1031798--3/28/2008--BEA_SYSTEMS

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Failure to complete the merger with Oracle Corporation could materially and adversely affect our results of operations and our stock price. Our officers and directors have certain interests in the merger that are different from, or in addition to, interests of our stockholders. We and Oracle may not be able to obtain, or may be delayed in obtaining, the regulatory approvals required to consummate the merger. In certain instances, the merger agreement requires us to pay a termination fee of $250 million to Oracle. This payment could affect the decisions of a third party considering making an alternative acquisition proposal to the merger. Purported stockholder class action lawsuits have been filed against us and members of our Board of Directors challenging the merger and an unfavorable judgment or ruling in these lawsuits could prevent or delay the consummation of the merger, result in substantive costs, or both. We have experienced in the past, and may experience in the future, significant fluctuations in our actual or anticipated revenues and operating results, which have prevented us in the past, and may prevent us in the future from meeting securities analysts or investors expectations and result in a decline in our stock price. Our quarterly revenues, expenses and operating results are difficult to forecast because of the volatility of our license revenues. The seasonality of our sales typically has a significant adverse effect on our revenues in our first fiscal quarter. The lengthy sales cycle for our products makes our revenues susceptible to substantial fluctuations. We have restructured, and may in the future restructure, our sales force, which can be disruptive. Any failure to maintain on-going sales through distribution channels could result in lower revenues, and increasing sales through distribution channels could result in lower margins on our license revenues. If we do not compete effectively, our revenues and operating margins will decline. Because the technological, market and industry conditions in our business can change very rapidly, if we do not successfully adapt our products to these changes, our revenue and profits will be harmed. If the markets for application servers, application platforms, application integration, portal, BPM, SOA and related application infrastructure software and Web services decline or do not grow as quickly as we expect, our revenues will be harmed. Our revenues are derived primarily from a single group of similar and related products and services, and a decline in demand or prices for these products or services could harm our operating results. If we fail to adequately protect our intellectual property rights, competitors may use our technology and trademarks, which could weaken our competitive position, reduce our revenues and increase our costs. Third parties could assert that our software products and services infringe their intellectual property rights, which could expose us to increased costs and litigation. If our products contain software defects, it could harm our revenues and expose us to litigation. If we do not maintain our relationships with third-party vendors, interruptions in the supply of our products may result. Our international operations expose us to greater management, collections, currency, export licensing, intellectual property, tax, regulatory and other risks. Changes in accounting regulations and related interpretations and policies, could cause us to recognize lower revenue and profits or to defer recognition of revenue. If we cannot successfully integrate our past and future acquisitions, our revenues may decline and expenses may increase. We face risks in connection with Plumtree s government contracts which may adversely affect our results of operations. The ongoing U.S. military activity in Iraq and any terrorist activities could adversely affect our revenues and operations. An unfavorable government review of our income and payroll tax returns or changes in our effective tax rates could adversely affect our operating results. Our cash investments in money market, government and corporate debt securities are subject to risks, which may cause losses and affect the liquidity of these investments. If we fail to maintain effective internal controls or remediate any future material weaknesses in our internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud which could have an adverse effect on our business and operating results and our stock price. Failure to comply with applicable corporate governance requirements may cause us to delay filing our periodic reports with the SEC, affect our Nasdaq listing, and adversely affect our stock price. The matters relating to the review of certain historical stock option grants could continue to have an adverse effect on our financial results. We have been named as a party to a number of shareholder derivative lawsuits relating to our historical stock option grant practices, and we may be named in additional lawsuits in the future. This litigation could become time consuming and expensive and could have a material adverse effect on our business.

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1031798--3/28/2008--BEA_SYSTEMS_INC