1034088--3/7/2006--ECLIPSYS

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{system, service, information}

{regulation, government, change}

{personnel, key, retain}

{cost, operation, labor}

{tax, income, asset}

{control, financial, internal}

{acquisition, growth, future}

{property, intellectual, protect}

{product, market, service}

{customer, product, revenue}

{regulation, change, law}

{competitive, industry, competition}

{stock, price, operating}

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{condition, economic, financial}

Risks relating to development and operation of our software Since October 2003, we have worked to overcome the effects of technical issues we experienced at that time, and the success of our recent software releases, particularly Sunrise Clinical Manager 4.5 XA, is critical. Our software may not operate properly, which could damage our reputation and impair our sales. Our software development efforts may not meet the needs of our clients, which could adversely affect our results of operations. Market changes or mistaken development decisions could decrease the demand for our software, which could harm our business and decrease our revenues. Our software strategy is dependent on the continued development and support by Microsoft of its .NET Framework and other technologies. Any failure by us to protect our intellectual property, or any misappropriation of it, could enable our competitors to market software with similar features, which could reduce demand for our software. Failure of security features of our software could expose us to significant expense and reputational harm. Risks related to sales and implementation of our software The length of our sales and implementation cycles may adversely affect our future operating results. We may experience implementation delays that could harm our reputation and violate contractual commitments. Implementation costs may exceed expectations, which can negatively affect our operating results. Risks related to our outsourcing services Various risks could interrupt clients access to their data residing in our service center, exposing us to significant costs. Any breach of confidentiality of client or patient data in our service center could expose us to significant expense and reputational harm. Any breach of confidentiality of client or patient data in our service center could expose us to significant expense and reputational harm. Recruiting challenges and higher than anticipated costs in outsourcing our client s IT operations may adversely affect our profitability. Inability to obtain consents needed from third parties could impair our ability to provide remote outsourcing services. Recruiting challenges and higher than anticipated costs in outsourcing our client s IT operations may adversely affect our profitability. Inability to obtain consents needed from third parties could impair our ability to provide remote outsourcing services. Risks related to the healthcare IT industry and market We operate in an intensely competitive market that includes companies that have greater financial, technical and marketing resources than we do. Clients that use our legacy software are vulnerable to competition. The healthcare industry faces financial constraints that could adversely affect the demand for our software and services. Healthcare industry consolidation could impose pressure on our software prices, reduce our potential client base and reduce demand for our software. Potential changes in standards applicable to our software could require us to incur substantial additional development costs. Potential changes in standards applicable to our software could require us to incur substantial additional development costs. Risks related to our operating results, accounting controls and finances We have a history of operating losses and we cannot predict future profitability. Our operating results may fluctuate significantly and may cause our stock price to decline. Early termination of client contracts could adversely affect results of operations. Because in many cases we recognize revenues for our software monthly over the term of a client contract, downturns or upturns in sales will not be fully reflected in our operating results until future periods. Payment defaults by large customers could have significant negative impact on our liquidity and overall financial condition. Impairment of intangible assets could increase our expenses. Failure to maintain effective internal controls could adversely affect our operating results and the market price of our common stock. ption of FAS 123R will increase our expenses and have a significant effect on our reported profit. ption of FAS 123R will increase our expenses and have a significant effect on our reported profit. Inability to obtain additional financing could limit our ability to conduct necessary development activities and make strategic investments. Risk of liability to third parties Our software and content are used to assist clinical decision-making and provide information about patient medical histories and treatment plans. If our software fails to provide accurate and timely information or is associated with faulty clinical decisions or treatment, clients, clinicians or their patients could assert claims against us that could result in substantial cost to us, harm our reputation in the industry and cause demand for our software to decline. Our software and our vendors software that we include in our offering could infringe third-party intellectual property rights, exposing us to costs that could be significant. Risks related to our strategic relationships and initiatives We depend on licenses from third parties for rights to some technology we use, and if we are unable to continue these relationships and maintain our rights to this technology, our business could suffer. Our offering often includes software modules provided by third parties, and if these third parties do not meet their commitments, our relationships with our clients could be impaired. Our offering often includes software modules provided by third parties, and if these third parties do not meet their commitments, our relationships with our clients could be impaired. Our offering often includes software modules provided by third parties, and if these third parties do not meet their commitments, our relationships with our clients could be impaired. If we undertake additional acquisitions, they may be disruptive to our business and could have an adverse effect on our future operations and the market price of our common stock. Risks related to industry regulation Potential regulation by the U.S. Food and Drug Administration of our software and content as medical devices could impose increased costs, delay the introduction of new software and hurt our business. Changes in federal and state regulations relating to patient data could depress the demand for our software and impose significant software redesign costs on us. Risks related to our personnel and organization Recent changes in our executive team could distract management and cause uncertainty that could result in delayed or lost sales. If we fail to attract, motivate and retain highly qualified technical, marketing, sales and management personnel, our ability to execute our business strategy could be impaired. If we fail to attract, motivate and retain highly qualified technical, marketing, sales and management personnel, our ability to execute our business strategy could be impaired. Provisions of our charter documents and Delaware law may inhibit potential acquisition bids that a stockholder may believe is desirable, and the market price of our common stock may be lower as a result.

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1034088--3/7/2006--ECLIPSYS_CORP