigation pending against Portable before any court, administrative agency or arbitrator that, if determined adversely to Portable, is likely to have a material adverse effect on Portable's financial condition or results of operation, nor, to Portable's knowledge, has any such action, suit, proceeding, arbitration, claim or investigation been threatened.

4.10 Disclosure. To Portable's knowledge, neither this Agreement, its exhibits and schedules, nor any of the certificates or documents to be delivered by Portable to Seven under this Agreement, taken together, contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements contained herein and therein, in light of the circumstances under which such statements were made, not misleading.

5. PRE-CLOSING COVENANTS OF SEVEN AND THE PRINCIPAL SHAREHOLDERS

During the period from the date of this Agreement until the Effective Time, Seven and each Principal Shareholder covenants and agrees as follows:

5.1 Advice of Changes. Seven will promptly advise Portable in writing (a) of any event occurring subsequent to the date of this Agreement of which Seven has knowledge that would render any representation or warranty of Seven contained in this Agreement, if made on or as of the date of such event or the Closing Date, untrue or inaccurate in any material respect and (b) of any material adverse change in Seven's business, results of operations or financial condition.

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5.2 Maintenance of Business. Seven will use its best efforts to carry on and preserve its business and its relationships with customers, suppliers, employees and others in substantially the same manner as it has prior to the date hereof. If Seven becomes aware of a material deterioration in the relationship with any customer, supplier or key employee, it will promptly bring such information to the attention of Portable in writing and, if requested by Portable, will exert its best efforts to restore the relationship.

5.3 Conduct of Business. Seven will continue to conduct its business and maintain its business relationships in the ordinary and usual course and will not, without the prior written consent of the President of Portable (which may be given verbally to be promptly followed by written confirmation):

(a) borrow any money except for expenses incurred in the ordinary course consistent with past practice, or lend any money;

(b) enter into any transaction or agreement not in the ordinary course of business consistent with past practice (other than the engagement of a purchaser representative);

(c) encumber or permit to be encumbered any of its assets;

(d) dispose of any of its assets;

(e) enter into any lease or contract for the purchase or sale of any property;

(f) pay any bonus, increased salary or special remuneration to any officer, employee or consultant (except pursuant to existing arrangements previously disclosed to and approved in writing by Portable) or enter into any new employment or consulting agreement with any such person or terminate any employee;

(g) change any of its accounting methods;

(h) declare, set aside or pay any cash or stock dividend or other distribution in respect of capital stock, or redeem or otherwise acquire any of its capital stock;

(i) amend or terminate any contract, agreement or license to which it is a party (including any royalty arrangement);

(j) lend any amount to any person or entity, other than advances for travel and expenses which are incurred in the ordinary course of business consistent with past practice, not material in amount and documented by receipts for the claimed amounts;

(k) guarantee or act as a surety for any obligation except for the endorsement of checks and other negotiable instruments in the ordinary course of business, consistent with past practice, which are not material in amount;

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(l) waive or release any material right or claim except in the ordinary course of business, consistent with past practice;

(m) issue or sell any shares of its capital stock of any class (except upon the exercise of an option or warrant currently outstanding), or any other of its securities, or issue or create any warrants, obligations, subscriptions, options, convertible securities, or other commitments to issue shares of capital stock, or accelerate the vesting of any outstanding option or other security;

(n) split or combine the outstanding shares of its capital stock of any class or enter into any recapitalization affecting the number of outstanding shares of its capital stock of any class or affecting any other of its securities;

(o) merge, consolidate or reorganize with, or acquire any entity;

(p) amend its Articles of Incorporation or Bylaws;

(q) license any of its technology or intellectual property (other than to end-users in the ordinary course of business pursuant to its standard end-user license agreement);

(r) change any insurance coverage or issue any certificates of insurance; or

(s) agree to do, any of the things described in the preceding clauses 5.3(a) through 5.3(r).

5.4 Shareholders Approval. Seven will hold a special meeting of its shareholders (the "SHAREHOLDERS MEETING") (or solicit the written consent of its shareholders in lieu thereof) at the earliest practicable date to submit this Agreement, the Merger and related matters for the consideration and approval of the Seven Shareholders, which approval will be recommended by Seven's Board of Directors and management. Such meeting (or the solicitation of a written consent in lieu thereof) will be called, held and conducted, and any proxies will be solicited, in compliance with applicable law.

5.5 Regulatory Approvals. Seven will execute and file, or join in the execution and filing, of any application or other document that may be necessary in order to obtain the authorization, approval or consent of any governmental body, federal, state, local or foreign which may be reasonably required, or which Portable may reasonably request, in connection with the consummation of the transactions contemplated by this Agreement. Seven will use its best efforts to obtain all such authorizations, approvals and consents.

5.6 Necessary Consents. Seven will use its best efforts to obtain such written consents and take such other actions as may be necessary or appropriate to allow the consummation of the transactions contemplated hereby and to allow Portable to carry on Seven's business after the Closing.

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5.7 Litigation. Seven will notify Portable in writing promptly after learning of any material actions, suits, proceedings or investigations by or before any court, board or governmental agency, initiated by or against it or known by it to be threatened against it.

5.8 No Other Negotiations. From the date hereof until the earlier of termination of this Agreement or consummation of the Merger, Seven will not, and will not authorize or permit any officer, director, employee or affiliate of Seven, or any other person, on its behalf to, directly or indirectly, solicit or encourage any offer from any party or consider any inquiries or proposals received from any other party, participate in any negotiations regarding, or furnish to any person any information with respect to, or otherwise cooperate with, facilitate or encourage any effort or attempt by any person (other than Portable), concerning the possible disposition of all or any substantial portion of Seven's business, assets or capital stock by merger, sale or any other means or concerning any investment in Seven. Seven will promptly notify Portable orally and in writing of any such inquiries or proposals.

5.9 Access to Information. Until the Closing, Seven will allow Portable and its agents reasonable access the files, books, records and offices of Seven, including, without limitation, any and all information relating to Seven's taxes, commitments, contracts, leases, licenses, and real, personal and intangible property and financial condition. Seven will cause its accountants to cooperate with Portable and its agents in making available all financial information reasonably requested, including without limitation the right to examine all working papers pertaining to all financial statements prepared or audited by such accountants.

5.10 Satisfaction of Conditions Precedent. Seven will use its best efforts to satisfy or cause to be satisfied all the conditions precedent which are set forth in Section 9, and Seven will use its best efforts to cause the transactions contemplated by this Agreement to be consummated, and, without limiting the generality of the foregoing, to obtain all consents and authorizations of third parties and to make all filings with, and give all notices to, third parties that may be necessary or reasonably required on its part in order to effect the transactions contemplated hereby.

5.11 Seven Dissenting Shares. As promptly as practicable after the date of the Shareholders' Meeting and prior to the Closing Date, Seven shall furnish Portable with the name and address of each holder of Seven Dissenting Shares ("SEVEN DISSENTING SHAREHOLDER") and the number of Seven Dissenting Shares owned by such Seven Dissenting Shareholder.

5.12 Blue Sky Laws. Seven shall use its best efforts to assist Portable to the extent necessary to comply with the securities and Blue Sky laws of all jurisdictions which are applicable in connection with the Merger.

6. PORTABLE PRE-CLOSING COVENANTS

During the period from the date of this Agreement until the Effective Time, Portable covenants and agrees as follows:

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6.1 Advice of Changes. Portable will promptly advise Seven in writing (a) of any event occurring subsequent to the date of this Agreement that would render any representation or warranty of Portable contained in this Agreement, if made on or as of the date of such event or the Closing Date, untrue or inaccurate in any material respect and (b) of any material adverse change in Portable's business, results of operations or financial condition.

6.2 Regulatory Approvals. Portable will execute and file, or join in the execution and filing, of any application or other document that may be necessary in order to obtain the authorization, approval or consent of any governmental body, federal, state, local or foreign, which may be reasonably required, or which Seven may reasonably request, in connection with the consummation of the transactions contemplated by this Agreement. Portable will use its best efforts to obtain all such authorizations, approvals and consents.

6.3 Satisfaction of Conditions Precedent. Portable will use its best efforts to satisfy or cause to be satisfied all the conditions precedent which are set forth in Section 8, and Portable will use its best efforts to cause the transactions contemplated by this Agreement to be consummated, and, without limiting the generality of the foregoing, to obtain all consents and authorizations of third parties and to make all filings with, and give all notices to, third parties that may be necessary or reasonably required on its part in order to effect the transactions contemplated hereby.

6.4 Blue Sky Laws. Portable shall take such steps as may be necessary to comply with the securities and Blue Sky laws of all jurisdictions which are applicable in connection with the Merger.

6.5 Employee Matters. Portable will have extended written offers of employment to each of the Seven employees listed on Exhibit 6.5.

7. CLOSING MATTERS

7.1 The Closing. Subject to termination of this Agreement as provided in Section 10 below, the Closing will take place at the offices of Fenwick & West, Two Palo Alto Square, Palo Alto, California 94306 at 1:30 p.m., Pacific Standard Time on June 30, 1998, or, if all conditions to closing have not been satisfied or waived by such date, such other place, time and date as Seven and Portable may mutually select (the "Closing Date"). Concurrently with the Closing, the Agreement of Merger will be filed in the office of the Delaware and California Secretaries of State. The Agreement of Merger provides that the Merger shall become effective upon filing with the California Secretary of State.

7.2 Exchange of Certificates.

7.2.1 As of the Effective Time, all shares of Seven Common Stock that are outstanding immediately prior thereto will, by virtue of the Merger and without further action, cease to exist and will be converted into the right to receive from Portable the number of shares

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of Portable Common Stock determined as set forth in Section 2.1.2, subject to Sections 2.1.3, 2.1.4 and 2.2.

7.2.2 As soon as practicable after the Effective Time, each holder of shares of Seven Common Stock that are not Seven Dissenting Shares will surrender the certificate(s) for such shares (the "SEVEN CERTIFICATES"), duly endorsed as requested by Portable, to Portable for cancellation. Within five (5) business days of the date that Portable receives written confirmation of the Effective Time, and conditioned upon Portable's receipt of such Seven Certificates and any other documentation deliverable by any such holder under this Agreement, Portable will issue to each tendering holder of Seven Certificates a certificate for the number of shares of Portable Common Stock to which such holder is entitled pursuant to Section 2.1.2 hereof, less the shares of Portable Common Stock deposited into escrow pursuant to Section 2.4 hereof, and distribute any cash payable under Section 2.2.

7.2.3 No dividends or distributions payable to holders of record of Portable Common Stock after the Effective Time, or cash payable in lieu of fractional shares, will be paid to the holder of any unsurrendered Seven Certificate(s) until the holder of the Seven Certificate(s) surrenders such Seven Certificate(s). Subject to the effect, if any, of applicable escheat and other laws, following surrender of any Seven Certificate, there will be delivered to the person entitled thereto, without interest, the amount of any dividends and distributions therefor paid with respect to Portable Common Stock so withheld as of any date subsequent to the Effective Time and prior to such date of delivery.

7.2.4 All Portable Common Stock delivered upon the surrender of Seven Common Stock in accordance with the terms hereof will be deemed to have been delivered in full satisfaction of all rights pertaining to such Seven Common Stock. There will be no further registration of transfers on the stock transfer books of Seven or its transfer agent of the Seven Common Stock. If, after the Effective Time, Seven Certificates are presented for any reason, they will be canceled and exchanged as provided in this Section 7.2.

7.2.5 Until certificates representing Seven Common Stock outstanding prior to the Merger are surrendered pursuant to Section 7.2.2 above, such certificates will be deemed, for all purposes, to evidence ownership of the number of shares of Portable Common Stock into which the Seven Common Stock will have been converted, reduced by the number of shares withheld as Escrow Shares.

7.3 Assumption of Options. As soon as practicable after the Effective Time, Portable will notify in writing each holder of a Seven Option of the assumption of such Seven Option by Portable, and the number of shares of Portable Common Stock that are then subject to such Portable Option and the exercise price of such Portable Option, as determined pursuant to Sections 2.1 and 2.3 hereof.

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8. CONDITIONS TO OBLIGATIONS OF SEVEN

The obligations of Seven and the Principal Shareholders hereunder are subject to the fulfillment or satisfaction, on and as of the Closing, of each of the following conditions (any one or more of which may be waived by Seven, but only in a writing signed by Seven):

8.1 Accuracy of Representations and Warranties. The representations and warranties of Portable and Portable Subsidiary set forth in
Section 4 shall be true and accurate in every material respect on and as of the Closing with the same force and effect as if they had been made at the Closing, and Seven shall receive a certificate to such effect executed by Portable's President and Chief Financial Officer.

8.2 Covenants. Portable shall have performed and complied in all material respects with all of its covenants contained in Section 6 on or before the Closing, and Seven shall receive a certificate to such effect signed by Portable's President and Chief Financial Officer.

8.3 Compliance with Law. There shall be no order, decree, or ruling by any court or governmental agency or threat thereof, or any other fact or circumstance, which would prohibit or render illegal the transactions contemplated by this Agreement.

8.4 Government Consents. There shall have been obtained at or prior to the Closing Date such permits or authorizations, and there shall have been taken such other action, as may be required to consummate the Merger by any regulatory authority having jurisdiction over the parties and the actions herein proposed to be taken, including but not limited to requirements under applicable federal and state securities laws.

8.5 Opinion of Portable's Counsel. Seven shall have received from counsel to Portable, an opinion substantially in the form of Exhibit 8.5.

8.6 Employment and Non-Competition Agreements. Portable shall execute and deliver Employment and Non-Competition Agreements in favor of Melissa Widner and Andrew Dent substantially in the forms attached as Exhibit 8.6A and 8.6B.

8.7 No Litigation. No litigation or proceeding shall be threatened or pending for the purpose or with the probable effect of enjoining or preventing the consummation of any of the transactions contemplated by this Agreement, or which could be reasonably expected to have a material adverse effect on the present or future operations or financial condition of Portable.

9. CONDITIONS TO OBLIGATIONS OF PORTABLE

The obligations of Portable hereunder are subject to the fulfillment or satisfaction on, and as of the Closing, of each of the following conditions (any one or more of which may be waived by Portable, but only in a writing signed by a duly authorized representative of Portable):

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9.1 Accuracy of Representations and Warranties. The representations and warranties of Seven and the Principal Shareholders set forth in Section 3 shall be true and accurate in every material respect on and as of the Closing with the same force and effect as if they had been made at the Closing, and Portable shall receive a certificate to such effect executed by Seven's President and Chief Financial Officer.

9.2 Covenants. Seven shall have performed and complied in all material respects with all of its covenants contained in Section 5 on or before the Closing, and Portable shall receive a certificate to such effect signed by Seven's President and Chief Financial Officer.

9.3 Compliance with Law. There shall be no order, decree, or ruling by any court or governmental agency or threat thereof, or any other fact or circumstance, which would prohibit or render illegal the transactions contemplated by this Agreement.

9.4 Government Consents. There shall have been obtained at or prior to the Closing Date such permits or authorizations, and there shall have been taken such other action, as may be required to consummate the Merger by any regulatory authority having jurisdiction over the parties and the actions herein proposed to be taken, including but not limited to requirements under applicable federal and state securities laws.

9.5 Opinion of Seven's Counsel. Portable shall have received from counsel to Seven, an opinion substantially in the form of Exhibit 9.5.

9.6 Consents. Portable shall have received duly executed copies of all material third-party consents, approvals, assignments, waivers, authorizations or other certificates specified on Exhibit 9.6.

9.7 No Litigation. No litigation or proceeding shall be threatened or pending for the purpose or with the probable effect of enjoining or preventing the consummation of any of the transactions contemplated by this Agreement, or which could be reasonably expected to have a material adverse effect on the present or future operations or financial condition of Seven.

9.8 Requisite Approvals. The principal terms of this Agreement and the Agreement of Merger shall have been approved and adopted by Seven Shareholders, as required by applicable law and Seven's Articles of Incorporation and Bylaws. Not less than ninety percent (90%) of the outstanding equity securities of Seven shall have voted in favor of the Merger.

9.9 Seven Dissenting Shares. The Seven Dissenting Shares shall not constitute more than five percent (5%) of the total number of shares of Seven Common Stock outstanding immediately prior to the Effective Time.

9.10 Escrow. Portable shall have received the Escrow Agreement executed by Seven and Melissa Widner, as the Representative for all Seven Shareholders, the Escrow Agent and by all shareholders of Seven voting for approval of this Agreement and the Merger providing for the escrow of the Escrow Shares on the terms and conditions of the Escrow Agreement.

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9.11 Exercise of Seven Derivative Securities. All outstanding Seven Derivative Securities shall have been exercised in full and thereby converted into shares of Seven Common Stock.

9.12 Employment and Non-Competition Agreements. Portable shall have received from each of Melissa Widner and Andrew Dent a duly executed Employment and Non-Competition Agreement substantially in the form attached as Exhibit 8.6.

9.13 Termination of Rights. Any registration rights, rights of refusal, rights to any liquidation preference, or redemption rights of any Seven Shareholder shall have been terminated or waived as of the Closing.

9.14 Maximum Number of Shares. Immediately prior to the Merger, Seven shall not have outstanding a Number of Fully Diluted Seven Shares that would require the issuance of more than 2,082,118 shares of Portable Common Stock (including options exercisable therefor) in exchange therefor.

9.15 Resignation of Directors. By virtue of the Merger at the Effective Time and without further action on the part of any person, the directors of Seven in office immediately prior to the Effective Time of the Merger will be deemed to have resigned as directors of Seven effective as of the Effective Time.

9.16 Investment Letters Executed. Each of the Seven Shareholders shall have executed and delivered to Seven an Investment Representation Letter, and substantially all of the holders of outstanding Seven Options shall have executed and delivered to Portable an Optionee Investment Representation Letter.

9.17 Continued Employment of Certain Employees. Each of the persons listed on Exhibit 9.17 will be employed by Seven on the Closing Date.

10. TERMINATION OF AGREEMENT

10.1 Prior to Closing.

10.1.1 This Agreement may be terminated at any time prior to the Closing by the mutual written consent of each of the parties hereto.

10.1.2 Unless otherwise agreed by the parties hereto, this Agreement will be terminated if all conditions to the Closing have not been satisfied or waived on or before July 15, 1998.

10.2 At the Closing. At the Closing, this Agreement may be terminated and abandoned:

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10.2.1 By Portable if any of the conditions precedent to Portable's obligations set forth in Section 9 above have not been fulfilled or waived at and as of the Closing; or

10.2.2 By Seven if any of the conditions precedent to Seven's obligations set forth in Section 8 above have not been fulfilled or waived at and as of the Closing.

Any termination of this Agreement under this Section 10.2 will be effective by the delivery of notice of the terminating party to the other party hereto.

10.3 No Liability. Any termination of this Agreement pursuant to this Section 10 will be without further obligation or liability upon any party in favor of the other party hereto other than the obligations provided in Sections 12.2 and 12.16 and in the Reciprocal Nondisclosure Agreement between Seven and Portable dated February 1, 1998, which will survive termination of this Agreement; provided, however, that nothing herein will limit the obligation of Seven and Portable to use their best efforts to cause the Merger to be consummated, as set forth in Sections 5.10 and 6.3 hereof, respectively.

10.4 Break-Up Fee. Portable agrees to pay Seven a "break-up fee" of Five Hundred Thousand Dollars ($500,000.00) in the event the Closing fails to occur unless such failure is due to the failure or non-satisfaction of conditions set forth in Sections 9.1, 9.2, 9.5, 9.6, 9.8, 9.9, 9.10, 9.11, 9.12, 9.13, 9.14, 9.16 or 9.17. Such amounts shall be paid to Seven within thirty (30) days of the termination of this Agreement in cash, or partly in cash and partly by cancellation of that certain Note dated May 23, 1998 payable to Portable described in the Seven Disclosure Schedule.

11. SURVIVAL OF REPRESENTATIONS, INDEMNIFICATION AND REMEDIES, CONTINUING COVENANTS

11.1 Survival of Representations. All representations, warranties and covenants of Portable contained in this Agreement will remain operative and in full force and effect, regardless of any investigation made by or on behalf of the parties to this Agreement, until the earlier of the termination of this Agreement or one year after the Closing Date, whereupon such representations, warranties and covenants will expire (except for covenants that by their terms survive for a longer period). Unless otherwise specified herein, all representations, warranties and covenants of Seven will survive the Effective Time and will continue until the expiration of the period set forth in the previous sentence and covenants that by their terms survive thereafter will continue to survive in accordance with their terms.

11.2 Agreement to Indemnify. Subject to the limitations set forth in this Section 11, Seven will indemnify and hold harmless Portable and its officers, directors, agents and employees, and each person, if any, who controls or may control Portable within the meaning of the Securities Act (hereinafter referred to individually as an "INDEMNIFIED PERSON" and collectively as "INDEMNIFIED PERSONS") from and against any and all claims, demands, actions, causes of actions, losses, costs, damages, liabilities and expenses including, without

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limitation, reasonable legal fees actually incurred by Portable (hereinafter referred to as "DAMAGES"):

(a) Arising out of any misrepresentation or breach of or default in connection with any of the representations, warranties and covenants given or made by Seven in this Agreement or any certificate, document or instrument delivered by or on behalf of Seven pursuant hereto (other than with respect to changes in the truth or accuracy of the representations and warranties of Seven under this Agreement after the date hereof if Seven has advised Portable of such changes in an update to Exhibit 3.0 delivered prior to the Closing and Portable has nonetheless proceeded with the Closing); or

(b) Resulting from any failure of any Seven Shareholders to have good, valid and marketable title to the issued and outstanding Seven Common Stock held by such shareholders, free and clear of all liens, claims, pledges, options, adverse claims, assessments or charges of any nature whatsoever, or to have full right, capacity and authority to vote such Seven Common Stock in favor of the Merger and the other transactions contemplated by the Agreement of Merger.

In seeking indemnification for Damages under this Section, the Indemnified Persons shall exercise their remedies solely with respect to the Escrow Shares and any other assets deposited in escrow pursuant to the Escrow Agreement; provided, however, that no such claim for Damages will be asserted after the expiration of the Escrow Period. Except for intentional fraud: (i) no Seven Shareholder shall have any liability to an Indemnified Person under this Agreement except to the extent of such Seven Shareholder's Escrow Shares and any other assets deposited under the Escrow Agreement and (ii) the remedies set forth in this Section 11.2 shall be the exclusive remedies of Portable and the other Indemnified Persons hereunder against any Seven Shareholder. The indemnification provided for in this Section 11.2 shall not apply unless the aggregate Damages for which one or more Indemnified Persons is entitled to indemnification exceeds Twenty-Five Thousand Dollars ($25,000) (the "BASKET"), in which case the indemnification provided for in this Section 11.2 shall apply to the extent the aggregate Damages for which one or more Indemnified Persons is entitled to indemnification exceeds Twelve Thousand Five Hundred Dollars ($12,500).

11.3 Notice and Defense of Third Party Claims.

(a) The Indemnified Persons shall give prompt written notice to the Representative of any claim by a third party that might give rise to a claim by the Indemnified Persons based upon the indemnity agreement contained in Section 11.2 hereof, stating the nature and basis of such claim and the amount thereof, to the extent known. The Indemnified Persons shall have the sole right to control the defense of any such action, suit or proceeding. The Representative shall be kept fully informed of such action, suit or proceeding at all stages thereof. In addition, the Representative may, at its expense, participate in the defense of any such action, suit or proceeding with one counsel of its choice; provided, however, that the Indemnified Persons shall at all times have the right to control such defense. The parties hereto

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shall render to each other such assistance as they may reasonably require of each other in order to ensure the proper and adequate defense of any such action, suit or proceeding.

(b) Neither the Indemnified Persons nor the Representative shall make any settlement of any claims without the written consent of the others, which consent shall not be unreasonably withheld.

12. MISCELLANEOUS

12.1 Governing Law. The internal laws of the State of California (irrespective of its choice of law principles) will govern the validity of this Agreement, the construction of its terms, and the interpretation and enforcement of the rights and duties of the parties hereto.

12.2 Assignment; Binding Upon Successors and Assigns. Neither party hereto may assign any of its rights or obligations hereunder without the prior written consent of the other party hereto. This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

12.3 Severability. If any provision of this Agreement, or the application thereof, will for any reason and to any extent be invalid or unenforceable, the remainder of this Agreement and application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of the void or unenforceable provision.

12.4 Counterparts. This Agreement may be executed in any number of counterparts, each of which will be an original as regards any party whose signature appears thereon and all of which together will constitute one and the same instrument. This Agreement will become binding when one or more counterparts hereof, individually or taken together, will bear the signatures of both parties reflected hereon as signatories.

12.5 Other Remedies. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby or by law on such party, and the exercise of any one remedy will not preclude the exercise of any other.

12.6 Amendment and Waivers. Any term or provision of this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a writing signed by the party to be bound thereby. The waiver by a party of any breach hereof or default in the performance hereof will not be deemed to constitute a waiver of any other default or any succeeding breach or default. The Agreement may be amended by the parties hereto at any time before or after approval of the Seven Shareholders, but, after such approval, no amendment will

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be made which by applicable law requires the further approval of the Seven Shareholders without obtaining such further approval.

12.7 No Waiver. The failure of any party to enforce any of the provisions hereof will not be construed to be a waiver of the right of such party thereafter to enforce such provisions.

12.8 Expenses. Portable will pay promptly (and in any event within thirty (30) days) upon demand the reasonable legal and accounting fees and expenses, in excess of $2,000, incurred by Seven in this transaction, not to exceed a combined total of $55,000.

12.9 Attorneys' Fees. Should suit be brought to enforce or interpret any part of this Agreement, the prevailing party will be entitled to recover, as an element of the costs of suit and not as damages, reasonable attorneys' fees to be fixed by the court (including without limitation, costs, expenses and fees on any appeal). The prevailing party will be entitled to recover its costs of suit, regardless of whether such suit proceeds to final judgment.

12.10 Notices. Any notice or other communication required or permitted to be given under this Agreement will be in writing, will be delivered personally or by registered or certified mail, postage prepaid and will be deemed given upon delivery, if delivered personally, or three days after deposit in the mails, if mailed, to the following addresses:

(i) If to Portable or Portable Subsidiary:

Portable Software Corporation 6222-185th Street, N.E.

Redmond, WA 98122
Attention: Fred Ingham

with a copy to:

Fenwick & West LLP
Two Palo Alto Square
Palo Alto, CA 94306
Attention: Matthew P. Quilter, Esq.

(ii) If to Seven:

7Software, Inc. 25 Loyola Avenue Menlo Park, CA 94025 Attention: President

with a copy to:

Gray Cary Ware & Freidenrich

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400 Hamilton Avenue Palo Alto, CA 94301 Attention: Peter M. Astiz, Esq.

or to such other address as a party may have furnished to the other parties in writing pursuant to this Section 12.10.

12.11 Construction of Agreement. This Agreement has been negotiated by the respective parties hereto and their attorneys and the language hereof will not be construed for or against either party. A reference to a
Section or an exhibit will mean a Section in, or exhibit to, this Agreement unless otherwise explicitly set forth. The titles and headings herein are for reference purposes only and will not in any manner limit the construction of this Agreement which will be considered as a whole.

12.12 No Joint Venture. Nothing contained in this Agreement will be deemed or construed as creating a joint venture or partnership between any of the parties hereto. No party is by virtue of this Agreement authorized as an agent, employee or legal representative of any other party. No party will have the power to control the activities and operations of any other and their status is, and at all times, will continue to be, that of independent contractors with respect to each other. No party will have any power or authority to bind or commit any other. No party will hold itself out as having any authority or relationship in contravention of this Section.

12.13 Further Assurances. Each party agrees to cooperate fully with the other parties and to execute such further instruments, documents and agreements and to give such further written assurances as may be reasonably requested by any other party to evidence and reflect the transactions described herein and contemplated hereby and to carry into effect the intents and purposes of this Agreement.

12.14 Absence of Third Party Beneficiary Rights. No provisions of this Agreement are intended, nor will be interpreted, to provide or create any third party beneficiary rights or any other rights of any kind in any client, customer, affiliate, shareholder, partner or any party hereto or any other person or entity unless specifically provided otherwise herein, and, except as so provided, all provisions hereof will be personal solely between the parties to this Agreement.

12.15 Public Announcement. Portable will, at its discretion issue a press release announcing the Merger, within six (6) months after the Effective Date. Portable may issue such press releases, and make such other disclosures regarding the Merger, as it determines are required under applicable securities laws or regulatory rules. Prior to the publication of such press release (unless this Agreement has been terminated), neither party will make any public announcement relating to this Agreement or the transactions contemplated hereby.

12.16 Confidentiality. Seven and Portable each recognize that they have received and will receive confidential information concerning the other during the course of the Merger negotiations and preparations. Accordingly, Portable and Seven and each Principal

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Shareholder each agrees (a) to use its respective best efforts to prevent the unauthorized disclosure of any confidential information concerning the other that was or is disclosed during the course of such negotiations and preparations, and is clearly designated in writing as confidential at the time of disclosure, and (b) to not make use of or permit to be used any such confidential information other than for the purpose of effectuating the Merger and related transactions. The obligations of this section will not apply to information that (i) is or becomes part of the public domain, (ii) is disclosed by the disclosing party to third parties without restrictions on disclosure,
(iii) is received by the receiving party from a third party without breach of a nondisclosure obligation to the other party or (iv) is required to be disclosed by law. If this Agreement is terminated, all copies of documents containing confidential information shall be returned by the receiving party to the disclosing party.

12.17 Entire Agreement. This Agreement and the exhibits hereto constitute the entire understanding and agreement of the parties hereto with respect to the subject matter hereof and supersede all prior and contemporaneous agreements or understandings, inducements or conditions, express or implied, written or oral, between the parties with respect hereto other than the Reciprocal Nondisclosure Agreement between Seven and Portable dated February 1, 1998. The express terms hereof control and supersede any course of performance or usage of the trade inconsistent with any of the terms hereof.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement and Plan of Reorganization as of the date first above written.

PORTABLE SOFTWARE CORPORATION         7SOFTWARE, INC.

By: /s/ STERLING WILSON               By: /s/ MELISSA WIDNER
   -----------------------------         ---------------------------------------
   Sterling Wilson, Chief                Melissa Widner
   Financial Officer                     CEO/President

PSC MERGER CORP.

By: /s/ DOUGLAS CHOI
   -----------------------------
   Douglas Choi, President

PRINCIPAL SHAREHOLDERS:

/s/ MELISSA WIDNER                    /s/ ANDREW DENT
--------------------------------      ------------------------------------------
Melissa Widner                        Andrew Dent

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Exhibit A

Agreement of Merger


Exhibit 2.4

Escrow Agreement


Exhibit 2.5

Amended Articles and Bylaws of Seven


Exhibit 2.8A

Investment Representation Letter


Exhibit 2.8B

Optionee Investment Representation Letter


Exhibit 3.0

Seven Disclosure Schedule


Exhibit 3.8

Seven Financial Statements


Exhibit 4.0

Portable Disclosure Schedule

This disclosure schedule (this "DISCLOSURE SCHEDULE") contains exceptions to the representations and warranties made by Portable and Portable Subsidiary in Section 4 of the Agreement and Plan of Reorganization dated as of June 30, 1998 (the "AGREEMENT") by and among Portable, Portable Subsidiary, Seven and the Principal Shareholders. The section references used herein are to particular subsections in Section 4 of the Agreement. Any information disclosed under any section in this Disclosure Schedule is deemed to be disclosed and incorporated in any other section of this Disclosure Schedule where such disclosure would or might be appropriate. Capitalized terms used in this Disclosure Agreement, unless otherwise specified, have the same meanings given to them in the Agreement. Nothing in this Disclosure Schedule constitutes an admission to any third party of any liability or obligation of Portable or Portable Subsidiary to any third party, nor an admission that any matter referred to herein is or would be material or would be reasonably likely to result in a material adverse effect on Portable or Portable Subsidiary.

Section 4.3. Capitalization.


Exhibit 4.5

Portable Financial Statements


Exhibit 6.5

Persons Offered Employment

Andrew Dent
Elena Donio
Terry Glenn
Ian Huynh
Vincent Payette
Kristin Reams
Karen Skjervem
Erik Wahlstrom
Melissa Widner


EXHIBIT 3.01

CERTIFICATE OF INCORPORATION
OF
CONCUR TECHNOLOGIES, INC.

ARTICLE I

The name of the corporation is Concur Technologies, Inc.

ARTICLE II

The address of the registered office of the corporation in the State of Delaware is Corporation Trust Center, 1209 Orange Street, City of Wilmington, 19801, County of New Castle. The name of its registered agent at that address is The Corporation Trust Company.

ARTICLE III

The purpose of 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.

ARTICLE IV

A. Authorization of Shares

The total number of shares of all classes of stock which the corporation has authority to issue is one hundred thirteen million (113,000,000) shares, consisting of two classes: sixty million (60,000,000) shares of Common Stock, $0.001 par value per share, and fifty-three million (53,000,000) shares of Preferred Stock, $0.001 par value per share.

B. Designation of Future Series of Preferred Stock

The Board of Directors is authorized, subject to any limitations prescribed by the law of the State of Delaware, to provide for the issuance of the shares of Preferred Stock in one or more series, and, by filing a certificate of designation pursuant to the applicable law of the State of Delaware, to establish from time to time the number of shares to be included in each such series, to fix the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions thereof and to increase or decrease the number of shares of any such series (but not below the number of shares of such series then outstanding). Subject to approval by the Board of Directors, the number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the corporation entitled to vote, unless a vote of any other holders is required pursuant to a certificate or certificates establishing a series of Preferred Stock.

Except as expressly provided in any certificate of designation designating any series of Preferred Stock pursuant to the foregoing provisions of this Article IV, any new series of Preferred


Certificate of Incorporation

Stock may be designated, fixed and determined as provided herein by the Board of Directors without approval of the holders of Common Stock or the holders of Preferred Stock, or any series thereof, and any such new series may have powers, preferences and rights, including, without limitation, voting rights, dividend rights, liquidation rights, redemption rights and conversion rights senior to, junior to or pari passu with the rights of the Common Stock, the Preferred Stock, or any future class or series of Preferred Stock or Common Stock.

If the certificate of designation creating a series of Preferred Stock so provides, any shares of a series of Preferred Stock that are acquired by the corporation, whether by redemption, purchase, conversion or otherwise, so that such shares are issued but not outstanding, may not be reissued as shares of such series or as shares of the class of Preferred Stock. Upon the retirement of any such shares and the filing of a certificate of retirement pursuant to Sections 103 and 243 of the Delaware General Corporation Law with respect thereto, the shares of such series shall be eliminated and the number of shares of Preferred Stock shall be reduced accordingly.

ARTICLE V

The Board of Directors of the corporation shall have the power to adopt, amend or repeal the Bylaws of the corporation.

ARTICLE VI

Election of directors need not be by written ballot unless the Bylaws of the corporation shall so provide.

ARTICLE VII

To the fullest extent permitted by law, no director of the corporation shall be personally liable for monetary damages for breach of fiduciary duty as a director. Without limiting the effect of the preceding sentence, if the Delaware General Corporation Law is hereafter amended to authorize the further elimination or limitation of the liability of a director, then the liability of a director of the corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended.

Neither any amendment nor repeal of this Article VII, nor the adoption of any provision of this Certificate of Incorporation inconsistent with this Article VII, shall eliminate, reduce or otherwise adversely affect any limitation on the personal liability of a director of the corporation existing at the time of such amendment, repeal or adoption of such an inconsistent provision.

ARTICLE VIII

Effective immediately after the closing of an underwritten public offering of shares of the corporation's Common Stock pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission, actions shall be taken by the corporation's stockholders only at annual or special meetings of stockholders, and the corporation's stockholders shall not be able to act by written consent.


Certificate of Incorporation

ARTICLE IX

The name and mailing address of the incorporator is Kevin S. Chou, c/o Fenwick & West LLP, Two Palo Alto Square, Palo Alto, California 94306.

The undersigned incorporator hereby acknowledges that the foregoing certificate is his act and deed and that the facts stated herein are true.

Dated: August 4, 1998                    /s/ Kevin S. Chou
                                         --------------------------------
                                         Kevin S. Chou, Incorporator


EXHIBIT 3.03

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
CONCUR TECHNOLOGIES, INC.

ARTICLE I

The name of the corporation is Concur Technologies, Inc.

ARTICLE II

The address of the registered office of the corporation in the State of Delaware is Corporation Trust Center, 1209 Orange Street, City of Wilmington, 19805, County of New Castle. The name of its registered agent at that address is The Corporation Trust Company.

ARTICLE III

The purpose of 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.

ARTICLE IV

A. Authorization of Shares

The total number of shares of all classes of stock which the corporation has authority to issue is sixty-five million (65,000,000) shares, consisting of two classes: sixty million (60,000,000) shares of Common Stock, $0.001 par value per share, and five million (5,000,000) shares of Preferred Stock, $0.001 par value per share.

B. Designation of Future Series of Preferred Stock

The Board of Directors is authorized, subject to any limitations prescribed by the law of the State of Delaware, to provide for the issuance of the shares of Preferred Stock in one or more series, and, by filing a certificate of designation pursuant to the applicable law of the State of Delaware, to establish from time to time the number of shares to be included in each such series, to fix the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions thereof and to increase or decrease the number of shares of any such series (but not below the number of shares of such series then outstanding). Subject to approval by the Board of Directors, the number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the corporation entitled to vote, unless a vote of any other holders is required pursuant to a certificate or certificates establishing a series of Preferred Stock.


Concur Technologies, Inc. Amended and Restated Certificate of Incorporation

Except as expressly provided in any certificate of designation designating any series of Preferred Stock pursuant to the foregoing provisions of this Article IV, any new series of Preferred Stock may be designated, fixed and determined as provided herein by the Board of Directors without approval of the holders of Common Stock or the holders of Preferred Stock, or any series thereof, and any such new series may have powers, preferences and rights including, without limitation, voting rights, dividend rights, liquidation rights, redemption rights and conversion rights senior to, junior to or pari passu with the rights of the Common Stock, the Preferred Stock, or any future class or series of Preferred Stock or Common Stock.

If the certificate of designation creating a series of Preferred Stock so provides, any shares of a series of Preferred Stock that are acquired by the corporation, whether by redemption, purchase, conversion or otherwise, so that such shares are issued but not outstanding, may not be reissued as shares of such series or as shares of the class of Preferred Stock. Upon the retirement of any such shares and the filing of a certificate of retirement pursuant to Sections 103 and 243 of the Delaware General Corporation Law with respect thereto, the shares of such series shall be eliminated and the number of shares of Preferred Stock shall be reduced accordingly.

ARTICLE V

The Board of Directors of the corporation shall have the power to adopt, amend or repeal the Bylaws of the corporation.

ARTICLE VI

A. Election of directors need not be by written ballot unless the Bylaws of the corporation shall so provide.

B. Any action required or permitted to be taken by the stockholders of the corporation must be effected at a duly called annual or special meeting of stockholders of the corporation and may not be effected by any consent in writing by such stockholders.

C. Special meetings of stockholders of the corporation may be called only by the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board for adoption), the Chairman of the Board or the Chief Executive Officer.

ARTICLE VII

A. The directors, other than those who may be elected by the holders of Preferred Stock under specified circumstances, shall be divided into three classes with the term of office of the first class (Class I) to expire at the annual meeting of stockholders held in 1999; the term of office of the second class (Class II) to expire at the annual meeting of stockholders held in 2000; the term of office of the third class (Class III) to expire at the annual meeting of stockholders held in 2001; and thereafter for each such term to expire at each third succeeding annual meeting of stockholders

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Concur Technologies, Inc. Amended and Restated Certificate of Incorporation

after such election. All directors shall hold office until the expiration of the term for which elected, and until their respective successors are elected, except in the case of the death, resignation or removal of any director.

B. Subject to the rights of the holders of any series of Preferred Stock then outstanding, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board of Directors resulting from death, resignation or other cause may be filled (a) by the stockholders at any meeting, (b) by a majority of the directors, although less than a quorum, or (c) by a sole remaining director, and directors so chosen shall hold office for a term expiring at the next annual meeting of stockholders at which the term of office of the class to which they have been elected expires, and until their respective successors are elected, except in the case of the death, resignation or removal of any director. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

ARTICLE VIII

To the fullest extent permitted by law, no director of the corporation shall be personally liable for monetary damages for breach of fiduciary duty as a director. Without limiting the effect of the preceding sentence, if the Delaware General Corporation Law is hereafter amended to authorize the further elimination or limitation of the liability of a director, then the liability of a director of the corporation shall be eliminated or limited to the fullest extent permitted by the Delaware General Corporation Law, as so amended.

To the extent permitted by applicable law, this corporation is also authorized to provide indemnification of (and advancement of expenses to) agents (and any other persons to which Delaware law permits this corporation to provide indemnification) through bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise, in excess of the indemnification and advancement otherwise permitted by Section 145 of the Delaware General Corporation Law, subject only to limits created by applicable Delaware law (statutory or non-statutory), with respect to actions for breach of duty to the corporation, its stockholders, and others.

Neither any amendment nor repeal of any of the foregoing provisions of this Article VIII, nor the adoption of any provision of this Certificate of Incorporation inconsistent with this Article VIII, shall eliminate, reduce or otherwise adversely affect any limitation on the personal liability of a director of the corporation existing at the time of such amendment, repeal or adoption of such an inconsistent provision.

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AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
CONCUR TECHNOLOGIES, INC.

(ORIGINALLY INCORPORATED ON AUGUST 5, 1998)

Concur Technologies, Inc., a Delaware corporation, hereby certifies that the Amended and Restated Certificate of Incorporation of the corporation attached hereto as Exhibit A, which is incorporated herein by this reference, and which restates, integrates and further amends the provisions of the Certificate of Incorporation of this corporation, has been duly adopted by the corporation's Board of Directors and stockholders in accordance with Sections 228, 242 and 245 of the Delaware General Corporation Law.

IN WITNESS WHEREOF, said corporation has caused this Amended and Restated Certificate of Incorporation to be signed by its duly authorized officers this ____ day of ___________, 1998.

CONCUR TECHNOLOGIES, INC.
a Delaware corporation

By:______________________________________
S. Steven Singh, President

ATTEST:


Matthew P. Quilter, Secretary

EXHIBIT 3.04


BYLAWS

OF

CONCUR TECHNOLOGIES, INC.

(A DELAWARE CORPORATION)

AS ADOPTED AUGUST 19, 1998



BYLAWS
OF
CONCUR TECHNOLOGIES, INC.

(A DELAWARE CORPORATION)

TABLE OF CONTENTS

                                                                                       PAGE
                                                                                       ----
ARTICLE I - STOCKHOLDERS........................................................          1

         Section 1.1:       Annual Meetings.....................................          1

         Section 1.2:       Special Meetings....................................          1

         Section 1.3:       Notice of Meetings..................................          1

         Section 1.4:       Adjournments........................................          1

         Section 1.5:       Quorum..............................................          2

         Section 1.6:       Organization........................................          2

         Section 1.7:       Voting; Proxies.....................................          2

         Section 1.8:       Fixing Date for Determination of Stockholders
                            of Record...........................................          3

         Section 1.9:       List of Stockholders Entitled to Vote...............          3

         Section 1.10:      Action by Written Consent of Stockholders............         4

         Section 1.11:      Inspectors of Elections.............................          5

         Section 1.12:      Notice of Stockholder Business; Nominations.........          6

ARTICLE II - BOARD OF DIRECTORS.................................................          8

         Section 2.1:       Number; Qualifications..............................          8

         Section 2.2:       Election; Resignation; Removal; Vacancies...........          8


                                                                                       PAGE
                                                                                       ----
         Section 2.3:       Regular Meetings....................................          8

         Section 2.4:       Special Meetings....................................          9

         Section 2.5:       Telephonic Meetings Permitted.......................          9

         Section 2.6:       Quorum; Vote Required for Action....................          9

         Section 2.7:       Organization........................................          9

         Section 2.8:       Written Action by Directors.........................          9

         Section 2.9:       Powers..............................................          9

         Section 2.10:      Compensation of Directors...........................          9

ARTICLE III - COMMITTEES........................................................         10

         Section 3.1:       Committees..........................................         10

         Section 3.2:       Committee Rules.....................................         10

ARTICLE IV - OFFICERS...........................................................         11

         Section 4.1:       Generally...........................................         11

         Section 4.2:       Chief Executive Officer.............................         11

         Section 4.3:       Chairman of the Board...............................         12

         Section 4.4:       President...........................................         12

         Section 4.5:       Vice President......................................         12

         Section 4.6:       Chief Financial Officer.............................         12

         Section 4.7:       Treasurer...........................................         12

         Section 4.8:       Secretary...........................................         12

         Section 4.9:       Delegation of Authority.............................         12


                                                                                       PAGE
                                                                                       ----
         Section 4.10:      Removal.............................................         13

ARTICLE V - STOCK...............................................................         13

         Section 5.l:       Certificates........................................         13

         Section 5.2:       Lost, Stolen or Destroyed Stock Certificates;
                            Issuance of New Certificate.........................         13

         Section 5.3:       Other Regulations...................................         13

ARTICLE VI - INDEMNIFICATION....................................................         13

         Section 6.1:       Indemnification of Officers and Directors...........         13

         Section 6.2:       Advance of Expenses.................................         14

         Section 6.3:       Non-Exclusivity of Rights...........................         14

         Section 6.4:       Indemnification Contracts...........................         14

         Section 6.5:       Effect of Amendment.................................         14

ARTICLE VII - NOTICES...........................................................         15

         Section 7.l:       Notice..............................................         15

         Section 7.2:       Waiver of Notice....................................         15

ARTICLE VIII - INTERESTED DIRECTORS.............................................         15

         Section 8.1:       Interested Directors; Quorum........................         15

ARTICLE IX - MISCELLANEOUS......................................................         16

         Section 9.1:       Fiscal Year.........................................         16

         Section 9.2:       Seal................................................         16

         Section 9.3:       Form of Records.....................................         16

         Section 9.4:       Reliance Upon Books and Records.....................         16


                                                                                       PAGE
                                                                                       ----
         Section 9.5:       Certificate of Incorporation Governs................         16

         Section 9.6:       Severability........................................         16

ARTICLE X - AMENDMENT...........................................................         17

         Section 10.1:      Amendments..........................................         17


BYLAWS

OF

CONCUR TECHNOLOGIES, INC.

(a Delaware corporation)

As Adopted August 19, 1998

ARTICLE I

STOCKHOLDERS

Section 1.1: Annual Meetings. An annual meeting of stockholders shall be held for the election of directors at such date, time and place, either within or without the State of Delaware, as the Board of Directors shall each year fix. Any other proper business may be transacted at the annual meeting.

Section 1.2: Special Meetings. Special meetings of stockholders for any purpose or purposes may be called at any time by the Chairman of the Board, the Chief Executive Officer or by a majority of the members of the Board of Directors. Special meetings may not be called by any other person or persons. If a special meeting of stockholders is called by any person or persons other than by a majority of the members of the Board of Directors, then such person or persons shall call such meeting by delivering a written request to call such meeting to each member of the Board of Directors, and the Board of Directors shall then determine the time, date and place of such special meeting, which shall be held not more than one hundred twenty (120) nor less than thirty-five
(35) days after the written request to call such special meeting was delivered to each member of the Board of Directors.

Section 1.3: Notice of Meetings. Written notice of all meetings of stockholders shall be given stating the place, date and time of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise required by applicable law or the Certificate of Incorporation of the Corporation, such notice shall be given not less than ten
(10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting.

Section 1.4: Adjournments. Any meeting of stockholders may adjourn from time to time to reconvene at the same or another place, and notice need not be given of any such adjourned meeting if the time, date and place thereof are announced at the meeting at which the adjournment is taken; provided, however, that if the adjournment is for more than thirty (30) days, or if after the adjournment, a new record date is fixed for the adjourned meeting, then a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. At the adjourned meeting, the Corporation may transact any business that might have been transacted at the original meeting.


Section 1.5: Quorum. At each meeting of stockholders, the holders of a majority of the shares of stock entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business, except if otherwise required by applicable law. If a quorum shall fail to attend any meeting, the chairman of the meeting or the holders of a majority of the shares entitled to vote who are present, in person or by proxy, at the meeting may adjourn the meeting. Shares of the Corporation's stock belonging to the Corporation (or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation are held, directly or indirectly, by the Corporation), shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation or any other corporation to vote any shares of the Corporation's stock held by it in a fiduciary capacity.

Section 1.6: Organization. Meetings of stockholders shall be presided over by such person as the Board of Directors may designate, or, in the absence of such a person, the Chairman of the Board, or, in the absence of such person, the President of the Corporation, or, in the absence of such person, such person as may be chosen by the holders of a majority of the shares entitled to vote who are present, in person or by proxy, at the meeting. Such person shall be chairman of the meeting and, subject to Section 1.12 hereof, shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of discussion as seems to him or her to be in order. The Secretary of the Corporation shall act as secretary of the meeting, but in his or her absence, the chairman of the meeting may appoint any person to act as secretary of the meeting.

Section 1.7: Voting; Proxies. Unless otherwise provided by law or the Certificate of Incorporation of the Corporation, and subject to the provisions of Section 1.8 of these Bylaws, each stockholder shall be entitled to one (1) vote for each share of stock held by such stockholder. Each stockholder entitled to vote at a meeting of stockholders, or to express consent or dissent to corporate action in writing without a meeting, may authorize another person or persons to act for such stockholder by proxy. Such a proxy may be prepared, transmitted and delivered in any manner permitted by applicable law. Voting at meetings of stockholders need not be by written ballot unless such is demanded at the meeting before voting begins by a stockholder or stockholders holding shares representing at least one percent (1%) of the votes entitled to vote at such meeting, or by such stockholder's or stockholders' proxy; provided, however, that an election of directors shall be by written ballot if demand is so made by any stockholder at the meeting before voting begins. If a vote is to be taken by written ballot, then each such ballot shall state the name of the stockholder or proxy voting and such other information as the chairman of the meeting deems appropriate. Directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. Unless otherwise provided by applicable law, the Certificate of Incorporation of the Corporation or these Bylaws, every matter other than the election of directors shall be decided by the affirmative vote of the holders of a majority of the shares of stock entitled to vote thereon that are present in person or represented by proxy at the meeting and are voted for or against the matter.

-2-

Section 1.8: Fixing Date for Determination of Stockholders of Record.

(a) Generally. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors and which shall not be more than sixty
(60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. If no record date is fixed by the Board of Directors, then the record date shall be as provided by applicable law. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

(b) Stockholder Request for Action by Written Consent. For such period of time as stockholders are authorized to act by written consent pursuant to the provisions of the Certificate of Incorporation of the Corporation and Section 1.10 hereof, any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent without a meeting shall, by written notice to the Secretary of the Corporation, request the Board of Directors to fix a record date for such consent. Such request shall include a brief description of the action proposed to be taken. The Board of Directors shall, within ten (10) days after the date on which such a request is received, adopt a resolution fixing the record date. Such record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors within ten
(10) days after the date on which such a request is received, then the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, to its principal place of business or to any officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, then the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action.

Section 1.9: List of Stockholders Entitled to Vote. A complete list of stockholders entitled to vote at any meeting of stockholders, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of each stockholder, shall be open to the examination of any stockholder, for any purpose germane to the meeting,

-3-

during ordinary business hours, for a period of at least ten (10) 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 of the meeting, 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 at the meeting.

Section 1.10: Action by Written Consent of Stockholders.

(a) Procedure. Unless otherwise provided by the Certificate of Incorporation of the Corporation, and except as set forth in Section 1.8(b) above, any action required or permitted to be taken at any annual or special meeting of the stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted; provided, however, that effective immediately after the closing of an underwritten public offering of shares of the Corporation's Common Stock pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission, any action required or permitted to be taken by the Corporation's stockholders shall be taken only at a duly called annual or special meeting of such stockholders, and the Corporation's stockholders shall not be able to act by written consent. For such period of time as written stockholder consents are permitted, such consents shall bear the date of signature of each stockholder who signs the consent and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, to its principal place of business or to any officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. No written consent shall be effective to take the action set forth therein unless, within sixty
(60) days of the earliest dated consent delivered to the Corporation in the manner provided above, written consents signed by a sufficient number of stockholders to take the action set forth therein are delivered to the Corporation in the manner provided above.

(b) Notice of Consent. Prompt notice of the taking of corporate action by stockholders without a meeting by less than unanimous written consent of the stockholders shall be given to those stockholders who have not consented thereto in writing and, in the case of a Certificate Action (as defined below), if the Delaware General Corporation Law so requires, such notice shall be given prior to filing of the certificate in question. If the action which is consented to requires the filing of a certificate under the Delaware General Corporation Law (a "Certificate Action"), then if the Delaware General Corporation Law so requires, the certificate so filed shall state that written stockholder consent has been given in accordance with Section 228 of the Delaware General Corporation Law and that written notice of the taking of corporate action by stockholders without a meeting as described herein has been given as provided in such section.

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Section 1.11: Inspectors of Elections.

(a) Applicability. Unless otherwise provided in the Corporation's Certificate of Incorporation or required by the Delaware General Corporation Law, the following provisions of this Section 1.11 shall apply only if and when the Corporation has a class of voting stock that is: (i) listed on a national securities exchange; (ii) authorized for quotation on an interdealer quotation system of a registered national securities association; or (iii) held of record by more than 2,000 stockholders; in all other cases, observance of the provisions of this Section 1.11 shall be optional and at the discretion of the Corporation.

(b) Appointment. The Corporation shall, in advance of any meeting of stockholders, appoint one or more inspectors of election 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 shall appoint one or more inspectors to act at the meeting.

(c) Inspector's Oath. Each inspector of election, 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 or her ability.

(d) Duties of Inspectors. At a meeting of stockholders, the inspectors of election shall (i) ascertain the number of shares outstanding and the voting power of each share, (ii) determine the shares represented at a meeting and the validity of proxies and ballots, (iii) count all votes and ballots, (iv) determine and retain for a reasonable period of time a record of the disposition of any challenges made to any determination by the inspectors and (v) certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of the duties of the inspectors.

(e) Opening and Closing of Polls. The date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be announced by the inspectors at the meeting. No ballot, proxies or votes, nor any revocations thereof or changes thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery upon application by a stockholder shall determine otherwise.

(f) Determinations. In determining the validity and counting of proxies and ballots, the inspectors shall be limited to an examination of the proxies, any envelopes submitted with those proxies, any information provided in connection with proxies in accordance with Section 212(c)(2) of the Delaware General Corporation Law, the ballots and the regular books and records of the Corporation, except that the inspectors may consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers, their nominees or similar persons that represent more votes than the holder of a proxy is authorized by the record owner to cast or more votes than the stockholder holds of record. If the inspectors consider other reliable information for the limited purpose permitted herein, the

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inspectors at the time they make their certification of their determinations pursuant to this Section 1.11 shall specify the precise information considered by them, including the person or persons from whom they obtained the information, when the information was obtained, the means by which the information was obtained and the basis for the inspectors' belief that such information is accurate and reliable.

Section 1.12: Notice of Stockholder Business; Nominations.

(a) Annual Meeting of Stockholders.

(i) Nominations of persons for election to the Board of Directors and the proposal of business to be considered by the stockholders shall be made at an annual meeting of stockholders (A) pursuant to the Corporation's notice of such meeting, (B) by or at the direction of the Board of Directors or (C) by any stockholder of the Corporation who was a stockholder of record at the time of giving of the notice provided for in this Section 1.12, who is entitled to vote at such meeting and who complies with the notice procedures set forth in this Section 1.12.

(ii) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (C) of subparagraph
(a)(i) of this Section 1.12, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and such other business must otherwise be a proper matter for stockholder action. To be timely, a stockholder's notice must be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the sixtieth (60th) day nor earlier than the close of business on the ninetieth
(90th) day prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is more than thirty (30) days before or more than sixty (60) days after such anniversary date, notice by the stockholder, to be timely, must be so delivered not earlier than the close of business on the ninetieth (90th) day prior to such annual meeting and not later than the close of business on the later of the sixtieth (60th) day prior to such annual meeting or the close of business on the tenth (10th) day following the day on which public announcement of the date of such meeting is first made by the Corporation. Such stockholder's notice shall set forth: (a) as to each person whom the stockholder proposes to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected; (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made, (1) the name and address of such stockholder, as they appear on the Corporation's books, and of such beneficial owner and (2) the class and number of shares of the Corporation that are owned beneficially and held of record by such stockholder and such beneficial owner.

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(iii) Notwithstanding anything in the second sentence of subparagraph (a)(ii) of this Section 1.12 to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased board of directors at least seventy (70) days prior to the first anniversary of the preceding year's annual meeting (or, if the annual meeting is held more than thirty (30) days before or sixty (60) days after such anniversary date, at least seventy (70) days prior to such annual meeting), a stockholder's notice required by this Section 1.12 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary of the Corporation at the principal executive office of the Corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the Corporation.

(b) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation's notice of such meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation's notice of such meeting (i) by or at the direction of the Board of Directors or (ii) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice of the special meeting, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 1.12. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation's notice of meeting, if the stockholder's notice required by subparagraph (a)(ii) of this Section 1.12 shall be delivered to the Secretary of the Corporation at the principal executive offices of the Corporation not earlier than the ninetieth (90th) day prior to such special meeting and not later than the close of business on the later of the sixtieth (60th) day prior to such special meeting or the tenth (10th) day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting.

(c) General.

(i) Only such persons who are nominated in accordance with the procedures set forth in this Section 1.12 shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 1.12. Except as otherwise provided by law or these Bylaws, the chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 1.12 and, if any proposed nomination or business is not in compliance herewith, to declare that such defective proposal or nomination shall be disregarded.

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(ii) For purposes of this Section 1.12, the term "public announcement" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to sections 13, 14 or 15(d) of the Exchange Act.

(iii) Notwithstanding the foregoing provisions of this Section 1.12, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in this Section 1.12 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act.

ARTICLE II

BOARD OF DIRECTORS

Section 2.1: Number; Qualifications. The Board of Directors shall consist of one or more members. The initial number of directors shall be six
(6), and thereafter shall be fixed from time to time by resolution of the Board of Directors. No decrease in the authorized number of directors constituting the Board of Directors shall shorten the term of any incumbent director. Directors need not be stockholders of the Corporation.

Section 2.2: Election; Resignation; Removal; Vacancies. The Board of Directors shall initially consist of the person or persons elected by the incorporator or named in the Corporation's initial Certificate of Incorporation. The Board of Directors shall be divided into three classes, with the term of office of the first class, which class initially consists of two (2) directors, to expire at the annual meeting of stockholders held in 1999; the term of office of the second class, which class initially consists of two (2) directors, to expire at the annual meeting of stockholders held in 2000; the term of office of the third class, which class initially consists of two (2) directors, to expire at the annual meeting of stockholders held in 2001; and thereafter with the term of office of each class to expire at the third succeeding annual meeting of stockholders after the election of each such class. Each director shall hold office until the expiration of his or her term of office and until his or her successor is elected and qualified, or until his or her earlier death, resignation or removal. Any director may resign at any time upon written notice to the Corporation. Subject to the rights of any holders of Preferred Stock then outstanding: (i) any director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors and (ii) any vacancy occurring in the Board of Directors for any cause, and any newly created directorship resulting from any increase in the authorized number of directors to be elected by all stockholders having the right to vote as a single class, may be filled by the stockholders, by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.

Section 2.3: Regular Meetings. Regular meetings of the Board of Directors may be held at such places, within or without the State of Delaware, and at such times as the Board of

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Directors may from time to time determine. Notice of regular meetings need not be given if the date, times and places thereof are fixed by resolution of the Board of Directors.

Section 2.4: Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board, the President or a majority of the members of the Board of Directors then in office and may be held at any time, date or place, within or without the State of Delaware, as the person or persons calling the meeting shall fix. Notice of the time, date and place of such meeting shall be given, orally or in writing, by the person or persons calling the meeting to all directors at least four (4) days before the meeting if the notice is mailed, or at least twenty-four (24) hours before the meeting if such notice is given by telephone, hand-delivery, telegram, telex, mailgram, facsimile or similar communication method. Unless otherwise indicated in the notice, any and all business may be transacted at a special meeting.

Section 2.5: Telephonic Meetings Permitted. Members of the Board of Directors, or any committee of the Board of Directors, may participate in a meeting of the Board or such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to conference telephone or similar communications equipment shall constitute presence in person at such meeting.

Section 2.6: Quorum; Vote Required for Action. At all meetings of the Board of Directors a majority of the total number of authorized directors shall constitute a quorum for the transaction of business. Except as otherwise provided herein or in the Certificate of Incorporation of the Corporation, or required by law, the vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.

Section 2.7: Organization. Meetings of the Board of Directors shall be presided over by the Chairman of the Board, or in his or her absence by the President, or in his or her absence by a chairman chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his or her absence, the chairman of the meeting may appoint any person to act as secretary of the meeting.

Section 2.8: Written Action by Directors. Any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of proceedings of the Board or committee, respectively.

Section 2.9: Powers. The Board of Directors may, except as otherwise required by law or the Certificate of Incorporation of the Corporation, exercise all such powers and do all such acts and things as may be exercised or done by the Corporation.

Section 2.10: Compensation of Directors. Directors, as such, may receive, pursuant to a resolution of the Board of Directors, fees and other compensation for their services as directors, including without limitation their services as members of committees of the Board of Directors.

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ARTICLE III

COMMITTEES

Section 3.1: Committees. The Board of Directors may, by resolution passed by a majority of the whole Board of Directors, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. 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 the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting of such committee who are not disqualified from voting, whether or not he, she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent provided in a resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers that may require it; but no such committee shall have the power or authority in reference to amending the Certificate of Incorporation of the Corporation (except that a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the Board of Directors as provided in subsection (a) of Section 151 of the Delaware General Corporation Law, fix the designations and any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the Corporation, or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the Corporation, or fix the number of shares of any series of stock or authorize the increase or decrease of the shares of any series, adopting an agreement of merger or consolidation under Sections 251 or 252 of the Delaware General Corporation Law, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, or amending these Bylaws; and unless the resolution of the Board of Directors expressly so provides, no such committee shall have the power or authority to declare a dividend, authorize the issuance of stock or adopt a certificate of ownership and merger pursuant to section 253 of the Delaware General Corporation Law.

Section 3.2: Committee Rules. Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may make, alter and repeal rules for the conduct of its business. In the absence of such rules, each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to Article II of these Bylaws.

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ARTICLE IV

OFFICERS

Section 4.1: Generally. The officers of the Corporation shall consist of a Chief Executive Officer and/or a President, one or more Vice Presidents, a Secretary, a Treasurer and such other officers, including a Chairman of the Board of Directors and/or Chief Financial Officer, as may from time to time be appointed by the Board of Directors. All officers shall be elected by the Board of Directors; provided, however, that the Board of Directors may empower the Chief Executive Officer of the Corporation to appoint officers other than the Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer or the Treasurer. Each officer shall hold office until his or her successor is elected and qualified or until his or her earlier death, resignation or removal. Any number of offices may be held by the same person. Any officer may resign at any time upon written notice to the Corporation. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise may be filled by the Board of Directors.

Section 4.2: Chief Executive Officer. Subject to the control of the Board of Directors and such supervisory powers, if any, as may be given by the Board of Directors, the powers and duties of the Chief Executive Officer of the Corporation are:

(a) To act as the general manager and, subject to the control of the Board of Directors, to have general supervision, direction and control of the business and affairs of the Corporation;

(b) To preside at all meetings of the stockholders;

(c) To call meetings of the stockholders to be held at such times and, subject to the limitations prescribed by law or by these Bylaws, at such places as he or she shall deem proper; and

(d) To affix the signature of the Corporation to all deeds, conveyances, mortgages, guarantees, leases, obligations, bonds, certificates and other papers and instruments in writing which have been authorized by the Board of Directors or which, in the judgment of the Chief Executive Officer, should be executed on behalf of the Corporation; to sign certificates for shares of stock of the Corporation; and, subject to the direction of the Board of Directors, to have general charge of the property of the Corporation and to supervise and control all officers, agents and employees of the Corporation.

The President shall be the Chief Executive Officer of the Corporation unless the Board of Directors shall designate another officer to be the Chief Executive Officer. If there is no President, and the Board of Directors has not designated any other officer to be the Chief Executive Officer, then the Chairman of the Board shall be the Chief Executive Officer.

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Section 4.3: Chairman of the Board. The Chairman of the Board shall have the power to preside at all meetings of the Board of Directors and shall have such other powers and duties as provided in these Bylaws and as the Board of Directors may from time to time prescribe.

Section 4.4: President. The President shall be the Chief Executive Officer of the Corporation unless the Board of Directors shall have designated another officer as the Chief Executive Officer of the Corporation. Subject to the provisions of these Bylaws and to the direction of the Board of Directors, and subject to the supervisory powers of the Chief Executive Officer (if the Chief Executive Officer is an officer other than the President), and subject to such supervisory powers and authority as may be given by the Board of Directors to the Chairman of the Board and/or to any other officer, the President shall have the responsibility for the general management and control of the business and affairs of the Corporation and the general supervision and direction of all of the officers, employees and agents of the Corporation (other than the Chief Executive Officer, if the Chief Executive Officer is an officer other than the President) and shall perform all duties and have all powers that are commonly incident to the office of president or that are delegated to the President by the Board of Directors.

Section 4.5: Vice President. Each Vice President shall have all such powers and duties as are commonly incident to the office of Vice President or that are delegated to him or her by the Board of Directors or the Chief Executive Officer. A Vice President may be designated by the Board to perform the duties and exercise the powers of the Chief Executive Officer in the event of the Chief Executive Officer's absence or disability.

Section 4.6: Chief Financial Officer. Subject to the direction of the Board of Directors and the President, the Chief Financial Officer shall perform all duties and have all powers that are commonly incident to the office of chief financial officer.

Section 4.7: Treasurer. The Treasurer shall have custody of all monies and securities of the Corporation. The Treasurer shall make such disbursements of the funds of the Corporation as are authorized and shall render from time to time an account of all such transactions. The Treasurer shall also perform such other duties and have such other powers as are commonly incident to the office of a treasurer or as the Board of Directors or the President may from time to time prescribe.

Section 4.8: Secretary. The Secretary shall issue or cause to be issued all authorized notices for, and shall keep or cause to be kept, minutes of all meetings of the stockholders and the Board of Directors. The Secretary shall have charge of the corporate minute books and similar records and shall perform such other duties and have such other powers as are commonly incident to the office of secretary or as the Board of Directors or the President may from time to time prescribe.

Section 4.9: Delegation of Authority. The Board of Directors may from time to time delegate the powers or duties of any officer to any other officers or agents, notwithstanding any provision hereof.

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Section 4.10: Removal. Any officer of the Corporation shall serve at the pleasure of the Board of Directors and may be removed at any time, with or without cause, by the Board of Directors. Such removal shall be without prejudice to the contractual rights of such officer, if any, with the Corporation.

ARTICLE V

STOCK

Section 5.1: Certificates. Every holder of stock shall be entitled to have a certificate signed by or in the name of the Corporation by the Chairman or Vice-Chairman of the Board of Directors, or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, of the Corporation, certifying the number of shares owned by such stockholder in the Corporation. Any or all of the signatures on the certificate may be a facsimile.

Section 5.2: Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates. The Corporation may issue a new certificate of stock in the place of any certificate previously issued by it that is alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner's legal representative, to agree to indemnify the Corporation and/or to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

Section 5.3: Other Regulations. The issue, transfer, conversion and registration of stock certificates shall be governed by such other regulations as the Board of Directors may establish.

ARTICLE VI

INDEMNIFICATION

Section 6.1: Indemnification of Officers and Directors. Each person who was or is made a party to, or is threatened to be made a party to, or is involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a "proceeding"), by reason of the fact that he or she (or a person of whom he or she is the legal representative) is or was a director or officer of the Corporation or a Reincorporated Predecessor (as defined below) or is or was serving at the request of the Corporation or a Reincorporated Predecessor (as defined below) as a director or officer of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by the Delaware General Corporation Law against all expenses, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes and penalties and amounts paid or to be paid in settlement) reasonably

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incurred or suffered by such person in connection therewith, and such indemnification shall continue as to a person who has ceased to be a director or officer and shall inure to the benefit of his or her heirs, executors and administrators; provided, however, that the Corporation shall indemnify any such person seeking indemnity in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation; provided, further, that the Corporation shall not be required to indemnify a person for amounts paid in settlement of a proceeding unless the Corporation consents in writing to such a settlement (such consent not to be unreasonably withheld). As used herein, the term "Reincorporated Predecessor" means a corporation that is merged with and into the Corporation in a statutory merger where (a) the Corporation is the surviving corporation of such merger and (b) the primary purpose of such merger is to change the corporate domicile of the Reincorporated Predecessor, and shall include Concur Technologies, Inc., a Washington corporation.

Section 6.2: Advance of Expenses. The Corporation shall pay all expenses (including attorneys' fees) incurred by such a director or officer in defending any such proceeding as such expenses are incurred in advance of its final disposition; provided, however, that if the Delaware General Corporation Law then so requires, the payment of such expenses incurred by such a director or officer in advance of the final disposition of such proceeding shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it should be determined ultimately that such director or officer is not entitled to be indemnified under this Article VI or otherwise; and provided, further, that the Corporation shall not be required to advance any expenses to a person against whom the Corporation directly brings a claim, in a proceeding, alleging that such person has breached his or her duty of loyalty to the Corporation, committed an act or omission not in good faith or that involves intentional misconduct or a knowing violation of law, or derived an improper personal benefit from a transaction.

Section 6.3: Non-Exclusivity of Rights. The rights conferred on any person in this Article VI shall not be exclusive of any other right that such person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation of the Corporation, these Bylaws, agreement, vote or consent of stockholders or disinterested directors, or otherwise. Additionally, nothing in this Article VI shall limit the ability of the Corporation, in its discretion, to indemnify or advance expenses to persons whom the Corporation is not obligated to indemnify or advance expenses pursuant to this Article VI.

Section 6.4: Indemnification Contracts. The Board of Directors is authorized to cause the Corporation to enter into indemnification contracts with any director, officer, employee or agent of the Corporation, or any person serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including employee benefit plans, providing indemnification and related rights to such person. Such rights may be greater than those provided in this Article VI.

Section 6.5: Effect of Amendment. Any amendment, repeal or modification of any provision of this Article VI shall be prospective only, and shall not adversely affect any right or

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protection conferred on a person pursuant to this Article VI and existing at the time of such amendment, repeal or modification.

ARTICLE VII

NOTICES

Section 7.1: Notice. Except as otherwise specifically provided herein or required by law, all notices required to be given pursuant to these Bylaws shall be in writing and may in every instance be effectively given by hand delivery (including use of a delivery service) by depositing such notice in the mail, postage prepaid, or by sending such notice by prepaid telegram, telex, overnight express courier, mailgram or facsimile. Any such notice shall be addressed to the person to whom notice is to be given at such person's address as it appears on the records of the Corporation. The notice shall be deemed given (i) in the case of hand delivery, when received by the person to whom notice is to be given or by any person accepting such notice on behalf of such person, (ii) in the case of delivery by mail, upon deposit in the mail, (iii) in the case of delivery by overnight express courier, on the first business day after such notice is dispatched, and (iv) in the case of delivery via telegram, telex, mailgram or facsimile, when dispatched.

Section 7.2: Waiver of Notice. Whenever notice is required to be given under any provision of these Bylaws, a written waiver of notice, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting 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 regular or special meeting of the stockholders, directors or members of a committee of directors need be specified in any written waiver of notice.

ARTICLE VIII

INTERESTED DIRECTORS

Section 8.1: Interested Directors; Quorum. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof that authorizes the contract or transaction, or solely because his, her or their votes are counted for such purpose, if: (i) the material facts as to his, her or their relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or

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committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; (ii) the material facts as to his, her or their relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (iii) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified by the Board of Directors, a committee thereof or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

ARTICLE IX

MISCELLANEOUS

Section 9.1: Fiscal Year. The fiscal year of the Corporation shall be determined by resolution of the Board of Directors.

Section 9.2: Seal. The Board of Directors may provide for a corporate seal, which shall have the name of the Corporation inscribed thereon and shall otherwise be in such form as may be approved from time to time by the Board of Directors.

Section 9.3: Form of Records. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account and minute books, may be kept on, or be in the form of, magnetic tape, diskettes, photographs, microphotographs or any other information storage device, provided that the records so kept can be converted into clearly legible form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect the same.

Section 9.4: Reliance Upon Books and Records. A member of the Board of Directors, or a member of any committee designated by the Board of Directors shall, in the performance of his or her duties, be fully protected in relying in good faith upon records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of the Corporation's officers or employees, or committees of the Board of Directors, or by any other person as to matters the member reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

Section 9.5: Certificate of Incorporation Governs. In the event of any conflict between the provisions of the Corporation's Certificate of Incorporation and Bylaws, the provisions of the Corporation's Certificate of Incorporation shall govern.

Section 9.6: Severability. If any provision of these Bylaws shall be held to be invalid, illegal, unenforceable or in conflict with the provisions of the Corporation's Certificate of Incorporation, then such provision shall nonetheless be enforced to the maximum extent possible

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consistent with such holding and the remaining provisions of these Bylaws (including, without limitation, all portions of any section of these Bylaws containing any such provision held to be invalid, illegal, unenforceable or in conflict with the Corporation's Certificate of Incorporation that are not themselves invalid, illegal, unenforceable or in conflict with the Corporation's Certificate of Incorporation) shall remain in full force and effect.

ARTICLE X

AMENDMENT

Section 10.1: Amendments. Stockholders of the Corporation holding a majority of the Corporation's outstanding voting stock shall have the power to adopt, amend or repeal Bylaws. To the extent provided in the Corporation's Certificate of Incorporation, the Board of Directors of the Corporation shall also have the power to adopt, amend or repeal Bylaws of the Corporation, except insofar as Bylaws adopted by the stockholders shall otherwise provide.

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CERTIFICATION OF BYLAWS
OF
CONCUR TECHNOLOGIES, INC.
(A DELAWARE CORPORATION)

KNOW ALL BY THESE PRESENTS:

I, Matthew P. Quilter, certify that I am Corporate Secretary of Concur Technologies, Inc., a Delaware corporation (the "Company"), that I am duly authorized to make and deliver this certification and that the attached Bylaws are a true and correct copy of the Bylaws of the Company in effect as of the date of this certificate.

Dated: August 19, 1998


                                       /s/ MATTHEW P. QUILTER
                                       -----------------------------------------
                                       Matthew P. Quilter, Secretary


EXHIBIT 4.02

PORTABLE SOFTWARE CORPORATION

SECOND AMENDED AND RESTATED INFORMATION
AND REGISTRATION RIGHTS AGREEMENT


TABLE OF CONTENTS

                                                                                   PAGE
                                                                                   ----
1.  Certain Definitions ........................................................    1

2.  Financial Statements and Reports to Shareholders ...........................    2

3.  Additional Information .....................................................    3

4.  Inspection .................................................................    3

5.  Right of First Refusal .....................................................    4

6.  Termination of Covenants ...................................................    5

7.  Demand Registration ........................................................    5

    7.1  Request for Registration on Form Other Than Form S-3 ..................    5
    7.2  Right of Deferral of Registration on Form Other Than S-3 ..............    6
    7.3  Request for Registration on Form S-3 ..................................    6
    7.4  Registration of Other Securities in Demand Registration ...............    7
    7.5  Underwriting in Demand Registration ...................................    7
         7.5.1    Notice of Underwriting .......................................    7
         7.5.2    Inclusion of Other Holders in Demand Registration ............    7
         7.5.3    Selection of Underwriter in Demand Registration ..............    8
         7.5.4    Marketing Limitation in Demand Registration ..................    8
         7.5.5    Right of Withdrawal in Demand Registration ...................    8
    7.6  Blue Sky in Demand Registration .......................................    8

8.  Piggyback Registration .....................................................    9

    8.1      Notice of Piggyback Registration and Inclusion of Registrable
                 Securities ....................................................    9
    8.2      Underwriting in Piggyback Registration ............................    9
             8.2.1    Notice of Underwriting in Piggyback Registration .........    9
             8.2.2    Marketing Limitation in Piggyback Registration ...........    9
             8.2.3    Allocation of Shares in Piggyback Registration ...........   10
             8.2.4    Withdrawal in Piggyback Registration .....................   10
    8.3  Blue Sky in Piggyback Registration ....................................   10


TABLE OF CONTENTS
(CONTINUED)

                                                                                  PAGE
                                                                                  ----
9.  Expenses of Registration ...................................................   11

10. Termination of Registration Rights .........................................   11

11. Registration Procedures and Obligations ....................................   11

12. Information Furnished by Holder ............................................   12

13. Indemnification ............................................................   12

    13.1 Company's Indemnification of Holders ..................................   12
    13.2 Holder's Indemnification of Company ...................................   13
    13.3 Indemnification Procedure .............................................   14
    13.4 Contribution ..........................................................   14

14. Limitations on Registration Rights Granted to Other Securities .............   15

15. Transfer of Rights .........................................................   15

16. Market Stand-off ...........................................................   15

17. Conversion of Preferred Stock ..............................................   16

18. Reports Under Securities Exchange Act of 1934 ..............................   16

19. Miscellaneous ..............................................................   17

    19.1 Entire Agreement; Successors and Assigns ..............................   17
    19.2 Governing Law .........................................................   17
    19.3 Counterparts ..........................................................   17
    19.4 Headings ..............................................................   17
    19.5 Notices ...............................................................   17
    19.6 Amendment of Agreement ................................................   18
    19.7 Severability ..........................................................   18

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SECOND AMENDED AND RESTATED INFORMATION
AND REGISTRATION RIGHTS AGREEMENT

This SECOND AMENDED AND RESTATED INFORMATION AND REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of May 29, 1998, by and among Portable Software Corporation, a Washington corporation (the "Company") and the persons listed on the attached Schedule A who become signatories to this Agreement (collectively, the "Investors").

R E C I T A L S

A. The Company and the Investors have entered into agreements for sale by the Company and purchase by the Investors of the Company's securities.

B. In connection with the purchase and sale of the Company's securities, the Company and the Investors desire to provide for the rights of the Investors with respect to information about the Company and registration of the Company's common stock ("Common Stock") issued upon conversion or exercise of the securities according to the terms of this Agreement. In addition, the Investors who were signatories to the Restated Information and Registration Rights Agreement made as of July 12, 1996 and amended July 22, 1997 (as amended, the "Previous Agreement") desire to restate the Previous Agreement as set forth below and consent to the addition, as parties to this Agreement, of the Investors who purchase shares of the Company's Series E Preferred Stock.

THE PARTIES AGREE AS FOLLOWS:

1. Certain Definitions.

As used in this Agreement, the following terms shall have the following respective meanings:

(a) "Commission" shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

(b) "Convertible Securities" shall mean securities of the Company convertible into or exchangeable for Common Stock of the Company or into other securities that are convertible into or exchangeable for Common Stock.

(c) "Form S-3" shall mean Form S-3 issued by the Commission or any substantially similar form then in effect.

(d) "Holder" shall mean any holder of outstanding Registrable Securities which have not been sold to the public, but only if such holder is one of the Investors or an assignee or transferee of Registration rights as permitted by Section 15.


(e) "Initiating Holders" shall mean Holders who in the aggregate hold at least twenty-five percent (25%) of the Registrable Securities.

(f) "Material Adverse Event" shall mean an occurrence having a consequence that either (a) is materially adverse as to the business, properties, prospects, or financial condition of the Company or (b) is reasonably foreseeable, has a reasonable likelihood of occurring, and if it were to occur might materially adversely affect the business, properties, prospects, or financial condition of the Company.

(g) The terms "Register", "Registered", and "Registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act ("Registration Statement"), and the declaration or ordering of the effectiveness of such Registration Statement.

(h) "Registrable Securities" shall mean all Common Stock not previously sold to the public and issued or issuable upon conversion or exercise of any of the Company's Convertible Securities purchased by or issued to the Investors, including Common Stock issued pursuant to stock splits, stock dividends and similar distributions, and any securities of the Company granted registration rights pursuant to Section 14 of this Agreement.

(i) "Registration Expenses" shall mean all expenses incurred by the Company in complying with Sections 7 or 8 of this Agreement, including, without limitation, all federal and state registration, qualification, and filing fees, printing expenses, fees and disbursements of counsel for the Company and one special counsel for Holders (if different from the Company), blue sky fees and expenses, and the expense of any special audits incident to or required by any such registration.

(j) "Securities Act" shall mean the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.

(k) "Selling Expenses" shall mean all underwriting discounts and selling commissions applicable to the sale of Registrable Securities pursuant to this Agreement.

2. Financial Statements and Reports to Shareholders.

The Company shall deliver to each Investor as soon as practicable after the end of each fiscal year of the Company, and in any event within 90 days thereafter, an audited consolidated balance sheet of the Company as of the end of such year and audited consolidated statements of income, shareholders' equity and cash flow for such year, which year-end financial reports shall be in reasonable detail and shall be prepared in accordance with generally accepted accounting principles and accompanied by the opinion of independent public accountants of nationally recognized standing selected by the Company. In addition, the Company shall deliver to the Investors: (a) contemporaneously with delivery to holders of Common Stock, a copy of each report of the Company delivered to holders of Common Stock and (b) an annual capitalization summary.

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3. Additional Information.

As long as an Investor (together with any affiliate) or its transferee holds the lesser of (i) all of the Convertible Securities purchased by such Investor, (ii) not less than 5% of the total number of Convertible Securities of the Company (or an equivalent number of shares consisting of Registrable Securities issued upon conversion or exercise of the Convertible Securities of the Company or a combination of such Registrable Securities and such Convertible Securities), and (iii) 100,000 shares of Series E Preferred Stock (including for these purposes as a share of Series E Preferred Stock shares of Common Stock issued upon conversion of Series E Preferred Stock) as adjusted for recapitalizations, stock splits, stock dividends and the like, the Company will deliver to such Investor:

(a) As soon as practicable after the end of each month, and in any event within 30 days thereafter, consolidated balance sheets of the Company and its subsidiaries, if any, as of the end of such month, and consolidated statements of income and cash flow for such month and for the fiscal year to date, prepared in accordance with generally accepted accounting principles (other than for accompanying notes) and signed by the Chief Financial Officer or President of the Company certifying that they fairly and accurately present the financial condition and results of operation of the Company, subject to changes resulting from year-end audit adjustment.

(b) As soon as practicable after the end of each of the first three fiscal quarters of each fiscal year after fiscal year 1998, and in any event within thirty (30) days thereafter, consolidated balance sheets of the Company and its subsidiaries, if any, as of the end of such quarter, and consolidated statements of income and cash flow for such quarter and the fiscal year to date, prepared in accordance with generally accepted accounting principles (other than for accompanying notes) and signed by the Chief Financial Officer or President of the Company certifying that they fairly and accurately present the financial condition and results of operation of the Company, subject to changes resulting from year-end audit adjustment.

(c) As soon as practicable following submission to and approval by the Board of Directors of the Company, but in no event later than 90 days after the end of each fiscal year, an operating budget and plan (the "Plan") respecting the next fiscal year and a summary of such Plan together with any update of the Plan as such update is prepared.

(d) Such other information relating to the financial condition, business, prospects, or corporate affairs of the Company as the Investor or any assignee of the Investor may from time to time request, provided, however, that the Company shall not be obligated under this subsection
(d) or any other subsection of Section 3 to provide information which it deems in good faith to be a trade secret or confidential information unless the Investor signs an appropriate confidentiality agreement with the Company.

4. Inspection.

The Company shall permit each Investor, at such Investor's expense, to visit and inspect the Company's properties, to examine its books of account and records and to discuss the

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Company's affairs, finances, and accounts with its officers, all at such reasonable times as may be requested by each such Investor; provided, however, that the Company shall not be obligated pursuant to this Section 4 to provide any information which it reasonably considers to be a trade secret or confidential information. Subject to Section 15, the rights of an Investor under this Section 4 may not be assigned as part of such Investor's sale of any of the Registrable Securities or Convertible Securities except with the consent of the Company, which consent shall not be unreasonably withheld.

5. Right of First Refusal.

5.1 The Company hereby grants to each Investor the right of first refusal to purchase up to its Pro Rata Share of the New Securities (as defined below) which the Company may, from time to time, propose to sell and issue. The Investors may purchase said New Securities on the same terms and at the same price at which the Company proposes to sell the New Securities. The "Pro Rata Share" of each Investor, for purposes of this right of first refusal, is the ratio of (i) the total number of shares of Common Stock held by such Investor (including any shares of Common Stock into which shares of the Convertible Securities held by such Investor are convertible) to (ii) the total number of shares of Common Stock and Common Stock options outstanding immediately prior to the issuance of the New Securities (including any shares of Common Stock into which outstanding shares of the Convertible Securities are convertible).

5.2 "New Securities" shall mean any capital stock of the Company, whether authorized or not, and any rights, options, or warrants to purchase said capital stock, and securities of any type whatsoever that are, or may become, convertible into said capital stock; provided that "New Securities" does not include (i) the Convertible Securities listed on Schedule A hereto or the securities issuable upon conversion of such Convertible Securities, (ii) securities offered pursuant to a registration statement filed under the Securities Act, (iii) securities issued pursuant to the acquisition of another corporation by the Company by merger, purchase of substantially all of the assets, or other reorganization, if approved by the Company's Board of Directors, (iv) shares issued or issuable to officers, directors, employees of, or consultants to, the Company pursuant to a plan or arrangement approved by the Company's Board of Directors, (v) shares issued without consideration pursuant to a stock dividend, stock split, or similar transaction, and (vi) warrants, and shares issuable upon exercise of such warrants, issued in connection with equipment leasing transactions approved by the Company's Board of Directors.

5.3 In the event the Company proposes to undertake an issuance of New Securities, it shall give to each Investor written notice (the "Notice") of its intention, describing the type of New Securities, the price, the terms upon which the Company proposes to issue the same, the number of shares which such Investor is entitled to purchase, and a statement that each Investor shall have twenty (20) days to respond to such Notice. Each Investor shall have twenty (20) days from the date of receipt of the Notice to agree to purchase any or all of its Pro Rata Share of the New Securities for the price and upon the terms specified in the Notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased

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and forwarding payment for such New Securities to the Company if immediate payment is required by such terms.

5.4 In the event an Investor fails to exercise in full the right of first refusal within said twenty (20) day period, the Company shall have ninety (90) days thereafter to sell or enter into an agreement (pursuant to which the sale of New Securities covered thereby shall be closed, if at all, within sixty (60) days from date of said agreement) to sell the New Securities respecting which such Investor's rights were not exercised, at a price and upon general terms no more favorable to the purchaser thereof than specified in the Notice. In the event the Company has not sold the New Securities within said ninety (90) day period (or sold and issued New Securities in accordance with the foregoing within sixty (60) days from the date of said agreement), the Company shall not thereafter issue or sell any New Securities without first offering such securities to such Investor in the manner provided above.

5.5 The right of first refusal granted under this Section 5 is assignable by each Investor to (i) any transferee of a minimum of One Million (1,000,000) shares of Common Stock (including any shares of Common Stock into which shares of Convertible Securities then held by it are convertible), and (ii) any other transferee approved by the Board of Directors, such approval not to be unreasonably withheld or delayed.

6. Termination of Covenants.

The covenants of the Company set forth in Sections 2, 3, 4 and 5 shall be terminated and be of no further force or effect upon the earlier of
(a) immediately prior to the closing of the first public offering of the Common Stock of the Company that is effected pursuant to a Registration Statement filed with, and declared effective by, the Commission under the Securities Act (other than either a public offering limited solely to employees of the Company or an offering pursuant to Rule 145 under the Securities Act) and (b) the date the Company registers any securities under the Securities and Exchange Act of 1934, and such covenants shall terminate as to any Investor as of the date such Investor no longer holds any shares of the capital stock of the Company.

7. Demand Registration.

7.1 Request for Registration on Form Other Than Form S-3.

Subject to the terms of this Agreement, in the event that the Company shall receive from the Initiating Holders at any time after the earlier of (a) October 31, 1999 and (b) one year after the closing of the Company's initial public offering of shares of Common Stock under a Registration Statement, a written request that the Company effect any Registration with respect to all or a part of the Registrable Securities on a Form other than Form S-3 for an offering of at least 25% of the then outstanding Registrable Securities (or any lesser percent if the reasonably anticipated aggregate offering price to the public would exceed $10,000,000), the Company (i) shall promptly give written notice of the proposed Registration to all other Holders and (ii) shall, as soon as practicable, use its best efforts to effect Registration of the Registrable Securities specified in such request, together with any Registrable Securities of any Holder

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joining in such request as are specified in a written request given within 20 days after written notice from the Company. The Company shall not be obligated to take any action to effect any such Registration pursuant to this Section 7.1
(i) during the period starting with the date sixty (60) days prior to the Company's estimated date of filing, and ending on the date sixty (60) days immediately following the effective date of an underwritten public offering pertaining to securities of the Company (other than a registration of securities in a Rule 145 transaction or with respect to an employee benefit plan) provided that the Company is employing all reasonable efforts in good faith to cause such Registration to become effective or (ii) after the Company has effected three such Registrations pursuant to this Section 7.1 and such Registrations have been declared effective.

7.2 Right of Deferral of Registration on Form Other Than Form S-3.

If the Company shall furnish to all such Holders who joined in the request a certificate signed by the President of the Company stating that, in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company for any Registration to be effected as requested under Section 7.1, the Company shall have the right, exercisable not more than once in any twelve-month period, to defer the filing of a Registration Statement with respect to such offering for a period of not more than 90 days from delivery of the request of the Initiating Holders.

7.3 Request for Registration on Form S-3.

(a) If a Holder or Holders of the outstanding Registrable Securities request that the Company file a Registration Statement on Form S-3 (or any successor form to Form S-3) for a public offering of shares of Registrable Securities the reasonably anticipated aggregate price to the public of which, net of underwriting discounts and commissions, would not be less than $2,000,000, and the Company is a registrant entitled to use Form S-3 to register the Registrable Securities for such an offering, the Company shall use all reasonable efforts to cause such Registrable Securities to be Registered for the offering on such form and to cause such Registrable Securities to be qualified in such jurisdictions as the Holder or Holders may reasonably request; provided, however, that the Company shall not be required to effect more than two Registrations pursuant to this Section 7.3 in any twelve (12) month period. The substantive provisions of Section 7.5 shall be applicable to each registration initiated under this Section 7.3.

(b) Notwithstanding the foregoing, the Company shall not be obligated to file a registration statement pursuant to this Section 7.3:

(i) in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification, or compliance unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

(ii) if the Company, within ten (10) days of the receipt of the request of the Initiating Holders, gives notice of its bona fide intention to effect the filing of a

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registration statement with the Commission within sixty (60) days of receipt of such request (other than with respect to a registration statement relating to a Rule 145 transaction or an offering solely to employees), provided that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective;

(iii) within six months immediately following the effective date of any registration statement pertaining to the securities of the Company (other than a registration of securities in a Rule 145 transaction or with respect to an employee benefit plan); or

(iv) if the Company shall furnish to such Holders a certificate signed by the President of the Company stating that in the good faith judgment of the Board of Directors it would be seriously detrimental to the Company or its shareholders for a registration statement to be filed in the near future, then the Company's obligation to use its best efforts to file a registration statement shall be deferred for a period not to exceed 90 days from the receipt of the request to file such registration by such Holder provided that the Company shall not exercise the right contained in this paragraph (iv) more than once in any twelve (12) month period.

7.4 Registration of Other Securities in Demand Registration.

Any Registration Statement filed pursuant to the request of the Initiating Holders under this Section 7 may, subject to the provisions of Section 7.5, include securities of the Company in addition to Registrable Securities.

7.5 Underwriting in Demand Registration.

7.5.1 Notice of Underwriting.

If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 7, and the Company shall include such information in the written notice referred to in Section 7.1 or 7.3. The right of any Holder to Registration pursuant to Section 7 shall be conditioned upon such Holder's agreement to participate in such underwriting and the inclusion of such Holder's Registrable Securities in the underwriting.

7.5.2 Inclusion of Other Holders in Demand Registration.

If the Company, officers or directors of the Company holding Common Stock other than Registrable Securities, or holders of securities other than Registrable Securities, request inclusion in such Registration, the Initiating Holders, to the extent they deem advisable and consistent with the goals of such Registration, may, in their sole discretion, on behalf of all Holders, offer to any or all of the Company, such officers or directors, and such holders of securities other than Registrable Securities that such securities other than Registrable Securities be included in the underwriting and may condition such offer on the acceptance by such persons of the terms of this
Section 7. In the event, however, that the number of shares so

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included exceeds the number of shares of Registrable Securities included by all Holders, such Registration shall be treated as governed by Section 8 hereof rather than Section 7, and it shall not count as a Registration for purposes of
Section 7.1 hereof.

7.5.3 Selection of Underwriter in Demand Registration.

The Company shall (together with all Holders proposing to distribute their securities through such underwriting) enter into an underwriting agreement with the representative ("Underwriter's Representative") of the underwriter or underwriters selected for such underwriting by the Holders of a majority of the Registrable Securities being registered by the Initiating Holders and agreed to by the Company.

7.5.4 Marketing Limitation in Demand Registration.

In the event the Underwriter's Representative advises the Initiating Holders in writing that market factors (including, without limitation, the aggregate number of shares of Common Stock requested to be Registered, the general condition of the market, and the status of the persons proposing to sell securities pursuant to the Registration) require a limitation of the number of shares to be underwritten, then (i) first the Common Stock (other than Registrable Securities) held by officers or directors of the Company, (ii) next the securities other than Registrable Securities, and (iii) last the securities requested to be registered by the Company, shall be excluded from such Registration to the extent required by such limitation. If a limitation of the number of shares is still required, the Initiating Holders shall so advise all Holders and the number of shares of Registrable Securities that may be included in the Registration and underwriting shall be allocated among all Holders in proportion, as nearly as practicable, to the respective amounts of Registrable Securities entitled to inclusion in such Registration held by such Holders at the time of filing the Registration Statement. No Registrable Securities or other securities excluded from the underwriting by reason of this Section 7.5.4 shall be included in such Registration Statement.

7.5.5 Right of Withdrawal in Demand Registration.

If any Holder of Registrable Securities, or a holder of other securities entitled (upon request) to be included in such Registration, disapproves of the terms of the underwriting, such person may elect to withdraw therefrom by written notice to the Company, the underwriter and the Initiating Holders delivered at least seven days prior to the effective date of the Registration Statement. The securities so withdrawn shall also be withdrawn from the Registration Statement.

7.6 Blue Sky in Demand Registration.

In the event of any Registration pursuant to Section 7, the Company will exercise its best efforts to Register and qualify the securities covered by the Registration Statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably appropriate for the distribution of such securities; provided, however, that (i) the Company shall not be required to qualify to do business or to file a general consent to service of

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process in any such states or jurisdictions, and (ii) notwithstanding anything in this Agreement to the contrary, in the event any jurisdiction in which the securities shall be qualified imposes a non-waivable requirement that expenses incurred in connection with the qualification of the securities be borne by selling shareholders, such expenses shall be payable pro rata by selling shareholders.

8. Piggyback Registration.

8.1 Notice of Piggyback Registration and Inclusion of Registrable Securities.

Subject to the terms of this Agreement, in the event the Company decides to Register any of its Common Stock (either for its own account or the account of a security holder or holders exercising their respective demand registration rights) on a form that would be suitable for a registration involving solely Registrable Securities, the Company will: (i) promptly give each Holder written notice thereof (which shall include a list of the jurisdictions in which the Company intends to attempt to qualify such securities under the applicable Blue Sky or other state securities laws) and (ii) include in such Registration (and any related qualification under Blue Sky laws or other compliance), and in any underwriting involved therein, all the Registrable Securities specified in a written request delivered to the Company by any Holder within 20 days after delivery of such written notice from the Company.

8.2 Underwriting in Piggyback Registration.

8.2.1 Notice of Underwriting in Piggyback Registration.

If the Registration of which the Company gives notice is for a Registered public offering involving an underwriting, the Company shall so advise the Holders as a part of the written notice given pursuant to Section 8.1. In such event, the right of any Holder to Registration shall be conditioned upon such underwriting and the inclusion of such Holder's Registrable Securities in such underwriting to the extent provided in this
Section 8. All Holders proposing to distribute their securities through such underwriting shall (together with the Company and the other holders distributing their securities through such underwriting) enter into an underwriting agreement with the Underwriter's Representative for such offering. The Holders shall have no right to participate in the selection of the underwriters for an offering pursuant to this Section 8.

                           8.2.2  Marketing Limitation in Piggyback
Registration.

                                  In the event the Underwriter's Representative

advises the Holders seeking registration of Registrable Securities pursuant to
Section 8 in writing that market factors (including, without limitation, the aggregate number of shares of Common Stock requested to be Registered, the general condition of the market, and the status of the persons proposing to sell securities pursuant to the Registration) require a limitation of the number of shares to be underwritten, the Underwriter's Representative (subject to the allocation priority set forth in Section 8.2.3) may:

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(a) in the case of the Company's initial Registered public offering, limit the number of shares of Registrable Securities to be included in such registration and underwriting to not less than fifteen percent (15%) of the securities included in such Registration (based on aggregate market values); and

(b) in the case of any Registered public offering subsequent to the initial public offering, limit the number of shares of Registrable Securities to be included in such Registration and underwriting to not less than thirty percent (30%) of the securities included in such Registration (based on aggregate market values).

8.2.3 Allocation of Shares in Piggyback Registration.

In the event that the Underwriter's Representative limits the number of shares to be included in a Registration pursuant to Section 8.2.2, the number of shares to be included in such Registration shall be allocated (subject to Section 8.2.2) in the following manner: The shares (other than Registrable Securities) held by officers or directors of the Company shall be excluded from such Registration and underwriting to the extent required by such limitation. If a limitation of the number of shares is still required after such exclusion, the number of shares that may be included in the Registration and underwriting by selling shareholders shall be allocated among all other Holders thereof, in proportion, as nearly as practicable, to the respective amounts of securities (including Registrable Securities) which such Holders would otherwise be entitled to include in such Registration. No Registrable Securities or other securities excluded from the underwriting by reason of this Section 8.2.3 shall be included in the Registration Statement.

8.2.4 Withdrawal in Piggyback Registration.

If any Holder disapproves of the terms of any such underwriting, such person may elect to withdraw therefrom by written notice to the Company and the underwriter delivered at least seven days prior to the effective date of the Registration Statement. Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall be withdrawn from such Registration.

8.3 Blue Sky in Piggyback Registration.

In the event of any Registration of Registrable Securities pursuant to Section 8, the Company will exercise its best efforts to Register and qualify the securities covered by the Registration Statement under such other securities or Blue Sky laws of such jurisdictions (not exceeding 20 unless otherwise agreed to by the Company) as shall be reasonably appropriate for the distribution of such securities; provided, however, that (i) the Company shall not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, and (ii) notwithstanding anything in this Agreement to the contrary, in the event any jurisdiction in which the securities shall be qualified imposes a non-waivable requirement that expenses incurred in connection with the qualification of the securities be borne by selling shareholders, such expenses shall be payable pro rata by selling shareholders.

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9. Expenses of Registration.

All Registration Expenses incurred in connection with three Registrations pursuant to Section 7 and unlimited Registrations pursuant to Sections 7.3 and 8, shall be borne by the Company. All Registration Expenses incurred in connection with any other registration, qualification, or compliance, shall be apportioned among the Holders and other holders of the securities so registered on the basis of the number of shares so registered. Notwithstanding the above, the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 7 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (which Holders shall bear such expenses), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one demand registration pursuant to
Section 7; provided further, however, that if at the time of such withdrawal, the Holders have learned of a Material Adverse Event with respect to the condition, business, or prospects of the Company not known to the Holders at the time of their request, then the Holders shall not be required to pay any of such expenses and shall retain their rights pursuant to Section 7. All Selling Expenses shall be borne by the holders of the securities Registered pro rata on the basis of the number of shares Registered.

10. Termination of Registration Rights.

The rights to cause the Company to register securities granted under Sections 7 and 8 of this Agreement shall terminate, with respect to each Holder, on the earlier of (i) the date five years after the closing date of the Company's initial public offering and (ii) upon such Holder holding less than 1% of the outstanding Registrable Securities (or, if less, one-half of the Registrable Securities acquired by such Holder from the Company).

11. Registration Procedures and Obligations.

Whenever required under this Agreement to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

(a) Prepare and file with the Commission a Registration Statement with respect to such Registrable Securities and use its best efforts to cause such Registration Statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such Registration Statement effective for up to one hundred twenty (120) days.

(b) Prepare and file with the Commission 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 Securities Act with respect to the disposition of all securities covered by such Registration Statement.

(c) Furnish to the Holders such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them.

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(d) Use its best 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 Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions.

(e) 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 managing underwriter of such offering. Each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement.

(f) Notify each Holder of Registrable Securities covered by such Registration Statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act 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.

(g) Provide a transfer agent and registrar for all Registrable Securities registered pursuant to such Registration Statement and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such Registration.

(h) Furnish, at the request of any Holder requesting registration of Registrable Securities pursuant to this Agreement, on the date that such Registrable Securities are delivered for sale in connection with a Registration pursuant to this Agreement, (i) an opinion, dated such date, of the counsel representing the Company for the purposes of such Registration, in form and substance as is customarily given to underwriters in an underwritten public offering, and (ii) a letter dated such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters.

12. Information Furnished by Holder.

It shall be a condition precedent of the Company's obligations under this Agreement that each Holder of Registrable Securities included in any Registration furnish to the Company such information regarding such Holder and the distribution proposed by such Holder or Holders as the Company may reasonably request.

13. Indemnification.

13.1 Company's Indemnification of Holders.

To the extent permitted by law, the Company will indemnify each Holder, each of its officers, directors, and constituent partners, legal counsel for the Holders, and each person controlling such Holder, with respect to which Registration, qualification, or compliance of Registrable Securities has been effected pursuant to this Agreement, and each underwriter, if

12

any, and each person who controls any underwriter against all claims, losses, damages, or liabilities (or actions in respect thereof) to the extent such claims, losses, damages, or liabilities arise out of or are based upon any untrue statement (or alleged untrue statement) of a material fact contained in any prospectus or other document (including any related Registration Statement) incident to any such Registration, qualification, or compliance, or are based on any 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 any violation by the Company of any rule or regulation promulgated under the Securities Act applicable to the Company and relating to action or inaction required of the Company in connection with any such Registration, qualification, or compliance; and the Company will reimburse each such Holder, each such underwriter, and each person who controls any such Holder or underwriter, for any legal and any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability, or action; provided, however, that the indemnity contained in this Section 13.1 shall not apply to amounts paid in settlement of any such claim, loss, damage, liability, or action if settlement is effected without the consent of the Company (which consent shall not unreasonably be withheld); and provided, further, that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability, or expense arises out of or is based upon any untrue statement or omission based upon written information furnished to the Company by such Holder, underwriter, or controlling person and stated to be for use in connection with the offering of securities of the Company.

13.2 Holder's Indemnification of Company.

To the extent permitted by law, each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such Registration, qualification or, compliance is being effected pursuant to this Agreement, indemnify the Company, each of its directors and officers, each legal counsel and independent accountant of the Company, each underwriter, if any, of the Company's securities covered by such a Registration Statement, each person who controls the Company or such underwriter within the meaning of the Securities Act, and each other such Holder, each of its officers, directors, and constituent partners, and each person controlling such other Holder, against all claims, losses, damages, and liabilities (or actions in respect thereof) arising out of or based upon any untrue statement (or alleged untrue statement) of a material fact contained in any such Registration Statement, prospectus, offering circular, or other document, or any 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 any violation by such Holder of any rule or regulation promulgated under the Securities Act applicable to such Holder and relating to action or inaction required of such Holder in connection with any such Registration, qualification, or compliance, and will reimburse the Company, such Holders, such directors, officers, partners, persons, law and accounting firms, underwriters or control persons for any legal and any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability, or action, in each case to the extent, but in each case only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such Registration Statement, prospectus, offering circular, or other document in reliance upon and in conformity with written information furnished to the Company by such Holder and stated to be specifically for use in connection with

13

the offering of securities of the Company, provided, however, that the indemnity contained in this Section 13.2 shall not apply to amounts paid in settlement of any such claim, loss, damage, liability or action if settlement is effected without the consent of such Holder (which consent shall not be unreasonably withheld) and provided, further, that each Holder's liability under this Section 13.2 shall not exceed such Holder's proceeds from the offering of securities made in connection with such Registration.

13.3 Indemnification Procedure.

Promptly after receipt by an indemnified party under this
Section 13 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this Section 13, notify the indemnifying party in writing of the commencement thereof and generally summarize such action. The indemnifying party shall have the right to participate in and to assume the defense of such claim; provided, however, that the indemnifying party shall be entitled to select counsel for the defense of such claim with the approval of any parties entitled to indemnification, which approval shall not be unreasonably withheld; provided further, however, that if either party reasonably determines that there may be a conflict between the position of the Company and the Investors in conducting the defense of such action, suit, or proceeding by reason of recognized claims for indemnity under this Section 13, then counsel for such party shall be entitled to conduct the defense to the extent reasonably determined by such counsel to be necessary to protect the interest of such party. The failure to notify an indemnifying party promptly of the commencement of any such action, if prejudicial to the ability of the indemnifying party to defend such action, shall relieve such indemnifying party, to the extent so prejudiced, of any liability to the indemnified party under this Section 13, but the omission to so notify the indemnifying party will not relieve such party of any liability that such party may have to any indemnified party otherwise other than under this
Section 13.

13.4 Contribution.

If the indemnification provided for in this Section 13 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage, or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.

14

14. Limitations on Registration Rights Granted to Other Securities.

From and after the date of this Agreement, the Company shall not enter into any agreement with any holder or prospective holder of any securities of the Company providing for the granting to such holder of any information or Registration rights, except that, with the consent of (i) the Holders of a majority of the aggregate of the Convertible Securities and Registrable Securities then outstanding and (ii) if such holders are to receive piggyback registration rights superior to or on a parity with the holders of Series E Preferred Stock, with the consent of the holders of a majority of the aggregate of the Series E Preferred Stock (and Registrable Securities issued upon conversion thereof) then outstanding, additional holders may be added as parties to this Agreement with regard to any or all securities of the Company held by them. Any such additional parties shall execute a counterpart of this Agreement, and upon execution by such additional parties and by the Company, shall be considered an Investor for all purposes of this Agreement. The additional parties and the additional Registrable Securities shall be identified in an amendment to Schedule A hereto.

15. Transfer of Rights.

The rights to information under Sections 2, 3, and 4 and the right to cause the Company to Register securities granted by the Company to the Investors under this Agreement may be assigned by any Holder to a transferee or assignee of any Convertible Securities or Registrable Securities not sold to the public acquiring at least 100,000 shares of such Holder's Registrable Securities (equitably adjusted for any stock splits, subdivisions, stock dividends, changes, combinations or the like); provided, however, that (i) the shares of Convertible Securities or Registrable Securities acquired by said transferee must constitute at least 20% of Holder's aggregate of Convertible Securities and Registrable Securities immediately prior to the transfer, (ii) the Company must receive written notice prior to the time of said transfer, stating the name and address of said transferee or assignee and identifying the securities with respect to which such information and Registration rights are being assigned,
(iii) such transferee or assignee must agree to be bound by the provisions of this Agreement, and (iv) the transferee or assignee of such be a person deemed by the Board of Directors of its best judgment, to be a competitor or potential competitor of the Company. Notwithstanding the limitation set forth in the foregoing sentence respecting the minimum number of shares which must be transferred, any Holder which is a partnership may transfer such Holder's Registration rights to such Holder's constituent partners without restriction as to the number or percentage of shares acquired by any such constituent partner.

16. Market Stand-off.

Each Holder hereby agrees that, if so requested by the Company and the Underwriter's Representative (if any) in connection with the Company's initial public offering, such Holder shall not sell, make any short sale of, loan, grant any option for the purchase of, or otherwise transfer or dispose of any Registrable Securities or other securities of the Company without the prior written consent of the Company and the Underwriters Representative for such period of time (not to exceed 90 days) following the effective date of a Registration Statement of

15

the Company filed under the Securities Act as may be requested by the Underwriter's Representative. The obligations of Holders under this Section 16 shall be conditioned (i) upon similar agreements being in effect with each other shareholder who is an officer, director, or 1% shareholder of the Company, and
(ii) if marketing limitations are sought by the Underwriter's Representative, upon imposition of marketing limitations no more extensive than those described in Section 8.2.2(a).

17. Conversion of Preferred Stock.

The Registration rights of the Holders of the shares set forth in this Agreement are conditioned upon the conversion of the shares with respect to which Registration is sought into Common Stock immediately prior to the closing of the offering of Common Stock effected pursuant to the Registration Statement.

18. Reports Under Securities Exchange Act of 1934.

With a view to making available to the Holders the benefits of Rule 144 promulgated under the Securities Act and any other rule or regulation of the Commission that may at any time permit a Holder to sell securities of the Company to the public without Registration or pursuant to a registration on Form S-3, the Company agrees to:

(a) make and keep public information available, as those terms are understood and defined in Rule 144, at all times after ninety (90) days after the effective date of the first Registration Statement filed by the Company for the offering of its securities to the general public;

(b) take such action, including the voluntary registration of its Common Stock under Section 12 of the Securities Exchange Act of 1934, as amended (the "1934 Act"), as is necessary to enable the Holders to utilize Form S-3 for the sale of their Registrable Securities, such action to be taken as soon as practicable after the end of the fiscal year in which the first Registration Statement filed by the Company for the offering of its securities to the general public is declared effective;

(c) file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the 1934 Act; and

(d) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144 (at any time after ninety (90) days after the effective date of the first Registration Statement filed by the Company), the Securities Act, and the 1934 Act (at any time after it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the Commission which permits the selling of any such securities without Registration or pursuant to such form.

16

19. Miscellaneous.

19.1 Entire Agreement; Successors and Assigns.

This Agreement constitutes the entire contract between the Company and the Investors relative to the subject matter hereof. Any previous agreement between the Company and any Investor concerning Registration rights, including the Previous Agreement, is superseded by this Agreement. Subject to the exceptions specifically set forth in this Agreement, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective executors, administrators, heirs, successor, and assigns of the parties. Investors who are parties to the Previous Agreement are waiving rights of first refusal; with respect to shares of Series E Preferred Stock that it is not acquiring, each investor who was a signatory to the Previous Agreement waives the right of first refusal with respect to the shares of Series E Preferred Stock it has elected not to purchase. In addition, the Investors agree to the grant of Registration rights with respect to the shares of Series E Preferred Stock or other securities issuable upon exercise of certain warrants issued to Comdisco, Inc., Imperial Bank, and the American Express Company, and the Common Stock issuable upon conversion thereof.

19.2 Governing Law.

This Agreement shall be governed by, and construed in accordance with, the laws of the State of California excluding those laws that direct the application of the laws of another jurisdiction.

19.3 Counterparts.

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.

19.4 Headings.

The headings of the Sections of this Agreement are for convenience and shall not by themselves determine the interpretation of this Agreement.

19.5 Notices.

Any notice required or permitted hereunder shall be given in writing and shall be conclusively deemed effectively given upon personal delivery, or five days after deposit in the United States mail, by registered or certified mail, postage prepaid, addressed (i) if to the Company, as set forth below the Company's name on the signature page of this Agreement, and (ii) if to an Investor, at such Investor's address as set forth on Schedule A, or at such other address as the Company or such Investor may designate by ten (10) days' advance written notice to the Investors or the Company, respectively.

17

19.6 Amendment of Agreement.

Any provision of this Agreement may be amended only by a written instrument signed by the Company and by persons holding at least sixty percent (60%) of the Registrable Securities as defined in Section 1 of this Agreement.

19.7 Severability.

In case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

18

IN WITNESS WHEREOF, the parties hereto have executed this Second Amended and Restated Information and Registration Rights Agreement as of the day and year first above written.

COMPANY: PORTABLE SOFTWARE CORPORATION

A Washington Corporation

By /s/ STEVEN SINGH
  -----------------------------------
  S. Steven Singh, President

Address: 6222 185th Avenue Redmond, WA 98052

INVESTORS:                             RRE INVESTORS, L.P.
                                       By:  RRE Investors II, LLC,
                                              its General Partner



                                       By /s/ ANDREW ZALASIN
                                         -----------------------------------
                                         Name:  Andrew Zalasin
                                         Title: Member General Partner

RRE INVESTORS FUND, L.P.
By: RRE Investors Fund GP, L.P.,
its General Partner

By: RRE Investors Fund LDC,
its General Partner

By /s/ ANDREW ZALASIN
  -----------------------------------
  Name:  Andrew Zalasin
  Title: Member, General Partner


IN WITNESS WHEREOF, the parties hereto have executed this Second Amended and Restated Information and Registration Rights Agreement as of the day and year first above written.

COMPANY: PORTABLE SOFTWARE CORPORATION

A Washington Corporation

By:
S. Steven Singh, President

Address: 6222 185th Avenue
Redmond, WA 98052

INVESTOR: AMERICAN EXPRESS TRAVEL RELATED

SERVICES COMPANY, INC.

By: /s/ ANN BUSQUET
   -----------------------------------
   Name:   Ann Busquet
   Title:  President, American Express
           Relationship Services


IN WITNESS WHEREOF, the parties hereto have executed this Second Amended and Restated Information and Registration Rights Agreement as of the day and year first above written.

COMPANY: PORTABLE SOFTWARE CORPORATION

A Washington Corporation

By_________________________________
S. Steven Singh, President

Address: 6222 185th Avenue
Redmond, WA 98052

INVESTORS:                             U.S.V.P. ENTREPRENEUR PARTNERS II, L.P.
                                       A Delaware Limited Partnership

                                       U.S. VENTURE PARTNERS IV, L.P.

                                       SECOND VENTURES II, L.P.

                                       By: Presidio Management Group IV, L.P.
                                           Their General Partner


                                       By:__________________________________
                                       Title:_______________________________

                                       Address:   2180 Sand Hill Road, Suite 300
                                                  Menlo Park, CA 94025


IN WITNESS WHEREOF, the parties hereto have executed this Second Amended and Restated Information and Registration Rights Agreement as of the day and year first above written.

COMPANY:                               PORTABLE SOFTWARE CORPORATION
                                       A Washington Corporation


                                       By:
                                          ---------------------------------
                                           S. Steven Singh, President

INVESTOR:                              INSTITUTIONAL VENTURE
                                       PARTNERS VII, L.P.
                                       by its General Partner
                                       Institutional Venture Management VII,
                                       L.P.


                                       By: /s/ T. PETER THOMAS
                                          ---------------------------------
                                           T. Peter Thomas, A General
                                           Partner

                                       Address:  3000 Sand Hill Road
                                                 Building Two, Suite 290
                                                 Menlo Park, CA  94025

INVESTOR:                              IVP FOUNDERS FUND I, L.P.
                                       by its General Partner
                                       Institutional Venture Management VI, L.P.


                                       By: /s/ T. PETER THOMAS
                                          ---------------------------------
                                           T. Peter Thomas, A General
                                           Partner

                                       Address:  3000 Sand Hill Road
                                                 Building Two, Suite 290
                                                 Menlo Park, CA  94025

INVESTOR:                              INSTITUTIONAL VENTURE MANAGEMENT VII,
                                       L.P.

                                       By: /s/ T. PETER THOMAS
                                          ---------------------------------
                                           T. Peter Thomas, A General
                                           Partner

                                       Address:  3000 Sand Hill Road
                                                 Building Two, Suite 290
                                                 Menlo Park, CA  94025


IN WITNESS WHEREOF, the parties hereto have executed this Second Amended and Restated Information and Registration Rights Agreement as of the day and year first above written.

COMPANY: PORTABLE SOFTWARE CORPORATION

A Washington Corporation

By_________________________________
S. Steven Singh, President

Address: 6222 185th Avenue
Redmond, WA 98052

INVESTOR:                              BRENTWOOD ASSOCIATES VI, L.P.

                                       By:  Brentwood VI Ventures, L.P.
                                            Its General Partner


                                       By:________________________________
                                          General Partner

                                       Address:  3000 Sand Hill Road
                                                 Building One, Suite 260
                                                 Menlo Park, CA  94025-7068


IN WITNESS WHEREOF, the parties hereto have executed this Second Amended and Restated Information and Registration Rights Agreement as of the day and year first above written.

COMPANY: PORTABLE SOFTWARE CORPORATION

A Washington Corporation

By:
S. Steven Singh, President

Address: 6222 185th Avenue
Redmond, WA 98052

INVESTORS:                              MAYFIELD ASSOCIATES FUND III
                                        A California Limited Partnership

                                        MAYFIELD VIII
                                        A California Limited Partnership

                                        By: MAYFIELD VIII MANAGEMENT, L.L.C.
                                            A Delaware Limited Liability Company
                                            Their General Partner


                                        By: /s/ MICHAEL LEVINTHAL
                                           ---------------------------------
                                         Title: Managing Member

                                         Address: 2800 Sand Hill Road, Suite 250
                                                  Menlo Park, CA 94025


IN WITNESS WHEREOF, the parties hereto have executed this Second Amended and Restated Information and Registration Rights Agreement as of the day and year first above written.

COMPANY: PORTABLE SOFTWARE CORPORATION

A Washington Corporation

By:
S. Steven Singh, President

Address: 6222 185th Avenue
Redmond, WA 98052

INVESTOR:                              COMDISCO, INC.


                                       By: /s/ JAMES P. LABE
                                          ---------------------------------
                                       Title: James P. Labe, President
                                              Comdisco Ventures Division

                                       Address:  3000 Sand Hill Road
                                                 Building 1, Suite 155
                                                 Menlo Park, CA  94025


IN WITNESS WHEREOF, the parties hereto have executed this Second Amended and Restated Information and Registration Rights Agreement as of the day and year first above written.

COMPANY: PORTABLE SOFTWARE CORPORATION

A Washington Corporation

By:
S. Steven Singh, President

Address: 6222 185th Avenue
Redmond, WA 98052

INVESTOR:                              CAMBRIDGE TECHNOLOGY CAPITAL
                                       FUND I, L.P.

                                       By:  Cambridge Technology GPLP, L.P.
                                       By:  Cambridge Technology CGP, Inc.


                                       By: /s/ BARRY ROSENBAUM
                                          ---------------------------------
                                          Barry Rosenbaum, Managing Director

                                       Address:  11512 El Camino Real, Suite 215
                                                 San Diego, CA 92130-2046


IN WITNESS WHEREOF, the parties hereto have executed this Second Amended and Restated Information and Registration Rights Agreement.

COMPANY:                               PORTABLE SOFTWARE CORPORATION
                                       A Washington Corporation


                                       By:
                                          -------------------------------------
                                          S. Steven Singh, President

                                       Address:     6222 185th Avenue
                                                    Redmond, WA  98052


INVESTOR:                              BRENTWOOD AFFILIATES FUND II, L.P.

By: Brentwood VII Ventures, LLC Its General Partner

By: /s/ JEFFREY BRODY
   -------------------------------------
   Managing Member

Address:     3000 Sand Hill Road
             Building One, Suite 260
             Menlo Park, CA  94025-7068


1. /s/ JEFFREY BRODY
   -------------------------------------
   (Signature)

Jeffrey Brody
(Print Name)

2. /s/ JAMES MONGIELLO
   -------------------------------------
   (Signature)

James Mongiello
(Print Name)

3. /s/ ERIC CHIU
   -------------------------------------
   (Signature)

Eric Chiu
(Print Name)

4. ________________________________
(Signature)

(Print Name)

5. ________________________________
(Signature)

(Print Name)

IN WITNESS WHEREOF, the parties hereto have executed this Second Amended and Restated Information and Registration Rights Agreement.

COMPANY:                               PORTABLE SOFTWARE CORPORATION
                                       A Washington Corporation


                                       By:
                                          -------------------------------------
                                          S. Steven Singh, President

                                       Address:     6222 185th Avenue
                                                    Redmond, WA  98052

INVESTORS:

                                       /s/ STEVE SINGH
                                       ----------------------------------------
                                       S. Steven Singh

                                       /s/ MICHAEL W. HILTON
                                       ----------------------------------------
                                       Michael W. Hilton

                                       /s/ STERLING WILSON
                                       ----------------------------------------
                                       Sterling Wilson

                                       /s/ JON MATSUO
                                       ----------------------------------------
                                       Jon Matsuo

                                       /s/ RAJ SINGH
                                       ----------------------------------------
                                       Raj Singh

                                       /s/ FREDERICK L. INGHAM
                                       ----------------------------------------
                                       Fred Ingham

                                       6222 185th Avenue NE
                                       Redmond, WA  98052


INVESTOR:                              HAMBRECHT & QUIST LLC


                                       By: /s/ LISA L. LEWIS
                                          -----------------------------------

                                       Name: Lisa L. Lewis
                                            ---------------------------------

                                       Title: Controller, Attorney-in-Fact
                                             --------------------------------

                                       Address:     One Bush Street
                                                    San Francisco, CA  94104


IN WITNESS WHEREOF, the parties hereto have executed this Second Amended and Restated Information and Registration Rights Agreement.

COMPANY:                               PORTABLE SOFTWARE CORPORATION
                                       A Washington Corporation


                                       By:
                                          --------------------------------------
                                          S. Steven Singh, President

INVESTOR:

/s/ JEFFREY D. BRODY
-----------------------------------------
Jeffrey D. Brody

Address: c/o Brentwood Venture Capital 3000 Sand Hill Road Building 1, Suite 260 Menlo Park, CA 94025

INVESTOR:

/s/ MATTHEW P. QUILTER
-----------------------------------------
Matthew P. Quilter

Address: c/o Fenwick & West LLP Two Palo Alto Square Palo Alto, CA 94306


IN WITNESS WHEREOF, the parties hereto have executed this Second Amended and Restated Information and Registration Rights Agreement.

COMPANY:                               PORTABLE SOFTWARE CORPORATION
                                       A Washington Corporation


                                       By:
                                          --------------------------------------
                                           S. Steven Singh, President

INVESTOR:

/s/ CHRISTINA MORGAN
-----------------------------------------
Name: Christina Morgan
     ------------------------------------

/s/ DAN RIMER
-----------------------------------------
Name: Dan Rimer
     ------------------------------------

/s/ ANDREW KEARNS
-----------------------------------------
Name: Andrew Kearns
     ------------------------------------


Name:


Name:

Address: c/o Hambrecht & Quist LLC One Bush Street San Francisco, CA 94104


IN WITNESS WHEREOF, the parties hereto have executed this Second Amended and Restated Information and Registration Rights Agreement.

COMPANY:                               PORTABLE SOFTWARE CORPORATION
                                       A Washington Corporation


                                       By:
                                          --------------------------------------
                                          S. Steven Singh, President

INVESTORS:

/s/ JAMES MONGIELLO
-----------------------------------------
James Mongiello

/s/ ERIC CHIU
-----------------------------------------
Eric Chiu

Address: c/o Brentwood Venture Capital 3000 Sand Hill Road Building 1, Suite 260 Menlo Park, CA 94025


Schedule A

To Portable Software Corporation

Second Amended and Restated Information and Registration Rights Agreement

------------------------------------------------- ------------------------- ------------------------
INVESTOR NAME & ADDRESS                               PREFERRED STOCK              NUMBER OF SHARES
------------------------------------------------- ------------------------- ------------------------
Brentwood Affiliates Fund II, L.P.                        Series E                          170,632
Brentwood Associates VI, L.P.                             Series A                        3,824,092
3000 Sand Hill Road                                       Series B                          781,250
Building One, Suite 260                                   Series C                          593,750
Menlo Park, CA  94025                                     Series D                          338,447
  Attn:  Jeffrey D. Brody
------------------------------------------------- ------------------------- ------------------------
Jeffrey D. Brody                                          Series E                            9,678
c/o Brentwood Venture Capital
3000 Sand Hill Road
Building Two, Suite 290
Menlo Park, CA  94025-7068
------------------------------------------------- ------------------------- ------------------------
Cambridge Technology Capital Fund I, L.P.                 Series E                          161,290
11512 El Camino Real, Suite 215
San Diego, CA  92130-2046
  Attn:  Barry Rosenbaum
  Managing Director
------------------------------------------------- ------------------------- ------------------------
Eric Chiu                                                 Series E                            3,226
c/o Brentwood Venture Capital
3000 Sand Hill Road
Building Two, Suite 290
Menlo Park, CA  94025-7068
------------------------------------------------- ------------------------- ------------------------
Comdisco, Inc.                                            Series D                          106,165
3000 Sand Hill Road                                       Series E                           80,645
Building One, Suite 155
Menlo Park, CA  94025
  Attn:  James P. Labe
------------------------------------------------- ------------------------- ------------------------
Hambrecht & Quist California                              Series E                           51,614
One Bush Street
San Francisco, CA  94104
  Attn:  Jeff Fulcher
------------------------------------------------- ------------------------- ------------------------


------------------------------------------------- ------------------------- ------------------------
INVESTOR NAME & ADDRESS                               PREFERRED STOCK              NUMBER OF SHARES
------------------------------------------------- ------------------------- ------------------------
Michael W. Hilton                                         Series C                          175,975
c/o Portable Software Corporation                         Series E                            9,678
6222 185th Avenue, NE
Redmond, WA  98052
------------------------------------------------- ------------------------- ------------------------
Fred Ingham                                               Series E                            6,425
c/o Portable Software Corporation
6222 185th Avenue, NE
Redmond, WA  98052
------------------------------------------------- ------------------------- ------------------------
Institutional Venture Management VII, LP                  Series C                           75,000
3000 Sand Hill Road                                       Series D                            6,510
Building Two, Suite 290                                   Series E                            3,605
Menlo Park, CA  94025
  Attn:  Norman A. Fogelsong
------------------------------------------------- ------------------------- ------------------------
Institutional Venture Partners VII, LP                    Series C                        4,750,000
3000 Sand Hill Road                                       Series D                          307,584
Building Two, Suite 290                                   Series E                          174,821
Menlo Park, CA  94025
  Attn:  Norman A. Fogelsong
------------------------------------------------- ------------------------- ------------------------
IVP Founders Fund I, L.P.                                 Series C                           75,000
3000 Sand Hill Road                                       Series D                           11,392
Building Two, Suite 290                                   Series E                            1,802
Menlo Park, CA  94025
  Attn:  Norman A. Fogelsong
------------------------------------------------- ------------------------- ------------------------
Andrew Kearns                                             Series E                              806
c/o Hambrecht & Quist LLC
One Bush Street
San Francisco, CA 94104
------------------------------------------------- ------------------------- ------------------------
Jon Matsuo                                                Series E                            6,452
c/o Portable Software Corporation
6222 185th Avenue, NE
Redmond, WA  98052
------------------------------------------------- ------------------------- ------------------------
Mayfield Associates Fund III                              Series C                          156,250
2800 Sand Hill Road, Suite 250                            Series D                          100,914
Menlo Park, CA  94025                                     Series E                            8,734
  Attn:  Mike Levinthal
------------------------------------------------- ------------------------- ------------------------

-2-

------------------------------------------------- ------------------------- ------------------------
INVESTOR NAME & ADDRESS                               PREFERRED STOCK              NUMBER OF SHARES
------------------------------------------------- ------------------------- ------------------------
Mayfield VIII                                             Series C                        2,968,750
2800 Sand Hill Road, Suite 250                            Series D                        1,917,359
Menlo Park, CA  94025                                     Series E                          165,949
  Attn:  Mike Levinthal
------------------------------------------------- ------------------------- ------------------------
James Mongiello                                           Series E                            3,226
c/o Brentwood Venture Capital
3000 Sand Hill Road
Building Two, Suite 290
Menlo Park, CA  94025-7068
------------------------------------------------- ------------------------- ------------------------
Cristina M. Morgan                                        Series E                            6,613
c/o Hambrecht & Quist LLC
One Bush Street
San Francisco, CA 94104
------------------------------------------------- ------------------------- ------------------------
Matthew P. Quilter                                        Series E                            3,226
c/o Fenwick & West LLP
Two Palo Alto Square
Palo Alto, CA  94306
------------------------------------------------- ------------------------- ------------------------
Daniel H. Rimer                                           Series E                            4,839
c/o Hambrecht & Quist LLC
One Bush Street
San Francisco, CA 94104
------------------------------------------------- ------------------------- ------------------------
RRE Investors, L.P.                                       Series E                        1,040,218
RRE Investors Fund, L.P.                                  Series E                          572,685
126 East 56th Street
New York, NY  10022
  Attn:  Andrew L. Zalasin
------------------------------------------------- ------------------------- ------------------------
Second Ventures II, L.P.                                  Series B                          410,156
2180 Sand Hill Road, Suite 300                            Series C                           65,625
Menlo Park, CA  94025                                     Series D                           41,999
------------------------------------------------- ------------------------- ------------------------
The Schuster Revocable Trust                              Series C                           31,250
  dtd 2/10/95
c/o Brentwood Venture Capital
3000 Sand Hill Road
Bldg. One, Suite 260
Menlo Park, CA  94025-7068
------------------------------------------------- ------------------------- ------------------------

-3-

------------------------------------------------- ------------------------- ------------------------
INVESTOR NAME & ADDRESS                               PREFERRED STOCK              NUMBER OF SHARES
------------------------------------------------- ------------------------- ------------------------
Rajeev Singh                                              Series E                            6,452
c/o Portable Software Corporation
6222 185th Avenue, NE
Redmond, WA  98052
------------------------------------------------- ------------------------- ------------------------
S. Steven Singh                                           Series C                          161,326
c/o Portable Software Corporation                         Series E                            9,678
6222 185th Avenue, NE
Redmond, WA  98052
------------------------------------------------- ------------------------- ------------------------
USVP Entrepreneur Partners II, L.P.                       Series B                          117,188
2180 Sand Hill Road, Suite 300                            Series C                           18,750
Menlo Park, CA  94025                                     Series D                           12,000
------------------------------------------------- ------------------------- ------------------------
U.S. Venture Partners IV, L.P.                            Series B                        3,378,906
2180 Sand Hill Road, Suite 300                            Series C                          540,625
Menlo Park, CA  94025                                     Series D                          345,987
------------------------------------------------- ------------------------- ------------------------
Sterling Wilson                                           Series E                            6,452
c/o Portable Software Corporation
6222 185th Avenue, NE
Redmond, WA  98052
------------------------------------------------- ------------------------- ------------------------

-4-

EXHIBIT 10.01

1994 STOCK OPTION PLAN
OF
CONCUR TECHNOLOGIES, INC.

[LOGO]


TABLE OF CONTENTS

                                                                              Page
1.   PURPOSE OF THE PLAN....................................................   1

2.   ELIGIBLE PERSONS.......................................................   1

3.   STOCK SUBJECT TO THIS PLAN.............................................   1

4.   ADMINISTRATION.........................................................   1

5.   GRANTING OF OPTIONS; OPTION AGREEMENT..................................   2

6.   TERMS AND CONDITIONS OF OPTIONS........................................   3
     6.1    Terms and Conditions to Which All Options are Subject...........   3
            6.1.1      Changes in Capital Structure.........................   3
            6.1.2      Corporate Transactions...............................   3
            6.1.3      Time of Option Exercise..............................   4
            6.1.4      Option Grant Date....................................   4
            6.1.5      Nonassignability of Option Rights....................   4
            6.1.6      Payment..............................................   4
            6.1.7      Termination of Employment............................   5
            6.1.8      Repurchase of Stock..................................   5
            6.1.9      Withholding and Employment Taxes.....................   6
            6.1.10     Other Provisions.....................................   6
            6.1.11     Determination of Value...............................   7
            6.1.12     Option Term..........................................   7
            6.1.13     Exercise Price.......................................   7
     6.2    Term and Conditions to Which Only NQOs Are Subject..............   7
            6.2.1      Exercise Price.......................................   7
     6.3    Terms and Conditions to Which only ISOs Are Subject.............   8
            6.3.1      Exercise Price.......................................   8
            6.3.2      Disqualifying Dispositions...........................   8
            6.3.3      Grant Date...........................................   8
            6.3.4      Vesting..............................................   8
            6.3.5      Term.................................................   8

7.   MANNER OF EXERCISE.....................................................   7

8.   EMPLOYMENT OR CONSULTING RELATIONSHIP..................................   8

9.   CONDITIONS UPON ISSUANCE OF SHARES.....................................   8

10.  NONEXCLUSIVITY OF THE PLAN.............................................   8

11.  MARKET STANDOFF........................................................   8

12.  AMENDMENTS TO PLAN.....................................................   8

13.  EFFECTIVE DATE OF PLAN.................................................   9

i

1994 STOCK OPTION PLAN
OF
CONCUR TECHNOLOGIES, INC.

1. PURPOSE OF THE PLAN

The purposes of the 1994 Stock Option Plan (the "Plan") of Concur Technologies, Inc. (formerly Portable Software Corporation), a Washington corporation (the "Company"), are to:

(a) Encourage selected employees, directors and consultants to improve operations and increase profits of the Company;

(b) Encourage selected employees, directors and consultants to accept or continue employment or association with the Company or its Affiliates; and

(c) Increase the interest of selected employees, directors and consultants in the Company's welfare through participation in the growth in value of the common stock of the Company (the "Common Stock").

Options granted under this Plan ("Options") may be "incentive stock option" ("ISOs") intended to satisfy the requirements of section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or "nonqualified options" ("NQOs").

2. ELIGIBLE PERSONS

Every person who at the date of grant of an Option is a full-time employee of the Company or of any Affiliate (as defined below) of the Company is eligible to receive NQOs or ISOs under this Plan. Every person who at the date of grant is a consultant to, or non-employee director of, the Company or any Affiliate (as defined below) of the Company is eligible to receive NQOs under this Plan. The term "Affiliate" as used in the Plan means a parent or subsidiary corporation as defined in the applicable provisions (currently Sections 424(e) and (f), respectively) of the Code. The term "employee" includes an officer or director who is an employee, of the Company. The term "consultant" includes persons employed by, or otherwise affiliated with, a consultant.

3. STOCK SUBJECT TO THIS PLAN

Subject to the provisions of Section 6.1.1 of the Plan, the total number of shares of stock which may be issued under options granted pursuant to this Plan shall not exceed 375,000 shares of Common Stock. The shares covered by the portion of any grant under the Plan, which expires unexercised, shall become available again for grants under the Plan.

4. ADMINISTRATION

(a) This Plan shall be administered by the Board of Directors of the Company (the "Board") or, either in its entirety or only insofar as required pursuant to Section 4(b) hereof, by a committee (the "Committee") of at least two Board members to which administration of the Plan, is delegated (in either case, the "Administrator").


(b) From and after such time as the Company registers a class of equity securities under Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), it is intended hat this Plan shall be administered in accordance with the disinterested administration requirements of Rule 16b-3 promulgated by the Securities and Exchange Commission ("Rule 16b-3"), or any successor rule thereto.

(c) Subject to the other provisions of this Plan, the Administrator shall have the authority, in its discretion: (i) to grant Options; (ii) to determine the fair market value of the Common Stock subject to Options; (iii) to determine the exercise price of Options granted; (iv) to determine the persons to whom, and the time or times at which, Options shall be granted, and the number of shares subject to each Option; (v) to interpret this Plan; (vi) to prescribe, amend, and rescind rules and regulations relating to this Plan; (vii) to determine the terms and provisions of each Option granted (which need not be identical), including but not limited to, the time or times at which Options shall be exercisable; (viii) with the consent of the optionee, to modify or amend any Option; (ix) to defer (with the consent of the optionee) the exercise date of any option; (x) to authorize any person to execute on behalf of the Company any instrument evidencing the grant of an Option; and (xi) to make all other determinations deemed necessary or advisable for the administration of this Plan. The Administrator may delegate nondiscretionary administrative duties to such employees of the Company as it deems proper.

(d) All questions of interpretation, implementation, and application of this Plan shall be determined by the Administrator. Such determinations shall be final and binding on all persons.

(e) With respect to persons subject to Section 16 of the Exchange Act, if any, transactions under this Plan are intended to comply with the applicable conditions of Rule 16b-3, or any successor rule thereto. To the extent any provision of this Plan or action by the Administrator fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Administrator. Notwithstanding the above, it shall be the responsibility of such persons, not of the Company or the Administrator, to comply with the requirements of Section 16 of the Exchange Act; and neither the Company nor the Administrator shall be liable if this Plan or any transaction under this Plan fails to comply with the applicable conditions of Rule 16b-3 or any successor rule thereto, or if any such person incurs any liability under
Section 16 of the Exchange Act.

5. GRANTING OF OPTIONS; OPTION AGREEMENT

(a) No Options shall be granted under this Plan after ten years from the date of adoption of this Plan by the Board.

(b) Each Option shall be evidenced by a written stock option agreement, in form satisfactory to the Company, executed by the Company and the person to whom such Option is granted; provided, however, that the failure by the Company, the optionee, or both to execute such an agreement shall not invalidate the granting of an Option, although te exercise of each option shall be subject to Section 6.1.3.

(c) The stock option agreement shall specify whether each Option it evidences is NQO or an ISO.

(d) Subject to Section 6.3.3 with respect to ISOs, the Administrator may approve the grant of Options under this Plan to persons who are expected to become employees, directors or consultants of the Company, but are not employees, directors or consultants at the date of approval.

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6. TERMS AND CONDITIONS OF OPTIONS

Each Option granted under this Plan shall be subject to the terms and conditions set forth in Section 6.1. NQOs shall be also subject to the terms and conditions set forth in Section 6.2, but not those set forth in Section 6.3. ISOs shall also be subject to the terms and conditions set forth in Section 6.3, but not those set forth in Section 6.2.

6.1 Terms and Conditions to Which All Options Are Subject. All Options granted under this Plan shall be subject to the following terms and conditions:

6.1.1 Changes in Capital Structure. Subject to Section 6.1.2, if the stock of the Company is changed by reason of stock split, reverse stock split, stock dividend, or recapitalization, combination or reclassification, appropriate adjustments shall be made by the Board in (a) the number and class of shares of stock subject to this Plan and each Option outstanding under this Plan, and (b) the exercise price of each outstanding Option; provided, however, that the Company shall not be required to issue fractional shares as a result of any such adjustments. Each such adjustment shall be subject to approval by the Board in its sole discretion.

6.1.2 Corporate Transactions. Except as provided in subsequent sentences of this Section 6.1.2, upon a merger, consolidation, acquisition of property or stock, reorganization or liquidation of the Company, as a result of which the shareholders of the Company receive cash, stock or other property in exchange for their shares of Common Stock, any option granted hereunder shall terminate, provided that the Optionee shall have the right immediately prior to any such merger, consolidation, acquisition of property or stock, reorganization, or liquidation to exercise his or her option in whole or in part whether or not the vesting requirement set forth in the option agreement have been satisfied. If the shareholders of the Company receive capital stock of another corporation ("Exchange Stock") in exchange for their shares of Common Stock in any transaction involving a merger, consolidation, acquisition of property or stock, or reorganization, all options granted hereunder shall terminate in accordance with the provisions of the preceding sentence unless the Board of Directors and the corporation issuing the Exchange Stock, in their sole discretion and subject to any required action by the shareholders of the Company and such corporation, agree that all such options granted hereunder are converted into options to purchase shares of Exchange Stock. The amount and price of such options shall be determined by adjusting the amount and price of the options granted hereunder in the same proportion as used for determining the number of shares of Exchange Stock the holders of the Common Stock received in such merger, consolidation, acquisition of property or stock, or reorganization. The vesting schedule set forth in the option agreement shall continue to apply to the options granted for the Exchange Stock.

6.1.3 Time of Option Exercise. Subject to Section 5 and
Section 6.3.4, Options granted under this Plan shall be exercisable (a) immediately as of the effective date of the stock option agreement granting the Option, or (b) in accordance with a schedule related to the date of the grant of the Option, the date of first employment, or such other date as may be set by the Administrator (in any case, the "Vesting Base Date") and specified in the written stock option agreement relating to such Option; provided, however, that the right to exercise an Option must vest at the rate of at least 20% per year over five years from the date the option was granted. In any case, no Option shall be exercisable until a written stock option agreement in form satisfactory to the Company is executed by the Company and the optionee.

6.1.4 Option Grant Date. Except in the case of advance approvals described in Section 5(d), the date of grant of an Option under this Plan shall be the date as of which the Administrator approves the grant.

3

6.1.5 Nonassignability of Option Rights. No Option granted under this Plan shall be assignable or otherwise transferable by the optionee except by will or by the laws of descent and distribution. During the life of the optionee, an Option shall be exercisable only by the optionee.

6.1.6 Payment. Except as provided below, payment in full, in cash, shall be made for all stock purchased at the time written notice of exercise of an Option is given to the Company, and proceeds of any payment shall constitute general funds of the Company. At the time an Option is granted or exercised, the Administrator, in the exercise of its absolute discretion after considering any tax or accounting consequences, may authorize any one or more of the following additional methods of payment:

(a) Acceptance of the optionee's full recourse promissory not for all or part of the Option price, payable on such terms and bearing such interest rate as determined by the Administrator (but in no event less than the minimum interest rate specified under the Code at which no additional interest would be imputed), which promissory not may be either secured or unsecured in such manner as the Administrator shall approve (including, without limitation, by a security interest in the shares of the Company);

(b) Delivery by the optionee of Common Stock already owned by the optionee for all or part of the Option price, provided the value (determined as set forth in Section 6.1.11) of such Common Stock is equal on the date of Exercise to the Option price, or such portion thereof as the optionee is authorized to pay by delivery of such stock; provided, however, that if any optionee has exercised any portion of any Option granted by the Company by delivery of Common Stock, the optionee may not, within six months following such exercise, exercise any Option granted under this Plan by delivery of Common Stock without the consent of the Administrator; and

(c) Any other consideration and method of payment to the extent permitted under the Washington Business Corporation Act.

6.1.7 Termination of Employment. If for any reason other than death or permanent and total disability, an optionee ceases to be employed by the Company or any of its Affiliates (such event being called "Termination"), Options held at the date of Termination (to the extent then exercisable) may be exercised in whole or in part at any time within three (3) months of the date of such Termination, or such other period as is specified in the Option Agreement (but in no event after the Expiration Date); provided, that if such exercise of the Option would result in liability for the optionee under Section 16(b) of the Exchange Act, then such three-month period automatically shall be extended until the tenth (10) day following the last date upon which optionee has any liability under Section 16(b) (but in no event after the Expiration Date). If an optionee dies or becomes permanently and totally disabled (within the meaning of Section
22(e) (3) of the Code) while employed by the Company or an Affiliate or within the period that the Option remains exercisable after Termination, Options then held (to the extent then exercisable) may be exercised, in whole or in part, by the optionee, by the optionee's personal representative or by the person to whom the Option is transferred by devise or the laws of descent and distribution, at any time within six (6) months after the death or six (6) months after the permanent and total disability of the optionee or any longer period specified in the Option Agreement (but in no event after the Expiration Date). For purposes of this Section 6.1.7, "employment" includes service as a director or as a consultant. For purposes of this Section 6.1.7, an optionee's employment shall not be deemed to terminate by reason of sick leave, military leave or other leave of absence approved by the Administrator, if the period of any such leave does not exceed 90 days or, if longer, if the optionee's right to reemployment by the Company or any Affiliate is guaranteed either contractually or by statute.

4

6.1.8 Repurchase of Stock. At the option of the Administrator, the stock to be delivered pursuant to the exercise of any Option granted to an employee, director or consultant under this Plan may be subject to a right of repurchase in favor of the Company with respect to any employee, or director or consultant whose employment, or director or consulting relationship with the Company is terminated. Such right of repurchase either:

(a) shall be at the Option exercise price and (i) shall lapse at the rate of at lease 20% per year over five (5) years from the date the Option is granted (without regard to the date it becomes exercisable), and must be exercised for cash or cancellation of purchase money indebtedness within 90 days of such termination and (ii) if the right is assignable by the Company, the assignee must pay the Company upon assignment of the right (unless the assignee is a 100% owned subsidiary of the Company or is an Affiliate) cash equal to the difference between the Option exercise price and the value (determined as set forth in Section 6.1.11) of the stock to be purchased if the Option exercise price is less than such value; or

(b) shall be a the higher of the Option exercise price or the value (determined as set forth in Section 6.1.11) of the stock being purchased on the date of termination, and must be exercised for cash or cancellation of purchase money indebtedness within 90 days of termination of employment, and such right shall terminate when the Company's securities become publicly traded.

Determination of the number of shares subject to any such right of repurchase shall be made as of the date the employee's employment by, director's director relationship with, or consultant's consulting relationship with, the Company terminates, not as of the date that any Option granted to such employee, director or consultant is thereafter exercised.

6.1.9 Withholding and Employment Taxes. At the time of exercise of an Option or at such other time as the amount of such obligations becomes determinable (the "Tax Date"), the optionee shall remit to the Company in cash all applicable federal and state withholding and employment taxes. If authorized by the Administrator in its sole discretion after considering any tax or accounting consequences, an optionee may elect to (i) deliver a promissory note on such terms as the Administrator deems appropriate, (ii) tender to the Company previously owned shares of Stock or other securities of the Company, or
(iii) have shares of Common Stock which are acquired upon exercise of the Option withheld by the Company to pay some or all of the amount of tax that is required by law to be withheld by the Company as a result of the exercise of such Option, subject to the following limitations:

(a) Any election pursuant to clause (iii) above by an optionee subject to Section 16 of the Exchange Act shall either (x) be made at least six months before the Tax Date and shall be irrevocable; or (y) shall be made in (or made earlier to take effect in) any ten-day period beginning on the third business day following the date of release for publication of the Company" quarterly or annual summary statements of earnings and shall be subject to approval by the Administrator, which approval may be given at any time after such election has been made. In addition, in the case of (y), the Option shall be held at least six months prior to the Tax Date.

(b) Any election pursuant to clause (ii) above, where the optionee is tendering Common Stock issued pursuant to the exercise of an Option, shall require that such shares be held at least six months prior to the Tax Date.

Any of the foregoing limitations may be waived (or additional limitations may be imposed) by the Administrator, in its sole discretion, if the Administrator determines that such foregoing limitations are not required (or that such additional limitations are required) in order that the transaction shall be exempt from Section 16(b) of the Exchange Act pursuant to Rule 16b-3, or any successor rule

5

thereto. In addition, any of the foregoing limitations may be waived by the Administrator, in its sole discretion, if the Administrator determines that Rule 16b-3, or any successor rule thereto, is not applicable to the exercise of the Option by the optionee or for any other reason.

Any securities tendered or withheld in accordance with this Section 6.1.9 shall be valued by the Company as of the Tax Date.

6.1.10 Other Provisions. Each Option granted under this Plan may contain such other terms, provisions, and conditions not inconsistent with this Plan as may be determined by the Administrator, and each ISO granted under this Plan shall include such provisions and conditions as are necessary to qualify the Option as an "incentive stock option" within the meaning of Section 422 of the Code. If Options provide for a right of first refusal in favor of the company with respect to stock acquired by employees, directors or consultants, such Options shall provide that the right of first refusal shall terminate upon the earlier of (i) the closing of the Company's initial registered public offering to the public generally, or (ii) the date ten years after the grant date as set forth in Section 6.1.4.

6.1.11 Determination of Value. For purposes of the Plan, the value of Common Stock or other securities of the Company shall be determined as follows:

(a) If the stock of the Company is listed on any established stock exchange or National Market System of the National Association of Securities Dealers, Inc. Automated Quotations System, its fair market value shall be the closing sales price for such stock or the closing bid if no sales were reported, as quoted on such system or exchange (or the largest such exchange) for the date the value is to be determined (or if there are no sales for such date, then for the last preceding business day on which there were sales), as reported in the Wall Street Journal or similar publication.

(b) If the stock of the Company is regularly quoted by a recognized securities dealer but selling prices are not reported, its fair market value shall be the mean between the high bid and low asked prices for the stock on the date the value is to be determined (or if there are no quoted prices for the date of grant, then for the last preceding business day on which there were quoted prices).

(c) In the absence of an established market for the stock, the fair market value thereof shall be determined in good faith by the Administrator, with reference to the Company's net worth, prospective earning power, dividend-paying capacity, and other relevant factors, including the goodwill of the Company, the economic outlook in the Company's industry, the Company's position in the industry and its management, and the values of stock of other corporations in the same or a similar line of business.

6.1.12 Option Term. Subject to Section 6.3.5, no Option shall be exercisable more than ten years after the date of grant, or such lesser period of time as is set forth in the stock option agreement (the end of the maximum exercise period stated in the stock option agreement is referred to in this Plan as the "Expiration Date").

6.1.13 Exercise Price. The exercise price of any Option granted to any person who owns, directly or by attribution under the Code currently Section 424(d), stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company or of any Affiliate (a "Ten Percent Stockholder") shall in no event be less than 110% of the fair market value (determined in accordance with Section 6.1.11) of the stock covered by the Option at the time the Option is granted.

6

6.2 Terms and Conditions to Which Only NQOs Are Subject. Options granted under this Plan which are designated as NQOs shall be subject to the following terms and conditions:

6.2.1 Exercise Price. Except as set forth in Section 6.1.13, the exercise price of a NQO shall be not less than 85% of the fair market value (determined in accordance with Section 6.1.11) of the stock subject to the Option on the date of grant.

6.3 Terms and Conditions to Which Only ISOs Are Subject. Options granted under this Plan which are designated as ISOs shall be subject to the following terms and conditions:

6.3.1 Exercise Price. Except as set forth in Section 6.1.13, the exercise price of an ISO shall be determined in accordance with the applicable provisions of the Code and shall in no even be less than the fair market value (determined in accordance with Section 6.1.11) of the stock covered by the Option at the time the Option is granted.

6.3.2 Disqualifying Dispositions. If stock acquired by exercise of an ISO granted pursuant to this Plan is disposed of in a "disqualifying disposition" within the meaning of Section 422 of the Code, the holder of the stock immediately before the disposition shall promptly notify the Company in writing of the date and terms of the disposition and shall provide such other information regarding the Option as the Company may reasonably require.

6.3.3 Grant Date. If an ISO is granted in anticipation of employment as provided in Section 5(d), the Option shall be deemed granted, without further approval, on the date the grantee assumes the employment relationship forming the basis for such grant, and, in addition, satisfies all requirements of this Plan for Options granted on that date.

6.3.4 Vesting. Notwithstanding any other provision of this Plan, ISOs granted under all incentive stock option plans of the Company and its subsidiaries may not "vest" for more than $100,000 In fair market value of stock (measured on the grant date(s)) in any calendar year. For purposes of the preceding sentence, an option "vests" when it first becomes exercisable. If, by their terms, such ISOs taken together would vest to a greater extent in a calendar year, and unless otherwise provided by the Administrator, the vesting limitation described above shall be applied by deferring the exercisability of those ISOs or portions of ISOs which have the highest per share exercise prices; but in no event shall more than $100,000 in fair market value of stock (measured on the grant date(s) vest in any calendar year. The ISOs or portions of ISOs whose exercisability is so deferred shall become exercisable on the first day of the first subsequent calendar year during which they may be exercised, as determined by applying these same principles and all other provisions of this Plan including those relating to the expiration and termination of ISOs. In no even, however, will the operation of this Section 6.3.4 cause an ISO to vest before its terms or, having vested, cease to be vested.

6.3.5 Term. Notwithstanding Section 6.1.12, no ISO granted to any Ten Percent Stockholder shall be exercisable more than five years after the date of grant.

7. MANNER OF EXERCISE

(a) An optionee wishing to exercise an Option shall give written notice to the Company at its principal executive office, to the attention of the officer of the Company designated by the Administrator, accompanied by payment of the exercise price as provided in Section 6.1.6. The date the Company receives written notice of an exercise hereunder accompanied by payment of the exercise price will be considered as the date such Option was exercised.

7

(b) Promptly after receipt of written notice of exercise of an Option, the Company shall, without stock issue or transfer taxes to the optionee or other person entitled to exercise the Option, deliver to the optionee or such other person a certificate or certificates for the requisite number of shares of stock. An optionee or permitted transferee of an optionee shall not have any privileges as a shareholder with respect to any shares of stock covered by the Option until the date of issuance (as evidenced by the appropriate entry on the books of the Company or a duly authorized transfer agent) of such shares.

8. EMPLOYMENT OR CONSULTING RELATIONSHIP

Nothing in this Plan or any Option granted thereunder shall interfere with or limit in any way the right of the Company or of any of its Affiliates to terminate any optionee's employment or consulting at any time, nor confer upon any optionee any right to continue in the employ of, or consult with, the Company or any of its Affiliates.

9. CONDITIONS UPON ISSUANCE OF SHARES

Shares of Common stock shall not be issued pursuant to the exercise of an Option unless the exercise of such Option and the issuance and delivery of such shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act of 1933, as amended (the "Securities Act").

10. NONEXCLUSIVITY OF THE PLAN

The adoption of the Plan shall not be construed as creating any limitations on the power of the Company to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options other than under the Plan.

11. MARKET STANDOFF

Each Optionee, if so requested by the Company or any representative of the underwriters in connection with any registration of the offering of any securities of the company under the Securities Act shall not sell or otherwise transfer any shares of Common Stock acquired upon exercise of Options during the 180-day period following the effective date of a registration statement of the company filed under the Securities Act; provided, however, that such restriction shall apply only to the first two registration statements of the Company to become effective under the Securities Act which includes securities to be sold on behalf of the Company to the public in an underwritten public offering under the Securities Act. The Company may impose stop-transfer instructions with respect to securities subject to the foregoing restriction until the end of such 180-day period.

12. AMENDMENTS TO PLAN

The Board may at any time amend, alter, suspend or discontinue this Plan. Without the consent of an optionee, no amendment, alteration, suspension or discontinuance may adversely affect outstanding Options except to conform this Plan and ISOs granted under this Plan to the requirements of federal or other tax laws relating to incentive stock options. No amendment, alteration, suspension or discontinuance shall require shareholder approval unless (a) shareholder approval is required to preserve incentive stock option treatment for federal income tax purposes, or (b) the Board otherwise concludes that shareholder approval is advisable.

8

13. EFFECTIVE DATE OF PLAN

This Plan shall become effective upon adoption by the Board provided, however, that no Option shall be exercisable unless and until written consent of the shareholders of the Company, or approval of shareholders of the Company voting at a validly called shareholders' meeting, is obtained within 12 months after adoption by the Board. If such shareholder approval is not obtained within such time, Options granted hereunder shall terminate and be of no force and effect from and after expiration of such 12-month period. Options may be granted and exercised under this Plan only after there has been compliance with all applicable federal and state securities laws.

Plan adopted by the Board of Directors on January 14, 1994. Plan approved by Shareholders on January 14, 1994.

9

CONCUR TECHNOLOGIES, INC.
1994 STOCK OPTION PLAN
INCENTIVE STOCK OPTION AGREEMENT

(A)  NAME OF OPTIONEE:  [Employee]
(B)  GRANT DATE:        07/29/98
(C)  NUMBER OF SHARES:  [M_of_shares]
(D)  EXERCISE PRICE:    $[Price]
(E)  VESTING BASE DATE: [start_date]
(F)  EFFECTIVE DATE:    07/29/98

THIS INCENTIVE STOCK OPTION AGREEMENT (the "Agreement"), is made and entered into as of the date set forth in Item F above (the "Effective Date") between Concur Technologies, Inc. (formerly Portable Software Corporation), a Washington corporation (the "Company") and the person named in Item A above ("Optionee").

THE PARTIES AGREE AS FOLLOWS:

1. Grant of Option; Vesting Base Date.

1.1 Grant. The Company hereby grants to Optionee pursuant to the Company's 1994 Stock Option Plan (the "Plan"), a copy of which is attached to this Agreement as Exhibit 1, an incentive stock option (the "ISO") to purchase all or any part of an aggregate of the number of shares (the "ISO Shares") of the Company's Common Stock (as defined in the Plan) listed in Item C above on the terms and conditions set forth herein and in the Plan, the terms and conditions of the Plan being hereby incorporated into this Agreement by reference.

1.2 Vesting Base Date. The parties hereby establish the date set forth in Item E above as the Vesting Base Date (as defined in Section 5.1 below).

2. Exercise Price. The exercise price for purchase of each share of Common Stock covered by this ISO shall be the price set forth in Item D above.

3. Term. Unless otherwise specified on Exhibit 3 attached hereto, if any (the absence of such exhibit indicating that no such exhibit was intended), this ISO shall expire as provided in Section 6.1.12 of the Plan.

4. Adjustment of ISOs. The Company shall adjust the number and kind of shares and the exercise price thereof in certain circumstances in accordance with the provisions of Section 6.1.1 of the Plan.

5. Exercise of Options.

5.1 Vesting; Time of Exercise. This ISO shall be exercisable according to the schedule set forth on Exhibit 5.1 attached hereto. Such schedule shall commence as of the date set forth in Item (E) above (the "Vesting Base Date").

5.2 Exercise After Termination of Status as an Employee, Director or Consultant. In the event of termination of Optionee's continuous status as an employee, director or consultant, this ISO may be exercised only in accordance with the provisions of Section 6.1.7 of the Plan.


5.3 Manner of Exercise. Optionee may exercise this ISO, or any portion of this ISO, by giving written notice to the Company at its principal executive office, to the attention of the officer of the Company designated by the Plan Administrator, accompanied by a copy of the 1994 Stock Option Plan Stock Purchase Agreement in substantially the form attached hereto as Exhibit 5.3 executed by Optionee (or at the option of the Company such other form of stock purchase agreement as shall then be acceptable to the Company), payment of the exercise price and payment of any applicable withholding or employment taxes. The date the Company receives written notice of an exercise hereunder accompanied by payment will be considered as the date this ISO was exercised.

5.4 Payment. Except as provided in Exhibit 5.4 attached hereto, if any (the absence of such exhibit indicating that no exhibit was intended), payment may be made for ISO Shares purchased at the time written notice of exercise of the ISO is given to the Company, by delivery of cash, check, previously owned shares of Common Stock (provided that delivery of previously owned shares may not be made more than once in any six-month period), or a full recourse promissory note equal to up to 90% of the exercise price and payable over no more than five years. The proceeds of any payment shall constitute general funds of the Company.

5.5 Delivery of Certificate. Promptly after receipt of written notice of exercise of the ISO, the Company shall, without stock issue or transfer taxes to the Optionee or other person entitled to exercise, deliver to the Optionee or other person a certificate or certificates for the requisite number of ISO Shares. An Optionee or transferee of an Optionee shall not have any privileges as a shareholder with respect to any ISO Shares covered by the option until the date of issuance of a stock certificate.

6. Nonassignability of ISO. This ISO is not assignable or transferable by Optionee except by will or by the laws of descent and distribution. During the life of Optionee, the ISO is exercisable only by the Optionee. Any attempt to assign, pledge, transfer, hypothecate or otherwise dispose of this ISO in a manner not herein permitted, and any levy of execution, attachment, or similar process on this ISO, shall be null and void.

7. Company's Repurchase Rights. The ISO Shares arising from exercise of this ISO shall be subject to a right of repurchase in favor of the Company (the "Right of Repurchase") to the extent set forth on Exhibit 7 attached hereto (the absence of such exhibit indicating that no such exhibit was intended and that the ISO shall be subject to the limitations set forth on Exhibit 5.1). If the Optionee's employment with the Company terminates before the Right of Repurchase lapses in accordance in accordance with Exhibit 7, the Company may purchase ISO shares subject to the Right of Repurchase (either by payment of cash or by cancellation of purchase money indebtedness) for an amount equal to the price the Optionee paid for such ISO Shares (exclusive of any taxes paid upon acquisition of the stock) by giving notice at any time within the later of (a) 30 days after the acquisition of the ISO Shares upon option exercise, or (b) 90 days after such termination of employment, that the Company is exercising its right of repurchase. The Company shall include with such notice payment in full in cash or by evidence of cancellation of purchase money indebtedness. The Optionee may not dispose of or transfer ISO Shares while such shares are subject to the Right of Repurchase and any such attempted transfer shall be null and void.

8. Company's Right of First Refusal.

8.1 Right of First Refusal. In the event that the Optionee proposes to sell, pledge, or otherwise transfer any ISO Shares or any interest in such shares to any person or entity, the Company shall have a right of first refusal (the "Right of First Refusal") with respect to such ISO Shares. If Optionee desires to transfer ISO Shares, Optionee shall give a written notice (the "Transfer Notice") to the Company describing fully the proposed transfer, including the number of ISO Shares proposed to be transferred, the proposed transfer price, and the name and address of the proposed transferee. The Transfer Notice shall be signed both by Optionee and by the proposed transferee and must constitute a binding commitment of both such parties for the transfer of such ISO Shares. The Company may elect to purchase all, but not less than all, of the ISO Shares subject to the Transfer Notice by delivery of a notice of exercise of the Company's Right of First Refusal within 30 days after the date the Transfer Notice is delivered to the Company. The purchase price paid

2

by the Company shall be the price per share equal to the proposed per share transfer price, and shall be paid to the Optionee within 60 days after the date the Transfer Notice is received by the Company, unless a longer period for payment was offered by the proposed transferee, in which case the Company shall pay the purchase price within such longer period. The Company's rights under this Section 8.1 shall be freely assignable, in whole or in part. Notwithstanding the foregoing, the Right of First Refusal does not apply to a transfer of shares by gift or devise to the Optionee's immediate family (i.e., parents, spouse or children or to a trust for the benefit of the Optionee or any of the Optionee's immediate family members), but does apply to any subsequent transfer of such shares by such immediate family members.

8.2 Transfer of ISO Shares. If the Company fails to exercise the Right of First Refusal within 30 days after the date the Transfer Notice is delivered to the Company, the Optionee may, not later than 75 days following delivery to the Company of the Transfer Notice, conclude a transfer of the ISO Shares subject to the Transfer Notice on the terms and conditions described in the Transfer Notice. Any proposed transfer on terms and conditions different from those described in the Transfer Notice, as well as any subsequent proposed transfer by the Optionee, shall again be subject to the Right of First Refusal and shall require compliance by the Optionee with the procedure described in Section 8.1 of this Agreement. If the Company exercises the Right of First Refusal, the parties shall consummate the sale of ISO Shares on the terms, other than price, as applicable under Section 8.1, set forth in the Transfer Notice; provided, however in the event the Transfer Notice provides for payment for the ISO Shares other than in cash, the Company shall have the option of paying for the ISO Shares by paying in cash the present value of the consideration described in the Transfer Notice; and further provided that if the value of noncash consideration is to be paid and the Optionee disagrees with the value determined by the Company, the Optionee may request an independent appraisal by an appraiser acceptable to the Optionee and the Company, the costs of such appraisal to be borne equally by the Optionee and the Company.

8.3 Binding Effect. The Right of First Refusal shall inure to the benefit of the successors and assigns of the Company and shall be binding upon any transferee of ISO Shares other than a transferee acquiring ISO Shares in a transaction where the Company failed to exercise the Right of First Refusal (a "Free Transferee") or a transferee of a Free Transferee.

8.4 Termination of Company's Right of First Refusal. Notwithstanding anything in this Section 8, the Company shall have no Right of First Refusal, and Optionee shall have no obligation to comply with the procedures in Sections 8.1 through 8.3 after the earlier of (i) the closing of the Company's initial public offering to the public generally, or (ii) the date ten (10) years after the Effective Date.

9. Market Standoff. Optionee hereby agrees that if so requested by the Company or any representative of the underwriters in connection with any registration of the offering of the securities of the Company under the Securities Act of 1933, as amended (the "Securities Act"), Optionee shall not sell or otherwise transfer the ISO Shares for a period of 180 days following the effective date of a Registration Statement filed under the Securities Act; provided that such restrictions shall only apply to the first two registration statements of the Company to become effective under the Securities Act which include securities to be sold on behalf of the Company in an underwritten public offering under the Securities Act. The Company may impose stop-transfer instructions with respect to the ISO Shares subject to the foregoing restrictions until the end of each such 180-day period.

10. Restriction on Issuance of Shares.

10.1 Legality of Issuance. The Company shall not be obligated to sell or issue any ISO Shares pursuant to this Agreement if such sale or issuance, in the opinion of the Company and the Company's counsel, might constitute a violation by the Company of any provision of law, including without limitation the provisions of the Securities Act.

10.2 Registration or Qualification of Securities. The Company may, but shall not be required to, register or qualify the sale of this ISO or any ISO Shares under the Securities Act or any other applicable law. The Company shall not be obligated to take any affirmative action in order to cause the grant or exercise of this option or the issuance or sale of any ISO Shares pursuant thereto to comply with any law.

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11. Restriction on Transfer. Regardless whether the sale of the ISO Shares has been registered under the Securities Act or has been registered or qualified under the securities laws of any state, the Company may impose restrictions upon the sale, pledge or other transfer of ISO Shares (including the placement of appropriate legends on stock certificates) if, in the judgment of the Company and the Company's counsel, such restrictions are necessary or desirable in order to achieve compliance with the provisions of the Securities Act, the securities laws of any state, or any other law, or if the Company does not desire to have a trading market develop for its securities.

12. Stock Certificate. Stock certificates evidencing ISO Shares may bear such restrictive legends as the Company and the Company's counsel deem necessary or advisable under applicable law or pursuant to this Agreement.

13. Disqualifying Dispositions. If stock acquired by exercise of this ISO is disposed of within two years after the Effective Date or within one year after date of such exercise (as determined under Section 5.3 of this Agreement), the Optionee immediately prior to the disposition shall promptly notify the Company in writing of the date and terms of the disposition and shall provide such other information regarding the disposition as the Company may reasonably require.

14. Representations, Warranties, Covenants, and Acknowledgments of Optionee Upon Exercise of ISO. Optionee hereby agrees that in the event that the Company and the Company's counsel deem it necessary or advisable in the exercise of their discretion, the issuance of ISO Shares may be conditioned upon certain representations, warranties, and acknowledgments by the person exercising the ISO (the "Purchaser"), including, without limitation, those set forth in Sections 14.1 through 14.8 inclusive:

14.1 Investment. Purchaser is acquiring the ISO Shares for Purchaser's own account, and not for the account of any other person. Purchaser is acquiring the ISO Shares for investment and not with a view to distribution or resale thereof except in compliance with applicable laws regulating securities.

14.2 Business Experience. Purchaser is capable of evaluating the merits and risks of Purchaser's investment in the Company evidenced by purchase of the ISO Shares.

14.3 Relation to Company. Purchaser is presently an officer, director, or other employee of, or consultant to the Company, and in such capacity has become personally familiar with the business, affairs, financial condition, and results of operations of the Company.

14.4 Access to Information. Purchaser has had the opportunity to ask questions of, and to receive answers from, appropriate executive officers of the Company with respect to the terms and conditions of the transaction contemplated hereby and with respect to the business, affairs, financial condition, and results of operations of the Company. Purchaser has had access to such financial and other information as is necessary in order for Purchaser to make a fully-informed decision as to investment in the Company by way of purchase of the ISO Shares, and has had the opportunity to obtain any additional information necessary to verify any of such information to which Purchaser has had access.

14.5 Speculative Investment. Purchaser's investment in the Company represented by the ISO Shares is highly speculative in nature and is subject to a high degree of risk of loss in whole or in part. The amount of such investment is within Purchaser's risk capital means and is not so great in relation to Purchaser's total financial resources as would jeopardize the personal financial needs of Purchaser or Purchaser's family in the event such investment were lost in whole or in part.

14.6 Registration. Purchaser must bear the economic risk of investment for an indefinite period of time because the sale to Purchaser of the ISO Shares has not been registered under the Securities Act and the ISO Shares cannot be transferred by Purchaser unless such transfer is registered under the Securities Act or an exemption from such registration is available. The Company has made no agreements, covenants, or undertakings whatsoever to register the transfer of any of the ISO Shares under the Securities Act. The Company has made no representations, warranties, or covenants whatsoever as to whether any exemption from

4

the Securities Act, including without limitation any exemption for limited sales in routine brokers' transactions pursuant to Rule 144, will be available; if the exemption under Rule 144 is available at all, it may not be available until at least two years after payment of cash for the ISO Shares and not then unless:
(i) a public trading market then exists in the Company's common stock; (ii) adequate information as to the Company's financial and other affairs and operations is then available to the public; and (iii) all other terms and conditions of Rule 144 have been satisfied. Purchaser understands that the resale provisions of Rule 701 will not apply until 90 days after the Company becomes subject to the reporting obligations of the Securities Exchange Act of 1934 (typically 90 days after the effective date of an initial public offering).

14.7 Public Trading. None of the Company's securities is presently publicly traded, and the Company has made no representation, covenant, or agreement as to whether there will be a public market for any of its securities.

14.8 Tax Advice. The Company has made no warranties or representations to Purchaser with respect to the income tax consequences of the transactions contemplated by the agreement pursuant to which the ISO Shares will be purchased and Purchaser is in no manner relying on the Company or its representatives for an assessment of such tax consequences.

15. Assignment; Binding Effect. Subject to the limitations set forth in this Agreement, this Agreement shall be binding upon and inure to the benefit of the executors, administrators, heirs, legal representatives, and successors of the parties hereto; provided, however, that Optionee may not assign any of Optionee's rights under this Agreement.

16. Damages. Optionee shall be liable to the Company for all costs and damages, including incidental and consequential damages, resulting from a disposition of ISO Shares which is not in conformity with the provisions of this Agreement.

17. Governing Law; Consent to Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Washington excluding those laws that direct the application of the laws of another jurisdiction. The parties agree that the exclusive jurisdiction and venue of any action with respect to this Agreement shall be in the Superior Court of Washington for the County of King or the United States District Court for the Western District of Washington, in either case as located in Seattle, and each of the parties submits itself to the exclusive jurisdiction and venue of such courts for the purpose of such action. The parties agree that service of process in any such action may be effected in the manner provided in this Agreement for delivery of notices.

18. Notices. All notices and other communications under this Agreement shall be in writing. Unless and until the Optionee is notified in writing to the contrary, all notices, communications, and documents directed to the Company and related to the Agreement, if not delivered by hand, shall be mailed, addressed as follows:

Concur Technologies, Inc.
6222 - 185th Avenue NE
Redmond, WA 98052

Unless and until the Company is notified in writing to the contrary, all notices, communications, and documents intended for the Optionee and related to this Agreement, if not delivered by hand, shall be mailed to Optionee's last known address as shown on the Company's books. Notices and communications shall be mailed by first class mail, postage prepaid; documents shall be mailed by registered mail, return receipt requested, postage prepaid. All mailings and deliveries related to this Agreement shall be deemed received when actually received, if by hand delivery, and two business days after mailing, if by mail.

19. Entire Agreement. This Agreement, together with the Plan and any stock purchase agreement relating to the purchase of ISO Shares, contains all of the terms and conditions agreed upon by the parties relating to its subject matter and supersedes any and all prior and contemporaneous agreements, negotiations, correspondence, understandings and communications of the parties, whether oral or written, respecting that subject matter.

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IN WITNESS WHEREOF, the parties have executed this Incentive Stock Option Agreement as of the Effective Date.

CONCUR TECHNOLOGIES, INC.

By

Anne Kroger

Title: Director of Finance and Operations

The Optionee hereby accepts and agrees to be bound by all of the terms and conditions of this Agreement and the Plan.


Employee

Dated: As of

Optionee's spouse indicates by the execution of this Incentive Stock Option Agreement his or her consent to be bound by the terms thereof as to his or her interests, whether as community property or otherwise, if any, in the option granted hereunder, and in any ISO Shares purchased pursuant to this Agreement.


Optionee's Spouse

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EXHIBITS

Exhibit 1                     1994 Stock Option Plan

Exhibit 3   (if applicable)   Expiration of Incentive Stock Option

Exhibit 5.1                   Time of Exercise

Exhibit 5.3                   1994 Stock Option Plan Stock Purchase Agreement

Exhibit 5.4 (if applicable)   Payment

Exhibit 7   (if applicable)   Right of Repurchase

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EXHIBIT 5.1 OF THE INCENTIVE STOCK OPTION AGREEMENT

The ISO shall be exercisable with respect to 25% of the total number of ISO Shares one year after the Vesting Base Date and, thereafter, with respect to an additional 1/36 of the remaining ISO Shares at the end of each month after the month of the first anniversary of Vesting Base Date, so that all of the ISO Shares may be purchased on and after the fourth anniversary of the Vesting Base Date.

CONCUR TECHNOLOGIES, INC.

By

Anne Kroger


Employee

8

EXHIBIT 5.3 OF THE INCENTIVE STOCK OPTION AGREEMENT

9

EXHIBIT 7 OF THE INCENTIVE STOCK OPTION AGREEMENT

[Intentionally Left Blank]

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EXHIBIT 10.02

CONCUR TECHNOLOGIES, INC.

1998 EQUITY INCENTIVE PLAN

As Adopted August 21, 1998

1. PURPOSE. The purpose of this Plan is to provide incentives to attract, retain and motivate eligible persons whose present and potential contributions are important to the success of the Company, its Parent and Subsidiaries, by offering them an opportunity to participate in the Company's future performance through awards of Options, Restricted Stock and Stock Bonuses. Capitalized terms not defined in the text are defined in Section 23.

2. SHARES SUBJECT TO THE PLAN.

2.1 Number of Shares Available. Subject to Sections 2.2 and 18, the total number of Shares reserved and available for grant and issuance pursuant to this Plan will be 8,100,000 Shares plus Shares that are subject to:
(a) issuance upon exercise of an Option but cease to be subject to such Option for any reason other than exercise of such Option; (b) an Award granted hereunder but are forfeited or are repurchased by the Company at the original issue price; or (c) an Award that otherwise terminates without Shares being issued. In addition, any authorized shares not issued or subject to outstanding grants under the Company's 1994 Stock Option Plan (the "PRIOR PLAN") on the Effective Date (as defined below) and any shares issued under the Prior Plan that are forfeited or repurchased by the Company or that are issuable upon exercise of options granted pursuant to the Prior Plan that expire or become unexercisable for any reason without having been exercised in full, will no longer be available for grant and issuance under the Prior Plan, but will be available for grant and issuance under this Plan. At all times the Company shall reserve and keep available a sufficient number of Shares as shall be required to satisfy the requirements of all outstanding Options granted under this Plan and all other outstanding but unvested Awards granted under this Plan. The total number of Shares issued under the Plan upon exercise of ISOs (as defined in
Section 5 below) will in no event exceed 25,000,000 Shares (adjusted in proportion to any adjustment under Section 2.2 below) over the term of the Plan.

2.2 Adjustment of Shares. In the event that the number of outstanding shares is changed by a stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination, reclassification or similar change in the capital structure of the Company without consideration, then (a) the number of Shares reserved for issuance under this Plan, (b) the Exercise Prices of and number of Shares subject to outstanding Options, and (c) the number of Shares subject to other outstanding Awards will be proportionately adjusted, subject to any required action by the Board or the stockholders of the Company and compliance with applicable securities laws; provided, however, that fractions of a Share will not be issued but will either be replaced by a cash payment equal to the Fair Market Value of such fraction of a Share or will be rounded up to the nearest whole Share, as determined by the Committee.

3. ELIGIBILITY. ISOs (as defined in Section 5 below) may be granted only to employees (including officers and directors who are also employees) of the Company or of a Parent or Subsidiary of the Company. All other Awards may be granted to employees, officers, directors, consultants, independent contractors and advisors of the Company or any Parent or Subsidiary of the Company; provided such consultants, contractors and advisors render bona fide services not in connection with the offer and sale of securities in a capital-raising transaction. No person will be eligible to receive more than 1,200,000 Shares in any calendar year under this Plan pursuant to the grant of Awards hereunder, other than new employees of the Company or of a Parent or Subsidiary of the Company (including new employees who are also officers and directors of the Company or any Parent or Subsidiary of the Company), who are eligible to receive up to a maximum of 1,500,000 Shares in the calendar year in which they commence their employment. A person may be granted more than one Award under this Plan.


Concur Technologies, Inc. 1998 Equity Incentive Plan

4. ADMINISTRATION.

4.1 Committee Authority. This Plan will be administered by the Committee or by the Board acting as the Committee. Subject to the general purposes, terms and conditions of this Plan, and to the direction of the Board, the Committee will have full power to implement and carry out this Plan. Without limitation, the Committee will have the authority to:

(a) construe and interpret this Plan, any Award Agreement and any other agreement or document executed pursuant to this Plan;

(b) prescribe, amend and rescind rules and regulations relating to this Plan or any Award;

(c) select persons to receive Awards;

(d) determine the form and terms of Awards;

(e) determine the number of Shares or other consideration subject to Awards;

(f) determine whether Awards will be granted singly, in combination with, in tandem with, in replacement of, or as alternatives to, other Awards under this Plan or any other incentive or compensation plan of the Company or any Parent or Subsidiary of the Company;

(g) grant waivers of Plan or Award conditions;

(h) determine the vesting, exercisability and payment of Awards;

(i) correct any defect, supply any omission or reconcile any inconsistency in this Plan, any Award or any Award Agreement;

(j) determine whether an Award has been earned; and

(k) make all other determinations necessary or advisable for the administration of this Plan.

4.2 Committee Discretion. Any determination made by the Committee with respect to any Award will be made in its sole discretion at the time of grant of the Award or, unless in contravention of any express term of this Plan or Award, at any later time, and such determination will be final and binding on the Company and on all persons having an interest in any Award under this Plan. The Committee may delegate to one or more officers of the Company the authority to grant an Award under this Plan to Participants who are not Insiders of the Company.

5. OPTIONS. The Committee may grant Options to eligible persons and will determine whether such Options will be Incentive Stock Options within the meaning of the Code ("ISO") or Nonqualified Stock Options ("NQSOS"), the number of Shares subject to the Option, the Exercise Price of the Option, the period during which the Option may be exercised, and all other terms and conditions of the Option, subject to the following:

5.1 Form of Option Grant. Each Option granted under this Plan will be evidenced by an Award Agreement which will expressly identify the Option as an ISO or an NQSO ("STOCK OPTION AGREEMENT"), and will be in such form and contain such provisions (which need not be the same for each Participant) as the Committee may from time to time approve, and which will comply with and be subject to the terms and conditions of this Plan.

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Concur Technologies, Inc. 1998 Equity Incentive Plan

5.2 Date of Grant. The date of grant of an Option will be the date on which the Committee makes the determination to grant such Option, unless otherwise specified by the Committee. The Stock Option Agreement and a copy of this Plan will be delivered to the Participant within a reasonable time after the granting of the Option.

5.3 Exercise Period. Options may be exercisable within the times or upon the events determined by the Committee as set forth in the Stock Option Agreement governing such Option; provided, however, that no Option will be exercisable after the expiration of ten (10) years from the date the Option is granted; and provided further that no ISO granted to a person who directly or by attribution owns more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any Parent or Subsidiary of the Company ("TEN PERCENT STOCKHOLDER") will be exercisable after the expiration of five (5) years from the date the ISO is granted. The Committee also may provide for Options to become exercisable at one time or from time to time, periodically or otherwise, in such number of Shares or percentage of Shares as the Committee determines.

5.4 Exercise Price. The Exercise Price of an Option will be determined by the Committee when the Option is granted and may be not less than 85% of the Fair Market Value of the Shares on the date of grant; provided that:
(i) the Exercise Price of an ISO will be not less than 100% of the Fair Market Value of the Shares on the date of grant; and (ii) the Exercise Price of any ISO granted to a Ten Percent Stockholder will not be less than 110% of the Fair Market Value of the Shares on the date of grant. Payment for the Shares purchased may be made in accordance with Section 8 of this Plan.

5.5 Method of Exercise. Options may be exercised only by delivery to the Company of a written stock option exercise agreement (the "EXERCISE AGREEMENT") in a form approved by the Committee (which need not be the same for each Participant), stating the number of Shares being purchased, the restrictions imposed on the Shares purchased under such Exercise Agreement, if any, and such representations and agreements regarding Participant's investment intent and access to information and other matters, if any, as may be required or desirable by the Company to comply with applicable securities laws, together with payment in full of the Exercise Price for the number of Shares being purchased.

5.6 Termination. Notwithstanding the exercise periods set forth in the Stock Option Agreement, exercise of an Option will always be subject to the following:

(a) If the Participant is Terminated for any reason except death, Disability or Cause, then the Participant may exercise such Participant's Options only to the extent that such Options would have been exercisable upon the Termination Date no later than three (3) months after the Termination Date (or such shorter or longer time period not exceeding five (5) years as may be determined by the Committee, with any exercise beyond three (3) months after the Termination Date deemed to be an NQSO), but in any event, no later than the expiration date of the Options.

(b) If the Participant is Terminated because of Participant's death or Disability (or the Participant dies within three
(3) months after a Termination other than for Cause or because of Participant's Disability), then Participant's Options may be exercised only to the extent that such Options would have been exercisable by Participant on the Termination Date and must be exercised by Participant (or Participant's legal representative or authorized assignee) no later than twelve (12) months after the Termination Date (or such shorter or longer time period not exceeding five
(5) years as may be determined by the Committee, with any such exercise beyond (a) three (3) months after the Termination Date when the Termination is for any reason other than the Participant's death or Disability, or (b) twelve (12) months after the Termination Date when the Termination is for Participant's death or Disability, deemed to be an NQSO), but in any event no later than the expiration date of the Options.

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Concur Technologies, Inc. 1998 Equity Incentive Plan

(c) Notwithstanding the provisions in paragraph 5.6(a) above, if a Participant is terminated for Cause, then the Participant may exercise such Participant's Options, only to the extent that such Options would have been exercisable upon the Termination Date, no later than ten (10) days after the Termination Date, but in any event, no later than the expiration date of the Options. In making such determination, the Board shall give the Participant an opportunity to present to the Board evidence on his behalf.

5.7 Limitations on Exercise. The Committee may specify a reasonable minimum number of Shares that may be purchased on any exercise of an Option, provided that such minimum number will not prevent Participant from exercising the Option for the full number of Shares for which it is then exercisable.

5.8 Limitations on ISO. The aggregate Fair Market Value (determined as of the date of grant) of Shares with respect to which ISO are exercisable for the first time by a Participant during any calendar year (under this Plan or under any other incentive stock option plan of the Company, Parent or Subsidiary of the Company) will not exceed $100,000. If the Fair Market Value of Shares on the date of grant with respect to which ISO are exercisable for the first time by a Participant during any calendar year exceeds $100,000, then the Options for the first $100,000 worth of Shares to become exercisable in such calendar year will be ISO and the Options for the amount in excess of $100,000 that become exercisable in that calendar year will be NQSOs. In the event that the Code or the regulations promulgated thereunder are amended after the Effective Date of this Plan to provide for a different limit on the Fair Market Value of Shares permitted to be subject to ISO, such different limit will be automatically incorporated herein and will apply to any Options granted after the effective date of such amendment.

5.9 Modification, Extension or Renewal. The Committee may modify, extend or renew outstanding Options and authorize the grant of new Options in substitution therefor, provided that any such action may not, without the written consent of a Participant, impair any of such Participant's rights under any Option previously granted. Any outstanding ISO that is modified, extended, renewed or otherwise altered will be treated in accordance with
Section 424(h) of the Code. The Committee may reduce the Exercise Price of outstanding Options without the consent of Participants affected by a written notice to them; provided, however, that the Exercise Price may not be reduced below the minimum Exercise Price that would be permitted under Section 5.4 of this Plan for Options granted on the date the action is taken to reduce the Exercise Price.

5.10 No Disqualification. Notwithstanding any other provision in this Plan, no term of this Plan relating to ISO will be interpreted, amended or altered, nor will any discretion or authority granted under this Plan be exercised, so as to disqualify this Plan under Section 422 of the Code or, without the consent of the Participant affected, to disqualify any ISO under
Section 422 of the Code.

6. RESTRICTED STOCK. A Restricted Stock Award is an offer by the Company to sell to an eligible person Shares that are subject to restrictions. The Committee will determine to whom an offer will be made, the number of Shares the person may purchase, the price to be paid (the "PURCHASE PRICE"), the restrictions to which the Shares will be subject, and all other terms and conditions of the Restricted Stock Award, subject to the following:

6.1 Form of Restricted Stock Award. All purchases under a Restricted Stock Award made pursuant to this Plan will be evidenced by an Award Agreement ("RESTRICTED STOCK PURCHASE AGREEMENT") that will be in such form (which need not be the same for each Participant) as the Committee will from time to time approve, and will comply with and be subject to the terms and conditions of this Plan. The offer of Restricted Stock will be accepted by the Participant's execution and delivery of the Restricted Stock Purchase Agreement and full payment for the Shares to the Company within thirty (30) days from the date the Restricted Stock Purchase Agreement is delivered to the person. If such person does not execute and deliver the Restricted Stock Purchase Agreement along with full payment for the Shares to the Company within thirty (30) days, then the offer will terminate, unless otherwise determined by the Committee.

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Concur Technologies, Inc. 1998 Equity Incentive Plan

6.2 Purchase Price. The Purchase Price of Shares sold pursuant to a Restricted Stock Award will be determined by the Committee on the date the Restricted Stock Award is granted, except in the case of a sale to a Ten Percent Stockholder, in which case the Purchase Price will be 100% of the Fair Market Value. Payment of the Purchase Price may be made in accordance with Section 8 of this Plan.

6.3 Terms of Restricted Stock Awards. Restricted Stock Awards shall be subject to such restrictions as the Committee may impose. These restrictions may be based upon completion of a specified number of years of service with the Company or upon completion of the performance goals as set out in advance in the Participant's individual Restricted Stock Purchase Agreement. Restricted Stock Awards may vary from Participant to Participant and between groups of Participants. Prior to the grant of a Restricted Stock Award, the Committee shall: (a) determine the nature, length and starting date of any Performance Period for the Restricted Stock Award; (b) select from among the Performance Factors to be used to measure performance goals, if any; and (c) determine the number of Shares that may be awarded to the Participant. Prior to the payment of any Restricted Stock Award, the Committee shall determine the extent to which such Restricted Stock Award has been earned. Performance Periods may overlap and Participants may participate simultaneously with respect to Restricted Stock Awards that are subject to different Performance Periods and having different performance goals and other criteria.

6.4 Termination During Performance Period. If a Participant is Terminated during a Performance Period for any reason, then such Participant will be entitled to payment (whether in Shares, cash or otherwise) with respect to the Restricted Stock Award only to the extent earned as of the date of Termination in accordance with the Restricted Stock Purchase Agreement, unless the Committee will determine otherwise.

7. STOCK BONUSES.

7.1 Awards of Stock Bonuses. A Stock Bonus is an award of Shares (which may consist of Restricted Stock) for services rendered to the Company or any Parent or Subsidiary of the Company. A Stock Bonus may be awarded for past services already rendered to the Company, or any Parent or Subsidiary of the Company pursuant to an Award Agreement (the "STOCK BONUS AGREEMENT") that will be in such form (which need not be the same for each Participant) as the Committee will from time to time approve, and will comply with and be subject to the terms and conditions of this Plan. A Stock Bonus may be awarded upon satisfaction of such performance goals as are set out in advance in the Participant's individual Award Agreement (the "PERFORMANCE STOCK BONUS AGREEMENT") that will be in such form (which need not be the same for each Participant) as the Committee will from time to time approve, and will comply with and be subject to the terms and conditions of this Plan. Stock Bonuses may vary from Participant to Participant and between groups of Participants, and may be based upon the achievement of the Company, Parent or Subsidiary and/or individual performance factors or upon such other criteria as the Committee may determine.

7.2 Terms of Stock Bonuses. The Committee will determine the number of Shares to be awarded to the Participant. If the Stock Bonus is being earned upon the satisfaction of performance goals pursuant to a Performance Stock Bonus Agreement, then the Committee will: (a) determine the nature, length and starting date of any Performance Period for each Stock Bonus; (b) select from among the Performance Factors to be used to measure the performance, if any; and (c) determine the number of Shares that may be awarded to the Participant. Prior to the payment of any Stock Bonus, the Committee shall determine the extent to which such Stock Bonuses have been earned. Performance Periods may overlap and Participants may participate simultaneously with respect to Stock Bonuses that are subject to different Performance Periods and different performance goals and other criteria. The number of Shares may be fixed or may vary in accordance with such performance goals and criteria as may be determined by the Committee. The Committee may adjust the performance goals applicable to the Stock Bonuses to take into account changes in law and accounting or tax rules and to make such adjustments as the Committee deems necessary or appropriate to reflect the impact of extraordinary or unusual items, events or circumstances to avoid windfalls or hardships.

7.3 Form of Payment. The earned portion of a Stock Bonus may be paid currently or on a deferred basis with such interest or dividend equivalent, if any, as the Committee may determine. Payment

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Concur Technologies, Inc. 1998 Equity Incentive Plan

may be made in the form of cash or whole Shares or a combination thereof, either in a lump sum payment or in installments, all as the Committee will determine.

8. PAYMENT FOR SHARE PURCHASES.

8.1 Payment. Payment for Shares purchased pursuant to this Plan may be made in cash (by check) or, where expressly approved for the Participant by the Committee and where permitted by law:

(a) by cancellation of indebtedness of the Company to the Participant;

(b) by surrender of shares that either: (1) have been owned by Participant for more than six (6) months and have been paid for within the meaning of SEC Rule 144 (and, if such shares were purchased from the Company by use of a promissory note, such note has been fully paid with respect to such shares); or (2) were obtained by Participant in the public market;

(c) by tender of a full recourse promissory note having such terms as may be approved by the Committee and bearing interest at a rate sufficient to avoid imputation of income under Sections 483 and 1274 of the Code; provided, however, that Participants who are not employees or directors of the Company will not be entitled to purchase Shares with a promissory note unless the note is adequately secured by collateral other than the Shares;

(d) by waiver of compensation due or accrued to the Participant for services rendered;

(e) with respect only to purchases upon exercise of an Option, and provided that a public market for the Company's stock exists:

(1) through a "same day sale" commitment from the Participant and a broker-dealer that is a member of the National Association of Securities Dealers (an "NASD DEALER") whereby the Participant irrevocably elects to exercise the Option and to sell a portion of the Shares so purchased to pay for the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the Exercise Price directly to the Company; or

(2) through a "margin" commitment from the Participant and a NASD Dealer whereby the Participant irrevocably elects to exercise the Option and to pledge the Shares so purchased to the NASD Dealer in a margin account as security for a loan from the NASD Dealer in the amount of the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the Exercise Price directly to the Company; or

(f) by any combination of the foregoing.

8.2 Loan Guarantees. The Committee may help the Participant pay for Shares purchased under this Plan by authorizing a guarantee by the Company of a third-party loan to the Participant.

9. WITHHOLDING TAXES.

9.1 Withholding Generally. Whenever Shares are to be issued in satisfaction of Awards granted under this Plan, the Company may require the Participant to remit to the Company an amount sufficient to satisfy federal, state and local withholding tax requirements prior to the delivery of any certificate or certificates for such Shares. Whenever, under this Plan, payments in satisfaction of Awards are to be made in cash, such payment will be net of an amount sufficient to satisfy federal, state, and local withholding tax requirements.

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Concur Technologies, Inc. 1998 Equity Incentive Plan

9.2 Stock Withholding. When, under applicable tax laws, a Participant incurs tax liability in connection with the exercise or vesting of any Award that is subject to tax withholding and the Participant is obligated to pay the Company the amount required to be withheld, the Committee may in its sole discretion allow the Participant to satisfy the minimum withholding tax obligation by electing to have the Company withhold from the Shares to be issued that number of Shares having a Fair Market Value equal to the minimum amount required to be withheld, determined on the date that the amount of tax to be withheld is to be determined. All elections by a Participant to have Shares withheld for this purpose will be made in accordance with the requirements established by the Committee and be in writing in a form acceptable to the Committee

10. PRIVILEGES OF STOCK OWNERSHIP.

10.1 Voting and Dividends. No Participant will have any of the rights of a stockholder with respect to any Shares until the Shares are issued to the Participant. After Shares are issued to the Participant, the Participant will be a stockholder and have all the rights of a stockholder with respect to such Shares, including the right to vote and receive all dividends or other distributions made or paid with respect to such Shares; provided, that if such Shares are Restricted Stock, then any new, additional or different securities the Participant may become entitled to receive with respect to such Shares by virtue of a stock dividend, stock split or any other change in the corporate or capital structure of the Company will be subject to the same restrictions as the Restricted Stock; provided, further, that the Participant will have no right to retain such stock dividends or stock distributions with respect to Shares that are repurchased at the Participant's Purchase Price or Exercise Price pursuant to Section 12.

10.2 Financial Statements. The Company will provide financial statements to each Participant prior to such Participant's purchase of Shares under this Plan, and to each Participant annually during the period such Participant has Awards outstanding; provided, however, the Company will not be required to provide such financial statements to Participants whose services in connection with the Company assure them access to equivalent information.

11. TRANSFERABILITY. Awards granted under this Plan, and any interest therein, will not be transferable or assignable by Participant, and may not be made subject to execution, attachment or similar process, otherwise than by will or by the laws of descent and distribution or as determined by the Committee and set forth in the Award Agreement with respect to Awards that are not ISOs. During the lifetime of the Participant an Award will be exercisable only by the Participant, and any elections with respect to an Award may be made only by the Participant unless otherwise determined by the Committee and set forth in the Award Agreement with respect to Awards that are not ISOs.

12. RESTRICTIONS ON SHARES. At the discretion of the Committee, the Company may reserve to itself and/or its assignee(s) in the Award Agreement a right to repurchase a portion of or all Unvested Shares held by a Participant following such Participant's Termination at any time within ninety (90) days after the later of Participant's Termination Date and the date Participant purchases Shares under this Plan, for cash and/or cancellation of purchase money indebtedness, at the Participant's Exercise Price or Purchase Price, as the case may be.

13. CERTIFICATES. All certificates for Shares or other securities delivered under this Plan will be subject to such stock transfer orders, legends and other restrictions as the Committee may deem necessary or advisable, including restrictions under any applicable federal, state or foreign securities law, or any rules, regulations and other requirements of the SEC or any stock exchange or automated quotation system upon which the Shares may be listed or quoted.

14. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a Participant's Shares, the Committee may require the Participant to deposit all certificates representing Shares, together with stock powers or other instruments of transfer approved by the Committee, appropriately endorsed in blank, with the

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Company or an agent designated by the Company to hold in escrow until such restrictions have lapsed or terminated, and the Committee may cause a legend or legends referencing such restrictions to be placed on the certificates. Any Participant who is permitted to execute a promissory note as partial or full consideration for the purchase of Shares under this Plan will be required to pledge and deposit with the Company all or part of the Shares so purchased as collateral to secure the payment of Participant's obligation to the Company under the promissory note; provided, however, that the Committee may require or accept other or additional forms of collateral to secure the payment of such obligation and, in any event, the Company will have full recourse against the Participant under the promissory note notwithstanding any pledge of the Participant's Shares or other collateral. In connection with any pledge of the Shares, Participant will be required to execute and deliver a written pledge agreement in such form as the Committee will from time to time approve. The Shares purchased with the promissory note may be released from the pledge on a pro rata basis as the promissory note is paid.

15. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or from time to time, authorize the Company, with the consent of the respective Participants, to issue new Awards in exchange for the surrender and cancellation of any or all outstanding Awards. The Committee may at any time buy from a Participant an Award previously granted with payment in cash, Shares (including Restricted Stock) or other consideration, based on such terms and conditions as the Committee and the Participant may agree.

16. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award will not be effective unless such Award is in compliance with all applicable federal and state securities laws, rules and regulations of any governmental body, and the requirements of any stock exchange or automated quotation system upon which the Shares may then be listed or quoted, as they are in effect on the date of grant of the Award and also on the date of exercise or other issuance. Notwithstanding any other provision in this Plan, the Company will have no obligation to issue or deliver certificates for Shares under this Plan prior to:
(a) obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and/or (b) completion of any registration or other qualification of such Shares under any state or federal law or ruling of any governmental body that the Company determines to be necessary or advisable. The Company will be under no obligation to register the Shares with the SEC or to effect compliance with the registration, qualification or listing requirements of any state securities laws, stock exchange or automated quotation system, and the Company will have no liability for any inability or failure to do so.

17. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted under this Plan will confer or be deemed to confer on any Participant any right to continue in the employ of, or to continue any other relationship with, the Company or any Parent or Subsidiary of the Company or limit in any way the right of the Company or any Parent or Subsidiary of the Company to terminate Participant's employment or other relationship at any time, with or without cause.

18. CORPORATE TRANSACTIONS.

18.1 Assumption or Replacement of Awards by Successor. In the event of (a) a dissolution or liquidation of the Company, (b) a merger or consolidation in which the Company is not the surviving corporation (other than a merger or consolidation with a wholly-owned subsidiary, a reincorporation of the Company in a different jurisdiction, or other transaction in which there is no substantial change in the stockholders of the Company or their relative stock holdings and the Awards granted under this Plan are assumed, converted or replaced by the successor corporation, which assumption will be binding on all Participants), (c) a merger in which the Company is the surviving corporation but after which the stockholders of the Company immediately prior to such merger (other than any stockholder that merges, or which owns or controls another corporation that merges, with the Company in such merger) cease to own their shares or other equity interest in the Company, (d) the sale of substantially all of the assets of the Company, or (e) the acquisition, sale, or transfer of more than 50% of the outstanding shares of the Company by tender offer or similar transaction, any or all outstanding Awards may be assumed, converted or replaced by the successor corporation (if any), which assumption, conversion or replacement will be binding on all Participants. In the alternative, the successor corporation may substitute equivalent Awards or provide substantially similar consideration to Participants as was provided to stockholders (after taking into account

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the existing provisions of the Awards). The successor corporation may also issue, in place of outstanding Shares of the Company held by the Participant, substantially similar shares or other property subject to repurchase restrictions no less favorable to the Participant. In the event such successor corporation (if any) refuses to assume or substitute Awards, as provided above, pursuant to a transaction described in this Subsection 18.1, such Awards will expire on such transaction at such time and on such conditions as the Committee will determine. Notwithstanding anything in this Plan to the contrary, the Committee may, in its sole discretion, provide that the vesting of any or all Awards granted pursuant to this Plan will accelerate upon a transaction described in this Section 18. If the Committee exercises such discretion with respect to Options, such Options will become exercisable in full prior to the consummation of such event at such time and on such conditions as the Committee determines, and if such Options are not exercised prior to the consummation of the corporate transaction, they shall terminate at such time as determined by the Committee.

18.2 Other Treatment of Awards. Subject to any greater rights granted to Participants under the foregoing provisions of this Section 18, in the event of the occurrence of any transaction described in Section 18.1, any outstanding Awards will be treated as provided in the applicable agreement or plan of merger, consolidation, dissolution, liquidation, or sale of assets.

18.3 Assumption of Awards by the Company. The Company, from time to time, also may substitute or assume outstanding awards granted by another company, whether in connection with an acquisition of such other company or otherwise, by either; (a) granting an Award under this Plan in substitution of such other company's award; or (b) assuming such award as if it had been granted under this Plan if the terms of such assumed award could be applied to an Award granted under this Plan. Such substitution or assumption will be permissible if the holder of the substituted or assumed award would have been eligible to be granted an Award under this Plan if the other company had applied the rules of this Plan to such grant. In the event the Company assumes an award granted by another company, the terms and conditions of such award will remain unchanged (except that the exercise price and the number and nature of Shares issuable upon exercise of any such option will be adjusted appropriately pursuant to Section 424(a) of the Code). In the event the Company elects to grant a new Option rather than assuming an existing option, such new Option may be granted with a similarly adjusted Exercise Price.

19. ADOPTION AND STOCKHOLDER APPROVAL. This Plan will become effective on the date on which the registration statement filed by the Company with the SEC under the Securities Act registering the initial public offering of the Company's Common Stock is declared effective by the SEC (the "EFFECTIVE DATE"). This Plan shall be approved by the stockholders of the Company (excluding Shares issued pursuant to this Plan), consistent with applicable laws, within twelve (12) months before or after the date this Plan is adopted by the Board. Upon the Effective Date, the Committee may grant Awards pursuant to this Plan; provided, however, that: (a) no Option may be exercised prior to initial stockholder approval of this Plan; (b) no Option granted pursuant to an increase in the number of Shares subject to this Plan approved by the Board will be exercised prior to the time such increase has been approved by the stockholders of the Company; (c) in the event that initial stockholder approval is not obtained within the time period provided herein, all Awards granted hereunder shall be cancelled, any Shares issued pursuant to any Awards shall be cancelled and any purchase of Shares issued hereunder shall be rescinded; and
(d) in the event that stockholder approval of such increase is not obtained within the time period provided herein, all Awards granted pursuant to such increase will be cancelled, any Shares issued pursuant to any Award granted pursuant to such increase will be cancelled, and any purchase of Shares pursuant to such increase will be rescinded.

20. TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided herein, this Plan will terminate ten (10) years from the date this Plan is adopted by the Board or, if earlier, the date of stockholder approval. This Plan and all agreements thereunder shall be governed by and construed in accordance with the laws of the State of California.

21. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time terminate or amend this Plan in any respect, including without limitation amendment of any form of Award Agreement or

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Concur Technologies, Inc. 1998 Equity Incentive Plan

instrument to be executed pursuant to this Plan; provided, however, that the Board will not, without the approval of the stockholders of the Company, amend this Plan in any manner that requires such stockholder approval.

22. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the Board, the submission of this Plan to the stockholders of the Company for approval, nor any provision of this Plan will be construed as creating any limitations on the power of the Board to adopt such additional compensation arrangements as it may deem desirable, including, without limitation, the granting of stock options and bonuses otherwise than under this Plan, and such arrangements may be either generally applicable or applicable only in specific cases.

23. DEFINITIONS. As used in this Plan, the following terms will have the following meanings:

"AWARD" means any award under this Plan, including any Option, Restricted Stock or Stock Bonus.

"AWARD AGREEMENT" means, with respect to each Award, the signed written agreement between the Company and the Participant setting forth the terms and conditions of the Award.

"BOARD" means the Board of Directors of the Company.

"CAUSE" means the commission of an act of theft, embezzlement, fraud, dishonesty or a breach of fiduciary duty to the Company or a Parent or Subsidiary of the Company.

"CODE" means the Internal Revenue Code of 1986, as amended.

"COMMITTEE" means the Compensation Committee of the Board.

"COMPANY" means Concur Technologies, Inc. or any successor corporation.

"DISABILITY" means a disability, whether temporary or permanent, partial or total, as determined by the Committee.

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

"EXERCISE PRICE" means the price at which a holder of an Option may purchase the Shares issuable upon exercise of the Option.

"FAIR MARKET VALUE" means, as of any date, the value of a share of the Company's Common Stock determined as follows:

(a) if such Common Stock is then quoted on the Nasdaq National Market, its closing price on the Nasdaq National Market on the date of determination as reported in The Wall Street Journal;

(b) if such Common Stock is publicly traded and is then listed on a national securities exchange, its closing price on the date of determination on the principal national securities exchange on which the Common Stock is listed or admitted to trading as reported in The Wall Street Journal;

(c) if such Common Stock is publicly traded but is not quoted on the Nasdaq National Market nor listed or admitted to trading on a national securities exchange, the average of the closing bid and asked prices on the date of determination as reported in The Wall Street Journal;

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Concur Technologies, Inc. 1998 Equity Incentive Plan

(d) in the case of an Award made on the Effective Date, the price per share at which shares of the Company's Common Stock are initially offered for sale to the public by the Company's underwriters in the initial public offering of the Company's Common Stock pursuant to a registration statement filed with the SEC under the Securities Act; or

(d) if none of the foregoing is applicable, by the Committee in good faith.

"INSIDER" means an officer or director of the Company or any other person whose transactions in the Company's Common Stock are subject to
Section 16 of the Exchange Act.

"OPTION" means an award of an option to purchase Shares pursuant to Section 5.

"PARENT" means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if each of such corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

"PARTICIPANT" means a person who receives an Award under this Plan.

"PERFORMANCE FACTORS" means the factors selected by the Committee from among the following measures to determine whether the performance goals established by the Committee and applicable to Awards have been satisfied:

(a) Net revenue and/or net revenue growth;

(b) Earnings before income taxes and amortization and/or earnings before income taxes and amortization growth;

(c) Operating income and/or operating income growth;

(d) Net income and/or net income growth;

(e) Earnings per share and/or earnings per share growth;

(f) Total stockholder return and/or total stockholder return growth;

(g) Return on equity;

(h) Operating cash flow return on income;

(i) Adjusted operating cash flow return on income;

(j) Economic value added; and

(k) Individual confidential business objectives.

"PERFORMANCE PERIOD" means the period of service determined by the Committee, not to exceed five years, during which years of service or performance is to be measured for Restricted Stock Awards or Stock Bonuses.

"PLAN" means this Concur Technologies, Inc. 1998 Equity Incentive Plan, as amended from time to time.

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Concur Technologies, Inc. 1998 Equity Incentive Plan

"RESTRICTED STOCK AWARD" means an award of Shares pursuant to
Section 6.

"SEC" means the Securities and Exchange Commission.

"SECURITIES ACT" means the Securities Act of 1933, as amended.

"SHARES" means shares of the Company's Common Stock reserved for issuance under this Plan, as adjusted pursuant to Sections 2 and 18, and any successor security.

"STOCK BONUS" means an award of Shares, or cash in lieu of Shares, pursuant to Section 7.

"SUBSIDIARY" means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

"TERMINATION" or "TERMINATED" means, for purposes of this Plan with respect to a Participant, that the Participant has for any reason ceased to provide services as an employee, officer, director, consultant, independent contractor, or advisor to the Company or a Parent or Subsidiary of the Company. An employee will not be deemed to have ceased to provide services in the case of
(i) sick leave, (ii) military leave, or (iii) any other leave of absence approved by the Committee, provided, that such leave is for a period of not more than 90 days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute or unless provided otherwise pursuant to formal policy adopted from time to time by the Company and issued and promulgated to employees in writing. In the case of any employee on an approved leave of absence, the Committee may make such provisions respecting suspension of vesting of the Award while on leave from the employ of the Company or a Subsidiary as it may deem appropriate, except that in no event may an Option be exercised after the expiration of the term set forth in the Option agreement. The Committee will have sole discretion to determine whether a Participant has ceased to provide services and the effective date on which the Participant ceased to provide services (the "TERMINATION DATE").

"UNVESTED SHARES" means "Unvested Shares" as defined in the Award Agreement.

"VESTED SHARES" means "Vested Shares" as defined in the Award Agreement.

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EXHIBIT 10.03

CONCUR TECHNOLOGIES, INC.
1998 EMPLOYEE STOCK PURCHASE PLAN

As Adopted August 21, 1998

1. ESTABLISHMENT OF PLAN. Concur Technologies, Inc. (the "COMPANY") proposes to grant options for purchase of the Company's Common Stock to eligible employees of the Company and its Participating Subsidiaries (as hereinafter defined) pursuant to this Employee Stock Purchase Plan (this "PLAN"). For purposes of this Plan, "PARENT CORPORATION" and "SUBSIDIARY" shall have the same meanings as "parent corporation" and "subsidiary corporation" in Sections 424(e) and 424(f), respectively, of the Internal Revenue Code of 1986, as amended (the "CODE"). "PARTICIPATING SUBSIDIARIES" are Parent Corporations or Subsidiaries that the Board of Directors of the Company (the "BOARD") designates from time to time as corporations that shall participate in this Plan. The Company intends this Plan to qualify as an "employee stock purchase plan" under Section 423 of the Code (including any amendments to or replacements of such Section), and this Plan shall be so construed. Any term not expressly defined in this Plan but defined for purposes of Section 423 of the Code shall have the same definition herein. A total of 800,000 shares of the Company's Common Stock is reserved for issuance under this Plan. In addition, on each January 1, the aggregate number of shares of the Company's Common Stock reserved for issuance under the Plan shall be increased automatically by a number of shares equal to one percent (1%) of the total outstanding shares of the Company as of the immediately preceding December 31; provided that such increase shall in no event exceed 800,000 shares per year. Such number shall be subject to adjustments effected in accordance with Section 14 of this Plan.

2. PURPOSE. The purpose of this Plan is to provide eligible employees of the Company and Participating Subsidiaries with a convenient means of acquiring an equity interest in the Company through payroll deductions, to enhance such employees' sense of participation in the affairs of the Company and Participating Subsidiaries, and to provide an incentive for continued employment.

3. ADMINISTRATION. This Plan shall be administered by the Compensation Committee of the Board (the "COMMITTEE"). Subject to the provisions of this Plan and the limitations of Section 423 of the Code or any successor provision in the Code, all questions of interpretation or application of this Plan shall be determined by the Committee and its decisions shall be final and binding upon all participants. Members of the Committee shall receive no compensation for their services in connection with the administration of this Plan, other than standard fees as established from time to time by the Board for services rendered by Board members serving on Board committees. All expenses incurred in connection with the administration of this Plan shall be paid by the Company.

4. ELIGIBILITY. Any employee of the Company or the Participating Subsidiaries is eligible to participate in an Offering Period (as hereinafter defined) under this Plan except the following:

(a) employees who are not employed by the Company or a Participating Subsidiary (10) days before the beginning of such Offering Period, except that employees who are employed on the Effective Date of the Registration Statement filed by the Company with the Securities and Exchange Commission ("SEC") under the Securities Act of 1933, as amended (the "SECURITIES ACT") registering the initial public offering of the Company's Common Stock shall be eligible to participate in the first Offering Period under the Plan;

(b) employees who are customarily employed for twenty (20) hours or less per week;

(c) employees who are customarily employed for five (5) months or less in a calendar year;

(d) employees who, together with any other person whose stock would be attributed to such employee pursuant to Section 424(d) of the Code, own stock or hold options to purchase stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or any of its Participating Subsidiaries or who, as a result of being granted an option under this Plan with respect to such Offering Period,

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Concur Technologies, Inc. 1998 Employee Stock Purchase Plan

would own stock or hold options to purchase stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or any of its Participating Subsidiaries; and

(e) individuals who provide services to the Company or any of its Participating Subsidiaries as independent contractors who are reclassified as common law employees for any reason except for federal income and employment tax purposes.

5. OFFERING DATES. The offering periods of this Plan (each, an "OFFERING PERIOD") shall be of twenty-four (24) months duration commencing on May 1 and November 1 of each year and ending on the second April 30 and October 31 thereafter; provided, however, that notwithstanding the foregoing, the first such Offering Period shall commence on the first business day on which price quotations for the Company's Common Stock are available on the Nasdaq National Market (the "FIRST OFFERING DATE") and shall end on October 31, 2000. Except for the first Offering Period, each Offering Period shall consist of four (4) six month purchase periods (individually, a "PURCHASE PERIOD") during which payroll deductions of the participants are accumulated under this Plan. The first Offering Period shall consist of no more than five and no fewer than three Purchase Periods, any of which may be greater or less than six months as determined by the Committee. The first business day of each Offering Period is referred to as the "OFFERING DATE". The last business day of each Purchase Period is referred to as the "PURCHASE DATE". The Committee shall have the power to change the duration of Offering Periods with respect to offerings without stockholder approval if such change is announced at least fifteen (15) days prior to the scheduled beginning of the first Offering Period to be affected.

6. PARTICIPATION IN THIS PLAN. Eligible employees may become participants in an Offering Period under this Plan on the first Offering Date after satisfying the eligibility requirements by delivering a subscription agreement to the Company's treasury department (the "TREASURY DEPARTMENT") not later than five (5) days before such Offering Date. Notwithstanding the foregoing, the Committee may set a later time for filing the subscription agreement authorizing payroll deductions for all eligible employees with respect to a given Offering Period. An eligible employee who does not deliver a subscription agreement to the Treasury Department by such date after becoming eligible to participate in such Offering Period shall not participate in that Offering Period or any subsequent Offering Period unless such employee enrolls in this Plan by filing a subscription agreement with the Treasury Department not later than five (5) days preceding a subsequent Offering Date. Once an employee becomes a participant in an Offering Period, such employee will automatically participate in the Offering Period commencing immediately following the last day of the prior Offering Period unless the employee withdraws or is deemed to withdraw from this Plan or terminates further participation in the Offering Period as set forth in Section 11 below. Such participant is not required to file any additional subscription agreement in order to continue participation in this Plan. An eligible employee may not participate in more than one Offering Period at a time.

7. GRANT OF OPTION ON ENROLLMENT. Enrollment by an eligible employee in this Plan with respect to an Offering Period will constitute the grant (as of the Offering Date) by the Company to such employee of an option to purchase on the Purchase Date up to that number of shares of Common Stock of the Company determined by dividing (a) the amount accumulated in such employee's payroll deduction account during such Purchase Period by (b) the lower of (i) eighty-five percent (85%) of the fair market value of a share of the Company's Common Stock on the Offering Date (but in no event less than the par value of a share of the Company's Common Stock), or (ii) eighty-five percent (85%) of the fair market value of a share of the Company's Common Stock on the Purchase Date (but in no event less than the par value of a share of the Company's Common Stock), provided, however, that the number of shares of the Company's Common Stock subject to any option granted pursuant to this Plan shall not exceed the lesser of (x) the maximum number of shares set by the Committee pursuant to
Section 10(c) below with respect to the applicable Purchase Date, or (y) the maximum number of shares which may be purchased pursuant to Section 10(b) below with respect to the applicable Purchase Date. The fair market value of a share of the Company's Common Stock shall be determined as provided in Section 8 below.

8. PURCHASE PRICE. The purchase price per share at which a share of Common Stock will be sold in any Offering Period shall be eighty-five percent (85%) of the lesser of:

(a) The fair market value on the Offering Date; or

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Concur Technologies, Inc. 1998 Employee Stock Purchase Plan

(b) The fair market value on the Purchase Date.

For purposes of this Plan, the term "FAIR MARKET VALUE" means, as of any date, the value of a share of the Company's Common Stock determined as follows:

(a) if such Common Stock is then quoted on the Nasdaq National Market, its closing price on the Nasdaq National Market on the date of determination as reported in The Wall Street Journal;

(b) if such Common Stock is publicly traded and is then listed on a national securities exchange, its closing price on the date of determination on the principal national securities exchange on which the Common Stock is listed or admitted to trading as reported in The Wall Street Journal;

(c) if such Common Stock is publicly traded but is not quoted on the Nasdaq National Market nor listed or admitted to trading on a national securities exchange, the average of the closing bid and asked prices on the date of determination as reported in The Wall Street Journal; or

(d) if none of the foregoing is applicable, by the Board in good faith, which in the case of the First Offering Date will be the price per share at which shares of the Company's Common Stock are initially offered for sale to the public by the Company's underwriters in the initial public offering of the Company's Common Stock pursuant to a registration statement filed with the SEC under the Securities Act.

9. PAYMENT OF PURCHASE PRICE; CHANGES IN PAYROLL DEDUCTIONS; ISSUANCE OF SHARES.

(a) The purchase price of the shares is accumulated by regular payroll deductions made during each Offering Period. The deductions are made as a percentage of the participant's compensation in one percent (1%) increments not less than two percent (2%), nor greater than ten percent (15%) or such lower limit set by the Committee. Compensation shall mean all W-2 cash compensation, including, but not limited to, base salary, wages, commissions, overtime, shift premiums and bonuses, plus draws against commissions, provided, however, that for purposes of determining a participant's compensation, any election by such participant to reduce his or her regular cash remuneration under Sections 125 or 401(k) of the Code shall be treated as if the participant did not make such election. Payroll deductions shall commence on the first payday of the Offering Period and shall continue to the end of the Offering Period unless sooner altered or terminated as provided in this Plan.

(b) A participant may increase or decrease the rate of payroll deductions during an Offering Period by filing with the Treasury Department a new authorization for payroll deductions, in which case the new rate shall become effective for the next payroll period commencing more than fifteen (15) days after the Treasury Department's receipt of the authorization and shall continue for the remainder of the Offering Period unless changed as described below. Such change in the rate of payroll deductions may be made at any time during an Offering Period, but not more than one (1) change may be made effective during any Purchase Period. A participant may increase or decrease the rate of payroll deductions for any subsequent Offering Period by filing with the Treasury Department a new authorization for payroll deductions not later than fifteen (15) days before the beginning of such Offering Period.

(c) A participant may reduce his or her payroll deduction percentage to zero during an Offering Period by filing with the Treasury Department a request for cessation of payroll deductions. Such reduction shall be effective beginning with the next payroll period commencing more than fifteen (15) days after the Treasury Department's receipt of the request and no further payroll deductions will be made for the duration of the Offering Period. Payroll deductions credited to the participant's account prior to the effective date of the request shall be used to purchase shares of Common Stock of the Company in accordance with Section (e) below. A participant may not resume making payroll deductions during the Offering Period in which he or she reduced his or her payroll deductions to zero.

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Concur Technologies, Inc. 1998 Employee Stock Purchase Plan

(d) All payroll deductions made for a participant are credited to his or her account under this Plan and are deposited with the general funds of the Company. No interest accrues on the payroll deductions. All payroll deductions received or held by the Company may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions.

(e) On each Purchase Date, so long as this Plan remains in effect and provided that the participant has not submitted a signed and completed withdrawal form before that date which notifies the Company that the participant wishes to withdraw from that Offering Period under this Plan and have all payroll deductions accumulated in the account maintained on behalf of the participant as of that date returned to the participant, the Company shall apply the funds then in the participant's account to the purchase of whole shares of Common Stock reserved under the option granted to such participant with respect to the Offering Period to the extent that such option is exercisable on the Purchase Date. The purchase price per share shall be as specified in Section 8 of this Plan. Any cash remaining in a participant's account after such purchase of shares shall be refunded to such participant in cash, without interest; provided, however that any amount remaining in such participant's account on a Purchase Date which is less than the amount necessary to purchase a full share of Common Stock of the Company shall be carried forward, without interest, into the next Purchase Period or Offering Period, as the case may be. In the event that this Plan has been oversubscribed, all funds not used to purchase shares on the Purchase Date shall be returned to the participant, without interest. No Common Stock shall be purchased on a Purchase Date on behalf of any employee whose participation in this Plan has terminated prior to such Purchase Date.

(f) As promptly as practicable after the Purchase Date, the Company shall issue shares for the participant's benefit representing the shares purchased upon exercise of his or her option.

(g) During a participant's lifetime, his or her option to purchase shares hereunder is exercisable only by him or her. The participant will have no interest or voting right in shares covered by his or her option until such option has been exercised.

10. LIMITATIONS ON SHARES TO BE PURCHASED.

(a) No participant shall be entitled to purchase stock under this Plan at a rate which, when aggregated with his or her rights to purchase stock under all other employee stock purchase plans of the Company or any Subsidiary, exceeds $25,000 in fair market value, determined as of the Offering Date (or such other limit as may be imposed by the Code) for each calendar year in which the employee participates in this Plan. The Company shall automatically suspend the payroll deductions of any participant as necessary to enforce such limit provided that when the Company automatically resumes such payroll deductions, the Company must apply the rate in effect immediately prior to such suspension.

(b) On any single Purchase Date, a participant may not purchase more than two hundred percent (200%) of the number of shares such participant could have purchased if the purchase price were eighty-five percent (85%) of the fair market value of a share of the Company's Common Stock on the Offering Date.

(c) No participant shall be entitled to purchase more than the Maximum Share Amount (as defined below) on any single Purchase Date. Not less than thirty (30) days prior to the commencement of any Offering Period, the Committee may, in its sole discretion, set a maximum number of shares which may be purchased by any employee at any single Purchase Date (hereinafter the "MAXIMUM SHARE AMOUNT"). Until otherwise determined by the Committee, there shall be no Maximum Share Amount. In no event shall the Maximum Share Amount exceed the amounts permitted under Section 10(b) above. If a new Maximum Share Amount is set, then all participants must be notified of such Maximum Share Amount prior to the commencement of the next Offering Period. The Maximum Share Amount shall continue to apply with respect to all succeeding Purchase Dates and Offering Periods unless revised by the Committee as set forth above.

(d) If the number of shares to be purchased on a Purchase Date by all employees participating in this Plan exceeds the number of shares then available for issuance under this Plan, then the Company will make a pro rata allocation of the remaining shares in as uniform a manner as shall be reasonably practicable and as the Com-

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Concur Technologies, Inc. 1998 Employee Stock Purchase Plan

mittee shall determine to be equitable. In such event, the Company shall give written notice of such reduction of the number of shares to be purchased under a participant's option to each participant affected.

(e) Any payroll deductions accumulated in a participant's account which are not used to purchase stock due to the limitations in this Section 10 shall be returned to the participant as soon as practicable after the end of the applicable Purchase Period, without interest.

11. WITHDRAWAL.

(a) Each participant may withdraw from an Offering Period under this Plan by signing and delivering to the Treasury Department a written notice to that effect on a form provided for such purpose. Such withdrawal may be elected at any time at least fifteen (15) days prior to the end of an Offering Period.

(b) Upon withdrawal from this Plan, the accumulated payroll deductions shall be returned to the withdrawn participant, without interest, and his or her interest in this Plan shall terminate. In the event a participant voluntarily elects to withdraw from this Plan, he or she may not resume his or her participation in this Plan during the same Offering Period, but he or she may participate in any Offering Period under this Plan which commences on a date subsequent to such withdrawal by filing a new authorization for payroll deductions in the same manner as set forth in Section 6 above for initial participation in this Plan.

(c) If the Fair Market Value on the first day of the current Offering Period in which a participant is enrolled is higher than the Fair Market Value on the first day of any subsequent Offering Period, the Company will automatically enroll such participant in the subsequent Offering Period. Any funds accumulated in a participant's account prior to the first day of such subsequent Offering Period will be applied to the purchase of shares on the Purchase Date immediately prior to the first day of such subsequent Offering Period. A participant does not need to file any forms with the Company to automatically be enrolled in the subsequent Offering Period

12. TERMINATION OF EMPLOYMENT. Termination of a participant's employment for any reason, including retirement, death or the failure of a participant to remain an eligible employee of the Company or of a Participating Subsidiary, immediately terminates his or her participation in this Plan. In such event, the payroll deductions credited to the participant's account will be returned to him or her or, in the case of his or her death, to his or her legal representative, without interest. For purposes of this Section 12, an employee will not be deemed to have terminated employment or failed to remain in the continuous employ of the Company or of a Participating Subsidiary in the case of sick leave, military leave, or any other leave of absence approved by the Board; provided that such leave is for a period of not more than ninety (90) days or reemployment upon the expiration of such leave is guaranteed by contract or statute.

13. RETURN OF PAYROLL DEDUCTIONS. In the event a participant's interest in this Plan is terminated by withdrawal, termination of employment or otherwise, or in the event this Plan is terminated by the Board, the Company shall deliver to the participant all payroll deductions credited to such participant's account. No interest shall accrue on the payroll deductions of a participant in this Plan.

14. CAPITAL CHANGES. Subject to any required action by the stockholders of the Company, the number of shares of Common Stock covered by each option under this Plan which has not yet been exercised and the number of shares of Common Stock which have been authorized for issuance under this Plan but have not yet been placed under option (collectively, the "RESERVES"), as well as the price per share of Common Stock covered by each option under this Plan which has not yet been exercised, shall be proportionately adjusted for any increase or decrease in the number of issued and outstanding shares of Common Stock of the Company resulting from a stock split or the payment of a stock dividend (but only on the Common Stock) or any other increase or decrease in the number of issued and outstanding shares of Common Stock effected without receipt of any consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration". Such adjustment shall be made by the Committee, whose determination shall be final, binding and conclusive. Except as expressly provided herein, no issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an option.

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Concur Technologies, Inc. 1998 Employee Stock Purchase Plan

In the event of the proposed dissolution or liquidation of the Company, the Offering Period will terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Committee. The Committee may, in the exercise of its sole discretion in such instances, declare that this Plan shall terminate as of a date fixed by the Committee and give each participant the right to purchase shares under this Plan prior to such termination. In the event of (i) a merger or consolidation in which the Company is not the surviving corporation (other than a merger or consolidation with a wholly-owned subsidiary, a reincorporation of the Company in a different jurisdiction, or other transaction in which there is no substantial change in the stockholders of the Company or their relative stock holdings and the options under this Plan are assumed, converted or replaced by the successor corporation, which assumption will be binding on all participants), (ii) a merger in which the Company is the surviving corporation but after which the stockholders of the Company immediately prior to such merger (other than any stockholder that merges, or which owns or controls another corporation that merges, with the Company in such merger) cease to own their shares or other equity interest in the Company, (iii) the sale of all or substantially all of the assets of the Company or (iv) the acquisition, sale, or transfer of more than 50% of the outstanding shares of the Company by tender offer or similar transaction, the Plan will continue with regard to Offering Periods that commenced prior to the closing of the proposed transaction and shares will be purchased based on the Fair Market Value of the surviving corporation's stock on each Purchase Date, unless otherwise provided by the Committee consistent with pooling of interests accounting treatment.

The Committee may, if it so determines in the exercise of its sole discretion, also make provision for adjusting the Reserves, as well as the price per share of Common Stock covered by each outstanding option, in the event that the Company effects one or more reorganizations, recapitalizations, rights offerings or other increases or reductions of shares of its outstanding Common Stock, or in the event of the Company being consolidated with or merged into any other corporation.

15. NONASSIGNABILITY. Neither payroll deductions credited to a participant's account nor any rights with regard to the exercise of an option or to receive shares under this Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 22 below) by the participant. Any such attempt at assignment, transfer, pledge or other disposition shall be void and without effect.

16. REPORTS. Individual accounts will be maintained for each participant in this Plan. Each participant shall receive promptly after the end of each Purchase Period a report of his or her account setting forth the total payroll deductions accumulated, the number of shares purchased, the per share price thereof and the remaining cash balance, if any, carried forward to the next Purchase Period or Offering Period, as the case may be.

17. NOTICE OF DISPOSITION. Each participant shall notify the Company in writing if the participant disposes of any of the shares purchased in any Offering Period pursuant to this Plan if such disposition occurs within two (2) years from the Offering Date or within one (1) year from the Purchase Date on which such shares were purchased (the "Notice Period"). The Company may, at any time during the Notice Period, place a legend or legends on any certificate representing shares acquired pursuant to this Plan requesting the Company's transfer agent to notify the Company of any transfer of the shares. The obligation of the participant to provide such notice shall continue notwithstanding the placement of any such legend on the certificates.

18. NO RIGHTS TO CONTINUED EMPLOYMENT. Neither this Plan nor the grant of any option hereunder shall confer any right on any employee to remain in the employ of the Company or any Participating Subsidiary, or restrict the right of the Company or any Participating Subsidiary to terminate such employee's employment.

19. EQUAL RIGHTS AND PRIVILEGES. All eligible employees shall have equal rights and privileges with respect to this Plan so that this Plan qualifies as an "employee stock purchase plan" within the meaning of Section 423 or any successor provision of the Code and the related regulations. Any provision of this Plan which is inconsistent with Section 423 or any successor provision of the Code shall, without further act or amendment by the Company, the Committee or the Board, be reformed to comply with the requirements of Section 423. This
Section 19 shall take precedence over all other provisions in this Plan.

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Concur Technologies, Inc. 1998 Employee Stock Purchase Plan

20. NOTICES. All notices or other communications by a participant to the Company under or in connection with this Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.

21. TERM; STOCKHOLDER APPROVAL. After this Plan is adopted by the Board, this Plan will become effective on the First Offering Date (as defined above). This Plan shall be approved by the stockholders of the Company, in any manner permitted by applicable corporate law, within twelve (12) months before or after the date this Plan is adopted by the Board. No purchase of shares pursuant to this Plan shall occur prior to such stockholder approval. This Plan shall continue until the earlier to occur of (a) termination of this Plan by the Board (which termination may be effected by the Board at any time), (b) issuance of all of the shares of Common Stock reserved for issuance under this Plan, or (c) ten (10) years from the adoption of this Plan by the Board.

22. DESIGNATION OF BENEFICIARY.

(a) A participant may file a written designation of a beneficiary who is to receive any shares and cash, if any, from the participant's account under this Plan in the event of such participant's death subsequent to the end of an Purchase Period but prior to delivery to him of such shares and cash. In addition, a participant may file a written designation of a beneficiary who is to receive any cash from the participant's account under this Plan in the event of such participant's death prior to a Purchase Date.

(b) Such designation of beneficiary may be changed by the participant at any time by written notice. In the event of the death of a participant and in the absence of a beneficiary validly designated under this Plan who is living at the time of such participant's death, the Company shall deliver such shares or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares or cash to the spouse or to any one or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

23. CONDITIONS UPON ISSUANCE OF SHARES; LIMITATION ON SALE OF SHARES. Shares shall not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act, the Securities Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, and the requirements of any stock exchange or automated quotation system upon which the shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance.

24. APPLICABLE LAW. The Plan shall be governed by the substantive laws (excluding the conflict of laws rules) of the State of California.

25. AMENDMENT OR TERMINATION OF THIS PLAN. The Board may at any time amend, terminate or extend the term of this Plan, except that any such termination cannot affect options previously granted under this Plan, nor may any amendment make any change in an option previously granted which would adversely affect the right of any participant, nor may any amendment be made without approval of the stockholders of the Company obtained in accordance with
Section 21 above within twelve (12) months of the adoption of such amendment (or earlier if required by Section 21) if such amendment would:

(a) increase the number of shares that may be issued under this Plan; or

(b) change the designation of the employees (or class of employees) eligible for participation in this Plan.

Notwithstanding the foregoing, the Board may make such amendments to the Plan as the Board determines to be advisable, if the continuation of the Plan or any Offering Period would result in financial accounting treatment for the Plan that is different from the financial accounting treatment in effect on the date this Plan is adopted by the Board.

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EXHIBIT 10.04

CONCUR TECHNOLOGIES, INC.

1998 DIRECTORS STOCK OPTION PLAN

As Adopted August 21, 1998

1. PURPOSE. This 1998 Directors Stock Option Plan (this "PLAN") is established to provide equity incentives for certain nonemployee members of the Board of Directors of Concur Technologies, Inc. (the "COMPANY"), who are described in Section 6.1 below, by granting such persons options to purchase shares of stock of the Company.

2. ADOPTION AND STOCKHOLDER APPROVAL. After this Plan is adopted by the Board of Directors of the Company (the "BOARD"), this Plan will become effective on the time and date (the "EFFECTIVE DATE") on which the registration statement filed by the Company with the Securities and Exchange Commission ("SEC") under the Securities Act of 1933, as amended (the "SECURITIES ACT"), to register the initial public offering of the Company's Common Stock is declared effective by the SEC. This Plan shall be approved by the stockholders of the Company, consistent with applicable laws, within twelve (12) months after the date this Plan is adopted by the Board.

3. TYPES OF OPTIONS AND SHARES. Options granted under this Plan shall be non-qualified stock options ("NQSOS"). The shares of stock that may be purchased upon exercise of Options granted under this Plan (the "SHARES") are shares of the Common Stock of the Company.

4. NUMBER OF SHARES. The maximum number of Shares that may be issued pursuant to Options granted under this Plan (the "MAXIMUM NUMBER") is 600,000 Shares, subject to adjustment as provided in this Plan. If any Option is terminated for any reason without being exercised in whole or in part, the Shares thereby released from such Option shall be available for purchase under other Options subsequently granted under this Plan. At all times during the term of this Plan, the Company shall reserve and keep available such number of Shares as shall be required to satisfy the requirements of outstanding Options granted under this Plan; provided, however that if the aggregate number of Shares subject to outstanding Options granted under this Plan plus the aggregate number of Shares previously issued by the Company pursuant to the exercise of Options granted under this Plan equals or exceeds the Maximum Number, then notwithstanding anything herein to the contrary, no further Options may be granted under this Plan until the Maximum Number is increased or the aggregate number of Shares subject to outstanding Options granted under this Plan plus the aggregate number of Shares previously issued by the Company pursuant to the exercise of Options granted under this Plan is less than the Maximum Number.

5. ADMINISTRATION. This Plan shall be administered by the Board or by a committee of not less than two members of the Board appointed to administer this Plan (the "COMMITTEE"). As used in this Plan, references to the Committee shall mean either such Committee or the Board if no Committee has been established. The interpretation by the Committee of any of the provisions of this Plan or any Option granted under this Plan shall be final and binding upon the Company and all persons having an interest in any Option or any Shares purchased pursuant to an Option.

6. ELIGIBILITY AND AWARD FORMULA.

6.1 Eligibility. Options shall be granted only to directors of the Company who are not employees of the Company or any Parent, Subsidiary or Affiliate of the Company, as those terms are defined in Section 17 below (each such person referred to as an "Optionee").


Concur Technologies, Inc. 1998 Directors Stock Option Plan

6.2 Initial Grant. Each Optionee who is or becomes a member of the Board on or after the Effective Date will automatically be granted an Option for 50,000 Shares (an "INITIAL GRANT") on the later of the Effective Date or on the date such Optionee first becomes a member of the Board.

6.3 Succeeding Grants. At each Annual Meeting of the Company, each Optionee will automatically be granted an Option for 20,000 Shares (a "SUCCEEDING GRANT"), provided the Optionee is a member of the Board on such date and has served continuously as a member of the Board since the date of such Optionee's Initial Grant.

7. TERMS AND CONDITIONS OF OPTIONS. Subject to the following and to
Section 6 above:

7.1 Form of Option Grant. Each Option granted under this Plan shall be evidenced by a written Stock Option Grant ("GRANT") in such form (which need not be the same for each Optionee) as the Committee shall from time to time approve, which Grant shall comply with and be subject to the terms and conditions of this Plan.

7.2 Vesting. The date an Optionee receives an Initial Grant or a Succeeding Grant is referred to in this Plan as the "START DATE" for such Option.

(a) Initial Grants. Each Initial Grant will vest as to twenty-five percent (25%) of the Shares on the first anniversary of the Start Date for such Initial Grant, and as to one thirty-sixth (1/36th) of the Shares on each subsequent monthly anniversary of the Start Date, so long as the Optionee continuously remains a director or a consultant of the Company.

(b) Succeeding Grants. Each Succeeding Grant will vest as to twenty-five percent (25%) of the Shares on the first anniversary of the Start Date for such Succeeding Grant, and as to one thirty-sixth (1/36th) of the Shares on each subsequent monthly anniversary of the Start Date, so long as the Optionee continuously remains a director or a consultant of the Company.

7.3 Exercise Price. The exercise price of an Option shall be the Fair Market Value (as defined in Section 17.4) of the Shares, at the time that the Option is granted.

7.4 Termination of Option. Except as provided below in this Section, each Option shall expire ten (10) years after its Start Date (the "EXPIRATION DATE"). The Option shall cease to vest when the Optionee ceases to be a member of the Board or a consultant of the Company. The date on which the Optionee ceases to be a member of the Board or a consultant of the Company shall be referred to as the "TERMINATION DATE". An Option may be exercised after the Termination Date only as set forth below:

(a) Termination Generally. If the Optionee ceases to be a member of the Board or a consultant of the Company for any reason except death of the Optionee or disability of the Optionee (whether temporary or permanent, partial or total, as determined by the Committee), then each Option then held by such Optionee, to the extent (and only to the extent) that it would have been exercisable by the Optionee on the Termination Date, may be exercised by the Optionee no later than seven (7) months after the Termination Date, but in no event later than the Expiration Date.

(b) Death or Disability. If the Optionee ceases to be a member of the Board or a consultant of the Company because of the death of the Optionee or the disability of the Optionee (whether temporary or permanent, partial or total, as determined by the Committee), then each Option then held by such Optionee to the extent (and only to the extent) that it would have been exercisable by the Optionee on the Termination Date, may be exercised by the Optionee (or the Optionee's legal representative) no later than twelve (12) months after the Termination Date, but in no event later than the Expiration Date.

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Concur Technologies, Inc. 1998 Directors Stock Option Plan

8. EXERCISE OF OPTIONS.

8.1 Exercise Period. Subject to the provisions of Section 8.5 below, Options shall be exercisable as they vest; provided that the Committee may provide that such Options shall be immediately exercisable subject to repurchase in accordance with the vesting schedule set forth in Section 7.

8.2 Notice. Options may be exercised only by delivery to the Company of an exercise agreement in a form approved by the Committee stating the number of Shares being purchased, the restrictions imposed on the Shares and such representations and agreements regarding the Optionee's investment intent and access to information as may be required by the Company to comply with applicable securities laws, together with payment in full of the exercise price for the number of Shares being purchased.

8.3 Payment. Payment for the Shares purchased upon exercise of an Option may be made (a) in cash or by check; (b) by surrender of shares of Common Stock of the Company that have been owned by the Optionee for more than six (6) months (and which have been paid for within the meaning of SEC Rule 144 and, if such shares were purchased from the Company by use of a promissory note, such note has been fully paid with respect to such shares) or were obtained by the Optionee in the open public market, having a Fair Market Value equal to the exercise price of the Option; (c) by waiver of compensation due or accrued to the Optionee for services rendered; (d) provided that a public market for the Company's stock exists, through a "same day sale" commitment from the Optionee and a broker-dealer that is a member of the National Association of Securities Dealers (an "NASD DEALER") whereby the Optionee irrevocably elects to exercise the Option and to sell a portion of the Shares so purchased to pay for the exercise price and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the exercise price directly to the Company; (e) provided that a public market for the Company's stock exists, through a "margin" commitment from the Optionee and an NASD Dealer whereby the Optionee irrevocably elects to exercise the Option and to pledge the Shares so purchased to the NASD Dealer in a margin account as security for a loan from the NASD Dealer in the amount of the exercise price, and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the exercise price directly to the Company; or (f) by any combination of the foregoing.

8.4 Withholding Taxes. Prior to issuance of the Shares upon exercise of an Option, the Optionee shall pay or make adequate provision for any federal or state withholding obligations of the Company, if applicable.

8.5 Limitations on Exercise. Notwithstanding the exercise periods set forth in the Grant, exercise of an Option shall always be subject to the following limitations:

(a) An Option shall not be exercisable unless such exercise is in compliance with the Securities Act and all applicable state securities laws, as they are in effect on the date of exercise.

(b) The Committee may specify a reasonable minimum number of Shares that may be purchased upon any exercise of an Option, provided that such minimum number will not prevent the Optionee from exercising the full number of Shares as to which the Option is then exercisable.

9. NONTRANSFERABILITY OF OPTIONS. During the lifetime of the Optionee, an Option shall be exercisable only by the Optionee or by the Optionee's guardian or legal representative, unless otherwise determined by the Committee. No Option may be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent and distribution, unless otherwise determined by the Committee.

10. PRIVILEGES OF STOCK OWNERSHIP. No Optionee shall have any of the rights of a stockholder with respect to any Shares subject to an Option until the Option has been validly exercised. No adjustment shall be made for dividends or distributions or other rights for which the record date is prior to the date of exercise, except as provided in this Plan. The Company shall provide to each Optionee a copy of the annual financial statements of the

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Concur Technologies, Inc. 1998 Directors Stock Option Plan

Company at such time after the close of each fiscal year of the Company as they are released by the Company to its stockholders.

11. ADJUSTMENT OF OPTION SHARES. In the event that the number of outstanding shares of Common Stock of the Company is changed by a stock dividend, stock split, reverse stock split, combination, reclassification or similar change in the capital structure of the Company without consideration, the number of Shares available under this Plan and the number of Shares subject to outstanding Options and the exercise price per share of such outstanding Options shall be proportionately adjusted, subject to any required action by the Board or stockholders of the Company and compliance with applicable securities laws; provided, however, that no fractional shares shall be issued upon exercise of any Option and any resulting fractions of a Share shall be rounded up to the nearest whole Share.

12. NO OBLIGATION TO CONTINUE AS DIRECTOR. Nothing in this Plan or any Option granted under this Plan shall confer on any Optionee any right to continue as a director of the Company.

13. COMPLIANCE WITH LAWS. The grant of Options and the issuance of Shares upon exercise of any Options shall be subject to and conditioned upon compliance with all applicable requirements of law, including without limitation compliance with the Securities Act, compliance with all other applicable state securities laws and compliance with the requirements of any stock exchange or national market system on which the Shares may be listed. The Company shall be under no obligation to register the Shares with the SEC or to effect compliance with the registration or qualification requirement of any state securities laws, stock exchange or national market system.

14. ACCELERATION OF OPTIONS ON CERTAIN CORPORATE TRANSACTIONS. In the event of (a) a dissolution or liquidation of the Company, (b) a merger or consolidation in which the Company is not the surviving corporation (other than a merger or consolidation with a wholly-owned subsidiary, a reincorporation of the Company in a different jurisdiction, or other transaction in which there is no substantial change in the stockholders of the Company or their relative stock holdings and the Options granted under this Plan are assumed, converted or replaced by the successor corporation, which assumption, conversion or replacement will be binding on all Optionees), (c) a merger in which the Company is the surviving corporation but after which the stockholders of the Company (other than any stockholder which merges (or which owns or controls another corporation which merges) with the Company in such merger) cease to own their shares or other equity interests in the Company, (d) the sale of substantially all of the assets of the Company, or (e) the acquisition, sale or transfer of more than 50% of the outstanding shares of the Company by tender offer or similar transaction, the vesting of all options granted pursuant to this Plan will accelerate and the options will become exercisable in full prior to the consummation of such event at such times and on such conditions as the Committee determines, and must be exercised, if at all, within seven months of the consummation of said event. Any options not exercised within such seven-month period shall expire.

15. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time terminate or amend this Plan or any outstanding option, provided that the Board may not terminate or amend the terms of any outstanding option without the consent of the Optionee. In any case, no amendment of this Plan may adversely affect any then outstanding Options or any unexercised portions thereof without the written consent of the Optionee.

16. TERM OF PLAN. Options may be granted pursuant to this Plan from time to time within a period of ten (10) years from the Effective Date.

17. CERTAIN DEFINITIONS. As used in this Plan, the following terms shall have the following meanings:

17.1 "PARENT" means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if each of such corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

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Concur Technologies, Inc. 1998 Directors Stock Option Plan

17.2 "SUBSIDIARY" means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

17.3 "AFFILIATE" means any corporation that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, another corporation, where "control" (including the terms "controlled by" and "under common control with") means the possession, direct or indirect, of the power to cause the direction of the management and policies of the corporation, whether through the ownership of voting securities, by contract or otherwise.

17.4 "FAIR MARKET VALUE" means, as of any date, the value of a share of the Company's Common Stock determined as follows:

(a) if such Common Stock is then quoted on the Nasdaq National Market, its closing price on the Nasdaq National Market on the date of determination as reported in The Wall Street Journal;

(b) if such Common Stock is publicly traded and is then listed on a national securities exchange, its closing price on the date of determination on the principal national securities exchange on which the Common Stock is listed or admitted to trading as reported in The Wall Street Journal;

(c) if such Common Stock is publicly traded but is not quoted on the Nasdaq National Market nor listed or admitted to trading on a national securities exchange, the average of the closing bid and asked prices on the date of determination as reported in The Wall Street Journal;

(d) in the case of an Option granted on the Effective Date, the price per share at which shares of the Company's Common Stock are initially offered for sale to the public by the Company's underwriters in the initial public offering of the Company's Common Stock pursuant to a registration statement filed with the SEC under the Securities Act; or

(e) if none of the foregoing is applicable, by the Committee in good faith.

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EXHIBIT 10.05

KIBBLE & PRENTICE, INC. REGIONAL PROTOTYPE
DEFINED CONTRIBUTION PLAN AND TRUST


TABLE OF CONTENTS

ARTICLE I
DEFINITIONS

ARTICLE II
TOP HEAVY PROVISIONS AND ADMINISTRATION

2.1  TOP HEAVY PLAN REQUIREMENTS ................................    16

2.2  DETERMINATION OF TOP HEAVY STATUS ..........................    16

2.3  POWERS AND RESPONSIBILITIES OF THE EMPLOYER ................    20

2.4  DESIGNATION OF ADMINISTRATIVE AUTHORITY ....................    21

2.5  ALLOCATION AND DELEGATION OF RESPONSIBILITIES ..............    21

2.6  POWERS AND DUTIES OF THE ADMINISTRATOR .....................    21

2.7  RECORDS AND REPORTS ........................................    23

2.8  APPOINTMENT OF ADVISERS ....................................    23

2.9  INFORMATION FROM EMPLOYER ..................................    23

2.10 PAYMENT OF EXPENSES ........................................    23

2.11 MAJORITY ACTIONS ...........................................    23

2.12 CLAIMS PROCEDURE ...........................................    24

2.13 CLAIMS REVIEW PROCEDURE ....................................    24

                          ARTICLE III
                          ELIGIBILITY

3.1  CONDITIONS OF ELIGIBILITY ..................................    25

3.2  EFFECTIVE DATE OF PARTICIPATION ............................    25

3.3  DETERMINATION OF ELIGIBILITY ...............................    25

3.4  TERMINATION OF ELIGIBILITY .................................    25

3.5  OMISSION OF ELIGIBLE EMPLOYEE ..............................    26

3.6  INCLUSION OF INELIGIBLE EMPLOYEE ...........................    26

3.7  ELECTION NOT TO PARTICIPATE ................................    26

3.8  CONTROL OF ENTITIES BY OWNER-EMPLOYEE ......................    26


ARTICLE IV
CONTRIBUTION AND ALLOCATION

4.1  FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION ............    27

4.2  TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION .................    28

4.3  ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS .......    28

4.4  MAXIMUM ANNUAL ADDITIONS ...................................    35

4.5  ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS ..................    44

4.6  TRANSFERS FROM QUALIFIED PLANS .............................    44

4.7  VOLUNTARY CONTRIBUTIONS ....................................    45

4.8  DIRECTED INVESTMENT ACCOUNT ................................    47

4.9  QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS .................    47

4.10 ACTUAL CONTRIBUTION PERCENTAGE TESTS .......................    48

4.11 INTEGRATION IN MORE THAN ONE PLAN ..........................    48

                           ARTICLE V
                          VALUATIONS

5.1  VALUATION OF THE TRUST FUND ................................    48

5.2  METHOD OF VALUATION ........................................    49

                          ARTICLE VI
          DETERMINATION AND DISTRIBUTION OF BENEFITS

6.1  DETERMINATION OF BENEFITS UPON RETIREMENT ..................    49

6.2  DETERMINATION OF BENEFITS UPON DEATH .......................    49

6.3  DETERMINATION OF BENEFITS IN EVENT OF DISABILITY ...........    51

6.4  DETERMINATION OF BENEFITS UPON TERMINATION .................    51

6.5  DISTRIBUTION OF BENEFITS ...................................    55

6.6  DISTRIBUTION OF BENEFITS UPON DEATH ........................    60

6.7  TIME OF SEGREGATION OR DISTRIBUTION ........................    65

6.8  DISTRIBUTION FOR MINOR BENEFICIARY .........................    66

6.9  LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN .............    66

6.10 PRE-RETIREMENT DISTRIBUTION ................................    66


6.11 ADVANCE DISTRIBUTION FOR HARDSHIP ..........................    67

6.12 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS ..................    67

6.13 SPECIAL RULE FOR NON-ANNUITY PLANS .........................    68

                          ARTICLE VII
                            TRUSTEE

7.1  BASIC RESPONSIBILITIES OF THE TRUSTEE ......................    68

7.2  INVESTMENT POWERS AND DUTIES OF THE TRUSTEE ................    69

7.3  OTHER POWERS OF THE TRUSTEE ................................    71

7.4  LOANS TO PARTICIPANTS ......................................    74

7.5  DUTIES OF THE TRUSTEE REGARDING PAYMENTS ...................    76

7.6  TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES ..............    76

7.7  ANNUAL REPORT OF THE TRUSTEE ...............................    76

7.8  AUDIT ......................................................    77

7.9  RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE .............    78

7.10 TRANSFER OF INTEREST .......................................    79

7.11 TRUSTEE INDEMNIFICATION ....................................    79

7.12 EMPLOYER SECURITIES AND REAL PROPERTY ......................    79

                         ARTICLE VIII
              AMENDMENT, TERMINATION, AND MERGERS

8.1  AMENDMENT ..................................................    79

8.2  TERMINATION ................................................    81

8.3  MERGER OR CONSOLIDATION ....................................    81

                          ARTICLE IX
                        MISCELLANEOUS

9.1  EMPLOYER ADOPTIONS .........................................    81

9.2  PARTICIPANT'S RIGHTS .......................................    82

9.3  ALIENATION .................................................    82

9.4  CONSTRUCTION OF PLAN .......................................    83

9.5  GENDER AND NUMBER ..........................................    83


9.6  LEGAL ACTION ...............................................    83

9.7  PROHIBITION AGAINST DIVERSION OF FUNDS .....................    83

9.8  BONDING ....................................................    83

9.9  EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE .................    84

9.10 INSURER'S PROTECTIVE CLAUSE ................................    84

9.11 RECEIPT AND RELEASE FOR PAYMENTS ...........................    84

9.12 ACTION BY THE EMPLOYER .....................................    85

9.13 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY .........    85

9.14 HEADINGS ...................................................    85

9.15 APPROVAL BY INTERNAL REVENUE SERVICE .......................    85

9.16 UNIFORMITY .................................................    86

9.17 PAYMENT OF BENEFITS ........................................    86

                           ARTICLE X
                    PARTICIPATING EMPLOYERS

10.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER ................    86

10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS ....................    87

10.3 DESIGNATION OF AGENT .......................................    87

10.4 EMPLOYEE TRANSFERS .........................................    87

10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES ......    88

10.6 AMENDMENT ..................................................    88

10.7 DISCONTINUANCE OF PARTICIPATION ............................    88

10.8 ADMINISTRATOR'S AUTHORITY ..................................    88

10.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE ..........    89

                          ARTICLE XI
                     CASH OR DEFERRED PROVISIONS

11.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION ............    89

11.2 PARTICIPANT'S SALARY REDUCTION ELECTION ....................    90

11.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS .......    94


11.4 ACTUAL DEFERRAL PERCENTAGE TESTS ...........................     97

11.5 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS .............    100

11.6 ACTUAL CONTRIBUTION PERCENTAGE TESTS .......................    104

11.7 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS .........    107

11.8 ADVANCE DISTRIBUTION FOR HARDSHIP ..........................    111


ARTICLE I
DEFINITIONS

As used in this Plan, the follow