ITEM

A.        Corporate Documents

            1.         Charter.  All charter documents, including amendments and restatements.

            2.         Bylaws.  Bylaws.

            3.         Minutes.  Minutes of meetings of the Board of Directors and any committees thereof and minutes of meetings of the shareholders.

            4.         Shareholder Agreements.  All agreements, orders, liens or proceedings affecting rights of the shareholders, including, without limitation, voting agreements, voting trusts, shareholder agreements or other similar arrangements, stock purchase and repurchase agreements and stock restriction agreements.  Also include a summary of business and personal relationships and affiliations among directors, officers, shareholders, creditors, customers, suppliers and other business affiliates.

            5.         Qualifications to do Business.  List of all states in which the Company maintains an office or is otherwise qualified to do business as a foreign corporation.

                        6.         Stock Records.  The stock ledger and all records indicating issuance of shares, including any probate documents evidencing the transfer of shares to the current holders.

            7.         Derivative Securities.  Warrants, stock options, agreements relating to any warrants or options to purchase securities, any convertible security and other rights to subscribe for or purchase securities.

            8.         Subsidiaries.  List of all subsidiaries, divisions and affiliates of the Company at any time.

B.                    Tangible Properties

            1.         Real Property.  Listing of real estate presently or formerly owned, leased, subleased or used.

                        (i)         State whether the property is owned or leased (whether as lessor or lessee) and list the entity or individual which holds the title or lease and brief description of property, liens thereon, structures, lease provisions (including assignment, renewal and the term of each such lease), use and location.

                        (ii)        Copies of deeds, leases, mortgages, sales contracts, surveys, sublease contracts, appraisals, and with respect to leased properties, any notices of default under such leases and estoppel letters executed by the Company; and with respect to any such leases which have been assigned, any landlord's consent to such assignment, together with any material correspondence relating to the foregoing and any amendments to or modifications or supplements of any of the foregoing.

                        (iii)       Copies of title insurance policies, title opinions and/or lawyers' abstract reports (and any background documents) covering real estate listed above.

                        (iv)       Listing of all agreements, decrees, orders or judgments which in any way limit or restrict the Company's present use of any of the properties listed above.

                        (v)        Real property tax bills for the last three years and any notices of assessments and reassessments.

                        (vi)       Zoning information and records relating to zoning violations, approvals, special exceptions and non-conforming uses.

                        (vii)      Agreements relating to security, HVAC maintenance, pest control, roof guarantees, or other such matters.

                        (viii)     Certificates of occupancy and other permits with respect to the use and occupancy of property.

                        (ix)       All leases and contracts of sale on all properties formerly owned or leased by the Company.

            2.         Personal Property.  Description and age of principal items or classes of equipment, machinery, furniture and fixtures owned, and a schedule of costs, depreciation reserve, depreciation rates and methods, present book value, and all liens and encumbrances applicable to each.  List and description of all equipment, machinery, furniture and fixtures leased, with copies of each lease and related documentation.

            3.         Customer Lists.  Copies of all customer lists of the Company.

            4.         Excluded Assets.  Detailed listing of incidental assets and personal effects currently used in the business and/or located on Company property, whether or not owned by the Company, that sellers intend to exclude from the sale.

C.        Contracts and Commitments

Copies and details of all contracts and all capital commitments of the Company, including:

            1.         Customer Contracts:  All agreements with the Company's customers currently in effect or under consideration.

            2.         Dealer and Supplier Contracts:  All agreements with the Company's dealers, distributors, brokers and suppliers, including for the supply of materials used in the business of the Company.

            3.         Development Contracts and Joint Venture Agreements:  All agreements entered into out of the ordinary course of business, including development, capital commitments and joint venture agreements.

            4.         Employment Contracts:  All employment contracts with management, deferred compensation, severance agreements and similar agreements, and all general employment or collective bargaining agreements with employees.

            5.         Insurance Policies:  All material insurance policies and loss summaries for the past three years for general liability insurance and for workers compensation insurance and all reservations of rights and denials of coverage received from any insurance carrier relating to pending claims; workers' compensation claims history for the past three years; listing of workers' compensation classifications and codes.

            6.         Acquisitions and Divestitures:  All material contracts relating to material acquisitions and divestitures.

            7.         Affiliates:  All material contracts to which any officer or director of the Company, on the one hand, and the Company, on the other hand, are parties.

            8.         Non-competition Agreements.  Copies of all non competition agreements, non-disclosure agreements or standstill agreements to which the Company is a party.

            9.         Miscellaneous Material Contracts:  All other material contracts not otherwise described herein with a remaining term in excess of one year or involving amounts in excess of $5,000.

            10.       Standard Forms:  Standard forms of purchase orders and sales orders used in connection with the business of the Company.

D.        Indebtedness/Company Loans

            1.         Short-Term Debt:  All short-term loan agreements, lines of credit, letters of credit, and guarantees to which the Company is a party.  Please give descriptions of any bank overdrafts and state whether secured or unsecured.

            2.         Long-Term Debt:  All long-term loan agreements, bonds, debentures, notes, mortgages, security agreements and guarantees to which the Company is a party.

            3.         Other Credit Facilities:  Documentation related to any other credit facilities to which the Company is a party.

            4.         Accounts Payable:  Current and historical levels of accounts payable and terms of payment.

            5.         Debt Schedule:  Debt schedule summarizing short-term and long-term debt and capital lease obligations with principal amounts, interest rates, amount outstanding and maturity date.

            6.         Company Loans:  Details of any loans made by the Company (include details of interest payments received, and of terms and covenants).

            7.         Correspondence with Lenders:  Correspondence with the Company's lenders regarding any default by the Company under its credit facilities with any lender.

E.        Litigation and Claims

            1.         Current and Recent Litigation:  The Company's litigation summaries and memoranda of all outstanding litigation, and all litigation settled or otherwise terminated, to which the Company is or was a party containing the following information:  parties, nature of proceeding, date commenced, amount of damages or other relief sought; and access to all pleadings on file regarding such litigation and relevant insurance coverage.

            2.         Contingent Liabilities:  Summary of nature and amount of all unrecorded and contingent liabilities, including threatened claims and causes of action, warranty experience, products liability exposure, environmental contamination, employee problems and material disputes with third parties; and copies of all relevant correspondence.

            3.         Governmental Investigations:  Summaries and memoranda relating to any governmental or administrative investigations, proceedings or arbitrations, whether pending, threatened or concluded, to which the Company is or was subject; and access to all relevant documentation regarding such investigations, proceedings and arbitrations.

            4.         Consent Decrees:  All consent decrees, court and administrative judgments and orders, settlements, etc., requiring or prohibiting future activities of the Company.

            5.         Legal Opinions:  All opinions by the Company's counsel as to any pending litigation against the Company (including letters to auditors).

F.         Employees, Compensation and Benefits

            1.         Organizational chart.  Organizational chart for the management of the Company. 

            2.         Persons employed by the Company:  Total number of union and non-union employees; list of employees showing name, age, years of service, job description, location and current compensation level, whether salary or hourly.

            3.         Compensation:  Summary of current and past compensation of key personnel; copies of employment agreements, change in control arrangements, consulting arrangements, non-competition arrangements, and severance arrangements; indemnification contracts or similar arrangements; supplemental benefit plans/arrangements; deferred compensation arrangements; Department of Labor "top hat" notices, if applicable.

            4.         Insurance:  Life, health and disability insurance plans.

            5.         Benefit Plans:  Plan documents (including amendments) in regard to bonus, severance, pension, profit-sharing, savings, health, life, disability, welfare and other benefit plans; summary of annualized cost to the Company of each such plan; documentation, description and valuation, if any, in respect of any defined benefit and defined contribution plans (if plan permits loans, documentation on any loans outstanding); other benefit plans for retired or former employees; funding arrangements (including trusts, insurance and/or annuity contracts) and funding waivers, if any; for qualified plans, determination letters received, last determination letter request, and outstanding requests for letters, if any; summary plan descriptions; contracts with third party administrators, actuaries, investment; managers, consultants and other independent contractors relating to the plan; audited financial statements for the plan (last 3 years); responses to accountants' requests for information (last 3 years); COBRA compliance (documents, procedures); for plans with participant directed investments, communications and information provided to employees concerning plan investment choices.

            6.         Perquisites:  List of fringes and perquisites provided to key personnel, including automobiles, club memberships, additional insurance, and expense accounts.

            7.         Bonuses and Contingent Remuneration:  Bonus and incentive plans and actual payments made or accrued under such plans.

            8.         Interested Transactions:  Summary of all transactions between the Company and any officer, director or key employee of the Company, including loans, dividends, guarantees and contracts with such affiliated parties; a description of all legal proceedings, including any bankruptcy proceeding, whether settled, decided, pending or threatened, involving any officer, director or key employee of the Company.

            9.         Employee Policies:  All published employee policies, plan descriptions and handbooks, including severance, vacation, holiday, sick-pay, overtime and advances.

            10.       Union Agreements, Etc.:  Description and copy of current collective bargaining agreements or any other agreements involving a union at the Company and the date when any such agreement is open for renegotiation; description of "labor unrest" situations; all pending or threatened labor strikes or other labor trouble experienced by the Company; description of any current or expected attempts to unionize; grievance files; multiemployer plan contribution history.

            11.       Reportable Events, Audits, Etc.:  All notices to the Pension Benefit Guaranty Corporation (PBGC) concerning reportable events under ERISA; all documentation of any audits, investigations or reviews conducted within the last 3 years by the IRS, Department of Labor or PBGC with respect to any plan and any administrative proceedings in connection therewith; PBGC Forms 1 (3 most recent plan years).

            12.       Unfunded Pension Liabilities:  Actuarial reports concerning all defined benefit pension plans for the 3 most recent years.

            13.       Withdrawal Liabilities:  All communications regarding withdrawal liabilities under multiemployer pension plans; estimate of withdrawal liabilities under multiemployer pension plans.

            14.       Form 5500:  Form 5500s filed with the U.S. Department of Labor for each employee benefit plan (i.e., pension plans and welfare plans), for the last 3 years (including schedules and opinions).

            15.       Stock Plans:  Stock purchase, stock option and other stock benefit plan documents; forms of option, stock purchase and other related agreements; contractual agreements; SEC registration statements, if applicable; proxy statement pursuant to which shareholders approved plan, if applicable; Form 11-K, if applicable.

            16.       Workers' Compensation:  Workers' compensation program and a summary of workers' compensation experience; list of any pending workers' compensation claims/hearings.

            17.       Other:  All material documents pertaining to Occupational Health and Safety Administration (OSHA) and the Equal Opportunity Commission (EEOC).

G.        Regulatory Matters

            1.         Regulatory Compliance:  All regulatory compliance correspondence, filings, licenses, permits, consents and regulatory approvals, etc., required to enable the Company to transact or conduct its businesses.

            2.         Violations:  All material correspondence, if any, to the Company alleging violation of or requesting compliance with laws, regulations, etc. or requests for information with respect to interstate commerce laws, antitrust laws, securities laws, environmental laws, etc.

            3.         Manuals:  Any policy manuals or materials with respect to compliance with regulatory matters.

            4.         Permits, Licenses, Registrations and Authorizations:  All permits, licenses, registrations, or other authorizations held by the Company issued under any statute, regulation or ordinance.

H.        Environmental Matters

            1.         Audits and Assessments:  All environmental audits or assessments in connection with the business or real properties of the Company.

            2.         Suits:  All suits against the Company relating in any way to environmental matters.

            3.         Permits, Licenses, Registrations and Authorizations:  All permits, licenses, registrations, or other authorizations held by the Company issued under any environmental statute, regulation or ordinance.

            4.         Reports and Correspondence:  All reports or correspondence relating to any permits requested in the preceding paragraph.

            5.         Manifests:  All manifests for hazardous or special wastes.

            6.         Administrative Complaints, Orders, Notices and Citations:  All administrative complaints, orders, notices of violation, citations or similar documents and correspondence relating to alleged violations of environmental laws.

            7.         Underground Storage Tanks:  All records relating to any underground storage tanks, including but not limited to inventory records, notification forms, tank testing results, or records relating to installation and maintenance of cathodic protection.

            8.         Waste Disposal:  All contracts and records regarding disposal of wastes.

            9.         Reports and Inventories:  All SARA Title III reports or inventories.

            10.       Hazardous Substances Claims, Demands and Information Requests:  All documents concerning any claim, demand or information request relating to hazardous substances, including but not limited to, requests issued under CERCLA § 104, PRP letters or similar documents, whether issued under CERCLA or any similar state statute.

            11.       MSDS's:  All Material Safety Data Sheets.

            12.       Communications with Regulators:  All written communications with environmental regulators.

            13.       Communications with Third Parties:  All written communications with third parties regarding any demand, claim, notice or suit relating to environmental matters.

            14.       Hazardous Substance Storage Facilities:  All documents relating to the presence, repair, removal or closure of any underground storage tank, pit, pond, lagoon or landfill on the Company's premises wherein hazardous substance or regulated substances were or are located.

            15.       Laboratory and Field Tests:  All results of laboratory tests or field tests for the presence of hazardous substances or petroleum at properties owned, occupied or operated by the Company.

            16.       Spill Prevention and Countermeasures:  All Spill Prevention Control and Countermeasure plans for any transferred property, whether or not required by the Clean Water Act.

            17.       Contingency Plans:  All contingency plans required pursuant to any statute or rule.

            18.       Other Analyses and Documents:  All analyses or other documents relating to the presence of asbestos, lead paint, PCB's, ureaformaldehyde or radon at the real property subject to this transaction.

I.          Financial

            1.         Audited Financial Statements:  Audited financial statements of the Company for at least the last three financial years; copies of audit committee reports to the board of directors, if any.

            2.         Management Letters:  Auditors' management letters, management's replies thereto and lawyers' audit response letters.

            3.         Interim Financial Statements:  Any interim unaudited financial statements, including consolidating financial statements, along with the name, address and telephone number of the accountant or other person(s) who prepared each of the financial statements; copies of internal financial budgets and projections and business plans (last three years), together with a review of or comparison with actual results for evaluation of current projections.

            4.         Appraisals:  Appraisals of any fixed assets.

            5.         Accounting Policies.  Description of any change in accounting policies or procedures during the past three (3) years; description of any accounting policies or practices which differ from GAAP; copies of any documents relating to material write-downs or write-offs of notes or accounts receivable other than in the ordinary course of business.

            6.         Budgets and Projections.  All budgets and projections prepared by the Company, for the past five years, the current year and any future years for which such budgets or projections exist.

            7.         Accounts Receivable.  Current and past levels of accounts receivables, aging and write-off policies, and special cases.

            8.         Current Assets.  Current asset levels, working capital and liquidity including expected cash from operations, bank lines of credit and budgeted expenditures.

            9.         Inventory.  Inventory levels of raw materials, work-in-progress and finished goods, valuation policies, average turnover and obsolescence.

J.         Tax Matters

            1.         Tax Returns:  All tax returns (federal, state and local) for last 3 years.

            2.         Audit and Agents' Reports:  Any audit and revenue agents' reports (federal, state and local) for last 3 years.

            3.         Settlement Documents and Correspondence:  All settlement documents and correspondence relating to any material federal, state or local tax issue.

            4.         Agreements:  All agreements waiving statute of limitations or extending time for filing returns (federal, state and local), if any, for last 3 years.

            5.         Tax Liens:  List any tax liens on the Company's assets.

            6.         Claims:  All information concerning any significant claim asserted or threatened by any taxing authority against the Company or any other entity for whose taxes the Company could be liable, whether directly, indirectly, as transferee, or under a tax indemnity or tax-sharing arrangement. 

K.        Year 2000 Compliance

            1.         Potential Problems.  Please provide details of any perceived or potential problems relating to the Company's systems as a result of the Year 2000 issue, including an estimate of the costs associated with such problems.

            2.         Remedial Measures.  Please provide details of any plans, programs or other measures instituted or expected to be instituted to address the Year 2000 issue, including an estimate of the costs associated with such  measures.

            3.         Third Party Concerns.  Please provide information with respect to any potential Year 2000 problems arising as a result of the Company's relationships with suppliers, customers, creditors, borrowers, financial service organizations or other third parties.

L.         Licensing, Sales and Operations

            1.         License and Support Agreements. Please provide:

                        (a)  Standard form of domestic license agreement

                        (b)  Standard form of international license agreement

                                    - Form used by Company and its subsidiaries

                                    - Form used by resellers and distributors

                        (c)  List of and copies of nonstandard license agreements

                        (d)  All provisions relating to change of control, merger or acquisition.

                        (e)  Adequacy of limitations on copying and use, provisions regarding confidentiality, license transfer, limits of liability, warranties and product warranty period

                        (f)  Prior forms of license agreements and identification tying each customer to proper form of license agreement.

                        (g)  Identification of all customers with copies of source code escrow provision.

            2.         Patents and Patent Applications, U.S. and Foreign  Please provide:

                        (a)  List of a copies of all patents and patent applications

                        (b)  Identification of counsel handling application and maintenance of patents

                        (c)  Identification of all inventions for which patents have been considered or sought for reasons for failure to patent or abandonment

                        (d)  Copies of all correspondence and materials relating to actual or alleged infringements on patents held by or claimed by third parties on patents

                        (e)  Copies of all correspondence and materials relating to actual or alleged infringements on patents held by or claimed by third parties.

            3.         Trademarks, Service Marks, Tradenames and Copyrights, whether Registered or Unregistered, U.S. or Foreign.

                        Please provide:

                        (a)  List of and copies of all trademarks, service marks, tradenames, fictitious business names and copyrights, owned or used in the Company’s business;

                        (b)  Whether marks have been used regularly with proper identification of mark status

                        (c)  Files containing evidence of investigation of competing and conflicting marks;

                        (d)  Extent of actual use of registered marks;

                        (e)  Identification of counsel handling registration and maintenance of registrations of marks;

                        (f)  Listing of abandoned marks or marks not in actual use.;

                        (g)  Agreements for joint use of marks;

                        (h)  Copies of all correspondence and materials relating to actual or alleged infringements of third parties on marks;

                        (i)  Copies of all correspondence and materials relating to actual infringements on marks held by or claimed by third parties.

            4.         Distribution Agreements, Reseller Agreements, Commission or Agency Agreements or Sales Representative Agreements

                        Please provide:

                        (a)  Standard form of distributions agreements, reseller agreements, commission or agency agreements or sales representative agreements;

                        (b)  Copy of present and former domestic and international reseller, distributor, commission or agency agreement and sales representative agreements that are not on standard form;

                        (c)  Listing of all such agreements;

                        (d)  Copies of all agreements with terms;

                        (e)  Existence of provisions triggering off of merger, acquisition or change of control;

                        (f)  Provisions regarding ownership of marks or translations in territory;

                        (g)  Registration of agreement if required by laws of countries in the territory;

                        (h)  Exclusivity of rights in territory, termination provisions;

                        (i)  Support obligations ongoing and in connection with termination, transition of support after termination.

            5.         VAR, VAD, OEM and Similar Agreements

                        Please provide:

                        (a)  Standard form of listing of VAR, VAD, OEM and similar agreements;

                        (b)  Copies of VAR, VAD, OEM and similar agreements that vary from the standard form;

                        (c)  Existence of provisions triggering off of merger, acquisition or change of control;

                        (d) Provisions regarding ownership of marks or translations in territory;

                        (e)  Registration of agreement if required by laws of countries in the territory;

                        (f)  Exclusivity of rights in territory, termination provisions;

                        (g)  Support obligations ongoing and in connection with termination, transition of support after termination.

            6.         Agreements to Provide Consulting Services or Product Development Services to Others

                        Please provide:

                        (a)  Standard form of services agreement used domestically;

                        (b)  Standard form of international services agreement;

                        (c)  List of nonstandard services agreements;

                        (d)  All provisions relating to change of control, merger or acquisition;

                        (e)  Adequacy limits of liability and warranties;

                        (f)  Prior forms of services agreements and identification tying each customer to proper form of services agreement.

            7.         Standard Forms of Quotation, Evaluation Agreement, Lease or Rental Agreement, Support Agreement and Other Documents used in Connection with License of the Company’s Products or Provision of Services by the Company

            8.         Customer Provided Purchase Orders

            9.         Any Other Agreement of Whatever Kind Affecting the Technology or Proprietary Rights of the Company

            10.       List and Description of Major Suppliers and Major Customers (for each of the last three years).

            11.       Records Regarding Backlog, if Applicable

            12.       List of Customers

            13.       Copy of Product Packaging, Disk and Documentation regarding Use of Marks and Confidentiality Notices

            14.       Copy of all Product Packaging, Disk, and Documentation regarding Use of Marks and Confidentiality Notices

            15.       Copy of All Ads and Marketing Collateral Used in Past Year.  Please provide:

                        (a)  Use of marks and attribution of marks of others;

                        (b)  Representations regarding product functionality and performance.

            16.       Arrangements for Production of Product and Documentation

            17.       Copy Protection Scheme and License Key Lock Technology

            18.       Export License Compliance.  Please provide:

                        (a)  Files and correspondence regarding determination of applicability of restrictions on export of products and technology;

                        (b)  Export licenses or exceptions;

                        (c)  Files and correspondence regarding documentation of applicability of restrictions on import of products and technology in other countries;

                        (d)  Import licenses and exceptions, if applicable.

M.        Other Matters

            1.         Press Releases.  Copies of all press releases issued by the Company within the past two years.

            2.         Marketing & Sales Literature.  Samples of marketing and sales literature used for various products (e.g.  brochures of products and services).

            3.         Consultants' Reports.  Studies of the Company's business and industry prepared by management consultants or other consultants.

            4.         Internal Reports. Internal reports and studies concerning matters which are material to the ongoing business of the Company or the operation or ownership of its property (whether owned or leased), including any marketing and research reports.

            5.         Appraisals.  Appraisals of any asset.

            6.         All information or details related to any contingent liabilities of  the Company not reflected in the foregoing.

            7.         All other materials and documents involving the Company, not otherwise covered by the foregoing items, which, in your judgment, may be material to the business of the Company or which should be reviewed in making disclosures regarding the business and financial condition of the Company.