MOLDFLOW CORP, S-1/A, 2000-03-02

MOLDFLOW CORP
S-1/A, 2000-03-02
PREPACKAGED SOFTWARE

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 1, 2000

REGISTRATION STATEMENT NO. 333-95289
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 2 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

------------------------

MOLDFLOW CORPORATION
(Exact Name of Registrant as Specified in its Charter)

<TABLE>
<S> <C> <C>
DELAWARE 7372 04-3406763
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>

------------------------

91 HARTWELL AVENUE
LEXINGTON, MA 02421
(781) 674-0085
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive office)
------------------------------

MARC J. L. DULUDE
PRESIDENT AND CHIEF EXECUTIVE OFFICER
MOLDFLOW CORPORATION
91 HARTWELL AVENUE
LEXINGTON, MA 02421
(781) 674-0085
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------

COPIES TO:

<TABLE>
<S> <C>
STUART M. CABLE, P.C. KEITH F. HIGGINS, ESQ.
ANDREW F. VILES, ESQ. JOEL F. FREEDMAN, ESQ.
GOODWIN, PROCTER & HOAR LLP ROPES & GRAY
EXCHANGE PLACE ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02109-2881 BOSTON, MASSACHUSETTS 02110-2624
(617) 570-1000 (617) 951-7000
</TABLE>

------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective. 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

<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE AMOUNT OF
REGISTERED REGISTERED(1) SHARE(2) OFFERING PRICE(2) REGISTRATION FEE(3)
<S> <C> <C> <C> <C>
Common Stock, $.01 par
value per share....... 3,450,000 shares $14.00 $48,300,000 $12,752
</TABLE>

(1) Includes 450,000 shares of Common Stock which the underwriters have the
option to purchase solely to cover over-allotments, if any.

(2) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(o) under the Securities Act of 1933.

(3) Previously paid.

------------------------------

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 SEC, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

SUBJECT TO COMPLETION, DATED MARCH 1, 2000

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE IN WHICH THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
3,000,000 SHARES

[LOGO]

COMMON STOCK
------------------

This is an initial public offering of common stock of Moldflow Corporation.
We are offering 3,000,000 shares of common stock in this offering. We expect the
initial public offering price will be between $12.00 and $14.00 per share.

Prior to this offering, there has been no public market for our common
stock. We have applied to list our common stock on the Nasdaq National Market
under the symbol MFLO.

------------------------

INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. PLEASE SEE THE
SECTION ENTITLED "RISK FACTORS" STARTING ON PAGE 7 TO READ ABOUT RISKS YOU
SHOULD CONSIDER CAREFULLY BEFORE BUYING SHARES OF OUR COMMON STOCK.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

------------------------

<TABLE>
<CAPTION>
PER SHARE TOTAL
----------- -----------
<S> <C> <C>
Public offering price................................... $ $
Underwriting discounts.................................. $ $
Proceeds to Moldflow.................................... $ $
Proceeds to selling stockholders........................ $ $
</TABLE>

The underwriters have an option to purchase 181,656 additional shares of
common stock from Moldflow and 268,344 shares of common stock from several
stockholders identified in the section entitled "Principal and Selling
Stockholders" starting on page 51 at the initial public offering price less the
underwriting discount to cover any over-allotments of shares. We will not
receive any of the proceeds from the sale of shares by the selling stockholders.

------------------------

Adams, Harkness & Hill, Inc. A.G. Edwards & Sons, Inc.

Prospectus dated , 2000
<PAGE>

[EDGAR Graphics Descriptions]

(Inside Front Cover)

Three pages of graphics follow:

- - Page 1: The first page has the words "Process Wide Plastics Solutions" at
the top. The following paragraph is below next to a chart: "Our products work
together to optimize the process of designing and producing injection molded
plastic parts. Moldflow's software technology delivers solutions that
provide valuable information and advice at the product design, mold design
and part production phases of the process -- and this information can be
shared with colleagues down the hall or around the world." The chart has four
columns labeled "Initial Design," "In-Depth Analysis," "Mold Design" and
"Production." Across the rows are arrows labeled "Insight," "Advisers" and
"Xpert." The Insight arrow runs from part design through part production.
The Advisers arrow runs from conceptual design through mold design. The Xpert
arrow crosses part production only.

Lower on the page are the MPA, MPI and MPX logos with the following
respective words beside them: (i) "Moldflow Plastics Advisers helps design
engineers to create their initial product designs knowing that these designs
will be manufacturable and meet the design requirements," (ii) "Moldflow
Plastics Insight allows a specialist to perform comprehensive product reviews
to solve complex part and mold design problems and optimize these designs,"
and (iii) "Moldflow Plastics Xpert removes trial-and-error approaches to
pre-production mold set-up in the injection molding machine and monitors and
controls subsequent production." At the bottom of the page is Moldflow's logo
and Moldflow's website address "www.moldflow.com."

- - Pages 2 and 3: Gatefold has words "Global Concurrent Product Development"
at the top. Picture of planet Earth is in center with arrows pointing in
from and out to four corners of page. Each corner depicts a separate step
in the design and production process for plastic parts. The upper left
corner has the words "Initial Design" and a picture of a man and a woman
viewing a computer monitor depicting a three dimensional image of cell
phone outer casings as well as two computer screens with closer views of
these casings. Above this picture are the words "The Problem" and the
following paragraph: "The creation of injection molded plastic parts is a
complex, fragmented global process. Manufacturers in many industries are
facing increasing pressure to reduce the time required to bring a plastic
part from initial design to production." The upper right corner has the
words "In-Depth Analysis" and a picture of man working at a computer as well
as two computer screens depicting three dimensional images of cell phone
outer casings. The bottom right corner has the words "Mold Design" and a
picture of a metal mold as well as two computer screens depicting cell phone
outer casings within a mold. The bottom left corner has the words
"Production" and picture of a large injection molding machine as well as a
picture of a computer and a computer screen displaying pages of Moldflow's
MPX product. Below this picture are the words "The Moldflow Solution" and
the following paragraph: "Our approach, called Process Wide Plastics
Solutions, provides our customers with a software tool for each step in
the process, from part design through production monitoring. Using our
products can significantly reduce the time it takes to design plastic parts,
improve their quality and decrease the cost of production." The bottom
center has an arrow pointing down to a picture of cell phone.

There is a column on the left side with the words "Selected Industries and
Customers" at the top and the following list:

AUTOMOTIVE
----------
DaimlerChrysler AG
DENSO Corporation
Ford Motor Company
Hyundai Business Group
Solvay SA
Valeo SA
Volkswagen AG

TOYS
----
Hasbro Inc.
The Lego Group
Mattel, Inc.

MATERIAL SUPPLIERS
------------------
Bayer AG
The Dow Chemical Company
Eastman Chemical Company
E.I. duPont de Nemours and Co.
M.A. Hanna Company

ELECTRONICS
-----------
The Framatome Group
Fuji Xerox Co., Ltd
Hewlett-Packard Company
Lucent Technologies, Inc.
Motorola, Inc.
Nokia Corporation
Siemens AG
Tyco International Inc.

MEDICAL
-------
Abbott Laboratories
Baxter International, Inc.
Becton Dickinson and Co.

OTHER/MULTIPLE INDUSTRIES
-------------------------
Fisher & Paykel Industries Ltd.
Honeywell International, Inc.
LG Group
Minnesota Mining and Manufacturing (3M)
Montblanc-Simplo GmbH
Polaroid Corporation
Samsung Group

<PAGE>

TABLE OF CONTENTS

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<CAPTION>
PAGE
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<S> <C>
Prospectus Summary.......................................... 3

Risk Factors................................................ 7

Use of Proceeds............................................. 14

Dividend Policy............................................. 14

Capitalization.............................................. 15

Dilution.................................................... 16

Selected Financial Data..................................... 17

Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 19

Business.................................................... 30

Management.................................................. 43

Certain Relationships and Related Transactions.............. 50

Principal and Selling Stockholders.......................... 51

Description of Capital Stock................................ 53

Shares Eligible for Future Sale............................. 57

Underwriting................................................ 59

Validity of Common Stock.................................... 61

Experts..................................................... 61

Where You Can Find More Information......................... 61

Index to Consolidated Financial Statements.................. F-1
</TABLE>

<PAGE>
PROSPECTUS SUMMARY

YOU SHOULD READ THE FOLLOWING SUMMARY TOGETHER WITH THE MORE DETAILED
INFORMATION AND OUR CONSOLIDATED FINANCIAL STATEMENTS, THE NOTES TO THOSE
STATEMENTS AND THE OTHER FINANCIAL INFORMATION APPEARING ELSEWHERE IN THIS
PROSPECTUS.

MOLDFLOW CORPORATION

We believe we are the world's leading developer of software solutions that
enhance the design, analysis and manufacture of injection molded plastic parts.
We have developed a suite of software applications that address the difficulties
and variables inherent in the design and production of injection molded plastic
parts. We believe we have the widest and most advanced range of software
solutions and proprietary technology to address the problems that arise in each
phase of the process of designing and manufacturing injection molded plastic
parts. Our products enable our customers to speed their products to market,
decrease manufacturing costs and reduce costly design and manufacturing errors
with an automated and integrated process. Our products are used by more than
2,200 customers at more than 2,500 sites in over 50 countries around the world.
Representative customers include Baxter International, DaimlerChrysler, DuPont,
Fuji Xerox, Hewlett-Packard, Lego, Lucent Technologies, Motorola, Nokia and
Samsung.

The use of plastics as a manufacturing material is widespread because
plastic parts can be formed into an almost limitless number of shapes, are
relatively inexpensive to manufacture in volume and are easy to assemble.
Injection molding, the dominant method by which plastic parts are produced, is
extremely complex due to the inherent difficulties and the many variables
encountered in transforming various molten plastic materials into sophisticated
part shapes. Common consumer products that make extensive use of injection
molded plastic parts include cellular telephones, personal digital assistants,
pagers, automobiles, televisions, cameras, toys and personal computers. As
product life cycles shrink and the importance of time to market increases,
successful manufacturers in these industries must design and build products
quickly. In particular, product delays or high product defect rates for
manufacturers in rapidly changing industries can result in significant economic
and opportunity costs.

We believe a substantial portion of companies producing injection molded
plastic parts continue to employ trial-and-error at most steps of the design and
production process. We believe this condition exists today primarily because of
the limited availability of specific software tools which are capable of
addressing many of the complex and unique issues involved in designing injection
molded plastic parts and their molds. Further, the trend toward outsourcing and
supply chain management across multiple geographic time zones has exacerbated
the inefficiencies and costs occurring in the design and manufacturing of
plastic parts.

Prior to 1997, our products were designed to be used by highly specialized
engineers conducting in-depth plastics simulation. Since then, we have developed
two new product lines that can be used by design engineers and injection molding
machine operators who do not specialize in plastic part design. We believe a
large untapped market exists for these new product lines. In particular, we
believe that up to 750,000 injection molding machines are currently in use and
are being operated without integrated software solutions that can analyze and
improve the efficiency of their production.

We intend to exploit the universal accessibility of the Internet to further
grow our business. For example, we are currently configuring our products for
use in an application service provider or ASP model, which would permit our
customers to use our products on demand over the Internet. We also intend to
create an Internet portal to enable our customers to use our production set-up
and monitoring product to remotely monitor the injection molding manufacturing
process, including machine efficiency and production data, from anywhere in the
world. We believe this global

3
<PAGE>
availability of software solutions addressing each stage of the plastics product
development process will provide an environment for continuous collaboration
across all participants in a supply chain for every plastic part made.

We operate facilities in nine countries. We sell our products worldwide
primarily through our direct sales force in North America, Europe and Asia and,
to a lesser extent, through original equipment manufacturers and distributors.
We have distribution arrangements with Parametric Technology Corporation,
Structural Dynamics Research Corporation or SDRC, Unigraphics Solutions and
CoCreate and resellers of products of SolidWorks, a subsidiary of Dassault
Systemes, and Autodesk. Our research and development efforts involve
approximately 50 research and development personnel located at our United
States, Australia and United Kingdom facilities. As a result, our research and
development continues on an around-the-clock basis.

On February 11, 2000, we entered into a definitive agreement to acquire
C-Mold, a developer of software solutions for the design and analysis of
injection molded plastic parts headquartered in Ithaca, New York. C-Mold has
developed software that is complementary to our current product offerings in the
areas of part design and in-depth plastics simulation. In particular, we believe
the acquisition of C-Mold will enhance our development capabilities and enable
us to broaden our product lines into adjacent markets more quickly. C-Mold had
$7.7 million in revenue for the fiscal year ended September 30, 1999. The
purchase price will be $11.0 million in cash. We anticipate that the acquisition
will close on or prior to May 31, 2000. However, our acquisition of C-Mold may
not be completed.

------------------------

We were reincorporated in Delaware as Moldflow Corporation on January 15,
1997. From 1994 to 1997, we existed as an Australian corporation under the name
Moldflow International Pty. Ltd. From 1980 to 1994, we existed as an Australian
corporation under the name Moldflow Pty. Ltd. Our principal executive offices
are located at 91 Hartwell Avenue, Lexington, MA 02421. Our telephone number at
that location is (781) 674-0085 and our Internet address is www.moldflow.com.
The information contained on our Website is not part of this prospectus.

The name Moldflow and our logo are names and trademarks that belong to us.
We have registrations for other names and marks used in this prospectus. This
prospectus also contains the trademarks and trade names of other entities that
are the property of their respective owners.

4
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THE OFFERING

Shares offered by Moldflow................... 3,000,000 shares

Common stock to be outstanding after this
offering................................... 9,081,496 shares

Use of proceeds.............................. To fund our pending acquisition of C-Mold and
for general corporate purposes, including
working capital, capital expenditures and any
other acquisitions. See "Use of Proceeds."

Proposed Nasdaq National Market symbol....... MFLO

Risk factors................................. See "Risk Factors" for discussion of factors
you should carefully consider before deciding
to invest in shares of our common stock.
</TABLE>

The number of shares of our common stock that will be outstanding after this
offering excludes 599,900 shares of common stock issuable upon exercise of stock
options outstanding at March 1, 2000 at a weighted average exercise price of
$3.91 per share.

------------------------

EXCEPT AS OTHERWISE NOTED, ALL INFORMATION IN THIS PROSPECTUS ASSUMES NO
EXERCISE OF THE UNDERWRITERS' OVER-ALLOTMENT OPTION. IN ADDITION, WE HAVE
ADJUSTED ALL OF THE INFORMATION IN THIS PROSPECTUS, EXCEPT AS OTHERWISE NOTED,
TO REFLECT:

- A 2.4-TO-1 REVERSE STOCK SPLIT OF OUR COMMON STOCK TO BE EFFECTED IN
CONNECTION WITH THIS OFFERING,

- THE CONVERSION OF ALL OUTSTANDING SHARES OF OUR CLASS C PREFERRED STOCK
INTO SHARES OF COMMON STOCK UPON THE CLOSING OF THIS OFFERING,

- THE EXERCISE OF THE OUTSTANDING WARRANT TO PURCHASE 20,833 SHARES OF OUR
COMMON STOCK AT AN AGGREGATE EXERCISE PRICE OF $150,000 UPON THE CLOSING
OF THIS OFFERING, AND

- THE AMENDMENT AND RESTATEMENT OF OUR CERTIFICATE OF INCORPORATION IN
CONNECTION WITH THIS OFFERING.

5
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SUMMARY FINANCIAL DATA

The tables below present our summary consolidated financial data which you
should read together with our consolidated financial statements and related
notes and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" presented elsewhere in this prospectus. The pro forma
combined statement of operations data reflects the combined results of Moldflow
and C-Mold as if the acquisition of C-Mold had been completed at the beginning
of the applicable period. Pro forma net income per common share reflects the
assumed conversion of all convertible preferred stock and the exercise of an
outstanding warrant into shares of common stock upon the closing of this
offering as if they had occurred at the beginning of the applicable period. The
as adjusted balance sheet data at January 1, 2000 reflects the automatic
conversion of all outstanding shares of preferred stock into an aggregate of
5,488,450 shares of common stock and the exercise of the outstanding warrant to
purchase 20,833 shares of common stock upon the closing of this offering, as
well as the sale of the 3,000,000 shares of common stock in this offering,
assuming an initial public offering price of $13.00 per share and after
deducting underwriting discounts and commissions and our estimated offering
expenses. The pro forma combined as adjusted balance sheet data further reflects
the acquisition of C-Mold as if it had occurred on January 1, 2000.

<TABLE>
<CAPTION>
FISCAL YEAR SIX MONTHS ENDED SIX MONTHS
FISCAL YEAR ENDED ENDED ----------------------- ENDED
JUNE 30, JUNE 30, 1999 JANUARY 1, 2000
------------------------------ PRO FORMA JANUARY 2, JANUARY 1, PRO FORMA
1997 1998 1999 COMBINED 1999 2000 COMBINED
-------- -------- -------- -------------- ---------- ---------- ----------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue:
Software licenses................ $ 6,743 $ 8,514 $12,238 $16,010 $5,275 $ 6,651 $ 8,483
Services......................... 8,080 7,875 7,983 11,879 3,969 4,853 6,957
------- ------- ------- ------- ------ ------- -------
Total revenue.................. 14,823 16,389 20,221 27,889 9,244 11,504 15,440
Operating expenses, excluding
amortization and litigation...... 16,230 15,734 18,675 26,578 8,877 10,610 14,324
Amortization of goodwill and other
intangible assets................ 2,370 84 -- 1,543 -- -- 772
Litigation......................... -- -- 620 -- -- 530 --
------- ------- ------- ------- ------ ------- -------
Income (loss) from operations...... (3,777) 571 926 (232) 367 364 344
Net income (loss).................. (4,270) 189 481 (369) 203 433 258

Pro forma net income per common
share:
Basic............................ $ 0.08 $ 0.07
Diluted.......................... $ 0.08 $ 0.07

Shares used in computing pro forma
net income per common share:
Basic............................ 5,717 5,855
Diluted.......................... 6,166 6,311
</TABLE>

<TABLE>
<CAPTION>
AS OF JANUARY 1, 2000
--------------------------------------
PRO FORMA
COMBINED
ACTUAL AS ADJUSTED AS ADJUSTED
-------- ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 1,328 $36,248 $27,188
Total assets................................................ 10,564 45,484 49,513
Stockholders' equity........................................ 1,763 36,683 36,683
</TABLE>

6
<PAGE>
RISK FACTORS

YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISKS AND ALL OTHER INFORMATION
CONTAINED IN THIS PROSPECTUS BEFORE PURCHASING OUR COMMON STOCK.

IF WE EXPERIENCE DELAYS IN INTRODUCING NEW PRODUCTS OR IF OUR EXISTING OR NEW
PRODUCTS DO NOT ACHIEVE MARKET ACCEPTANCE, WE MAY LOSE REVENUE.

Our industry is characterized by:

- rapid technological advances,

- evolving industry standards,

- changes in end-user requirements,

- intense competition,

- technically complex products,

- frequent new product introductions, and

- evolving offerings by product manufacturers.

We believe our future success will depend, in part, on our ability to
anticipate or adapt to these factors and to offer on a timely basis products
that meet customer demands. For example, the introduction of new products and
services embodying new technologies and the emergence of new industry standards
can render our existing products obsolete. The development of new or enhanced
products is a complex and uncertain process requiring the anticipation of
technological and market trends. We may experience design, manufacturing,
marketing and other difficulties that could delay or prevent our development,
introduction or marketing of new products and enhancements and result in
unexpected expenses.

Our growth and profitability also will depend upon our ability to expand the
use and market penetration of our existing product lines as well as new products
we introduce. Market acceptance of our products will depend in part on our
ability to demonstrate the cost-effectiveness, ease of use and technological
advantages of our products over competing products.

BECAUSE WE DO NOT HAVE EXTENSIVE EXPERIENCE DEVELOPING INTERNET-ENABLED
PRODUCTS, WE MAY INCUR SIGNIFICANT COSTS DEVELOPING INTERNET-ENABLED PRODUCTS
AND MAY NOT BE ABLE TO DEVELOP THESE PRODUCTS.

Our business strategy includes providing additional Internet-related
functions to our products to exploit the trend toward worldwide collaborative
product development and manufacturing and to explore new pricing and packaging
strategies made possible by the Internet. We have limited experience in
developing and marketing Internet-enabled products. We may incur significant
costs developing Internet-enabled products and may be unable to capitalize on
the rapid transformation of the Internet as a computing platform, communications
vehicle and distribution channel.

IF INTERNET USAGE DOES NOT CONTINUE TO GROW, WE MAY NOT BE ABLE TO SUCCESSFULLY
IMPLEMENT OUR INTERNET STRATEGY.

Widespread use of the Internet is a relatively recent phenomenon. The future
success of our Internet strategy depends, in part, on the continued development
of the Internet as a viable commercial medium. We cannot be certain that the
Internet will continue to be developed or accessible for free or at nominal cost
to users. In this event, our future growth may be adversely impacted.

7
<PAGE>

WE MAY EXPERIENCE DIFFICULTY ACHIEVING SALES TARGETS, MAKING TIMELY PRODUCT
RELEASES OR OTHERWISE OPERATING OUR BUSINESS IF WE ARE UNABLE TO ATTRACT OR
RETAIN KEY PERSONNEL.

In order to grow our business, we will have to hire additional employees in
various countries. Our future success, therefore, will depend, in part, on
attracting and retaining additional qualified management, marketing and
technical personnel. We do not know whether we will be successful in hiring or
retaining qualified personnel. Competition for personnel throughout the software
industry is intense.

IF WE BECOME SUBJECT TO INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS, WE COULD
INCUR SIGNIFICANT EXPENSES AND WE COULD BE PREVENTED FROM OFFERING SPECIFIC
PRODUCTS OR SERVICES.

Our products include proprietary intellectual property. We may become
subject to claims that we infringe on the proprietary rights of others. In the
United States, a significant number of software and business method patents have
been issued over the past decade and the holders of these patents have been
actively seeking out potential infringers. If any element of our products or
services violates third-party proprietary rights, we might not be able to obtain
licenses on commercially reasonable terms to continue offering our products or
services without substantial re-engineering and any effort to undertake such
re-engineering might not be successful. In addition, any claim of infringement
could cause us to incur substantial costs defending against the claim, even if
the claim is invalid, and could distract our management from our business. Any
judgment against us could require us to pay substantial damages and could also
include an injunction or other court order that could prevent us from offering
our products and services.

WE MAY LOSE SALES TO COMPETITORS IF WE ARE UNABLE TO PROTECT IMPORTANT
INTELLECTUAL PROPERTY.

Our ability to compete effectively against other companies in our industry
will depend, in part, on our ability to protect our proprietary rights in our
technology. We may be unable to maintain the proprietary nature of our
technology. While we have attempted to safeguard and maintain our proprietary
rights, we do not know whether we have been or will be completely successful in
doing so.

We rely, in part, on contractual provisions to protect our trade secrets and
proprietary knowledge. These agreements may be breached, and we may not have
adequate remedies for any breach. Our trade secrets may also become known
without breach of such agreements or may be independently developed by
competitors. In addition, foreign countries, including some of those in which we
do business, may reduce or limit the protection of our intellectual property
rights.

OUR FINANCIAL CONDITION OR RESULTS OF OPERATIONS MAY BE ADVERSELY AFFECTED BY
INTERNATIONAL BUSINESS RISKS.

The majority of our employees, including sales, support and research and
development personnel, are located outside of the United States. Conducting
business outside of the United States is subject to numerous risks, including:

- decreased liquidity resulting from longer accounts receivable collection
cycles typical of foreign countries,

- decreased revenue on foreign sales resulting from possible foreign
currency exchange and conversion issues,

- lower productivity resulting from difficulties managing our sales, support
and research and development operations across many countries,

8
<PAGE>

- lost revenue resulting from difficulties associated with enforcing
agreements and collecting receivables through foreign legal systems,

- lost revenue resulting from the imposition by foreign governments of trade
protection measures, and

- higher cost of sales resulting from import or export licensing
requirements.

OUR PENDING ACQUISITION OF C-MOLD AS WELL AS ANY FUTURE ACQUISITIONS AND
STRATEGIC RELATIONSHIPS MAY RESULT IN LOST REVENUE CAUSED BY BUSINESS
DISRUPTIONS AND MISSED OPPORTUNITIES CAUSED BY THE DISTRACTION OF OUR
MANAGEMENT.

On February 11, 2000, we entered into a definitive agreement to acquire
Advanced CAE Technology, Inc., a software company doing business as C-Mold. We
may not complete the acquisition. The value of C-Mold may not be greater than or
equal to the purchase price. If we are unable to effectively integrate C-Mold's
products, personnel and systems, our business and operating results will likely
suffer. We expect this integration to place a significant burden on our
management team. Further, we cannot guarantee that we will realize any of the
benefits or strategic objectives we are seeking to obtain by acquiring C-Mold.
In connection with accounting for the acquisition of C-Mold, we will record a
significant amount of goodwill and other intangible assets, the amortization of
which will adversely affect our results of operations in future periods.

Additionally, we may engage in other acquisitions and strategic
relationships in the future. We may not be able to identify suitable acquisition
candidates, and, if we do identify suitable candidates, we may not be able to
make such acquisitions on commercially acceptable terms or at all. If we acquire
another company, we will only receive the anticipated benefits if we
successfully integrate the acquired business into our existing business in a
timely and non-disruptive manner. We may have to devote a significant amount of
time and management and financial resources to do so. Even with this investment
of management and financial resources, an acquisition may not produce the
revenues, earnings or business synergies that we anticipated. If we fail to
integrate the acquired business effectively or if key employees of that business
leave, the anticipated benefits of the acquisition would be jeopardized. The
time, capital, management and other resources spent on an acquisition that
failed to meet our expectations could cause our business and financial condition
to be materially and adversely affected. In addition, acquisitions can involve
non-recurring charges and amortization of significant amounts of goodwill and
other acquired intangible assets that could adversely affect our results of
operations.

WE COULD SUFFER MONETARY DAMAGES, INCUR SUBSTANTIAL COSTS, LOSE OUR PRODUCT
DEVELOPMENT ADVANTAGE AND FACE ENHANCED COMPETITION AS A RESULT OF PENDING
LITIGATION INVOLVING A FORMER EMPLOYEE AND ONE OF OUR COMPETITORS.

We are pursuing a lawsuit against both a former Moldflow employee and C-Mold
alleging theft and misappropriation of some of our trade secrets. In response to
our lawsuit, C-Mold filed counterclaims against us alleging antitrust
violations, defamation and trade libel and tortious interference. We may suffer
adverse consequences as a result of this lawsuit or the counterclaims which we
cannot now predict. If the lawsuit or the counterclaims are decided against us,
we could suffer monetary damages, lose our product development advantage and
face enhanced competition. Continuation of the lawsuit or the counterclaims will
result in additional litigation expenses. This litigation is currently being
held in abeyance in connection with our pending acquisition of C-Mold. If the
acquisition is completed, this litigation will be dismissed with prejudice by
the agreement of all parties. If for any reason our acquisition of C-Mold is not
completed, we expect that the litigation will resume.

9
<PAGE>

WE HAVE MORE LIMITED FINANCIAL AND OTHER RESOURCES THAN MANY OF OUR COMPETITORS
AND POTENTIAL COMPETITORS AND MAY BE UNABLE TO COMPETE SUCCESSFULLY AGAINST
THEM.

We operate in a highly competitive environment and may not be able to
successfully compete. Companies in our industry and entities in similar
industries could decide to focus on the development of software solutions for
the design, analysis and manufacturing of injection molded plastic parts. Many
of these entities have substantially greater financial, research and
development, manufacturing and marketing resources than we do. Increased
competition may result in price reductions, reduced profitability and loss of
market share.

OUR QUARTERLY OPERATING RESULTS ARE SUBJECT TO SIGNIFICANT FLUCTUATIONS AND AS A
RESULT PERIOD-TO-PERIOD COMPARISONS OF OUR RESULTS OF OPERATIONS ARE NOT
NECESSARILY MEANINGFUL AND SHOULD NOT BE RELIED UPON AS INDICATORS OF FUTURE
PERFORMANCE.

We have experienced significant fluctuations in our results of operations on
a quarterly basis. In particular, we have historically experienced lower revenue
in our first fiscal quarter as compared with the preceding quarter as a result
of seasonal factors, which decrease demand for our products in this quarter. For
instance, our total revenue in the first quarter of the current fiscal year was
$5.2 million as compared with total revenue of $5.6 million in the immediately
preceding fourth quarter. We expect to continue to experience significant
fluctuations in our future quarterly results of operations due to a variety of
factors, many of which are outside of our control, including:

- seasonal slowdowns, in particular, in our first fiscal quarter, in many of
the markets in which we sell our products,

- developments in the litigation that we are pursuing against our former
employee and our competitor, and in the nature and extent of proceedings
and findings related to the counterclaims pending against us,

- the timing and magnitude of capital expenditures, including costs relating
to the expansion of our operations and infrastructure,

- introductions of new services or enhancements by us and our competitors,

- changes in our and our competitors' pricing policies,

- currency fluctuations, and

- timing and integration of acquisitions, including our pending acquisition
of C-Mold.

WE MAY HAVE DIFFICULTY MANAGING THE EXPANSION OF OUR OPERATIONS, WHICH COULD
RESULT IN DAMAGE TO CUSTOMER RELATIONSHIPS OR DELAYED BILLING OR COLLECTION OF
REVENUE.

The implementation of our business strategy could result in a period of
rapid growth in the number of our employees and the scope of our operations. In
addition, if we complete the acquisition of C-Mold, we will be further expanding
the number of employees and facilities. Rapid expansion could place a
significant strain on our senior management team and our operational, financial
and other resources as we attempt to expand our operations in multiple locations
around the world. We may have difficulty effectively managing the budgeting,
forecasting, global hiring and other business control issues presented by such a
rapid expansion. This could, among other things, adversely affect our
relationships with our customers and result in delays in billing and collections
of revenue from our customers and increased costs.

10
<PAGE>
IF WE ARE UNABLE TO MAINTAIN AND LEVERAGE OUR STRATEGIC ALLIANCES, WE MAY BE
UNABLE TO GROW AS PLANNED.

We are, and will continue to be, dependent to some extent on distribution
arrangements and strategic partnerships with third-parties because we sell a
portion of our products through these third parties. In addition, we may sell
other products through third-party distributors in the future. These third
parties may not fulfill their agreements with us. In particular, third-party
distributors may breach or terminate their distribution agreements with us or
fail to devote sufficient time and resources to successfully commercialize, or
increase sales of, our products. As a result, our revenues from these
arrangements depend, in part, on third parties' sales of our products.

DISRUPTION OF OPERATIONS AT OUR MELBOURNE, AUSTRALIA FACILITY COULD INTERFERE
WITH OUR PRODUCT DEVELOPMENT AND PRODUCTION CYCLES.

A significant portion of our computer equipment, source code and personnel,
including critical resources dedicated to research and development, is presently
located at a single operating facility in a suburb of Melbourne, Australia. The
occurrence of a natural disaster or other unanticipated catastrophe at this
facility could cause interruptions in our operations and services. Extensive or
multiple interruptions in our operations at this facility could severely disrupt
our product development.

OUR MOLDFLOW PLASTICS XPERT (MPX) PRODUCT LINE MAY LEAD TO PRODUCT LIABILITY
CLAIMS AGAINST US.

We have designed our Moldflow Plastics Xpert (MPX) product line to be
installed directly on our customers' injection molding machines and to
automatically adjust the operation of these machines. As a result, it is
possible that our customers may claim that our product interfered with the
proper operation of their machines and may seek reimbursement for consequential
and other damages from us. Although we expressly disclaim any liability for
consequential or other damages in connection with our sale of the MPX product,
this disclaimer may not protect us from claims for damages from our customers
and these claims may adversely affect our relationships with our customers or
our reputation generally. In addition, our insurance coverage limits may not be
adequate to protect us against any product liability claims that arise. This
insurance is expensive and may not be available on acceptable terms, or at all.

OUR EXISTING STOCKHOLDERS WILL HAVE SUBSTANTIAL INFLUENCE OVER MATTERS REQUIRING
A STOCKHOLDER VOTE.

Upon the closing of this offering, funds associated with Ampersand Ventures
will own approximately 44.6% of our outstanding common stock. Ampersand will,
therefore, have the ability to exert significant influence over our board of
directors and the outcome of stockholder votes. Furthermore, officers, directors
and their affiliates, including Ampersand, will own approximately 60.6% of our
outstanding common stock. If all of these stockholders were to vote together as
a group, they would have the ability to elect our board of directors and control
the outcome of stockholder votes.

AN ACTIVE TRADING MARKET FOR OUR COMMON STOCK MAY NOT DEVELOP, WHICH MAY
ADVERSELY AFFECT OUR STOCK PRICE.

Before this offering, there has been no public market for our common stock.
Although we expect our common stock to be quoted on the Nasdaq National Market,
an active trading market for our shares may not develop or be sustained
following this offering. You may not be able to resell your shares at prices
equal to or greater than the initial public offering price. The initial public

11
<PAGE>
offering price will be determined through negotiations between us and the
underwriters and may not be indicative of the market price for these shares
following this offering. You should read "Underwriting" for a discussion of the
factors to be considered in determining the initial public offering price.

BECAUSE OUR STOCK PRICE IS LIKELY TO BE HIGHLY VOLATILE, OUR STOCK PRICE COULD
EXPERIENCE SUBSTANTIAL DECLINES AND OUR MANAGEMENT'S ATTENTION MAY BE DIVERTED
FROM MORE PRODUCTIVE TASKS.

The stock market has, from time to time, experienced extreme price and
volume fluctuations. Many factors may cause the market price for our common
stock to decline, perhaps substantially, following this offering, including:

- a decrease in the demand for our common stock,

- revenues and operating results failing to meet the expectations of
securities analysts or investors in any quarter,

- downward revisions in securities analysts' estimates or changes in general
market conditions,

- technological innovations by competitors or in competing technologies,

- investor perception of our industry or our prospects, and

- general technology or economic trends.

In the past, companies that have experienced volatility in the market price
of their stock have been the subject of securities class action litigation. We
may be involved in a securities class action litigation in the future. Such
litigation often results in substantial costs and a diversion of management's
attention and resources and could harm our business, financial condition and
results of operations.

SHARES ELIGIBLE FOR PUBLIC SALE AFTER THIS OFFERING COULD ADVERSELY AFFECT OUR
STOCK PRICE.

The market price of our common stock could decline as a result of sales of
shares by our existing stockholders after this offering, or the perception that
such sales will occur. These sales also might make it difficult for us to sell
equity securities in the future at a time and at a price that we deem
appropriate. After this offering, we will have 9,081,496 shares of common stock
outstanding. All of the shares sold in this offering will be freely tradeable.
Of the remaining shares, over 99% are subject to 180-day lock-up agreements. At
least 6,006,048 additional shares will generally be available for sale in the
public market 180 days after the date of this prospectus. In addition,
approximately 180 days after this offering, we intend to register
2,000,000 shares of common stock for issuance under our 2000 Stock Option and
Incentive Plan and promptly following this offering we intend to register
500,000 shares of common stock for issuance under our Employee Stock Purchase
Plan.

WE WILL HAVE BROAD DISCRETION AS TO THE USE OF THE PROCEEDS FROM THIS OFFERING
AND MAY USE THE PROCEEDS IN A MANNER WITH WHICH YOU DISAGREE.

Our board of directors and management will have broad discretion over the
use of the net proceeds of this offering. You may disagree with the judgment of
our board of directors and management regarding the application of the proceeds
of this offering.

12
<PAGE>
PROVISIONS OF DELAWARE LAW AND OF OUR CHARTER AND BY-LAWS MAY MAKE A TAKEOVER
MORE DIFFICULT.

Provisions in our certificate of incorporation and by-laws and in the
Delaware corporate law may make it difficult and expensive for a third party to
pursue a tender offer, change in control or takeover attempt which is opposed by
our management and board of directors. Public stockholders who might desire to
participate in such a transaction may not have an opportunity to do so. We also
have a staggered board of directors which makes it difficult for stockholders to
change the composition of the board of directors in any one year. These
anti-takeover provisions could substantially impede the ability of public
stockholders to change our management and board of directors.

BECAUSE WE DO NOT INTEND TO PAY DIVIDENDS, YOU WILL BENEFIT FROM AN INVESTMENT
IN OUR COMMON STOCK ONLY IF IT APPRECIATES IN VALUE.

We have never declared or paid any cash dividends on our common stock. We
currently intend to retain our future earnings, if any, to finance the expansion
of our business and do not expect to pay any cash dividends in the foreseeable
future. In addition, our existing credit facility does not permit us to pay cash
dividends. As a result, the success of your investment in our common stock will
depend entirely upon its future appreciation. There is no guaranty that our
common stock will appreciate in value after the offering or even maintain the
price at which you purchased your shares.

WE MAY LOSE REVENUE AS A RESULT OF DISRUPTIONS BROUGHT ABOUT BY YEAR 2000
PROBLEMS.

In conducting our business, we rely on computer systems to manage our
business and to serve our customers. Further, all of our products include
computer software or hardware components or both. Year 2000 problems may
adversely affect our operations and increase our costs. Among other things, Year
2000 problems could cause us to:

- fail to fulfill our contractual obligations with our customers,

- face substantial claims by our customers and loss of revenue,

- fail to bill our customers accurately and on a timely basis, and

- be subject to the inability by customers and others to pay, on a timely
basis or at all, obligations owed to us.

Although the effects of any or all of these events are not quantifiable at
this time, any of these events could have a material adverse effect on our
business and operating results.

13
<PAGE>
USE OF PROCEEDS

We estimate that the net proceeds to us from our sale of 3,000,000 shares of
our common stock in this offering will be approximately $34.8 million, assuming
an initial public offering price of $13.00 per share and after deducting the
underwriting discounts and commissions and our estimated offering expenses. If
the underwriters exercise their over-allotment option in full, we estimate that
our net proceeds will be approximately $37.0 million. We intend to use
approximately $11.2 million of our net proceeds to fund our pending acquisition
of C-Mold and related transaction expenses and the remainder for general
corporate purposes, including working capital, capital expenditures and any
other acquisitions. We will not receive any proceeds from the sale of shares by
selling stockholders in this offering in connection with the exercise of the
over-allotment option.

Until used, we intend to invest these proceeds in government securities and
other short-term, investment-grade securities.

DIVIDEND POLICY

14
<PAGE>
CAPITALIZATION

The following table sets forth our capitalization as of January 1, 2000 on
an actual basis and as adjusted for the following:

- the filing prior to the effective date of this offering of an amended
certificate of incorporation authorizing 60,000,000 shares of common stock
and 5,000,000 shares of undesignated preferred stock,

- the conversion of all outstanding shares of preferred stock into an
aggregate of 5,488,450 shares of common stock upon the closing of this
offering,

- the exercise of the outstanding warrant to acquire 20,833 shares of common
stock at an aggregate exercise price of $150,000 upon the closing of this
offering, and

- the receipt of the estimated net proceeds of $34.8 million from our sale
in this offering of 3,000,000 shares of common stock assuming an initial
public offering price of $13.00 per share.

<TABLE>
<CAPTION>
AS OF JANUARY 1, 2000
-----------------------
ACTUAL AS ADJUSTED
--------- -----------
(IN THOUSANDS)
<S> <C> <C>
Convertible preferred stock, $0.01 par value per share:
Series C-1; 4,918,616 shares authorized, issued and
outstanding, actual; no shares authorized, issued and
outstanding, as adjusted................................ $ 1,151 $ --
Series C-2; 1,855,688 shares authorized, issued and
outstanding, actual; no shares authorized, issued and
outstanding, as adjusted................................ 8,382 --
Series C-3; 1,480,082 shares authorized, 1,365,275 issued
and outstanding, actual; no shares authorized, issued
and outstanding, as adjusted............................ 2,833 --
------- --------
Total convertible preferred stock....................... 12,366 --
Undesignated preferred stock, $0.01 par value per share; no
shares authorized, issued and outstanding, actual;
5,000,000 shares authorized, no shares issued and
outstanding, as adjusted.................................. -- --
Common stock, $0.01 par value per share; 20,000,000 shares
authorized, 560,327 shares issued and outstanding, actual;
60,000,000 shares authorized, 9,069,610 shares issued and
outstanding, as adjusted.................................. 6 91
Additional paid-in capital.................................. 285 47,486
Deferred compensation....................................... (57) (57)
Notes receivable from stockholders.......................... (198) (198)
Accumulated deficit......................................... (11,280) (11,280)
Accumulated other comprehensive income...................... 641 641
------- --------
Total stockholders' equity................................ 1,763 36,683
------- --------
Total capitalization.................................... $ 1,763 $ 36,683
======= ========
</TABLE>

The above table excludes 574,234 shares of common stock issuable upon
exercise of stock options outstanding as of January 1, 2000 at a weighted
average exercise price of $3.35 per share. The above table also assumes no
exercise of the underwriters' over-allotment option.

15
<PAGE>
DILUTION

As of January 1, 2000, we had a pro forma net tangible book value of $1.9
million, or $0.32 per share of common stock. Pro forma net tangible book value
per share is equal to our total tangible assets less total liabilities, divided
by the number of shares of our outstanding common stock assuming the conversion
of all outstanding preferred stock into common stock and the exercise of the
outstanding warrant to purchase common stock.

After giving effect to the sale of the 3,000,000 shares of common stock
offered by us at an assumed initial public offering price of $13.00 per share,
and after deducting our underwriting discounts and commissions and our estimated
offering expenses, our pro forma net tangible book value as of January 1, 2000
would have been $36.7 million, or $4.04 per share of common stock. This
represents an immediate increase in pro forma net tangible book value of $3.72
per share to our existing stockholders and an immediate dilution of $8.96 per
share to new investors in this offering. If the initial public offering price is
higher or lower than $13.00 per share, the dilution to new stockholders will be
higher or lower. The following table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............. $13.00
Pro forma net tangible book value per share before this $0.32
offering................................................
Increase per share attributable to new investors.......... 3.72
-----
Pro forma net tangible book value per share after this
offering.................................................. 4.04
------
Dilution per share to new investors......................... $ 8.96
======
</TABLE>

In addition, after giving effect to the acquisition of C-Mold, our pro forma
net tangible book value after this offering as of January 1, 2000 would have
been $28.9 million, or $3.19 per share of common stock.

The following table summarizes, on a pro forma basis as of January 1, 2000,
the number of shares of common stock purchased, the total consideration paid and
the average price per share paid by existing stockholders and new investors in
this offering assuming the conversion of all outstanding preferred stock into
common stock and the exercise of the outstanding warrant to purchase common
stock. The table assumes that the initial public offering price will be $13.00.

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
-------------------- ---------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
--------- -------- ----------- -------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders.............. 6,069,610 66.9% $12,807,000 24.7% $ 2.11
New investors...................... 3,000,000 33.1 39,000,000 75.3 13.00
--------- ----- ----------- -----
Total.......................... 9,069,610 100.0% $51,807,000 100.0%
========= ===== =========== =====
</TABLE>

The tables above exclude:

- 181,656 shares which may be issued by us pursuant to the underwriters'
over-allotment option,

- 574,234 shares of common stock issuable upon exercise of outstanding
options at January 1, 2000 at a weighted average exercise price of $3.35
per share, and

- an aggregate of 2,500,000 shares available for future grant under our 2000
Stock Option and Incentive Plan and our Employee Stock Purchase Plan.

To the extent our outstanding options are exercised, new investors may
experience further dilution.

16
<PAGE>
SELECTED FINANCIAL DATA

The following selected consolidated financial data should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and our consolidated financial statements and related
notes included elsewhere in this prospectus. The statement of operations data
for the years ended June 30, 1997, 1998 and 1999 and the balance sheet data at
June 30, 1998 and 1999 are derived from our audited consolidated financial
statements appearing elsewhere in this prospectus. The balance sheet data at
June 30, 1997 are derived from our audited consolidated financial statements not
included in this prospectus. The statement of operations data for the years
ended June 30, 1995 and 1996 and the balance sheet data at June 30, 1995 and
1996 are derived from our unaudited consolidated financial statements not
included in this prospectus. The unaudited consolidated financial statements, in
the opinion of management, have been prepared on the same basis as the audited
consolidated financial statements and reflect all adjustments necessary for a
fair presentation of that data. The interim statement of operations data for the
six-month periods ended January 2, 1999 and January 1, 2000 and the interim
balance sheet data at January 1, 2000 are derived from our unaudited
consolidated interim financial statements appearing elsewhere in this prospectus
which, in the opinion of management, have been prepared on the same basis as the
audited consolidated financial statements and reflect all adjustments necessary
for a fair presentation of that data. The data for the six-month period ended
January 1, 2000 are not necessarily indicative of results for the year ending
June 30, 2000 or any future period. Pro forma net income per common share
reflects the assumed conversion of all outstanding convertible preferred stock
and the exercise of the outstanding warrant into shares of common stock upon
completion of this offering as if such conversion had occurred at the beginning
of the applicable period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
FISCAL YEAR ENDED JUNE 30, -----------------------
---------------------------------------------------- JANUARY 2, JANUARY 1,
1995 1996 1997 1998 1999 1999 2000
-------- -------- -------- -------- -------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue:
Software licenses.................... $ 5,374 $ 6,531 $ 6,743 $ 8,514 $12,238 $5,275 $ 6,651
Services............................. 6,162 7,472 8,080 7,875 7,983 3,969 4,853
------- ------- ------- ------- ------- ------ -------
Total revenue...................... 11,536 14,003 14,823 16,389 20,221 9,244 11,504
------- ------- ------- ------- ------- ------ -------
Costs and expenses:
Cost of software licenses revenue.... 215 261 377 397 378 168 322
Cost of services revenue............. 1,676 2,615 1,904 1,685 1,319 605 491
Research and development............. 2,234 3,535 3,527 3,062 3,466 1,754 1,709
Selling and marketing................ 4,541 6,094 6,703 7,287 9,673 4,615 5,811
General and administrative........... 2,486 2,550 3,719 3,303 3,839 1,735 2,277
Litigation........................... -- -- -- -- 620 -- 530
Amortization of intangible assets.... 2,440 2,904 2,370 84 -- -- --
------- ------- ------- ------- ------- ------ -------
Total operating expenses........... 13,592 17,959 18,600 15,818 19,295 8,877 11,140
------- ------- ------- ------- ------- ------ -------

Income (loss) from operations........ (2,056) (3,956) (3,777) 571 926 367 364
Interest income (expense), net......... 156 135 (139) (238) (177) (85) (39)
Other income (loss), net............... 766 (24) 17 19 (92) (22) (64)
------- ------- ------- ------- ------- ------ -------
Income (loss) before income taxes.... (1,134) (3,845) (3,899) 352 657 260 261
Provision for income taxes............. 466 414 371 163 176 57 (172)
------- ------- ------- ------- ------- ------ -------
Net income (loss).................... (1,600) (4,259) (4,270) 189 481 203 433
Accretion on convertible preferred
stock................................ 146 482 741 80 -- -- --
------- ------- ------- ------- ------- ------ -------
Net income (loss) available to common
stockholders....................... $(1,746) $(4,741) $(5,011) $ 109 $ 481 $ 203 $ 433
======= ======= ======= ======= ======= ====== =======
</TABLE>

17
<PAGE>

<TABLE>
<CAPTION>
AS OF JUNE 30,
---------------------------------------------------- AS OF JANUARY 1,
1995 1996 1997 1998 1999 2000
-------- -------- -------- -------- -------- ----------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents.................... $ 564 $ 1,638 $ 1,009 $ 1,700 $ 1,240 $ 1,328
Total assets................................. 16,184 16,432 13,940 14,336 10,247 10,564
Long-term debt, net of current portion....... -- -- 524 890 -- --
Redeemable convertible preferred stock....... 1,608 9,582 10,322 -- -- --
Stockholders' equity (deficit)............... 3,461 (5,340) (10,584) 34 1,270 1,763
</TABLE>

The computation of basic and diluted net income (loss) per common share has
been adjusted retroactively for all periods presented to reflect the
redesignation of our common and preferred stock in March 1998. As a result of
the treatment of this redesignation, we had no common stock outstanding prior to
June 30, 1998 for purposes of computing net income (loss) per common share.
Accordingly, basic net income (loss) per common share was zero for the years
ended June 30, 1995, 1996, 1997 and 1998.

18
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH OUR CONSOLIDATED
FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION APPEARING ELSEWHERE IN THIS
PROSPECTUS.

OVERVIEW

Our primary business is the development, sale and support of software
applications for the design and manufacture of plastic injection molded parts.
Our products allow a product designer or engineer to simulate the manufacture of
a plastic part to determine and maintain the optimal part design and
manufacturing conditions throughout the manufacturing process.

We develop software products internally and through cooperative research
relationships with a number of public and private educational and research
organizations around the world. Prior to June 1997, our products consisted
solely of our Moldflow Plastics Insight (MPI) series for in-depth mold design.
Since then, we have introduced two new product lines. Our Moldflow Plastics
Advisers (MPA) series for part design and high level mold design was introduced
in fiscal 1997 and our Moldflow Plastics Xpert (MPX) series for production
set-up and production monitoring was introduced in fiscal 1999. We have also
introduced additional modules of our MPI product series since June 1997.

We sell our products and services internationally through our direct sales
operations in nine countries. In addition, we sell through a network of
distributors and value-added resellers and through distribution arrangements
with developers of other design software products.

We generate revenue from two principal sources:

- license fees for our packaged software products, and

- services revenue derived from maintenance and support services related to
our software products, consulting, training and material testing.

SOFTWARE LICENSES REVENUE. Typically, our customers pay an up-front,
one-time fee for a perpetual license of our software products. The amount of the
fee depends upon the number and type of software modules purchased and the
number of the customers' employees or other users who can access the software
product simultaneously. Sales of our MPA product are initiated upon receipt of a
customer purchase order and are subject to the terms of a "shrink-wrapped" or
"click-wrapped" software license agreement which is pre-packaged with the
software and is also included as part of customers' installation process. For
sales of our MPI and MPX products, we generally require a signed license
agreement. In addition, we receive royalty payments from original equipment
manufacturers related to the bundling of our software with their design software
programs.

We recognize software licenses revenue when evidence of a purchase
commitment exists, delivery of the product has occurred, no significant
installation obligations remain, the license fee is fixed and determinable, and
collectibility is probable. Installation of the software by Moldflow is not
essential to its functionality, and typically is completed by our customers.

SERVICES REVENUE. Most of our customers enter into maintenance and support
contracts, which require us to provide customer technical support services and
unspecified product upgrades and enhancements on a when-and-if-available basis.
Services revenue is primarily comprised of revenue derived from these
maintenance and support contracts. We also provide consulting services, training
of customers' employees, and material testing services. Maintenance and support
contract revenue is invoiced in advance and is recognized ratably over the term
of the corresponding maintenance

19
<PAGE>
agreement, which typically is twelve months. Other services revenue is
recognized as the services are performed.

COST OF SOFTWARE LICENSES REVENUE. Cost of software licenses revenue
consists primarily of the costs associated with compact discs and related
packaging material, duplication and shipping costs and the salaries of our
distribution personnel. In some cases, we pay royalties to third parties for
usage-based licenses of their products that are embedded in our software
programs. Product royalties are expensed when the related obligation arises,
which is generally upon the sale of our products, and are included in cost of
software licenses revenue.

COST OF SERVICES REVENUE. Cost of services revenue consists primarily of
salary, fringe benefit and facility related costs of our maintenance and
support, consulting and training activities and of our material testing
laboratory in Australia, and is expensed when incurred. Additionally, from time
to time, we engage outside consultants to meet peaks in customer demand for our
consulting services.

RESEARCH AND DEVELOPMENT. We maintain an in-house development staff to
enhance our existing products and to develop new ones. Product development
expenditures are generally charged to operations as incurred. Statement of
Financial Accounting Standards No. 86 requires the capitalization of certain
software development costs subsequent to the establishment of technological
feasibility. We typically establish technological feasibility upon the
completion of a working model. Accordingly, due to the minimal level of software
development costs incurred subsequent to the establishment of technological
feasibility, costs eligible for capitalization have not been significant to
date.

SELLING AND MARKETING. We sell our products primarily through our direct
sales force and indirect distribution channels. Selling and marketing expenses
consist primarily of personnel costs, commissions to employees, sales office
facilities, travel and promotional events such as trade shows, advertising,
print and Web-based collateral materials, and public relations programs.

GENERAL AND ADMINISTRATIVE. General and administrative expenses include our
personnel, routine legal, audit and other costs of our executive management,
finance and administrative support activities.

LITIGATION. In February 1999, we filed suit in U.S. District Court against
a former employee and C-Mold in which we allege theft and misappropriation of
our trade secrets related to the development of a three-dimensional plastic
simulation and modeling product. The U.S. District Court has issued a
preliminary injunction precluding the defendants from using or disclosing our
trade secrets and prohibiting our former employee from working for our
competitor in this area. In January 2000, the court denied C-Mold's motion to
have this injunction lifted. In April 1999, C-Mold filed counterclaims against
us in which they allege that we engaged in anti-competitive practices including,
among other things, restraint of trade, attempt to monopolize, price
discrimination, libel and defamation. Certain of the counterclaims have been
dismissed. This litigation is currently being held in abeyance pending the
completion of our acquisition of C-Mold, at which time it will be dismissed. In
the event that the litigation resumes, we intend to vigorously pursue our claims
and defend the counterclaims asserted against us. We are unable to determine the
ultimate outcome of these matters. Litigation expenses reflect our costs for
pursuing our claims and for defending against the counterclaims.

INTEREST INCOME (EXPENSE), NET. Interest income (expense), net includes our
cost of borrowings, including interest cost incurred on our working capital
lines of credit and stockholder loans, offset in part by interest income earned
on invested cash balances.

20
<PAGE>
OTHER INCOME (LOSS), NET. Other income (loss), net includes realized and
unrealized gains and losses arising from translation of foreign currency
denominated asset and liability balances and other non-operating income and
expense items.

PROVISION FOR INCOME TAXES. Our provision for income taxes includes
federal, state and foreign taxes on our income in the countries in which we do
business. Because we have incurred significant operating losses in prior years,
we have significant net operating loss carryforwards available to offset our
future tax obligations in the U.S. and Australia, and to a lesser extent,
certain other countries. At June 30, 1999, we had available federal, state and
foreign net operating loss carryforwards of approximately $4.5 million,
$3.2 million and $7.8 million. Use of net operating losses to reduce future
taxable income is subject to a number of limitations. We expect that our income
taxes will increase in the future once our net operating loss carryforwards and
other deferred tax assets are fully utilized.

Our fiscal year end is June 30. References to 1997, 1998 or 1999 mean the
fiscal year ended June 30, unless otherwise indicated. During the fiscal year,
we follow a schedule in which each interim quarterly period ends on the Saturday
of the thirteenth full week of the reporting period.

RESULTS OF OPERATIONS

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

<TABLE>
<CAPTION>
SIX MONTHS
ENDED
FISCAL YEAR ENDED JUNE 30, --------------------
-------------------------------- JAN. 2, JAN. 1,
1997 1998 1999 1999 2000
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Revenue:
Software licenses.............................. 45.5% 51.9% 60.5% 57.1% 57.8%
Services....................................... 54.5 48.1 39.5 42.9 42.2
----- ----- ----- ----- -----
Total revenue................................ 100.0 100.0 100.0 100.0 100.0
----- ----- ----- ----- -----
Costs and expenses:
Cost of software licenses revenue.............. 2.6 2.4 1.9 1.8 2.8
Cost of services revenue....................... 12.8 10.3 6.5 6.5 4.3
Research and development....................... 23.8 18.7 17.1 19.0 14.9
Selling and marketing.......................... 45.2 44.4 47.8 49.9 50.5
General and administrative..................... 25.1 20.2 19.0 18.8 19.8
Litigation..................................... -- -- 3.1 -- 4.6
Amortization of intangible assets.............. 16.0 0.5 -- -- --
----- ----- ----- ----- -----
Total operating expenses..................... 125.5 96.5 95.4 96.0 96.9
----- ----- ----- ----- -----
Income (loss) from operations.................. (25.5) 3.5 4.6 4.0 3.1

Interest income (expense), net................... (0.9) (1.5) (0.9) (0.9) (0.4)
Other income (loss), net......................... 0.1 0.1 (0.5) (0.2) (0.6)
----- ----- ----- ----- -----
Income (loss) before income taxes.............. (26.3) 2.1 3.2 2.9 2.1
Provision for income taxes....................... 2.5 1.0 0.9 0.6 (1.5)
----- ----- ----- ----- -----
Net income (loss).............................. (28.8)% 1.1% 2.3% 2.3% 3.6%
===== ===== ===== ===== =====
</TABLE>

SIX MONTHS ENDED JANUARY 1, 2000 COMPARED TO SIX MONTHS ENDED JANUARY 2, 1999

REVENUE. Total revenue increased by 24.4%, or $2.3 million, to
$11.5 million for the six months ended January 1, 2000 from $9.2 million for the
six months ended January 2, 1999. In the same period, software licenses revenue
increased by 26.1%, or $1.4 million, to $6.7 million. The increase in software
licenses revenue was primarily attributable to an increase of $1.0 million in

21
<PAGE>

license revenue in our Asia region due in part to an improvement in the region's
economic conditions. To a lesser extent, license revenue was higher due to an
increase in the number of our direct sales representatives and new MPA and MPX
product releases in March 1999 and September 1999. Software licenses revenue
accounted for 57.8% of total revenue for the six months ended January 1, 2000
compared to 57.1% for the six months ended January 2, 1999. Services revenue
increased by 22.3%, or $884,000, to $4.9 million for the six months ended
January 1, 2000 from $4.0 million for the six months ended January 2, 1999. This
increase was due primarily to an increase in the amount of revenue derived from
maintenance and support contracts resulting from the growth in our software
licenses revenue and installed user base in fiscal 1999. No customer accounted
for more than 10% of total revenue for the six months ended January 1, 2000 and
January 2, 1999.

COST OF REVENUE. Cost of software licenses revenue increased 91.7%, or
$154,000, to $322,000 for the six months ended January 1, 2000 from $168,000 for
the six months ended January 2, 1999. This increase was primarily attributable
to hardware costs related to MPX product sales and, to a lesser extent, costs
associated with increased personnel. Cost of services revenue decreased 18.8%,
or $114,000, from $605,000 for the six months ended January 2, 1999 to $491,000
for the six months ended January 1, 2000. This decrease resulted from the
continued redirection of field technical personnel from largely passive roles of
customer hotline and maintenance services to active field roles in pre-sales and
customer retention programs, which costs are included in selling and marketing.

RESEARCH AND DEVELOPMENT. Research and development expenses decreased 2.6%,
or $45,000, to $1.7 million for the six months ended January 1, 2000 from
$1.8 million for the six months ended January 2, 1999. This decrease was the
result of lower research sponsorship costs in the six months ended January 1,
2000.

SELLING AND MARKETING. Selling and marketing expenses increased 25.9%, or
$1.2 million, to $5.8 million for the six months ended January 1, 2000 from
$4.6 million for the six months ended January 2, 1999. This growth was due
principally to an increase in the number of direct sales representatives and
pre-sales application support engineers. To a lesser extent, this growth was due
to the establishment of a direct sales subsidiary in Sweden in July 1999 and an
increase in spending for promotional activities.

GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
31.2%, or $542,000, to $2.3 million for the six months ended January 1, 2000
from $1.7 million for the six months ended January 2, 1999. This resulted from
the cost of additional finance and administrative personnel hired in the second
half of fiscal 1999, an increase in costs of pursuing business development
opportunities, and an increase in general corporate insurance and facility
costs.

LITIGATION. Litigation expenses were $530,000 for the six months ended
January 1, 2000. There were no litigation expenses for the six months ended
January 2, 1999. These litigation expenses consist of the legal costs incurred
to pursue our claims regarding theft of our trade secrets and to defend against
the counterclaims.

INTEREST INCOME (EXPENSE), NET. Interest income (expense), net decreased
54.1%, or $46,000, to a net expense of $39,000 in the six months ended
January 1, 2000 from a net expense of $85,000 for the six months ended
January 2, 1999. This was due primarily to a decrease in interest expense
resulting from the reduction in the amount of outstanding borrowings under our
domestic and foreign revolving credit facilities.

OTHER INCOME (LOSS), NET. Other income (loss), net increased $42,000 to a
loss of $64,000 in the six months ended January 1, 2000 from a loss of $22,000
for the six months ended January 2,

22
<PAGE>
1999. This change was primarily due to unrealized foreign exchange losses
incurred on the translation of intercompany foreign currency denominated
obligations.

PROVISION FOR INCOME TAXES. The provision for income taxes was a benefit of
$172,000 in the six months ended January 1, 2000 compared to a provision of
$57,000 for the six months ended January 2, 1999. This change reflects the
impact of a refund received in September 1999 of foreign taxes that we paid in
prior years.

COMPARISON OF FISCAL YEARS 1999 AND 1998

REVENUE. Total revenue increased 23.4%, or $3.8 million, to $20.2 million
for 1999 from $16.4 million for 1998. The increase was attributable principally
to growth in software licenses revenue, resulting primarily from the impact of
the release of three new products, MPI/Fusion, MPI/ FLOW 3D and MPA/Mold Adviser
in August 1998, September 1998 and March 1999. A portion of the increase
resulted from the continued implementation of our direct selling model,
including the addition of sales representatives and the improvement of sales
productivity. Software licenses revenue increased 43.7%, or $3.7 million, to
$12.2 million for 1999 from $8.5 million for 1998. Software licenses revenue
accounted for 60.5% of total revenue in 1999, compared to 51.9% during 1998.
Services revenue increased slightly by $108,000, or 1.4%, as the increase in
maintenance and support contract revenue was offset, in part, by a reduction in
consulting revenue resulting from our decision to de-emphasize our simulation
consulting and analysis business. No customer accounted for more than 10% of our
total revenue during 1999 and a distributor in Japan, ISI-Dentsu, Ltd.,
accounted for 12.7% of our total revenue in 1998.

COST OF REVENUE. Cost of software licenses revenue decreased by 4.8%, or
$19,000, to $378,000 for 1999 from $397,000 for 1998. This decrease was due
primarily to lower packaging and freight costs in 1999. Cost of services revenue
decreased by 21.7%, or $366,000, to $1.3 million for 1999 from $1.7 million for
1998. This was due primarily to lower personnel costs resulting from the
continued redirection of technical and consulting employees into pre-sales
support activities, which costs are included in selling and marketing. To a
lesser extent, this reduction was due to the implementation of a worldwide
customer support management system and the centralization of U.S.-based customer
support activities.

RESEARCH AND DEVELOPMENT. Research and development expenses increased by
13.2%, or $404,000, to $3.5 million for 1999 from $3.1 million for 1998. This
increase was attributable to the addition of software development engineers in
Australia and the United Kingdom, and increased costs of travel and outside
consultants primarily engaged in MPX product development activities.

SELLING AND MARKETING. Selling and marketing expenses increased by 32.7%,
or $2.4 million, to $9.7 million for 1999 from $7.3 million for 1998. These
expenses increased as a percentage of total revenue from 44.4% to 47.8% due
principally to the hiring of additional direct sales representatives, pre-sales
support and product marketing employees, and also to a lesser extent the
establishment of a marketing communications function. Further, we increased our
spending for promotional activities including collateral materials, direct
mailings and public relations in connection with the rollout of new products
introduced during 1999.

GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
by 16.2%, or $536,000, to $3.8 million for 1999 from $3.3 million for 1998.
These expenses increased in 1999 due primarily to the addition of financial and
administrative management personnel. In addition, we increased our spending for
improvements in information systems and routine legal and audit fees.

23
<PAGE>
LITIGATION. Litigation expenses were $620,000 in 1999. This was
attributable to the legal costs incurred in 1999 to pursue our claims regarding
theft of our trade secrets and to defend against the other parties'
counterclaims. There were no such expenses in 1998.

INTEREST INCOME (EXPENSE), NET. Interest income (expense), net decreased by
25.6%, or $61,000, to a net expense of $177,000 in 1999 from a net expense of
$238,000 in 1998 due primarily to a reduction in the amount of interest expense
incurred as a result of a reduction in the level of bank and stockholder debt
outstanding in 1999. Outstanding debt was reduced through repayment with funds
generated from operations in 1999 and through the conversion of $890,000 of
stockholder debt into preferred stock.

OTHER INCOME (LOSS), NET. Other income (loss), net decreased by $111,000,
to a loss of $92,000 in 1999 from income of $19,000 in 1998 due primarily to
unrealized foreign exchange losses incurred on the translation of intercompany
foreign currency denominated obligations.

PROVISION FOR INCOME TAXES. The provision for income taxes increased
slightly to $176,000 in 1999 from $163,000 in 1998 due primarily to changes in
the amount of taxes paid on income in state and foreign jurisdictions.

COMPARISON OF FISCAL YEARS 1998 AND 1997

REVENUE. Our total revenue increased 10.6%, or $1.6 million, to
$16.4 million for 1998 from $14.8 million for 1997. The increase was principally
attributable to the introduction in June 1997 of the MPA/Part Adviser product.
To a lesser extent our revenues increased as a result of the establishment of
our direct sales subsidiary in Italy in January 1998. This increase was offset
in part by lower sales in Asia resulting from declining economic conditions in
the region and the impact of currency fluctuations. Software licenses revenue
accounted for 51.9% of total revenue in 1998, compared to 45.5% during 1997.
Services revenue declined by 2.5% in 1998, or $205,000, to $7.9 million,
compared to $8.1 million in 1997. This was due to our decision to de-emphasize
our simulation and analysis consulting business while redirecting our
consultants into pre-sales support in order to increase software product sales
at a more rapid pace. In 1998 and 1997, a distributor in Japan, ISI-Dentsu,
Ltd., accounted for 12.7% and 14.9% of our total revenue for those periods.

COST OF REVENUE. Cost of software licenses revenue increased by 5.3%, or
$20,000, to $397,000 for 1998 from $377,000 for 1997 due primarily to the
increased volume of product sales. Cost of services revenue decreased by 11.5%,
or $219,000, to $1.7 million in 1998 from $1.9 million in 1997. The decrease was
attributable principally to a redirection of some of our technical and
consulting employees into pre-sales support activities, which costs are included
in selling and marketing.

RESEARCH AND DEVELOPMENT. Research and development expenses decreased by
13.2%, or $465,000, to $3.1 million for 1998 from $3.5 million for 1997. This
decrease was attributable primarily to the reduction in costs of our development
activities in Australia due to the weakening in the rate of exchange of the
Australian dollar to the U.S. dollar during 1998.

SELLING AND MARKETING. Selling and marketing expenses increased by 8.7%, or
$584,000, to $7.3 million for 1998 from $6.7 million for 1997. These expenses
increased due to compensation and other costs related to the addition of sales
associates and sales management in existing operations, including our Japanese
operation established in August 1997, and the establishment of direct sales and
support operations in Italy in January 1998.

GENERAL AND ADMINISTRATIVE. General and administrative expenses decreased
by 11.2%, or $416,000, to $3.3 million for 1998 from $3.7 million for 1997. The
decrease was due primarily to a reduction in the cost of our Asian regional
finance and administrative activities located in Australia

24
<PAGE>
resulting from changes in the rate of exchange versus the U.S. dollar and a
reduction in the level of professional fees incurred after our reorganization
into a U.S. corporation in August 1997.

AMORTIZATION OF INTANGIBLE ASSETS. Amortization of intangible assets
decreased $2.3 million, or 96.5%, to $84,000 in 1998 from $2.4 million in 1997
as our intangible assets, including developed software and goodwill acquired in
1994, became fully amortized in 1997.

INTEREST INCOME (EXPENSE), NET. Interest income (expense), net increased by
71.2%, or $99,000, to a net expense of $238,000 in 1998 from a net expense of
$139,000 in 1997 due to the increased level of bank and stockholder debt
outstanding in 1998.

OTHER INCOME (LOSS), NET. Other income (loss), net increased by $2,000, to
income of $19,000 in 1998 from income of $17,000 in 1997 due primarily to
unrealized foreign exchange gains resulting from the translation of intercompany
foreign currency denominated obligations.

PROVISION FOR INCOME TAXES. The provision for income taxes decreased by
56.1%, or $208,000, from $371,000 in 1997 to $163,000 in 1998 primarily as the
result of a reduction in the amount of foreign withholding taxes paid after the
establishment of our direct sales subsidiary in Japan.

25
<PAGE>
SELECTED QUARTERLY RESULTS OF OPERATIONS

The following table sets forth the unaudited quarterly consolidated
statement of operations data for each of the ten quarters in the period ended
January 1, 2000. In the opinion of management, the unaudited financial results
include all adjustments, consisting only of normal recurring adjustments,
necessary for the fair presentation of our results of operations for those
periods and have been prepared on the same basis as the audited consolidated
financial statements. The quarterly data should be read in conjunction with our
audited consolidated financial statements and the accompanying notes appearing
elsewhere in this prospectus. The results of operations for any quarter are not
necessarily indicative of the results of operations for any future period.

<TABLE>
<CAPTION>
QUARTER ENDED
-------------------------------------------------------------------------------------
OCT 4, JAN. 3, APR. 4, JUN. 30, OCT. 3, JAN. 2, APR. 3, JUN. 30,
1997 1998 1998 1998 1998 1999 1999 1999
-------- -------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue:
Software licenses................... $1,568 $2,410 $2,313 $2,223 $2,350 $2,925 $3,555 $3,408
Services............................ 1,956 2,050 1,851 2,018 1,838 2,131 1,845 2,169
------ ------ ------ ------ ------ ------ ------ ------
Total revenue..................... 3,524 4,460 4,164 4,241 4,188 5,056 5,400 5,577
------ ------ ------ ------ ------ ------ ------ ------
Costs and expenses:
Cost of software licenses revenue... 165 125 79 28 77 91 116 94
Cost of services revenue............ 429 398 417 441 290 315 363 351
Research and development............ 809 748 785 720 895 859 1,031 681
Selling and marketing............... 1,569 1,920 1,900 1,898 2,086 2,529 2,526 2,532
General and administrative.......... 776 840 742 945 794 941 1,065 1,039
Litigation.......................... -- -- -- -- -- -- 150 470
Amortization of intangible assets... 84 -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------ ------
Total operating expenses.......... 3,832 4,031 3,923 4,032 4,142 4,735 5,251 5,167
------ ------ ------ ------ ------ ------ ------ ------
Income (loss) from operations....... (308) 429 241 209 46 321 149 410
Interest income (expense), net........ (39) (42) (44) (113) (41) (44) 8 (100)
Other income (loss), net.............. 1 (60) 16 62 50 (72) (19) (51)
------ ------ ------ ------ ------ ------ ------ ------
Income (loss) before income taxes... (346) 327 213 158 55 205 138 259
Provision for income taxes............ -- 57 75 31 (3) 60 62 57
------ ------ ------ ------ ------ ------ ------ ------
Net income (loss)................... $ (346) $ 270 $ 138 $ 127 $ 58 $ 145 $ 76 $ 202
====== ====== ====== ====== ====== ====== ====== ======

<CAPTION>
QUARTER ENDED
-------------------
OCT. 2, JAN. 1,
1999 2000
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Revenue:
Software licenses................... $2,823 $3,828
Services............................ 2,358 2,495
------ ------
Total revenue..................... 5,181 6,323
------ ------
Costs and expenses:
Cost of software licenses revenue... 169 153
Cost of services revenue............ 236 255
Research and development............ 835 874
Selling and marketing............... 2,698 3,113
General and administrative.......... 1,076 1,201
Litigation.......................... 280 250
Amortization of intangible assets... -- --
------ ------
Total operating expenses.......... 5,294 5,846
------ ------
Income (loss) from operations....... (113) 477
Interest income (expense), net........ (1) (38)
Other income (loss), net.............. (34) (30)
------ ------
Income (loss) before income taxes... (148) 409
Provision for income taxes............ (217) 45
------ ------
Net income (loss)................... $ 69 $ 364
====== ======
</TABLE>

<TABLE>
<CAPTION>
QUARTER ENDED
---------------------------------------------------------------
OCT. 4, JAN. 3, APR. 4, JUN. 30, OCT. 3, JAN. 2,
1997 1998 1998 1998 1998 1999
-------- -------- -------- -------- -------- --------
(AS A PERCENTAGE OF TOTAL REVENUE)
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Software licenses................... 44.5% 54.0% 55.5% 52.4% 56.1% 57.9%
Services............................ 55.5 46.0 44.5 47.6 43.9 42.1
----- ----- ----- ----- ----- -----
Total revenue..................... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
===== ===== ===== ===== ===== =====
Costs and expenses:
Cost of software licenses revenue... 4.7% 2.8% 1.9% 0.7% 1.8% 1.8%
Cost of services revenue............ 12.2 8.9 10.0 10.4 6.9 6.2
Research and development............ 23.0 16.8 18.9 17.0 21.4 17.0
Selling and marketing............... 44.5 43.0 45.6 44.8 49.8 50.0
General and administrative.......... 22.0 18.8 17.8 22.3 19.0 18.6
Litigation.......................... -- -- -- -- -- --
Amortization of intangible assets... 2.4 -- -- -- -- --
----- ----- ----- ----- ----- -----
Total operating expenses.......... 108.8 90.3 94.2 95.2 98.9 93.6
----- ----- ----- ----- ----- -----
Income (loss) from operations....... (8.8) 9.7 5.8 4.8 1.1 6.4
Interest income (expense), net........ (1.1) (0.9) (1.1) (2.7) (1.0) (0.9)
Other income (loss), net.............. 0.0 (1.3) 0.4 1.5 1.2 (1.4)
----- ----- ----- ----- ----- -----
Income (loss) before income taxes... (9.9) 7.5 5.1 3.6 1.3 4.1
Provision for income taxes............ -- 1.3 1.8 0.7 (0.1) 1.2
----- ----- ----- ----- ----- -----
Net income (loss)................... (9.9)% 6.2% 3.3% 2.9% 1.4% 2.9%
===== ===== ===== ===== ===== =====

<CAPTION>
QUARTER ENDED
-----------------------------------------
APR. 3, JUN. 30, OCT. 2, JAN. 1,
1999 1999 1999 2000
-------- -------- -------- --------
(AS A PERCENTAGE OF TOTAL REVENUE)
<S> <C> <C> <C> <C>
Revenue:
Software licenses................... 65.8% 61.1% 54.5% 60.5%
Services............................ 34.2 38.9 45.5 39.5
----- ----- ----- -----
Total revenue..................... 100.0% 100.0% 100.0% 100.0%
===== ===== ===== =====
Costs and expenses:
Cost of software licenses revenue... 2.1% 1.7% 3.3% 2.4%
Cost of services revenue............ 6.7 6.3 4.6 4.0
Research and development............ 19.1 12.2 16.1 13.8
Selling and marketing............... 46.8 45.4 52.1 49.2
General and administrative.......... 19.7 18.6 20.8 19.0
Litigation.......................... 2.8 8.4 5.4 4.0
Amortization of intangible assets... -- -- -- --
----- ----- ----- -----
Total operating expenses.......... 97.2 92.6 102.3 92.4
----- ----- ----- -----
Income (loss) from operations....... 2.8 7.4 (2.3) 7.6
Interest income (expense), net........ 0.1 (1.8) -- (0.6)
Other income (loss), net.............. (0.4) (1.0) (0.7) (0.5)
----- ----- ----- -----
Income (loss) before income taxes... 2.5 4.6 (3.0) 6.5
Provision for income taxes............ 1.1 1.0 (4.2) 0.7
----- ----- ----- -----
Net income (loss)................... 1.4% 3.6% 1.2% 5.8%
===== ===== ===== =====
</TABLE>

26
<PAGE>
Our quarterly results have varied in the past and may vary significantly in
the future depending on many factors, many of which are outside of our control.
The primary factors that may affect us include the following:

- seasonal slowdowns, in particular, in our first fiscal quarter, in many of
the markets in which we sell our products,

- start-up expenses for new facilities and new personnel,

- our success in expanding our sales and marketing programs, including the
rollout of our Internet-enabled products currently under development,

- currency fluctuations,

- developments in the litigation that we are pursuing against our former
employee and our competitor, and in the nature and extent of proceedings
and findings related to their counterclaims pending against us, and

- the timing and integration of acquisitions.

LIQUIDITY AND CAPITAL RESOURCES

Historically, we have financed our operations and met our capital
expenditure requirements primarily through private sales of our capital stock,
stockholder loans, funds generated from operations and borrowings from lending
institutions. As of January 1, 2000, our primary sources of liquidity consisted
of $1.3 million in total cash and cash equivalents and $1.4 million of available
borrowings under our $3,250,000 domestic and foreign revolving lines of credit,
which are secured by substantially all of our assets. As of January 1, 2000, the
balance outstanding on our lines of credit was $998,000. Borrowings under our
lines of credit are subject to a borrowing base of 80% of eligible domestic
accounts receivable, 30% of eligible foreign accounts receivable, and 90% of a
standby letter of credit issued by an Australian bank. The assets of our
Australian subsidiary secure the standby letter of credit. Interest on these
lines of credit is payable monthly at rates of prime plus 1.25% for the domestic
line and prime plus 1.5% for the foreign line. The standby letter of credit is
subject to a fee of 0.5% per year.

Net cash used in operating activities was $608,000 in 1997, and net cash
provided by operations was $771,000 in 1998, $1.2 million in 1999 and $210,000
in the six months ended January 1, 2000. The cash used in operating activities
in 1997 primarily reflects the net loss of $4.3 million offset, in part, by
non-cash charges of $3.1 million for depreciation of fixed assets and
amortization of intangible assets included in the net loss. The cash provided by
operations in 1998, 1999 and the six months ended January 1, 2000 reflects the
impact of increases in net income, deferred maintenance and support contract
revenue and accounts payable, offset by the impact of the increase in 1998 of
accounts receivable, and by non-cash depreciation and amortization charges
included in net income.

Net cash used in investing activities was $1.2 million, $729,000 and
$854,000 in 1997, 1998 and 1999, and $387,000 in the six months ended
January 1, 2000. Net cash used in investing activities reflects amounts used for
purchases of property and equipment, primarily for computers, networking and
materials laboratory test equipment to support our global product development
activities, and to enable data communications among our worldwide development,
sales, customer support and administrative organizations. In addition, in 1997,
net cash used in investing activities reflects $431,000 used to acquire the
shares of our third party distributor in France.

Net cash provided by financing activities was $1.4 million and $716,000 in
1997 and 1998. Net cash used in financing activities was $907,000 in 1999 and
net cash provided by financing activities was $134,000 in the six months ended
January 1, 2000. Net cash provided by financing activities in 1997 and 1998
reflects primarily borrowings from stockholders and lending institutions, net of
the repayment of debt obligations. In July 1998, we converted indebtedness of
$890,000 incurred in

27
<PAGE>
1997 and 1998 under stockholder loans into shares of preferred stock. For more
information on the loan conversion, see "Certain Relationships and Related
Transactions--Loans from Stockholders." Net cash used in financing activities in
1999 reflects principally the repayments of amounts outstanding on our working
capital lines of credit and capital lease obligations. Net cash provided by
financing activities in the six months ended January 1, 2000 reflects
principally borrowings on our working capital lines of credit.

We believe that the net proceeds of this offering, together with our current
cash, cash equivalents, and available lines of credit will be sufficient to
complete the planned acquisition of C-Mold and to meet our anticipated cash
needs for working capital and capital expenditures for at least the next
12 months following the date of this prospectus. On a long-term basis or to
complete other acquisitions, we may require additional external financing
through credit facilities, sales of additional equity or other financing
vehicles.

YEAR 2000 ISSUES

We are unaware of any problems that have arisen with respect to year 2000
issues in our current software products, our internal computer systems or in the
computer systems of our vendors. Prior to January 1, 2000, we conducted a
comprehensive review of the potential impact that the change in the date to the
year 2000 would have on our current products and computer systems. Based on this
review, we determined that all of our current products and major computer
systems are able to recognize and appropriately process dates commencing in the
year 2000. Our historical costs to assess our year 2000 readiness have not been
significant. The majority of the costs required to complete our year 2000
compliance process were incurred as part of our normal capital asset acquisition
program, and would have been incurred without consideration of year 2000 issues.
We are not currently able to estimate the final aggregate cost of addressing the
year 2000 issue, because funds may be required as a result of future findings.
However, given the lack of any problems related to the year 2000 since the year
change, we do not anticipate that we will experience any material problems
related to the year 2000 in the future. As a result, we do not expect costs
associated with these problems to have an adverse effect on our business and
financial results.

RECENT ACCOUNTING PRONOUNCEMENTS

In December 1998, the American Institute of Certified Public Accountants
issued Statement of Position No. 98-9, "Modification of SOP No. 97-2, Software
Revenue Recognition, with Respect to Certain Transactions." SOP 98-9 amends SOP
97-2 to require recognition of revenue using the "residual method" in
circumstances outlined in SOP 98-9. Under the residual method, revenue is
recognized as follows: (1) the total fair value of undelivered elements, as
indicated by vendor specific objective evidence, is deferred and subsequently
recognized in accordance with the relevant sections of SOP 97-2 and (2) the
difference between the total arrangement fee and the amount deferred for the
undelivered elements is recognized as revenue related to the delivered elements.
SOP 98-9 is effective for transactions entered into in fiscal years beginning
after March 15, 1999. Also, the provision of SOP 97-2 that were deferred by SOP
98-4 will continue to be deferred until the date SOP 98-9 becomes effective. We
do not expect that the adoption of SOP 98-9 will have a significant impact on
our results of operations or financial position.

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities." SFAS 133 establishes accounting and reporting standards
for derivative instruments, including certain derivative instruments embedded in
other contracts (collectively referred to as derivatives), and for hedging
activities. SFAS 133, as amended by SFAS 137, is effective for all fiscal
quarters of all fiscal years beginning after June 15, 2000, with earlier
application encouraged. We do not currently use derivative instruments or engage
in hedging activities.

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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We develop our products in research centers in Australia, the United Kingdom
and the United States. We sell our products globally through our direct sales
force and indirect distributor channels. As a result, our financial results are
affected by factors such as changes in foreign currency exchange rates and weak
economic conditions in foreign markets. In the future, we expect to increase our
international operations in our existing markets and in geographic locations
where we do not have any operations now.

We collect a substantial portion of our revenue and pay a substantial
portion of our operating expenses in foreign currencies. As a result, changes in
currency exchange rates from time to time may affect our operating results.
Currently, we do not engage in hedging transactions to reduce our exposure to
changes in currency exchange rates, although we may do so in the future. We
cannot assure you, however, that any efforts we may make in the future to hedge
our exposure to currency exchange rate changes will be successful.

EUROPEAN UNION CURRENCY CONVERSION

On January 1, 1999, eleven member nations of the European Economic and
Monetary Union began using a common currency, the Euro. For a three-year
transition period ending June 30, 2002, both the Euro and each of the currencies
for such member countries will remain in circulation. After June 30, 2002, the
Euro will be the sole legal tender for those countries. The adoption of the Euro
will affect many financial systems and business applications as the commerce of
those countries may be transacted both in the Euro and the existing national
currency during the transition period. Significant portions of our revenue have
been historically generated in Europe. Of the eleven countries currently using
the Euro, we have subsidiary operations in France, Germany and Italy. We have
assessed the potential impact of the Euro conversion in a number of areas,
particularly on our pricing and other marketing strategies. Although we do not
currently expect that the conversion, either during or after the transition
period, will have an adverse effect on our operations or financial condition,
the conversion has only recently been implemented and there can be no assurance
that it will not have some unexpected adverse impact.

IMPACT OF INFLATION

We believe that our revenue and results of operations have not been
significantly impacted by inflation during the past three fiscal years.

FORWARD LOOKING STATEMENTS

This prospectus contains forward-looking statements. You can identify these
statements by forward-looking words such as "may," "will," "expect,"
"anticipate," "believe," "estimate," and "continue" or similar words. You should
read statements that contain these words carefully because they discuss our
future expectations, contain projections of our future results of operations or
of our financial condition, or state other "forward-looking" information. We
believe that it is important to communicate our future expectations to our
investors. However, there may be events in the future that we are not able to
accurately predict or control and that may cause our actual results to differ
materially from the expectations we describe in our forward-looking statements.
Investors are cautioned that all forward-looking statements involve risks and
uncertainties, and actual results may differ materially from those discussed as
a result of various factors, including those factors described in the "Risk
Factors" section of this prospectus. Readers should not place undue reliance on
our forward-looking statements. Before you invest in our common stock, you
should be aware that the occurrence of the events described in the "Risk
Factors" section and elsewhere in this prospectus could harm our business,
prospects, operating results and financial condition.

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BUSINESS

OVERVIEW

We believe we are the world's leading developer of software solutions that
enhance the design, analysis, and manufacture of injection molded plastic parts.
Our products are used by participants in all aspects of the injection molded
plastic parts manufacturing process, including part designers, mold designers,
manufacturing engineers and machine operators. Our products enable our customers
to speed their products to market, decrease manufacturing costs and reduce
costly design and manufacturing errors by:

- assisting part designers in the selection of a plastic material,

- determining the strength, rigidity and ease of manufacturing of a given
part design,

- predicting the amount a plastic part will shrink or warp during
production,

- optimizing production conditions such as machine temperatures, injection
speeds, cooling, times and the locations in a mold to inject the plastic,

- identifying and providing optimized solutions for adverse variations
during production, and

- providing features which facilitate collaboration over shared media, such
as the Internet.

Prior to 1997, we offered a single product line, Moldflow Plastics Insight
(MPI), which was designed to be used by highly specialized engineers conducting
in-depth plastics simulation. Our two new product lines, Moldflow Plastics
Advisers (MPA) and Moldflow Plastics Xpert (MPX), can be used by participants in
all phases of the design and production process for injection molded plastic
parts, many of whom do not specialize in plastic part design. We believe a
large, untapped market for our new product lines exists.

We focus on developing software tools that improve the entire span of
product development for injection molded plastic parts to enable our customers
to enhance their competitiveness and reduce their costs. We believe we have the
widest and most advanced range of software solutions and proprietary technology
to address the problems that arise in each phase of the process of designing and
manufacturing injection molded plastic parts.

Our products are used by more than 2,200 customers at more than 2,500 sites
in over 50 countries around the world. We sell our products primarily through
our direct sales force in North America, Europe and Asia and, to a lesser
extent, through original equipment manufacturers and through distributors in
defined geographic regions. Representative customers include Baxter
International, DaimlerChrysler, DuPont, Fuji Xerox, Hewlett-Packard, Lego,
Lucent Technologies, Motorola, Nokia and Samsung. We have distribution
arrangements with Parametric Technology Corporation, Structural Dynamics
Research Corporation or SDRC, Unigraphics Solutions and CoCreate and resellers
of products of SolidWorks, a subsidiary of Dassault Systemes, and Autodesk.

INDUSTRY BACKGROUND

INJECTION MOLDED PLASTICS INDUSTRY

From high technology to traditional manufacturing, companies in many
industries today make extensive use of plastic materials to produce component
parts for their products. The widespread use of plastics as a manufacturing
material has occurred because plastic parts can be formed into an almost
limitless number of shapes, are relatively inexpensive to manufacture in volume
and are easy to assemble. Common consumer products that make extensive use of
plastic parts include cellular telephones, personal digital assistants, pagers,
automobiles, televisions, cameras, toys and personal computers. The commercial
success of each of these products often relies heavily upon reducing the time to
bring new products to market, reducing engineering and manufacturing costs, and
improving product quality and design.

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In high technology industries, the use of plastics has become increasingly
important as weight, cost and quality are standard points of competitive
differentiation. Most importantly, because plastics can be molded into extremely
complex shapes, they are uniquely suited for use in high technology products.
Products such as cell phones, personal digital assistants or PDAs, and notebook
computers have all employed increasingly complex designs characterized by
smaller parts, reduced weight, more sophisticated shapes and lower tolerances.
These complexities often lengthen the time to market for new products. As
product life cycles shrink and time to market becomes increasingly important,
successful manufacturers in these industries must design and build products
quickly and correctly the first time. In particular, production delays or high
product defect rates for manufacturers in rapidly changing industries can
represent significant economic and opportunity costs. For example, according to
Dataquest analog cellular handset and digital cellular/PCS handset production is
forecast to grow from 175 million units in 1998 to 551 million units in 2003.

The use of plastics also continues to increase in traditional industries
such as the automotive industry in large part due to improvements in the
injection molding process. Automobile manufacturers frequently find that plastic
parts provide the same or superior functionality at a lower cost than other
alternatives and permit a single part to replace multiple parts. Reducing the
number of parts decreases assembly costs and simplifies the overall product
development process. For instance, industry trade journals have reported that
DaimlerChrysler predicts that the 75-100 metal parts currently used on a typical
car's body structure could be replaced by 6-12 plastic parts on future cars. In
addition to cost savings and enhanced part performance, the use of plastics in
the automobile industry can yield improvements in other important design
criteria such as fuel economy due to the weight savings achieved by using
plastics instead of other heavier structural materials. For example, industry
trade journals have reported that DaimlerChrysler has recently produced a new
hardtop for its Jeep Wrangler model which uses plastics on external components
and weighs 23 pounds less than its current production hardtop.

INJECTION MOLDING PROCESS

The dominant method for producing plastic parts with complex shapes is
injection molding. We believe that in 1999 up to 750,000 injection molding
machines were in operation on a worldwide basis. Injection molding involves the
injection of molten plastic into a cavity called the mold, usually made of
metal, where it is packed under pressure, subsequently cooled, and then ejected,
yielding a final part.

The injection molding process is extremely complex. It requires the matching
of part geometry to mold geometry, as well as accommodating varying material,
machine, and environmental operating conditions. Not only must the mold cavity
be machined precisely to produce the desired shape of the final part, it also
must account for shrinkage and warpage of the plastic material as it cools and
is ejected. Problems can arise in this process if the molten plastic enters the
mold at the wrong temperature, if the locations of the points of entry of the
plastic into the mold are mismatched to the design of the part, or if the
properties of the chosen plastic are poorly matched to the product's function.
Each of these potential problems can cause an excessive number of defective or
substandard parts to be produced or require several attempts to remachine the
mold.

The process of designing and producing injection molded plastic parts
consists of four distinct steps, the design portion of which can take from
several weeks to several months depending on the complexity and other attributes
of the part being designed:

- PART DESIGN--A design engineer, who typically does not specialize in the
design of plastic parts, lays out the initial design of the end product,
including the plastic components. These

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design engineers face difficult plastic-related decisions which often fall
outside of their area of specialization, including:

- selecting a plastic material out of which the plastic portion of the
product will be made from among the thousands of plastic materials
currently available,

- estimating the strength and rigidity of the part,

- designing the part with shapes and thicknesses that can be readily
produced using injection molding, and

- completing each of the steps in a cost efficient manner.

- MOLD DESIGN--After the part has been designed, typically a second engineer
designs the mold into which injection molding machines can pack the
selected plastic material to create the part. Designing a mold requires
the engineer to estimate many important variables, including the amount
the plastic part will warp or shrink and the optimal locations for
injecting plastic into the mold. The cost of a mold can vary from as
little as a few thousand dollars to more than one million dollars.

- PRODUCTION SET-UP--After the mold has been designed and built, the mold is
fastened into an injection molding machine. A machine operator then
adjusts several machine settings, such as machine temperature, injection
speed and cooling time until the machine produces a single acceptable
part. In many instances, once acceptable parts are made with some
frequency, the operator makes little or no effort to improve the machine's
set-up to optimize speed or minimize failure rates.

- PRODUCTION MONITORING--Once commercial production begins, machine
operators monitor the injection molding machine's performance, which will
vary over time. This variation can be caused by operating conditions which
shift as a result of factors such as temperature fluctuations and
lot-to-lot variations in the plastic raw material.

Traditionally, these steps have been carried out through a trial-and-error
process which requires a significant amount of guesswork throughout. As a
result, the design and development process has been inherently inefficient. An
incorrect guess at any step of this process may produce suboptimal parts or
require that portions or all of the process be repeated, delaying production and
increasing costs.

The inefficiencies and resulting cost increases occurring in this process
are further exacerbated when companies outsource one or more of these steps.
Many companies have set up supply chains to match expertise and cost structures
to each step of this process and take advantage of available networks to
establish "design anywhere, build anywhere" collaborations with suppliers and
between divisions across their company. The part design, mold design and
production steps often occur in geographically separated facilities. As a
result, the iterative process of designing a plastic part is frequently hindered
by having to coordinate this process across multiple locations and time zones.

ABSENCE OF SOFTWARE SOLUTIONS FOR THE INJECTION MOLDED PLASTICS INDUSTRY

Although many industries have embraced software tools to improve their
product design and production processes, we believe that a substantial portion
of companies in the injection molded plastics industry continue to employ a
trial-and-error process at most steps of the design and development process. We
believe this condition exists today primarily because of the limited
availability of specific software tools capable of addressing many of the
complex and unique issues involved in designing injection molded plastic parts
and their molds. In addition, we believe that up to 750,000 injection molding
machines are currently in use worldwide and are being operated without
integrated software tools which can analyze and improve the efficiency of their
production.

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THE MOLDFLOW SOLUTION

Using our extensive knowledge of designing and manufacturing with plastics,
we have developed a suite of software applications which enhance our customers'
ability to optimize the design and production process for injection molded
plastic parts. Our approach, which we call Process Wide Plastics Solutions,
provides our customers with a software tool for each step in this process, from
part design through production monitoring, in an integrated environment.
Together, our suite of products permit plastics manufacturers for the first time
to significantly decrease the guesswork involved in each step of the injection
molding process by replacing the traditional trial-and-error process with an
automated and integrated process.

Our products can significantly reduce the time it takes to design plastic
parts for injection molding, improve the quality of the plastic part produced
and decrease the cost of the production process by:

- assisting part designers in the selection of a plastic material based on
their design criteria,

- determining the strength and rigidity of a given part design,

- evaluating the ease of manufacturing a given part design,

- predicting the amount a part will shrink or warp during production,

- determining the optimal locations in a mold to inject the plastic
material,

- selecting optimal machine temperatures, injection speeds and cooling times
for part production,

- identifying and providing solutions for adverse variations during
production, and

- providing features which facilitate collaboration over shared media, such
as the Internet.

With direct sales offices and distribution partners worldwide, we believe
that we are uniquely positioned to deliver our evolving suite of software tools
to customers in any part of the world.

OUR STRATEGY

We plan to extend our position as the leading provider of software solutions
that enhance the design, analysis and manufacture of injection molded plastic
parts. Key elements of our strategy are to:

CAPITALIZE ON MARKET OPPORTUNITY FOR EXPANDED PRODUCT OFFERINGS

We focus our research and development efforts on developing new products to
address unmet market needs. We developed Moldflow Plastics Advisers (MPA),
initially released in June 1997 and expanded in 1999, to provide plastic part
and mold design solutions to design engineers who are not highly specialized in
plastics simulation. Prior to the introduction of MPA, no software solution
existed specifically for use by these design engineers for the design of
injection molded plastic parts. Our MPA product has contributed significantly to
our revenue since its introduction. We developed Moldflow Plastics Xpert (MPX),
our newest product line initially introduced in September 1998, to optimize the
production set-up and monitoring of injection molding machines. No software
solution currently exists with functionality comparable to our MPX product to
address this market. We believe MPX represents a significant opportunity for
growth and we intend to vigorously pursue this largely untapped market. In
addition, we will continue to develop new product lines and expand our existing
product lines as opportunities arise.

EXPLOIT THE INTERNET TO PROVIDE SOLUTIONS TO OUR CUSTOMERS

We intend to use the Internet to allow users of our products, including part
and mold designers, machine operators, suppliers, business customers and
outsourcing plants, to share product data and coordinate product design and
development on a worldwide basis. Currently, our

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products permit users to produce and access product reports via the Internet
which can be viewed with any standard web browser. For example, we intend to use
the Internet to:

- release our MPA product using an application server provider or ASP
model, which would permit customers to use our products on demand over
the Internet, and

- create an Internet portal to enable customers to use our MPX product to
monitor the injection molding process, including machine efficiency and
production data, from anywhere in the world.

FOCUS ON DIRECT SELLING MODEL

We believe that a key element of our success over the last two years has
been our focus on creating a highly effective direct sales organization. Most of
our products are sold through this organization, which encompassed 28 sales
associates employed at sales offices located in nine countries as of March 1,
2000. Over the last two years, we have implemented a new sales model which
involves teaming each sales associate with an engineer. Each team works together
to conduct a thorough evaluation of potential customers' design and
manufacturing processes and provide them with a detailed analysis of the cost
savings our products could produce.

EXPAND OUR GLOBAL PRESENCE

We will continue to build on our existing global presence in sales, support
and research and development, which we believe provides us with a competitive
advantage. We maintain direct sales and support offices in the United States,
Australia, United Kingdom, France, Germany, Italy, Sweden, Korea and Japan. In
addition, we extend our geographic coverage by selling our products through over
100 distributors worldwide. Our research and development process involves
approximately 50 research and development personnel located at our United
States, Australia and United Kingdom facilities. Our personnel share software
code among these facilities, and are able to electronically update colleagues in
most cases every two hours and, at a minimum, at the end of each team's working
day. As a result, our research and development continues on an around-the-clock
basis. We believe that this geographically dispersed, team-oriented approach to
product development and delivery helps us to bring new products to market
faster.

SELECTIVELY ENGAGE IN ACQUISITIONS AND STRATEGIC RELATIONSHIPS

We intend to selectively engage in acquisitions and enter into strategic
relationships to accelerate the implementation of elements of our strategy. We
may pursue acquisitions, partnerships or licensing arrangements to obtain
technology to improve or broaden our product offerings if we determine that to
do so would be more cost effective or timely than developing our own.

OUR PRODUCTS

We offer software solutions for all phases of designing and manufacturing
injection molded plastic parts. We have categorized our product offerings into
three distinct families, the Moldflow Plastics Advisers (MPA) series for part
design and high-level mold design, the Moldflow Plastics Insight (MPI) series
for more in-depth mold design and the Moldflow Plastics Xpert (MPX) series for
production set-up and production monitoring. Our products employ complex and
proprietary mathematical concepts. For example, our MPA and MPI products employ
our patent-pending Dual Domain technology, which permits users to conduct
complex plastic flow simulations using the solid models created by their design
modeling software. As a result, users can eliminate the otherwise necessary,
time consuming and error prone step of creating a different type of model based
upon the part geometry contained in the solid model's database. Our products run
on the most widely used computing platforms and operating systems, including
various versions of Windows and UNIX.

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MOLDFLOW PLASTICS ADVISERS

Our MPA series provides part and mold designers with applications that
permit them to quickly check the ultimate manufacturability of their designs at
an early stage in the design process. We have designed MPA to input its results
directly into MPX to enhance the efficiency of machine set-up. The MPA series
consists of two products:

PART ADVISER is a user-friendly application which enables product
designers without expertise in designing plastic parts to address key
manufacturing concerns in the preliminary design stage. Part Adviser offers
practical advice for the broad range of problems it identifies without the
need to consult with engineers who specialize in plastic part design. For
the first time, part designers are able to receive rapid feedback on the
extent to which a number of factors, including modifications such as part
geometry, material selection or plastic fill locations affect the
manufacturability of a plastic part. In addition, Part Adviser permits the
designer to instantly share information with fellow team members across the
Internet.

MOLD ADVISER extends the capabilities of Part Adviser to permit the mold
designer to layout and analyze an optimal mold. This product eliminates the
need to design and build molds through trial-and-error, enabling a mold
designer to create molds quickly and efficiently.

MOLDFLOW PLASTICS INSIGHT

The MPI series contains our broadest set of predictive capabilities for
injection molding for use by highly specialized design engineers. The MPI series
assists design engineers in determining the optimal combination of part
geometry, material choice, mold design and processing parameters to produce
quality finished products. MPI allows the optimization of the variables which
remain in the mold designer's control to adjust. For instance, a mold designer
often receives a part design and is not permitted to make changes to the design,
but rather must create a mold design and a set of operating conditions best
suited for the part as designed. MPI may also be used in connection with a
completed mold which was poorly designed and is producing defective parts at an
unacceptable rate. In these cases, MPI can be used to find the best possible
operating conditions for the mold-part combination to minimize the defects. The
results generated by our MPI products can be input directly into our MPX product
to reduce machine set-up time.

All applications in the MPI series use an integrated environment which
permits users to easily import all of the most commonly used types of
computer-generated models, select and compare material grades, prepare models
for analysis, sequence a series of analysis jobs, undertake advanced analysis
post-processing and use Internet-based capabilities to enhance collaboration
with team members. In these applications, we believe that we offer the broadest
integration with existing computer-aided design products in the plastics
software industry.

MPI/FLOW predicts the flow and subsequent packing of plastics at the
start of the injection molding cycle to enable users to optimize locations
for plastic filling and processing conditions, assess possible part defects
and automatically determine the dimensions for a balanced feed system for
the plastic material.

MPI/COOL is used to design cooling circuits and a mold block around a
part to optimize mold design by adjusting the size and locations of the
cooling circuits. Because many warpage problems result from improper cooling
design, using MPI/COOL for mold designs enhances ultimate product quality.
MPI/COOL also enables all the benefits of mold cooling analysis to be
applied to gas injection molded parts.

MPI/WARP AND MPI/SHRINK predict and identify the cause and amount of
warpage and shrinkage in plastic parts. The mathematical tools incorporated
in these products permit the user to analyze warpage for the more than 4,500
plastics materials in our database.

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MPI/FUSION allows users to work directly from three-dimensional solid
models to perform detailed calculations. Based upon the same patent pending
technology at the core of the MPA series of products, MPI/FUSION permits
more rapid investigation into the characteristics of the plastic parts and
molds being analyzed.

MPI/FLOW3D uses a fully three-dimensional meshing and solving technology
to analyze thick plastic parts. The majority of the MPI modules are focused
on the broadest class of plastic parts, those that are termed thin wall.
There are plastic parts, however, that are very thick or have widely varying
thicknesses throughout. Until the development of MPI/FLOW3D, creators of
these types of products had no commercially viable product alternative to
investigate the filling process to produce better parts and molds.

MPI/STRESS predicts the structural integrity of plastic components under
stress to quickly predict whether initial concept designs meet desired
structural requirements and whether the part will permanently deform if put
under load. The stress analysis calculates the amount of force which will
cause buckling and predicts the final buckled shape.

MPI/FIBER utilizes sophisticated visualization tools to provide insight
into the part's properties by allowing the user to see how fiber alignment
varies throughout the part's layers. The fiber analysis also predicts the
effects of fiber orientation. The effects of plastic flow on fiber
orientation have a significant impact on the mechanical and structural
properties of fiber filled plastic injection molded parts. Plastics are
often filled with various forms and quantities of fibers to tailor the
material's operating characteristics, such as strength or resistance to
bending.

MPI/OPTIM automatically determines the optimum processing conditions to
be set for a specific part on an injection molding machine to produce a part
of acceptable quality. These results may be used as input for MPX to ensure
molding machine setup is as quick and efficient as possible. The results may
also be used in isolation, as an input to assist the operator in finding the
best settings for a specific machine to produce the desired parts.

MPI/GAS provides predictive capabilities for the gas injection molding
process. The gas injection molding process is very similar to the injection
molding process described earlier but the machine produces an injection of
air, timed within the filling phase to follow the injection of plastic, to
produce wider, but hollow, channels within the part. These channels add
structural rigidity to the end product that is often desirable for large
parts such as television casings and lawn furniture.

MPI/TSETS provides tools to simulate the major thermoset molding
processes. Thermoset materials are a type of plastic which are used for
products which must withstand higher temperatures without alteration in
their material properties. Because other plastics may deform when exposed to
high temperatures, thermoset materials are used for a variety of plastic
parts such as chip holders in integrated circuits, distributor caps and
other automotive engine components and electrical outlets.

MOLDFLOW PLASTICS XPERT

Our MPX product attaches to injection molding machines to monitor and
control the manufacturing process. MPX addresses common shop floor issues such
as machine set-up, process optimization and production part quality monitoring.
MPX interacts directly with the molding machine's built-in controller to provide
optimized process correction. With MPX, engineers and die-setters can
consistently and systematically set up molds, identify a robust molding window
and monitor production. MPX can be used with substantially all injection molding
machines and provides operators with a single, intuitive user interface,
minimizing the need for machine-specific operator training. In addition, MPX
gives real-time feedback, providing a mechanism for rapid manual or automatic
process adjustments. We designed MPX to reduce mold set-up times and to

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optimize the efficiency of the part production cycle. Our MPX product consists
of three integrated modules:

SETUP XPERT enables systematic mold set-up from starting points
generated by MPA, MPI or operator inputs, independent of operator and
location. Setup Xpert optimizes the molding cycle and maximizes the usage of
machine capabilities without requiring the operator to have in-depth
knowledge of the individual machine or process. Setup Xpert quickly sets up
and optimizes each machine, while ensuring that each operator uses the same
set-up procedures.

MOLDSPACE XPERT establishes a defined range of operating conditions
within which acceptable quality parts will be produced. Moldspace Xpert can
reduce to a few minutes an optimization task that previously took several
hours or was not performed. The identification of a defined range of
operating conditions is one of the key steps in being able to determine what
operating conditions can be used by the machine to prevent scrap and machine
downtime.

PRODUCTION XPERT graphically monitors variables specific to the
injection molding process and automatically evaluates the quality of the
production process. In addition, Production Xpert spots problems and either
provides suggestions on how to correct the process or makes the necessary
changes.

OUR CUSTOMERS

Our products are used at more than 2,500 user sites in more than 2,200
companies, which are located in over 50 countries spanning the globe.
Representative customers in various industries include:

<TABLE>
<S> <C>
AUTOMOTIVE MATERIAL SUPPLIERS
- ---------- -----------------
DaimlerChrysler AG Bayer AG
DENSO Corporation The Dow Chemical Company
Ford Motor Company Eastman Chemical Company
Hyundai Business Group E. I. duPont de Nemours and Company
Solvay SA M. A. Hanna Company
Valeo SA MEDICAL
Volkswagen AG -------
TOYS Abbott Laboratories
- ---- Baxter International, Inc.
Hasbro, Inc. Becton Dickinson and Company
The Lego Group OTHER/MULTIPLE INDUSTRIES
Mattel, Inc. ------------------------
ELECTRONICS Fisher & Paykel Industries Limited
- ---------- Honeywell International, Inc.
The Framatome Group LG Group
Fuji Xerox Co., Ltd. Minnesota Mining and Manufacturing (3M)
Hewlett-Packard Company Montblanc-Simplo GmbH
Lucent Technologies, Inc. Polaroid Corporation
Motorola, Inc. Samsung Group
Nokia Corporation
Siemens AG
Tyco International Inc.
</TABLE>

SALES AND MARKETING

We distribute our products and services primarily through a direct sales
organization. As of March 1, 2000, our direct sales organization consisted of 28
sales associates, who operated out of offices located in Australia, France,
Germany, Italy, Japan, Korea, Sweden, the United Kingdom and the United States.
Our direct sales model involves pairing a sales associate and an engineer to
form a single sales team. These teams work together to conduct a thorough
evaluation of potential customers' design and manufacturing processes and
provide the potential customers with a detailed analysis of the cost savings our
products could produce in a selected aspect of their business. Based upon the
success of this sales model to date in increasing sales as well as the awareness
among our potential customers of our products, we intend to continue building
our direct sales organization worldwide.

37
<PAGE>
To supplement the efforts of our direct sales organization, we also sell our
products through marketing and distribution arrangements with several design
software vendors as an integrated application on their solid modeling design
systems. For example, Parametric Technology Corporation incorporates our MPA
product in a module of its Pro/ENGINEER product, which they call Pro/PLASTIC
ADVISOR, Structural Dynamics Research Corporation or SDRC sells our MPA product
as well as many modules contained within our MPI family of products, and
Unigraphics Solutions, Inc. sells our MPA product. Several distributors of
SolidWorks Corporation, a subsidiary of Dassault Systemes S.A., distribute our
MPA product and Autodesk, Inc. has designated us an MAI partner, which gives us
access to Autodesk's distribution channel to sell our MPA product. We have
retained over 100 distributors to provide worldwide sales coverage to complement
our direct sales organization.

CUSTOMER SUPPORT AND OTHER SERVICES

CUSTOMER SUPPORT AND TRAINING

We provide customer training on our products and 24-hour customer support.
Our customers may access customer support either through our telephone hotline
or our website. In addition, our product development staff is available to solve
more complex problems.

CONSULTING SERVICES

In addition to traditional customer support services, we also provide
consulting services to customers who lack employees with the expertise necessary
to take advantage of the full capability of our products. We employ design
engineers who use our products on behalf of our customers to optimize their part
design and production processes. We view providing consulting services as
complementary to our core business of selling sophisticated software solutions.
Accordingly, we provide consulting services typically in cases where we believe
that providing these services will help build relationships with future
customers for our software products.

MATERIAL TESTING SERVICES

Our material testing group provides testing services to our customers who
are seeking accurate, reliable material data on new or existing grades of
polymers, measured under a wide range of practical molding conditions. We have
established a database containing information on more than 4,500 plastics
materials. We conduct this testing at our facility located near Melbourne,
Australia, which we have equipped with state-of-the-art equipment and a number
of injection molding machines. The research and testing conducted at this
facility provides essential data for our full line of software applications.

PRODUCT DEVELOPMENT

Our product development strategy focuses on ongoing development and
innovation of new technologies to increase our customers' productivity and
provide solutions that our customers can integrate into their existing computing
platforms. We plan to extend our leadership position in plastics simulation
technology by continuing to make significant investments in research and
development and to maintain our market share by rapidly creating and delivering
new product releases to our customers. We intend to take advantage of current
and future technology trends, such as the Internet, to ensure our customers are
always able to gain incremental competitive advantage in their respective
industries.

Our product development activities take place in facilities located in the
United States, Australia and the United Kingdom. We linked the information
systems of each of these facilities to provide a continuous development
environment, enabling software development to be undertaken 24 hours per day.

38
<PAGE>

We also fund or participate in a wide assortment of external research and
development projects, often being conducted by the world's leading experts in
their fields. For instance, we currently have ongoing projects with CEMEF in
France and the University of Illinois, two highly regarded centers for plastic
material research. In many cases, under these projects we gain access to
fundamental research with comprehensive experimentation results. Often the
centers agree to restricted publishing rights in order to pursue topics of
mutual interest. A partial list of our collaborative partners includes ENSAM
(France) for shrinkage, Cranfield University (United Kingdom) for analysis of
fiber filled parts, Universities of Leeds, Bradford and Durham (United Kingdom)
for fiber orientation measurement, Technical University of Eindhoven
(Netherlands) for numerical methods, McGill University (Canada) for material
crystallization, University of Sydney (Australia) for fluid mechanics and
Nanyang Technological University of Singapore for optimization. We believe that
these relationships provide a significant benefit to our product development
efforts.

As of March 1, 2000, our product development staff had 50 employees, most of
whom hold advanced degrees and have industry experience in engineering,
mathematics, computer science or related disciplines. We seek to recruit highly
skilled employees, and our ability to attract and retain such employees will be
a principal factor in our success in maintaining our leading technological
position. We believe that such investments in research and development are
required in order for us to remain competitive and we believe our cadre of
software developers and our worldwide development capabilities represent a
significant competitive advantage.

COMPETITION

The markets into which our products are sold are highly competitive. We
compete with many companies engaged in selling software solutions to companies
engaged in product development and manufacturing. We also face competition from
materials vendors, injection molding machine manufacturers and small vendors,
such as independent engineering consultants. In addition, new competitors may
arise as we introduce new products into the marketplace. We believe that we have
the widest and most advanced range of software solutions and proprietary
technology to address the problems that arise in each phase of the process of
designing and manufacturing injection molded plastic parts. Although we have a
large number of current and potential competitors, we do not believe that any
competitor other than C-Mold currently constitutes a major competitor with
respect to any of our current product offerings.

The entrance of new competitors would be likely to intensify competition in
all or a portion of the markets in which we compete. Some of our current and
possible future competitors have greater financial, technical, marketing and
other resources than we do, and some have well established relationships with
our current and potential customers. Alliances among competitors may emerge and
rapidly acquire significant market share. Moreover, competition may increase as
a result of software industry consolidation.

We believe that the principal competitive factors affecting our market
include:

- speed of innovation,

- ease of use,

- flexibility,

- quality,

- ease of integration into or communication with computer-aided design
systems,

- compatibility across computer platforms,

- range of supported computer platforms,

- performance,

- price and cost of ownership,

- customer service and support,

39
<PAGE>
- company reputation and financial viability, and

- effectiveness of sales and marketing efforts.

We believe that we compete effectively on these factors.

TECHNOLOGY AND PROPRIETARY RIGHTS

Our proprietary technology applies general mathematical models describing
the behavior of plastics as fluids under conditions of heat and pressure to the
real world environment of plastic polymers and injection molding machines. We
believe that our broad range of proven numerical methods represents considerable
intellectual property and that these trade secrets are difficult to reproduce.
We own all of the core technology used in our products and license only assorted
peripheral software that facilitates the operation of our products' core
functions. We do not believe that the loss of any of these licenses would harm
our business operations or result in the loss of a significant amount of
revenue.

We engage in a regular review of our proprietary technology to determine the
optimal method of protecting such technology. We have been granted a patent on
portions of our technology and have filed both U.S. and international
applications with respect to other technologies. We view these patents as one
important way of protecting our key intellectual property that may not be
protected by the use of other methods. However, we do not view any patent or
patent application to be material to our business. We may not obtain any of the
patents for which we have applied and may not be able to enforce any patents we
currently hold or obtain in the future.

We rely on a combination of trade secret, copyright and trademark laws,
license agreements, nondisclosure and other contractual provisions and technical
measures to protect the unpatented proprietary technology contained in our
products. We distribute our software under software license agreements that
typically grant customers nonexclusive, nontransferable licenses to use our
products. These agreements usually restrict use of the licensed software to our
customer's internal operations on designated computers at specified sites unless
the customer obtains a site license for the customer's use of the software, and
are subject to terms and conditions prohibiting unauthorized reproduction or
transfer of the software.

For certain software such as the MPA series, we rely primarily on
"shrink-wrapped" or "click-wrapped" licenses that are not signed by licensees
and therefore may be unenforceable under the laws of certain jurisdictions.

We also seek to protect the source code of our software through trade secret
and copyright law. We have obtained or applied for United States federal
trademark mark protection for Moldflow, MPI, MPA, MPX and a number of other
trademarks and logos. We have also applied for or obtained trademark
registrations of these key marks in a number of foreign jurisdictions and are in
the process of seeking trademark registrations in other foreign countries.

We require our employees and consultants to sign a confidentiality and
non-competition agreement. Under these agreements, our employees agree not to
disclose trade secrets or confidential information and agree not to engage in or
be connected with any business that is competitive with our business while
employed by us, and in some cases for specified periods thereafter. Within these
agreements, employees also agree that any products or technology they create
during the term of their employment are our property.

Despite these precautions, misappropriation of our technology may occur.
Further, patent, trademark, copyright and trade secret protection may not be
available for our products in every country.

40
<PAGE>
The software development industry is characterized by rapid technological
change. Therefore, we believe that factors such as the technological and
creative skills of our personnel, new product developments, frequent product
enhancements, name recognition and reliable product maintenance are more
important to establishing and maintaining a technology leadership position than
the various legal protections of our technology which may be available.

We seek to monitor the public records in order to become aware of any
potentially conflicting proprietary rights. To date, we have not received any
notification that any of our products infringe on the proprietary rights of
third parties. We can not assure you, however, that third parties will not claim
such infringement by us or our licensors with respect to current or future
products. We expect that software product developers will increasingly be
subject to such claims as the number of products and competitors in our market
segment grows and the product functionality in different market segments
overlaps. In addition, patents on software and business methods are becoming
more common and we expect that more patents will issue in our technical field.
Any such claims, with or without merit, could be time-consuming, result in
costly litigation, cause product shipment delays or require us to enter into
royalty or licensing agreements. Moreover, such royalty or licensing agreements,
if required, may not be on terms acceptable to us.

We integrate third-party software into our products. This software may not
continue to be available on commercially reasonable terms. If we cannot maintain
licenses to this third-party software, distribution of our products could be
delayed until equivalent software could be developed or licensed and integrated
into our products. This could cause delays in our product sales and development
efforts.

EMPLOYEES

As of March 1, 2000, we had 163 employees, 55 of whom resided in Australia,
42 of whom resided in the United States, 15 of whom resided in the United
Kingdom and 51 of whom resided in other countries. None of our employees is
subject to any collective bargaining agreement. We believe that our relationship
with our employees is good.

FACILITIES

We operate out of two primary facilities. We lease a 7,900 square foot
office in Lexington, Massachusetts pursuant to a 5-year lease that expires in
November 2001. The Lexington facility is our corporate headquarters. Personnel
located at the Lexington facility include most of our senior management team,
some of our North American sales force, some product marketing and development
personnel and some finance and administration personnel. We also own an 18,100
square foot office building set on approximately 15 acres in the Kilsyth suburb
of Melbourne, Australia. Personnel located at our Melbourne facility include
members of our software development and research team, our materials testing
personnel and a portion of our Asia Pacific sales force. We also maintain an
office containing a smaller group of our sales, administrative and software
development personnel in the United Kingdom as well as direct sales offices in
Korea, Japan, Sweden, Germany, Italy and France. We had aggregate lease payments
of $664,000 in our 1999 fiscal year.

LEGAL PROCEEDINGS

In February 1999, we filed suit in the United States District Court for the
Northern District of New York against a former employee, Leonid K. Antanovskii,
and his current employer, C-Mold. We are seeking immediate and permanent
injunctive relief and monetary damages arising from the alleged theft and
misappropriation of some of our trade secrets. Specifically, we allege
misappropriation of trade secrets, proprietary information and confidential
information, breach of

41
<PAGE>
contract, breach of implied covenant of good faith, breach of fiduciary duty,
aiding and abetting a breach of fiduciary duty, unfair competition, interference
with contractual relations, fraud, civil conspiracy and unjust enrichment. On
February 28, 1999, the court issued a preliminary injunction prohibiting
Mr. Antanovskii and C-Mold from using or disclosing our confidential and trade
secret information. On January 11, 2000, the court denied C-Mold's motion to
vacate the preliminary injunction and ordered that it remain in place. On the
same date the court also held Mr. Antanovskii and C-Mold in contempt of court
and ordered sanctions, including the award of attorneys' fees in connection with
the motion, against Mr. Antanovskii and C-Mold.

In March 1999, C-Mold filed counterclaims against us alleging that we had
violated federal antitrust laws, committed defamation and trade libel and
tortiously interfered with C-Mold's prospective business advantage.
Specifically, C-Mold alleges that we have engaged in predatory and
anticompetitive conduct in an attempt to monopolize the market for computer
software for use in simulating, modeling and analyzing the design and
manufacture of plastic injection molded articles or products and their
corresponding molds, particularly in full three-dimensional geometry. C-Mold
alleges antitrust violations based on bad faith assertion of a trade secret
claim and predatory pricing. In addition, C-Mold claims that we made certain
disparaging comments regarding C-Mold's products and its business. C-Mold has
requested that the court awards costs, attorneys' fees, injunctive relief and
monetary damages. We filed a motion to dismiss the amended counterclaims in
July 1999 and all discovery with respect to the counterclaims was stayed. On
January 26, 2000, the court granted our motion to dismiss these counterclaims in
part and denied it in part. All aspects of the litigation are currently being
held in abeyance upon agreement of the parties, in connection with our pending
acquisition of C-Mold. If the acquisition is completed, this litigation will be
dismissed with prejudice by the agreement of all parties. If for any reason our
acquisition of C-Mold is not completed, we expect that the litigation will
resume.

In the event that the litigation resumes, we intend to vigorously defend
against the remaining counterclaims. We believe that the counterclaims are
without merit.

We have incurred and may continue to incur significant expenses in the
course of pursuing our claims in this case and defending the counterclaims made
against us. For the year ended June 30, 1999 and the six months ended
January 1, 2000, our litigation expenses were $620,000 and $530,000.

From time to time we may be involved in other disputes and litigation
matters that arise in the ordinary course of business.

PENDING ACQUISITION

On February 11, 2000, we entered into a definitive agreement to acquire
C-Mold. C-Mold has developed software that is complementary to our current
product offerings in the areas of part design and in-depth plastics simulation.
In particular, we believe the acquisition of C-Mold will enhance our development
capabilities and enable us to broaden our product lines into adjacent markets
more quickly. C-Mold had $7.7 million in revenue for the fiscal year ended
September 30, 1999. The purchase price will be $11.0 million in cash. The
acquisition is subject to a number of closing conditions, including completion
of our business and financial review of C-Mold, delivery by C-Mold of disclosure
schedules in a form satisfactory to us, settlement of our outstanding litigation
with C-Mold, approval by C-Mold's stockholders and our obtaining financing for
the acquisition. We anticipate that the acquisition will close on or prior to
May 31, 2000. However, our acquisition of C-Mold may not be completed.

42
<PAGE>
MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

Our executive officers and directors and their positions and ages as of
March 1, 2000 are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- -------- --------
<S> <C> <C>
Marc J. L. Dulude...................... 39 President, Chief Executive Officer and Director
Suzanne E. Rogers...................... 42 Vice President of Finance and Administration, Chief
Financial Officer and Treasurer
A. Roland Thomas....................... 41 Vice President of Research and Development and
Director
Richard M. Underwood................... 45 Vice President of Sales
Kenneth R. Welch....................... 42 Vice President of Marketing
Charles D. Yie(1)(2)................... 41 Chairman of the Board of Directors
Julian H. Beale(1)..................... 65 Director
Roger Brooks(2)........................ 55 Director
Richard A. Charpie, Ph.D............... 47 Director
Robert P. Schechter(2)................. 51 Director
</TABLE>

- ------------------------

(1) Member of the compensation committee

(2) Member of the audit committee

MARC J. L. DULUDE has served as our President and Chief Executive Officer
and as a director of Moldflow since May 1996. Prior to joining Moldflow,
Mr. Dulude served in various positions with and most recently as the Senior Vice
President of Marketing of Parametric Technology Corporation, a computer-aided
design software company, from 1991 to May 1996, and in various positions with
the Bell-Northern Research division of Northern Telecom, a telecommunications
company, from 1987 to 1991. Mr. Dulude holds Bachelor and Master of Mechanical
Engineering degrees from Carleton University in Canada.

SUZANNE E. ROGERS has served as our Vice President of Finance and
Administration, Chief Financial Officer and Treasurer since September 1996.
Before joining Moldflow, Ms. Rogers served as the Vice President of Finance and
Chief Financial Officer from November 1994 to September 1996 and as the
Controller from May 1993 to November 1994 of Scitex America Corp., a subsidiary
of Scitex Corporation Ltd., a graphic arts systems manufacturer, in various
positions with Autographix, a graphic workstation manufacturer, from 1991 to
1993 and as the Director of Finance of MRS Technology, a micro-lithography
equipment manufacturer, from 1987 to 1991. Ms. Rogers is a certified public
accountant.

A. ROLAND THOMAS has served as a director of Moldflow since November 1989,
our Vice President of Research and Development since January 1997 and has served
in various other positions with Moldflow since 1982. Mr. Thomas holds a Bachelor
of Mechanical Engineering degree from the Royal Melbourne Institute of
Technology.

RICHARD M. UNDERWOOD has served as our Vice President of Sales since
October 1997. Prior to joining Moldflow, Mr. Underwood served in various
positions with and most recently as the Vice President of Sales Operations of
Parametric Technology Corporation from 1990 to October 1997.

KENNETH R. WELCH has served as our Vice President of Marketing since
November 1996. Prior to joining Moldflow, Mr. Welch served as the Director of
AutoCAD Product Marketing for Autodesk, Inc., a computer-aided design software
company, from September 1995 to November 1996, Vice President of Sales and
Marketing of Visual Kinematics, an original equipment manufacturer of software
tools, from June 1994 to September 1995, and the Director of Product Marketing
of Rasna Corporation, a computer-aided engineering software company, from 1989
to June 1994. Mr. Welch holds Bachelor and Master of Science degrees in Civil
Engineering from the University of California at Davis.

43
<PAGE>
CHARLES D. YIE has served as the Chairman of our board of directors since
August 1996 and as a director since December 1995. He joined Ampersand's
predecessor in 1985 and serves as a General Partner of all Ampersand's active
partnerships. Mr. Yie has served as a director of more than twelve public and
private companies and currently serves as a director of Intelligent
Controls, Inc., an electronic measurement systems manufacturer serving the
petroleum industry, and various privately-held companies. Mr. Yie holds a B.S.
in Electrical Engineering and an M.S. in Management from the Massachusetts
Institute of Technology.

JULIAN H. BEALE has served as a director of Moldflow since September 1996.
Mr. Beale is a private investor. Mr. Beale served as a member of Australia's
federal Parliament from 1984 to 1996.

ROGER BROOKS has served as a director of Moldflow since October 1998.
Mr. Brooks has served as the President and Chief Executive Officer and a
director of Intelligent Controls, Inc. since May 1998. Previously, Mr. Brooks
served as President and Chief Executive Officer and a director of Dynisco Inc.,
an instrumentation and equipment company, from 1984 through 1996.

RICHARD A. CHARPIE, PH.D. has served as a director of Moldflow since
December 1995. Dr. Charpie joined Ampersand Ventures' predecessor in 1980 and
led its activities beginning in 1983. The Managing General Partner of all of
Ampersand's active partnerships, he founded the firm in 1988 and structured its
spinoff from PaineWebber. Dr. Charpie has served as a director of more than
thirty-five public and private companies and currently serves as a director of
TriPath Imaging, Inc., a medical products company, V. I. Technologies, Inc., a
developer of blood products and systems, and various privately-held companies.
Dr. Charpie holds an M.S. degree in Physics and a Ph.D. in Applied Economics and
Finance from the Massachusetts Institute of Technology.

ROBERT P. SCHECHTER has served as a director of Moldflow since
January 2000. Mr. Schechter has served as President and Chief Executive Officer
of Natural MicroSystems, a telecommunications enabling technology company, since
April 1995 and its chairman since March 1996. Prior to joining Natural
MicroSystems, Mr. Schechter served in various positions with and most recently
as the Senior Vice President of the International Business Group of Lotus
Development Corporation, a software company, from 1987 to March 1994.
Mr. Schechter also serves as a director of Infinium Software, Inc., an
application software company.

BOARD COMPOSITION

Following the closing of this offering, our board of directors will be
divided into three classes, each of whose members will serve for a staggered
three-year term. Our board of directors will consist of Messrs. Schechter,
Thomas and Yie as Class I directors, whose term of office will continue until
the 2000 annual meeting of stockholders, Messrs. Beale and Dulude as Class II
directors, whose term of office will continue until the 2001 annual meeting of
stockholders, and Messrs. Brooks and Charpie as Class III directors, whose term
of office will continue until the 2002 annual meeting of stockholders. At each
annual meeting of stockholders, a class of directors will be elected for a
three-year term.

BOARD COMMITTEES

Effective upon the closing of this offering, our board of directors will
reconstitute the audit committee and compensation committee.

AUDIT COMMITTEE. The members of the audit committee will be responsible for
recommending to the board of directors the engagement of our outside auditors
and reviewing our accounting controls and the results and scope of audits and
other services provided by our auditors. All of the members of the audit
committee will be independent directors unless the board of directors determines
that exceptional and limited circumstances exist which warrant the inclusion of
one non-independent director on the audit committee and that the inclusion of
one non-independent director is in the best interests of Moldflow and its
stockholders. Although Mr. Yie is not an independent director, the board of
directors has determined that his service on the audit committee

44
<PAGE>
is in the best interest of Moldflow and its stockholders. The board of directors
based this determination, in part, on Mr. Yie's expertise in financial and
accounting matters and his extensive knowledge of Moldflow's operations.

COMPENSATION COMMITTEE. The members of the compensation committee, a
majority of whom will be independent directors, will be responsible for
reviewing and recommending to the board of directors the amount and type of
consideration to be paid to senior management, administering our stock option
plans and establishing and reviewing general policies relating to compensation
and benefits of employees.

DIRECTOR COMPENSATION

Directors who are employees receive no additional compensation for their
services as directors. Non-employee directors receive a $2,000 quarterly fee for
their service as directors and $250 for each meeting of a committee of the board
of directors they attend. Non-employee directors are also eligible to
participate in the 2000 Stock Option and Incentive Plan. The 2000 Stock Option
and Incentive Plan contains a formula under which each non-employee director
will receive an option to acquire 10,000 shares of common stock upon initial
election to the board. Non-employee directors will also receive an option to
acquire an additional 10,000 shares of common stock following the 2002 annual
meeting of stockholders and at every second annual meeting of stockholders
thereafter. Mr. Schechter received an option to acquire 10,000 shares upon his
election on January 20, 2000 and Messrs. Beale, Brooks, Charpie and Yie will
each receive options to acquire 10,000 shares of common stock concurrently with
the effectiveness of this offering.

EXECUTIVE COMPENSATION

The following table sets forth the total compensation paid or accrued in the
fiscal year ended June 30, 1999 to our Chief Executive Officer and the four
other most highly compensated executive officers, each of whose aggregate
compensation exceeded $100,000.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------------- --------------
NUMBER
OF SECURITIES
OTHER UNDERLYING ALL
ANNUAL OPTIONS OTHER
NAME SALARY BONUS COMPENSATION GRANTED COMPENSATION
- ---- --------- --------- ----------------- -------------- -----------------
<S> <C> <C> <C> <C> <C>
Marc J. L. Dulude............. $215,000 $35,000 -- 131,250 $26,563(1)
President and Chief
Executive Officer
Suzanne E. Rogers............. 133,000 20,000 -- 35,417 10,400(2)
Vice President of Finance
and Administration, Chief
Financial Officer and
Treasurer
Richard M. Underwood.......... 120,000 -- $97,000(3) 22,917 17,321(2)
Vice President of Sales
A. Roland Thomas.............. 96,880 19,407 -- 25,000 22,150(4)
Vice President of Research
and Development
Kenneth R. Welch.............. 133,000 17,500 -- 33,333 10,400(2)
Vice President of Marketing
</TABLE>

- ------------------------------
(1) Includes $12,000 as a car allowance, $10,500 in contributions by Moldflow to
Mr. Dulude's 401(k) account, and $4,063 representing life insurance and
disability insurance purchased for Mr. Dulude's benefit.

(2) Constitute contributions by Moldflow to the executive officers' 401(k)
accounts.

(3) Constitutes sales commissions.

(4) Includes $9,057 in contributions to Mr. Thomas' retirement plan account and
$13,093 as a car allowance.

45
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth information regarding stock options granted
during fiscal 1999 to the executive officers listed in the Summary Compensation
Table. The exercise price per share of each option was equal to the fair market
value of the common stock as of the grant date as determined by the board of
directors.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------ POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
NUMBER OF PERCENT OF TOTAL EXERCISE STOCK PRICE
SECURITIES OPTIONS OR BASE APPRECIATION
UNDERLYING GRANTED TO PRICE FOR OPTION TERM(3)
OPTIONS EMPLOYEES IN ($/ EXPIRATION ---------------------
NAME GRANTED(1) FISCAL YEAR(2) SHARE) DATE 5% 10%
- ---- ----------- ---------------- -------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Marc J. L. Dulude............. 16,667 4.52% $0.72 8/14/2006 $ 5,729 $ 13,723
114,583 31.07 6.00 6/15/2007 328,251 786,217
Suzanne E. Rogers............. 10,417 2.82 0.72 8/14/2006 3,581 8,577
25,000 6.78 6.00 6/15/2007 71,618 171,538
Richard M. Underwood.......... 2,083 0.56 0.72 8/14/2006 716 1,715
2,083 0.56 1.20 1/21/2007 1,194 2,859
2,083 0.56 4.80 4/22/2007 4,774 11,434
16,668 4.52 6.00 6/15/2007 47,749 114,368
A. Roland Thomas.............. 25,000 6.78 6.00 6/15/2007 71,618 171,538
Kenneth R. Welch.............. 8,333 2.26 0.72 8/14/2006 2,865 6,862
25,000 6.78 6.00 6/15/2007 71,618 171,538
</TABLE>

- ------------------------

(1) Subject to each executive officer's continued employment with Moldflow, 25%
of the options in each option grant vest on the first anniversary of the
date of the grant and the remaining options vest in equal quarterly
installments through the fourth anniversary of the date of the grant. In
addition, these options also vest in full upon any change of control of
Moldflow as defined in the options.

(2) Based on an aggregate of 368,813 options granted to employees in fiscal
1999.

(3) The amounts shown as potential realizable value illustrate what might be
realized upon exercise immediately prior to expiration of the option term
using the 5% and 10% appreciation rates compounded annually as established
in regulations of the Securities and Exchange Commission.

The following table sets forth the potential realizable value of the options
granted to the listed executive officers using our assumed initial public
offering price of $13.00 per share:

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
NUMBER OF STOCK PRICE APPRECIATION FOR
SECURITIES OPTION TERM
UNDERLYING -----------------------------
OPTIONS GRANTED 5% 10%
---------------- ------------- -------------
<S> <C> <C> <C>
Marc J. L. Dulude...... 16,667 $ 308,122 $ 452,453
114,583 1,513,289 2,505,547
Suzanne E. Rogers...... 10,417 192,578 282,787
25,000 330,173 546,666
Richard M. Underwood... 2,083 38,508 56,547
2,083 37,508 55,547
2,083 30,010 48,048
16,668 220,133 364,473
A. Roland Thomas....... 25,000 330,173 546,666
Kenneth R. Welch....... 8,333 154,052 226,213
25,000 330,173 546,666
</TABLE>

The potential realizable value is not intended to predict future
appreciation of the price of our common stock. The values shown do not
consider non-transferability, vesting or termination of the options upon
termination of the employee's employment relationship with us.

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<PAGE>
FISCAL YEAR-END OPTION VALUES

The following table sets forth information concerning the number and value
of unexercised options to purchase common stock held as of June 30, 1999 by the
executive officers listed in the Summary Compensation Table. There was no public
trading market for our common stock as of June 30, 1999. Accordingly, the values
of the unexercised in-the-money options have been calculated on the basis of the
estimated fair value of our common stock at June 30, 1999 of $6.00 per share,
less the applicable exercise price multiplied by the number of shares which may
be acquired on exercise. None of the executive officers listed in the Summary
Compensation Table exercised any stock options in fiscal 1999.

AGGREGATE OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END
------------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Marc J. L. Dulude....................... -- 131,250 $ -- $ 88,002
Suzanne E. Rogers....................... -- 35,417 -- 55,002
Richard M. Underwood.................... -- 22,917 -- 23,496
A. Roland Thomas........................ 17,392 69,494 98,091 152,855
Kenneth R. Welch........................ -- 33,333 -- 43,998
</TABLE>

2000 STOCK OPTION AND INCENTIVE PLAN

Our board of directors has adopted and our stockholders have approved the
2000 Stock Option and Incentive Plan. The 2000 Stock Option and Incentive Plan
allows for the issuance of up to 2,000,000 shares of common stock plus an
additional amount equal to 20% of any net increase in the total number of shares
of common stock outstanding after this offering. Our compensation committee will
administer the 2000 Stock Option and Incentive Plan.

Under the 2000 Stock Option and Incentive Plan, our compensation committee
may:

- grant incentive stock options,

- grant non-qualified stock options,

- grant stock appreciation rights,

- issue or sell common stock with vesting or other restrictions, or without
restrictions,

- grant rights to receive common stock in the future with or without
vesting,

- grant common stock upon the attainment of specified performance goals, and

- grant dividend rights in respect of common stock.

These grants and issuances may be made to officers, employees, directors,
consultants, advisors and other key persons of Moldflow.

Our compensation committee has the right, in its discretion, to select the
individuals eligible to receive awards, determine the terms and conditions of
the awards granted, accelerate the vesting schedule of any award and generally
administer and interpret the plan.

The exercise price of options granted under the 2000 Stock Option and
Incentive Plan is determined by our compensation committee. Under present law,
incentive stock options and options intended to qualify as performance-based
compensation under Section 162(m) of the Internal Revenue Code of 1986 may not
be granted at an exercise price less than the fair market value of the common
stock on the date of grant, or less than 110% of the fair market value in the
case of incentive stock options granted to optionees holding more than 10% of
the voting power.

Non-qualified stock options may be granted at prices which are less than the
fair market value of the underlying shares on the date granted. Options are
typically subject to vesting schedules, terminate eight years from the date of
grant and may be exercised for specified periods after the

47
<PAGE>
termination of the optionee's employment or other service relationship with us.
Upon the exercise of options, the option exercise price must be paid in full
either in cash or by certified or bank check or other instrument acceptable to
the committee or by delivery of shares of common stock that have been owned by
the optionee free of restrictions for at least six months.

The 2000 Stock Option and Incentive Plan and all awards issued under the
plan will terminate upon a merger, reorganization or consolidation, the sale of
all or substantially all of our assets or all of our outstanding capital stock
or a liquidation or other similar transaction, unless Moldflow and the other
parties to such transactions have agreed otherwise.

EMPLOYEE STOCK PURCHASE PLAN

The Employee Stock Purchase Plan was adopted by our board of directors in
January 2000 and was approved by our stockholders in February 2000. Up to
500,000 shares of our common stock may be issued under the Employee Stock
Purchase Plan. The Employee Stock Purchase Plan is administered by our
compensation committee.

The first offering under the Employee Stock Purchase Plan will commence on
July 1, 2000 and end on December 31, 2000. Subsequent offerings will commence on
each January 1 and July 1 thereafter and will have a duration of six months.
Generally, all employees who are customarily employed for more than 20 hours per
week as of the first day of the applicable offering period are eligible to
participate in the Employee Stock Purchase Plan. Any employee who owns or is
deemed to own shares of stock representing in excess of 5% of the combined
voting power of all classes of our stock may not participate in the Employee
Stock Purchase Plan.

During each offering, an employee may purchase shares under the Employee
Stock Purchase Plan by authorizing payroll deductions of up to 10% of his cash
compensation during the offering period. Unless the employee has previously
withdrawn from the offering, his accumulated payroll deductions will be used to
purchase shares of our common stock on the last business day of the period at a
price equal to 85% of the fair market value of our common stock on the first or
last day of the offering period, whichever is lower. Under applicable tax rules,
an employee may purchase no more than $25,000 worth of our common stock in any
calendar year under the Employee Stock Purchase Plan. We have not issued any
shares to date under the Employee Stock Purchase Plan.

1997 EQUITY INCENTIVE PLAN

The 1997 Equity Incentive Plan was initially approved by our board of
directors in August 1997 and was approved by our stockholders in October 1997.
The 1997 Equity Incentive Plan provides for the issuance of 1,537,158 shares of
our common stock. As of March 1, 2000, options to purchase 599,900 shares of our
common stock were outstanding under the 1997 Equity Incentive Plan. Options
granted under the 1997 Equity Incentive Plan generally vest over four years and
terminate on the eighth anniversary of the date of grant. We will not make any
additional grants under the 1997 Equity Incentive Plan after the completion of
this offering.

EMPLOYMENT AGREEMENTS

We have entered into employment agreements with each of Messrs. Dulude,
Underwood and Welch and Ms. Rogers and anticipate entering into an employment
agreement with Mr. Thomas prior to the closing of this offering. Each agreement
is for a period of one year, and will be automatically extended for one
additional year on the anniversary date unless either party has given notice
that it does not wish to extend the agreement. Each agreement provides for the
payment of base salary and incentive compensation and for the provision of
certain fringe benefits to the executive. The agreements require our executive
officers to refrain from competing with Moldflow and from soliciting our
employees for a period of twelve months following termination for any reason.
Each agreement also provides for certain payments and benefits for an executive
officer should his or her employment with us be terminated because of death or
disability, by the executive for good reason or by us without cause, as further
defined in the agreements. In general, in the case

48
<PAGE>

of a termination by the executive officer for good reason, or by us without
cause, the executive officer will receive up to one year of salary, an extension
of benefits for one year and an acceleration of vesting for stock options and
restricted stock which otherwise would vest during the next twelve months. Upon
a change of control, as defined in the agreements, the executive officer is
eligible for payment of a minimum of six months and up to one year of salary, an
extension of benefits for one year and an acceleration of vesting for all
outstanding stock options and restricted stock. Mr. Dulude's agreement also
includes certain provisions requiring Moldflow to increase the payments to him
following a change in control in the event that amounts paid to him would
subject him to the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986.

RESTRICTED STOCK AGREEMENTS

In July 1998, Messrs. Dulude, Underwood and Welch and Ms. Rogers purchased
from Moldflow a total of 551,287 shares of common stock at a price of $0.36 per
share. Each of these executive officers paid for the shares by delivering to
Moldflow a promissory note, which bears interest at a rate of 5.77% per year.
Principal and interest on the notes become payable in full on June 30, 2003, but
may be prepaid at any time. Each of these executive officers also entered into a
stock restriction agreement with Moldflow. Pursuant to these agreements,
Moldflow has the right, but not the obligation, to repurchase a portion of these
shares at the initial purchase price per share upon the termination for any
reason of the employment of the respective executive officer. The repurchase
rights with respect to these shares lapse on varying schedules through
October 2002 so long as the executive officer who purchased the shares remains
an employee of Moldflow. The repurchase right with respect to a portion of these
shares will also lapse if Moldflow terminates the employment of the executive
officer without cause as defined in his or her employment agreement or if
employment terminates due to his or her death or disability. The repurchase
right will lapse in its entirety in the event Moldflow experiences a change in
control as defined in the executive officers' employment agreements.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Messrs. Beale and Yie are the members of our compensation committee. Neither
Mr. Beale nor Mr. Yie is an executive officer of Moldflow or has received any
compensation from Moldflow within the last three years other than in his
capacity as a director.

In January 1997, we entered into loan agreements with a group of our
stockholders consisting of JTC Investment Management Pty. Ltd., funds associated
with Ampersand Ventures, Thomas Investments Australia Pty. Ltd, Floatflow
Pty. Ltd. and Helmet Investments Australia Pty. Ltd. pursuant to which these
stockholders provided us with a credit line of approximately $1.1 million. In
July 1998, we converted the outstanding principal balance of $890,000 under this
credit line into 698,609 shares of our series C-3 convertible preferred stock
and paid these stockholders $107,000 of accrued interest. Mr. Yie is affiliated
with the funds associated with Ampersand Ventures, and Mr. Beale is affiliated
with JTC Investment Management Pty. Ltd.

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<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

1997 REORGANIZATION

In June 1997, our predecessor, Moldflow International Pty. Ltd., an
Australian corporation, entered into a reorganization agreement with Moldflow
and its stockholders. In the reorganization, the stockholders of Moldflow
International became stockholders of Moldflow, and Moldflow International became
a wholly-owned subsidiary of Moldflow. Stockholders of Moldflow International
were issued shares of either Moldflow's common stock, series A convertible
preferred stock or series B convertible preferred stock. In March 1998, these
shares of common stock, series A convertible preferred and series B convertible
preferred were redesignated as series C-1, C-2 and C-3 convertible preferred
stock. Upon completion of this offering, all shares of our outstanding preferred
stock will be converted into shares of common stock.

LOANS FROM STOCKHOLDERS

In January 1997, we entered into loan agreements with a group of our
stockholders consisting of JTC Investment Management Pty. Ltd., funds associated
with Ampersand Ventures, Thomas Investments Australia Pty. Ltd, Floatflow
Pty. Ltd. and Helmet Investments Australia Pty. Ltd. pursuant to which these
stockholders provided us with a credit line of approximately $1.1 million. In
July 1998, we converted the outstanding principal balance of $890,000 under this
credit line into 698,609 shares of our series C-3 convertible preferred stock
and paid these stockholders $107,000 of accrued interest. Dr. Charpie and
Mr. Yie, directors of Moldflow, are affiliated with the funds associated with
Ampersand Ventures, Mr. Beale, also a director of Moldflow, is affiliated with
JTC Investment Management Pty. Ltd., and Mr. Thomas, our Vice President of
Research and Development and a director of Moldflow, is the beneficial owner of
Thomas Investments Australia Pty. Ltd.

LOAN TO EXECUTIVE OFFICER AND DIRECTOR

In July 1999, Mr. Thomas borrowed approximately $129,000 from our
subsidiary, Moldflow International, pursuant to a promissory note. This
promissory note is not interest bearing and is due on July 1, 2000. The amounts
due under this promissory note will be completely offset by amounts due to
Mr. Thomas on July 1, 2000 pursuant to the terms of a deferred compensation
arrangement between Moldflow and Mr. Thomas.

In connection with the expatriate assignment of Mr. Thomas from Australia to
the United States, Moldflow loaned him $87,000 in September 1996. The loan was
repaid in January 1999.

OTHER ARRANGEMENTS WITH EXECUTIVE OFFICERS

In addition, other agreements with our executive officers are described
under "Management--Employment Agreements" and "Management--Restricted Stock
Agreements."

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<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information regarding the beneficial
ownership of Moldflow common stock as of March 1, 2000 and on an as adjusted
basis to reflect the sale of the common stock offered hereby by:

- all persons known by us to own beneficially 5% or more of the common
stock,

- each of our directors,

- the executive officers listed in the summary compensation table,

- each stockholder selling shares in this offering, and

- all of our directors and executive officers as a group.

Unless otherwise indicated, each of the stockholders has sole voting and
investment power with respect to the shares of common stock beneficially owned
by the stockholder. The address of Ampersand Ventures is 55 William Street,
Suite 240, Wellesley, MA 02481, the address of JTC Investment Management
Pty. Ltd. is 333 Collins Street, Melbourne VIC 3000, Australia, the address of
Lombard Capital Fund LLC, is c/o Asiaciti Corp. Services Pte. Ltd., 3 Raffles
Place, #09-01 Bharat Building, Singapore 048617 and the address of Paul
Bordonaro is c/o Floatflow Pty. Ltd., 13 Townsend Street, Ivanhoe, VIC 3079,
Australia. The address of all other listed stockholders is c/o Moldflow
Corporation, 91 Hartwell Avenue, Lexington, MA 02421.

The number of shares beneficially owned by each stockholder is determined
under rules issued by the Securities and Exchange Commission and includes voting
or investment power with respect to securities. Under these rules, beneficial
ownership includes any shares as to which the individual or entity has sole or
shared voting power or investment power and includes any shares as to which the
individual or entity has the right to acquire beneficial ownership within
60 days after March 1, 2000 through the exercise of any warrant, stock option or
other right. The inclusion in this prospectus of such shares, however, does not
constitute an admission that the named stockholder is a direct or indirect
beneficial owner of such shares.

<TABLE>
<CAPTION>
PERCENTAGE OF
SHARES
BENEFICIALLY
OWNED(1)
NUMBER OF SHARES ------------------- SHARES TO BE SOLD
BENEFICIALLY BEFORE AFTER UPON EXERCISE OF
NAME OF BENEFICIAL OWNER OWNED OFFERING OFFERING OVER-ALLOTMENT OPTION
- ------------------------ ---------------- -------- -------- ---------------------
<S> <C> <C> <C> <C>
Ampersand Ventures(2).............. 4,039,060 66.6% 44.6% --
Richard A. Charpie(3).............. 4,039,060 66.6 44.6 --
Charles D. Yie(4).................. 4,039,060 66.6 44.6 --
JTC Investment Management Pty.
Ltd.(5).......................... 752,627 12.4 8.3 204,177
Julian H. Beale(6)................. 752,627 12.4 8.3 --
Marc J. L. Dulude(7)............... 403,151 6.6 4.4 --
Lombard Capital Fund LLC(8)........ 218,054 3.6 2.4 35,000
A. Roland Thomas(9)................ 183,493 3.0 2.0 --
Paul Bordonaro(10)................. 158,457 2.6 1.7 29,167
Richard M. Underwood(11)........... 57,755 * * --
Suzanne E. Rogers(12).............. 54,127 * * --
Kenneth R. Welch(13)............... 51,486 * * --
Roger Brooks....................... 1,562 * * --
Robert P. Schechter................ -- * * --
All executive officers and
directors, as a group
(10 persons)(14)................. 5,543,261 90.9 60.9 --
</TABLE>

- ------------------------

* Represents less than 1% of the outstanding shares of common stock.

51
<PAGE>
(1) All percentages assume the underwriters do not elect to exercise the
over-allotment option to purchase an additional 450,000 shares of common
stock. The number of shares of common stock includes shares to be issued
upon completion of this offering pursuant to the conversion of all of the
shares of our class C preferred stock into shares of common stock and the
exercise of the outstanding warrant into shares of common stock.

(2) Consists of 1,482,131 shares held by Ampersand Specialty Materials and
Chemicals II Limited Partnership, 2,516,019 shares held by Ampersand
Specialty Materials and Chemicals III Limited Partnership and 40,910 shares
held by Ampersand Specialty Materials and Chemicals III Companion Fund
Limited Partnership. Ampersand Specialty Materials and Chemicals II Limited
Partnership, Ampersand Specialty Materials and Chemicals III Limited
Partnership and Ampersand Specialty Materials and Chemicals III Companion
Fund Limited Partnership are part of an affiliated group of investment
partnerships referred to collectively herein as Ampersand Ventures. ASMC-II
MCLP LLP is the general partner of ASMC-II Management Company Limited
Partnership, which is the general partner of Ampersand Specialty Materials
and Chemicals II Limited Partnership, which exercises sole voting and
investment power with respect to all of the shares held of record by
Ampersand Specialty Materials and Chemicals II Limited Partnership. ASMC-III
MCLP LLP is the general partner of ASMC-III Management Company Limited
Partnership, which is the general partner of Ampersand Specialty Materials
and Chemicals III Limited Partnership and Ampersand Specialty Materials and
Chemicals III Companion Fund Limited Partnership, which exercises sole
voting and investment power with respect to all of the shares held of record
by Ampersand Specialty Materials and Chemicals III Limited Partnership and
Ampersand Specialty Materials and Chemicals III Companion Fund Limited
Partnership. Dr. Charpie, a director of Moldflow, is the Managing General
Partner of both ASMC-II MCLP LLP and ASMC-III MCLP LLP and Mr. Yie, a
director of Moldflow, is a General Partner of both ASMC-II MCLP LLP and
ASMC-III MCLP LLP. Dr. Charpie and Mr. Yie disclaim any beneficial ownership
of the shares held by Ampersand Ventures, except to the extent of their
respective pecuniary interests therein.

(3) Consists solely of the shares described in note (2) above, of which
Dr. Charpie may be considered the beneficial owner. Dr. Charpie disclaims
beneficial ownership of such shares, except to the extent of his pecuniary
interest therein.

(4) Consists solely of the shares described in note (2) above, of which Mr. Yie
may be considered the beneficial owner. Mr. Yie disclaims beneficial
ownership of such shares, except to the extent of his pecuniary interest
therein.

(5) Mr. Beale, a director of Moldflow, may be considered the beneficial owner of
these shares based on his voting and investment power with respect to the
parent company of JTC Investment Management Pty. Ltd.

(6) Consists solely of the shares described in note (5) above, of which
Mr. Beale may be considered the beneficial owner. Mr. Beale disclaims
beneficial ownership of 323,706 of such shares.

(7) Includes 6,250 shares that may be acquired within 60 days of March 1, 2000.

(8) The sole beneficial owner of these shares is Asiaciti Trust Samoa Limited.

(9) Includes 158,457 shares held by Thomas Investments Australia Pty. Ltd., of
which Mr. Thomas is the beneficial owner. Also includes 25,036 shares that
may be acquired within 60 days of March 1, 2000.

(10) Consists solely of shares held by Floatflow Pty. Ltd., of which
Mr. Bordonaro is the beneficial owner.

(11) Includes 1,953 shares that may be acquired within 60 days of March 1, 2000.

(12) Includes 3,906 shares that may be acquired within 60 days of March 1, 2000.

(13) Includes 3,125 shares that may be acquired within 60 days of March 1, 2000.

(14) Includes 40,270 shares that may be acquired within 60 days of March 1,
2000.

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<PAGE>
DESCRIPTION OF CAPITAL STOCK

AUTHORIZED AND OUTSTANDING CAPITAL STOCK

Following the offering, our authorized capital stock will consist of
60,000,000 shares of common stock, of which 9,081,496 will be issued and
outstanding, and 5,000,000 shares of undesignated preferred stock issuable in
one or more series designated by our board of directors, of which no shares will
be issued and outstanding. In addition, 599,900 shares of our common stock will
be issuable upon exercise of stock options outstanding and 2,500,000 shares of
our common stock will be available for future grant under our stock option plan
and our employee stock purchase plan.

COMMON STOCK

VOTING RIGHTS. The holders of our common stock have one vote per share.
Holders of our common stock are not entitled to vote cumulatively for the
election of directors. Generally, all matters to be voted on by stockholders
must be approved by a majority, or, in the case of the election of directors, by
a plurality, of the votes cast at a meeting at which a quorum is present, voting
together as a single class, subject to any voting rights granted to holders of
any then outstanding preferred stock.

DIVIDENDS. Holders of common stock will share ratably in any dividends
declared by our board of directors, subject to the preferential rights of any
preferred stock then outstanding. Dividends consisting of shares of common stock
may be paid to holders of shares of common stock.

OTHER RIGHTS. Upon liquidation, dissolution or winding up of Moldflow, all
holders of common stock are entitled to share ratably in any assets available
for distribution to holders of shares of common stock. No shares of common stock
are subject to redemption or have preemptive rights to purchase additional
shares of common stock.

PREFERRED STOCK

Our certificate of incorporation provides that shares of preferred stock may
be issued from time to time in one or more series. Our board of directors is
authorized to fix the voting rights, if any, designations, powers, preferences,
qualifications, limitations and restrictions thereof, applicable to the shares
of each series. Our board of directors may, without stockholder approval, issue
preferred stock with voting and other rights that could adversely affect the
voting power and other rights of the holders of the common stock and could have
anti-takeover effects, including preferred stock or rights to acquire preferred
stock in connection with implementing a shareholder rights plan. We have no
present plans to issue any shares of preferred stock. The ability of our board
of directors to issue preferred stock without stockholder approval could have
the effect of delaying, deferring or preventing a change of control of Moldflow
or the removal of existing management.

INDEMNIFICATION MATTERS

Prior to the offering, we will have entered into indemnification agreements
with each of our directors. The form of indemnification agreement provides that
we will indemnify our directors for expenses incurred because of their status as
a director to the fullest extent permitted by Delaware law, our certificate of
incorporation and our by-laws.

Our certificate of incorporation contains a provision permitted by Delaware
law that generally eliminates the personal liability of directors for monetary
damages for breaches of their fiduciary duty, including breaches involving
negligence or gross negligence in business combinations, unless the director has
breached his or her duty of loyalty, failed to act in good faith, engaged in
intentional misconduct or a knowing violation of law, paid a dividend or
approved a stock

53
<PAGE>
repurchase in violation of the Delaware General Corporation Law or obtained an
improper personal benefit. This provision does not alter a director's liability
under the federal securities laws and does not affect the availability of
equitable remedies, such as an injunction or rescission, for breach of fiduciary
duty. Our by-laws provide that directors and officers shall be, and in the
discretion of our board of directors, non-officer employees may be, indemnified
by Moldflow to the fullest extent authorized by Delaware law, as it now exists
or may in the future be amended, against all expenses and liabilities reasonably
incurred in connection with service for or on behalf of Moldflow. Our by-laws
also provide for the advancement of expenses to directors and, in the discretion
of our board of directors, to officers and non-officer employees. In addition,
our by-laws provide that the right of directors and officers to indemnification
shall be a contract right and shall not be exclusive of any other right now
possessed or hereafter acquired under any by-law, agreement, vote of
stockholders or otherwise. We also have directors' and officers' insurance
against certain liabilities. We believe that the indemnification agreements,
together with the limitation of liability and indemnification provisions of our
certificate of incorporation and by-laws and directors' and officers' insurance
will assist us in attracting and retaining qualified individuals to serve as
directors and officers of Moldflow.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be provided to directors, officers or persons controlling Moldflow
as described above, we have been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable. At present,
there is no pending material litigation or proceeding involving any director,
officer, employee or agent of Moldflow in which indemnification will be required
or permitted.

PROVISIONS OF OUR CERTIFICATE OF INCORPORATION AND BY-LAWS THAT MAY HAVE
ANTI-TAKEOVER EFFECTS

Certain provisions of our certificate of incorporation and by-laws described
below, as well as the ability of our board of directors to issue shares of
preferred stock and to set the voting rights, preferences and other terms
thereof, may be deemed to have an anti-takeover effect and may discourage
takeover attempts not first approved by our board of directors, including
takeovers which particular stockholders may deem to be in their best interests.
These provisions also could have the effect of discouraging open market
purchases of our common stock because they may be considered disadvantageous by
a stockholder who desires subsequent to such purchases to participate in a
business combination transaction with us or to elect a new director to our
board.

CLASSIFIED BOARD OF DIRECTORS

Our board of directors is divided into three classes serving staggered
three-year terms, with approximately one-third of the board being elected each
year. Our classified board, together with certain other provisions of our
certificate of incorporation authorizing the board of directors to fill vacant
directorships or increase the size of the board, may prevent a stockholder from
removing, or delay the removal of, incumbent directors and simultaneously
gaining control of the board of directors by filling vacancies created by such
removal with its own nominees.

DIRECTOR VACANCIES AND REMOVAL

Our certificate of incorporation and by-laws provide that vacancies in our
board of directors may be filled only by the affirmative vote of a majority of
the remaining directors. Our certificate of incorporation provides that
directors may be removed from office only with cause and only by the affirmative
vote of holders of at least 75% of the shares then entitled to vote at an
election of directors.

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<PAGE>
NO STOCKHOLDER ACTION BY WRITTEN CONSENT

Our certificate of incorporation provides that any action required or
permitted to be taken by our stockholders at an annual or special meeting of
stockholders must be effected at a duly called meeting and may not be taken or
effected by a written consent of stockholders.

SPECIAL MEETINGS OF STOCKHOLDERS

Our certificate of incorporation and by-laws provide that a special meeting
of stockholders may be called only by our board of directors. Our by-laws
provide that only those matters included in the notice of the special meeting
may be considered or acted upon at that special meeting unless otherwise
provided by law.

ADVANCE NOTICE OF DIRECTOR NOMINATIONS AND STOCKHOLDER PROPOSALS

Our by-laws include advance notice and informational requirements and time
limitations on any director nomination or any new proposal which a stockholder
wishes to make at an annual meeting of stockholders. For the first annual
meeting following the completion of this offering, a stockholder's notice of a
director nomination or proposal will be timely if delivered to the Secretary of
Moldflow at our principal executive offices not later than the close of business
on the later of the 75th day prior to the scheduled date of such annual meeting
or the 10th day following the day on which public announcement of the date of
such annual meeting is made by Moldflow.

AMENDMENT OF THE CERTIFICATE OF INCORPORATION

As required by Delaware law, any amendment to our certificate of
incorporation must first be approved by a majority of our board of directors
and, if required by law, thereafter approved by a majority of the outstanding
shares entitled to vote with respect to such amendment, except that any
amendment to the provisions relating to stockholder action by written consent,
directors, limitation of liability and the amendment of our certificate of
incorporation must be approved by not less than 75% of the outstanding shares
entitled to vote with respect to such amendment.

AMENDMENT OF BY-LAWS

Our certificate of incorporation and by-laws provide that our by-laws may be
amended or repealed by our board of directors or by the stockholders. Such
action by the board of directors requires the affirmative vote of a majority of
the directors then in office. Such action by the stockholders requires the
affirmative vote of at least 75% of the shares present in person or represented
by proxy at an annual meeting of stockholders or a special meeting called for
such purpose unless our board of directors recommends that the stockholders
approve such amendment or repeal at such meeting, in which case such amendment
or repeal only requires the affirmative vote of a majority of the shares present
in person or represented by proxy at the meeting.

STATUTORY BUSINESS COMBINATION PROVISION

Following the offering, we will be subject to Section 203 of the Delaware
General Corporation Law, which prohibits a publicly-held Delaware corporation
from consummating a "business combination," except under certain circumstances,
with an "interested stockholder" for a period of three years after the date such
person became an "interested stockholder" unless:

- before such person became an interested stockholder, the board of
directors of the corporation approved the transaction in which the
interested stockholder became an interested stockholder or approved the
business combination;

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<PAGE>
- upon the closing of the transaction that resulted in the interested
stockholder becoming such, the interested stockholder owned at least 85%
of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding shares held by directors who are also
officers of the corporation and shares held by employee stock plans; or

- following the transaction in which such person became an interested
stockholder, the business combination is approved by the board of
directors of the corporation and authorized at a meeting of stockholders
by the affirmative vote of the holders of at least two-thirds of the
outstanding voting stock of the corporation not owned by the interested
stockholder.

The term "interested stockholder" generally is defined as a person who,
together with affiliates and associates, owns, or, within the prior three years,
owned, 15% or more of a corporation's outstanding voting stock. The term
"business combination" includes mergers, consolidations, asset sales involving
10% or more of a corporation's assets and other similar transactions resulting
in a financial benefit to an interested stockholder. Section 203 makes it more
difficult for an "interested stockholder" to effect various business
combinations with a corporation for a three-year period. A Delaware corporation
may "opt out"of Section 203 with an express provision in its original
certificate of incorporation or an express provision in its certificate of
incorporation or by-laws resulting from an amendment approved by holders of at
least a majority of the outstanding voting stock. Neither our certificate of
incorporation nor our by-laws contain any such exclusion.

TRADING ON THE NASDAQ NATIONAL MARKET SYSTEM

We have applied to have our common stock approved for quotation on the
Nasdaq National Market under the symbol MFLO.

NO PREEMPTIVE RIGHTS

No holder of any class of our stock has any preemptive right to purchase any
of our securities.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock will be EquiServe
Trust Company, N.A.

56
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there was no public market for our common stock, and
we cannot predict the effect, if any, that sales of common stock or the
availability of common stock for sale will have on the market price of our
common stock prevailing from time to time. Nonetheless, substantial sales of
common stock in the public market following this offering, or the perception
that such sales could occur, could lower the market price of our common stock or
make it difficult for us to raise additional equity capital in the future.

Following this offering, there will be 9,081,496 shares of our common stock
outstanding, assuming no exercise of the underwriters' over-allotment option and
no exercise of outstanding options. All of the shares which are being sold in
this offering will be freely transferable without restriction or further
registration under the Securities Act unless the shares are purchased by
"affiliates" as that term is defined in Rule 144 under the Securities Act.

The remaining 6,081,496 shares of common stock held by existing stockholders
that will be outstanding after the offering will be "restricted securities" as
defined in Rule 144, and may be sold in the future without registration under
the Securities Act subject to compliance with the provisions of Rule 144,
Rule 701 or any other applicable exemption under the Securities Act.

In connection with this offering, our existing officers, directors and
stockholders, who hold substantially all of our currently outstanding shares of
common stock and will own an aggregate of 6,080,024 shares of common stock after
this offering and 527,572 shares of common stock issuable upon exercise of stock
options outstanding, have agreed with the underwriters that, subject to
exceptions, they will not sell or dispose of any of their shares for 180 days
after the date of this prospectus. Adams, Harkness & Hill, Inc. may, in its sole
discretion and at any time without notice, release all or any portion of the
shares subject to such restrictions. Subject to these lock-up agreements, the
shares of common stock outstanding upon the closing of the offering will be
available for sale in the public market as follows:

<TABLE>
<CAPTION>
APPROXIMATE
NUMBER OF
SHARES DESCRIPTION
- --------------------- -----------
<C> <S>
3,000,000 After the date of this prospectus, freely tradeable shares
sold in the offering.

6,006,048 After 180 days from the date of this prospectus, the lock-up
period will expire and these shares will be saleable under
Rule 144.

75,448 On various dates following the 180th day from the date of
this prospectus, these shares will vest and be saleable
under Rule 144.
</TABLE>

In general, under Rule 144, as currently in effect, a person 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:

- one percent of the then outstanding shares of common stock, which is
expected to be approximately 90,815 shares upon the completion of this
offering, or

- the average weekly trading volume of the common stock during the four
calendar weeks preceding the date on which notice of such sale is filed,
subject to manner of sale provisions and notice requirements and to the
availability of current public information about us.

Affiliates may sell shares not constituting restricted securities in accordance
with the foregoing volume limitations and other restrictions, but without regard
to the one-year holding period.

57
<PAGE>
In addition, a person who was not an affiliate of ours, as defined in
Rule 144, at any time during the 90 days preceding a sale and who has
beneficially owned the shares proposed to be sold for at least two years would
be entitled to sell such shares under Rule 144(k) without regard to the
requirements described above. To the extent that shares were acquired from an
affiliate of ours, such person's holding period for the purpose of effecting a
sale under Rule 144 commences on the date of transfer from the affiliate.

In general, under Rule 701 of the Securities Act as currently in effect,
each of our employees, consultants or advisors who purchased shares from us in
connection with a compensatory stock plan or other written agreement is eligible
to resell those shares 90 days after the effective date of this offering in
reliance on Rule 144, but without compliance with some of the restrictions,
including the holding period, contained in Rule 144.

We cannot predict the effect, if any, that market sales of shares or the
availability of shares for sale will have on the market price of our common
stock prevailing from time to time. We are unable to estimate the number of our
shares that may be sold in the public market pursuant to Rule 144 or Rule 701
because this will depend on the market price of our common stock, the personal
circumstances of the sellers and other factors. Nevertheless, sales of
significant amounts of our common stock in the public market could adversely
affect the market price of our common stock.

We have agreed not to sell or otherwise dispose of any shares of common
stock during the 180-day period following the date of this prospectus, except we
may issue, and grant options to purchase, shares of common stock under the 2000
Stock Option and Incentive Plan and our Employee Stock Purchase Plan.

We intend to file registration statements on Form S-8 with respect to the
aggregate of shares of common stock issuable under our 2000 Stock Option
and Incentive Plan approximately 180 days following this offering. We intend to
file a registration statement with respect to our Employee Stock Purchase Plan
promptly following the consummation of this offering. Shares issued upon the
exercise of stock options after the effective date of the Form S-8 registration
statement will be eligible for resale in the public market without restriction,
except that affiliates must comply with Rule 144.

58
<PAGE>
UNDERWRITING

Under the underwriting agreement, which is filed as an exhibit to the
registration statement relating to this prospectus, each underwriter named
below, for whom Adams, Harkness & Hill, Inc. and A.G. Edwards & Sons, Inc. are
acting as representatives, has agreed to purchase from us the respective number
of shares of common stock shown opposite its name below:

<TABLE>
<CAPTION>
NUMBER OF SHARES
OF COMMON
UNDERWRITERS STOCK
- ------------ ----------------
<S> <C>
Adams, Harkness & Hill, Inc................................
A.G. Edwards & Sons, Inc...................................

---------
Total.................................................. 3,000,000
=========
</TABLE>

The underwriting agreement provides that the underwriters' obligation to
purchase shares of common stock depends on the satisfaction of the conditions
contained in the underwriting agreement and that, if any of the shares of common
stock are purchased by the underwriters under the underwriting agreement, all of
the shares of common stock that the underwriters have agreed to purchase under
the underwriting agreement must be purchased. The conditions contained in the
underwriting agreement include the requirement that the representations and
warranties made by us and the selling stockholders to the underwriters are true,
that there is no material change in the financial markets and that we deliver to
the underwriters customary closing documents.

The representatives of the underwriters have advised us that the
underwriters propose to offer the shares of common stock directly to the public
at the public offering price set forth on the cover page of this prospectus, and
to dealers, who may include the underwriters, at the public offering price less
a selling concession not in excess of $ per share. The underwriters may
also allow, and dealers may reallow, a concession not in excess of $ per
share to brokers and dealers. After the offering, the underwriters may change
the offering price and other selling terms.

Adams, Harkness & Hill, Inc. and A.G. Edwards & Sons, Inc. have informed us
that the underwriters do not intend to confirm sales of shares of common stock
offered by this prospectus to any accounts over which they exercise
discretionary authority.

The following table shows the per share and total public offering price,
underwriting discount to be paid by us to the underwriters and the proceeds
before expenses to us and the selling stockholders. This information is
presented assuming both no exercise and full exercise by the underwriters of
their over-allotment option.

<TABLE>
<CAPTION>
TOTAL
-------------------------
WITHOUT WITH
PER SHARE OPTION OPTION
--------- ----------- -----------
<S> <C> <C> <C>
Public offering price.................................. $13.00 $39,000,000 $41,361,528
Underwriting discount.................................. 0.91 2,730,000 2,895,307
Proceeds before expenses to Moldflow................... 12.09 36,270,000 38,466,221
Proceeds before expenses to the selling stockholders... 12.09 -- 3,244,279
</TABLE>

59
<PAGE>
The total proceeds before expenses to be received by us from this offering
will be approximately $36.3 million, assuming no exercise of the over-allotment
option.

The expenses of this offering, exclusive of the underwriting discount, are
estimated at $1.5 million and are payable by us.

We have granted to the underwriters an option to purchase from us and the
selling stockholders up to 450,000 additional shares of common stock,
exercisable solely to cover over-allotments, if any, at the public offering
price less the underwriting discount shown on the cover page of this prospectus.
The underwriters may exercise this option at any time until 30 days after the
date of the underwriting agreement. If this option is exercised, each
underwriter will be committed, so long as the conditions of the underwriting
agreement are satisfied, to purchase a number of additional shares of common
stock proportionate to the underwriters' initial commitment as indicated in the
preceding table and we and the selling stockholders will be obligated, under the
over-allotment option, to sell the shares of common stock to the underwriters.

We have agreed that, without the prior consent of Adams, Harkness &
Hill, Inc., we will not, directly or indirectly, offer, sell or otherwise
dispose of any shares of common stock or any securities which may be converted
into or exchanged for any such shares of common stock for a period of 180 days
from the date of this prospectus. Our executive officers and directors, the
selling stockholders and other stockholders who currently hold in the aggregate
more than 99% of our outstanding common stock have agreed under lock-up
agreements that, without the prior written consent of Adams, Harkness &
Hill, Inc., they will not, directly or indirectly, offer, sell or otherwise
dispose of any shares of common stock or any securities that may be converted
into or exchanged for any such shares other than 268,344 shares that may be sold
by selling stockholders in connection with the underwriters' exercise of the
over-allotment option for the period ending 180 days after the date of this
prospectus.

Prior to the offering, there has been no public market for the shares of
common stock. The initial public offering price and the underwriters'
compensation will be negotiated between the representatives and us. In
determining the initial public offering price of the common stock, we and the
representatives will consider, in addition to prevailing market conditions, our
historical performance and capital structure, estimates of our business
potential and earning prospects, an overall assessment of our management and the
consideration of the above factors in relation to the market valuation of
companies in related businesses.

We and the selling stockholders will indemnify the underwriters against
certain liabilities, including liabilities under the Securities Act and
liabilities arising from breaches of representations and warranties contained in
the underwriting agreement, and contribute to payments that the underwriters may
be required to make for certain liabilities.

Until the distribution of the common stock is completed, rules of the
Securities and Exchange Commission may limit the ability of the underwriters and
selling group members to bid for and purchase shares of common stock. As an
exception to these rules, the representatives are permitted to engage in
transactions that stabilize the price of the common stock. These transactions
may consist of bids or purchases for the purposes of pegging, fixing or
maintaining the price of the common stock.

The underwriters may create a short position in the common stock in
connection with the offering, which means that they may sell more shares than
are set forth on the cover page of this prospectus. If the underwriters create a
short position, then the representatives may reduce that short position by
purchasing common stock in the open market. The representatives also may elect
to reduce any short position by exercising all or part of the over-allotment
option.

The representatives also may impose a penalty bid on underwriters and
selling group members. This means that if the representatives purchase shares of
common stock in the open market to reduce the underwriters' short position or to
stabilize the price of the common stock, the

60
<PAGE>
representatives may reclaim the amount of the selling concession from the
underwriters and selling group members who sold those shares as part of the
offering. In addition, the representatives reserve the right to reclaim selling
concessions from underwriters and selling group members if the representatives
receive a report that clients of the underwriters and selling group members have
sold the stock they purchased in this offering, generally within 30 days
following this offering. The representatives reserve this right even if the
representatives do not purchase shares in the open market.

In general, purchases of a security for the purpose of stabilization or to
reduce a syndicate short position could cause the price of the security to be
higher than it might otherwise be in the absence of such purchases. The
imposition of a penalty bid might have an effect on the price of a security to
the extent that it might discourage resales of the security by purchasers in an
offering.

The underwriters have reserved for sale at the initial public offering price
up to 225,000 shares of our common stock for persons designated by Moldflow. 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. Moldflow intends, through Adams,
Harkness & Hill, Inc. and A.G. Edwards & Sons, Inc., to seek indications of
interest from designated persons, including employees, customers and others with
whom Moldflow has or may seek to develop business relationships. No offers or
other solicitations were made prior to the filing of the registration statement
of which this prospectus is a part. Moldflow has not sent communications to
anyone regarding the purchase of reserved shares and has not determined how many
persons it will contact.

VALIDITY OF COMMON STOCK

The validity of the shares of common stock offered hereby will be passed
upon for Moldflow by Goodwin, Procter & Hoar LLP, Boston, Massachusetts. Various
legal matters related to the sale of the common stock offered hereby will be
passed upon for the underwriters by Ropes & Gray, Boston, Massachusetts.

EXPERTS

The audited consolidated financial statements of Moldflow as of June 30,
1998 and 1999, and for each of the years ended June 30, 1997, 1998 and 1999, and
the audited consolidated financial statements of C-Mold as of September 30, 1998
and 1999, and for each of the years ended September 30, 1998 and 1999, included
in this prospectus have been so included in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission, or SEC, a
registration statement on Form S-1 (including the exhibits and schedules
thereto) under the Securities Act and the rules and regulations thereunder, for
the registration of the common stock offered hereby. This prospectus is part of
the registration statement. This prospectus does not contain all the information
included in the registration statement because we have omitted certain parts of
the registration statement as permitted by the SEC rules and regulations. For
further information about us and our common stock, you should refer to the
registration statement. Statements contained in this prospectus as to any
contract, agreement or other document referred to are not necessarily complete.
Where the contract or other document is an exhibit to the registration
statement, each statement is qualified by the provisions of that exhibit.

You can inspect and copy at the public reference facility maintained by the
SEC at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
SEC's regional offices at Seven World

61
<PAGE>
Trade Center, 13th Floor, New York, New York 10048 and 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. You may call the SEC at 1-800-732-0330 for
further information about the operation of the public reference rooms. Copies of
all or any portion of the registration statement can be obtained from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. In addition, the registration statement is publicly available
through the SEC's site on the Internet's World Wide Web, located at
http://www.sec.gov.

We will also file annual, quarterly and current reports, proxy statements
and other information with the SEC. You can also request copies of these
documents, for a copying fee, by writing to the SEC. We intend to furnish to our
stockholders annual reports containing audited financial statements for each
fiscal year.

62
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<S> <C>
MOLDFLOW CORPORATION

Report of Independent Accountants........................... F-2
Consolidated Balance Sheet at June 30, 1998 and 1999 and
January 1, 2000 (unaudited)............................... F-3
Consolidated Statement of Operations for the years ended
June 30, 1997, 1998 and 1999 and the six months ended
January 2, 1999 (unaudited) and January 1, 2000
(unaudited)............................................... F-4
Consolidated Statement of Stockholders' Equity for the years
ended June 30, 1997, 1998 and 1999 and the six months
ended January 1, 2000 (unaudited)......................... F-5
Consolidated Statement of Cash Flows for the years ended
June 30, 1997, 1998 and 1999 and the six months ended
January 2, 1999 (unaudited) and January 1, 2000
(unaudited)............................................... F-6
Notes to Consolidated Financial Statements.................. F-7

ADVANCED CAE TECHNOLOGY, INC.

Report of Independent Accountants........................... F-24
Consolidated Balance Sheet at September 30, 1998 and 1999
and December 31, 1999 (unaudited)......................... F-25
Consolidated Statement of Operations for the years ended
September 30, 1998 and 1999 and the three months ended
December 31, 1998 and 1999 (unaudited).................... F-26
Consolidated Statement of Stockholders' Equity for the years
ended September 30, 1998 and 1999 and the three months
ended December 31, 1999 (unaudited)....................... F-27
Consolidated Statement of Cash Flows for the years ended
September 30, 1998 and 1999 and the three months ended
December 31, 1998 and 1999 (unaudited).................... F-28
Notes to Consolidated Financial Statements.................. F-29

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION FOR
MOLDFLOW CORPORATION

Basis of Presentation....................................... F-41
Unaudited Pro Forma Combined Balance Sheet at January 1,
2000...................................................... F-42
Unaudited Pro Forma Combined Statement of Operations for the
year ended June 30, 1999 and for the six months ended
January 1, 2000........................................... F-43
Notes to Unaudited Pro Forma Combined Financial
Information............................................... F-44
</TABLE>

F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Stockholders of Moldflow Corporation

The 2.4-to-1 reverse stock split approved by the Board of Directors on
January 20, 2000 described in Note 16 to the consolidated financial statements
has not been consummated at March 1, 2000. When it has been consummated, we will
be in a position to furnish the following report:

"In our opinion, the accompanying consolidated balance sheet and the
related consolidated statements of operations, of stockholders' equity
and of cash flows present fairly, in all material respects, the financial
position of Moldflow Corporation and its subsidiaries at June 30, 1999
and 1998, and the results of their operations and their cash flows for
the years ended June 30, 1999, 1998 and 1997, in conformity with
generally accepted accounting principles. 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 of these statements in accordance with generally
accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above."

PricewaterhouseCoopers LLP

Boston, Massachusetts
August 20, 1999, except as to Note 16 for
which the date is January 20, 2000

F-2
<PAGE>
MOLDFLOW CORPORATION

CONSOLIDATED BALANCE SHEET

(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
PRO FORMA
JANUARY 1,
JUNE 30, JANUARY 1, 2000
------------------- 2000 (UNAUDITED)
1998 1999 (UNAUDITED) (NOTE 2)
-------- -------- ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 1,700 $ 1,240 $ 1,328 $ 1,478
Accounts receivable, net of allowance for doubtful
accounts of $539, $232 and $237 at June 30, 1998 and
1999 and January 1, 2000 (unaudited), respectively...... 4,277 4,444 4,534 4,534
Inventories............................................... -- 84 99 99
Prepaid expenses.......................................... 400 283 340 340
Other current assets...................................... 814 539 851 851
-------- -------- -------- --------
Total current assets.................................... 7,191 6,590 7,152 7,302
Fixed assets, net........................................... 2,978 3,110 3,026 3,026
Restricted cash............................................. 3,982 -- 22 22
Other assets................................................ 185 547 364 364
-------- -------- -------- --------
Total assets............................................ $ 14,336 $ 10,247 $ 10,564 $ 10,714
======== ======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank notes payable........................................ $ 1,525 $ 832 $ 1,029 $ 1,029
Current portion of capital lease obligations.............. 158 191 120 120
Accounts payable.......................................... 985 1,422 1,202 1,202
Accrued expenses.......................................... 3,539 2,835 3,102 3,102
Deferred revenue.......................................... 2,983 3,418 3,310 3,310
-------- -------- -------- --------
Total current liabilities............................... 9,190 8,698 8,763 8,763
Notes payable to stockholders............................... 890 -- -- --
Capital lease obligations, net of current portion........... 227 11 -- --
Unearned revenue from research and development contract..... 3,982 -- -- --
Other long-term liabilities................................. 13 268 38 38
-------- -------- -------- --------
Total liabilities....................................... 14,302 8,977 8,801 8,801
-------- -------- -------- --------
Commitments and contingencies (Note 13)
Stockholders' equity:
Convertible preferred stock, $0.01 par value; 8,254,386
shares authorized; 7,440,970, 8,139,579, 8,139,579 and 0
shares issued and outstanding at June 30, 1998 and 1999,
January 1, 2000 (unaudited) and pro forma January 1,
2000 (unaudited), respectively.......................... 11,476 12,366 12,366 --
Common stock, $0.01 par value; 8,333,333 shares
authorized; 0, 553,177, 560,327 and 6,069,610 shares
issued and outstanding at June 30, 1998 and 1999,
January 1, 2000 (unaudited) and pro forma January 1,
2000 (unaudited), respectively.......................... -- 6 6 61
Additional paid-in capital................................ -- 270 285 12,746
Deferred compensation..................................... -- (67) (57) (57)
Notes receivable from stockholders........................ -- (198) (198) (198)
Accumulated deficit....................................... (12,194) (11,713) (11,280) (11,280)
Accumulated other comprehensive income.................... 752 606 641 641
-------- -------- -------- --------
Total stockholders' equity.............................. 34 1,270 1,763 1,913
-------- -------- -------- --------
Total liabilities and stockholders' equity.............. $ 14,336 $ 10,247 $ 10,564 $ 10,714
======== ======== ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-3
<PAGE>
MOLDFLOW CORPORATION

CONSOLIDATED STATEMENT OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
---------------------------
YEAR ENDED JUNE 30, JANUARY 2, JANUARY 1,
------------------------------ 1999 2000
1997 1998 1999 (UNAUDITED) (UNAUDITED)
-------- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenue:
Software licenses...................................... $ 6,743 $8,514 $12,238 $5,275 $6,651
Services............................................... 8,080 7,875 7,983 3,969 4,853
------- ------ ------- ------ ------
Total revenue........................................ 14,823 16,389 20,221 9,244 11,504
------- ------ ------- ------ ------
Costs and expenses:
Cost of software licenses revenue...................... 377 397 378 168 322
Cost of services revenue............................... 1,904 1,685 1,319 605 491
Research and development............................... 3,527 3,062 3,466 1,754 1,709
Selling and marketing.................................. 6,703 7,287 9,673 4,615 5,811
General and administrative............................. 3,719 3,303 3,839 1,735 2,277
Litigation............................................. -- -- 620 -- 530
Amortization of intangible assets...................... 2,370 84 -- -- --
------- ------ ------- ------ ------
Total operating expenses............................. 18,600 15,818 19,295 8,877 11,140
------- ------ ------- ------ ------
Income (loss) from operations.......................... (3,777) 571 926 367 364
Interest income.......................................... 14 -- 21 1 26
Interest expense......................................... (153) (238) (198) (86) (65)
Other income (loss), net................................. 17 19 (92) (22) (64)
------- ------ ------- ------ ------
Income (loss) before income taxes...................... (3,899) 352 657 260 261
Provision (benefit) for income taxes..................... 371 163 176 57 (172)
------- ------ ------- ------ ------
Net income (loss)...................................... (4,270) 189 481 203 433
Accretion on convertible preferred stock................. 741 80 -- -- --
------- ------ ------- ------ ------
Net income (loss) available to common stockholders... $(5,011) $ 109 $ 481 $ 203 $ 433
======= ====== ======= ====== ======
Net income (loss) per common share:
Basic................................................ $ -- $ -- $ 1.82 $ 0.94 $ 1.18
Diluted.............................................. $ -- $ 0.04 $ 0.08 $ 0.03 $ 0.07
Pro forma unaudited net income per common share:
Basic................................................ $ 0.08 $ 0.07
Diluted.............................................. $ 0.08 $ 0.07
Shares used in computing net income (loss) per common
share:
Basic................................................ -- -- 265 215 367
Diluted.............................................. -- 5,228 6,166 6,042 6,311
Pro forma unaudited basic............................ 5,717 5,855
Pro forma unaudited diluted.......................... 6,166 6,311
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-4
<PAGE>
MOLDFLOW CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
CONVERTIBLE
PREFERRED STOCK COMMON STOCK ADDITIONAL
-------------------- ---------------------- PAID-IN DEFERRED
SHARES AMOUNT SHARES PAR VALUE CAPITAL COMPENSATION
--------- -------- ---------- --------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Balance at June 30, 1996.................. -- $ -- 2,016,923 $297 $740 $ --
Issuance of common stock.................. 3,333 1 36
Accretion of redeemable preferred stock to
redemption value........................
Comprehensive income (loss):
Net loss................................
Foreign currency translation
adjustment............................
Comprehensive loss......................
--------- ------- ---------- ---- ---- -----
Balance at June 30, 1997.................. -- -- 2,020,256 298 776 --
Accretion of redeemable preferred stock to
redemption value........................
Issuance of common stock in exchange for
redemption rights of outstanding
preferred stock......................... 29,167 4 73
Exchange of class A convertible preferred
stock for series A convertible preferred
stock, which was redesignated as series
C-2 convertible preferred stock......... 1,855,688 8,382
Exchange of convertible preferred stock
for series B convertible preferred
stock, which was redesignated as series
C-3 convertible preferred stock......... 666,666 1,943
Redesignation of common stock as series
C-1 convertible preferred stock......... 4,918,616 1,151 (2,049,423) (302) (849)
Comprehensive income:
Net income..............................
Foreign currency translation
adjustment............................
Comprehensive income....................
--------- ------- ---------- ---- ---- -----
Balance at June 30, 1998.................. 7,440,970 11,476 -- -- -- --
Conversion of promissory notes to series
C-3 convertible preferred stock......... 698,609 890
Issuance of common stock.................. 551,287 6 192
Exercise of stock options................. 1,890 -- 1
Deferred compensation associated with
stock options........................... 77 (77)
Amortization of deferred compensation..... 10
Comprehensive income:
Net income..............................
Foreign currency translation
adjustment............................
Comprehensive income....................
--------- ------- ---------- ---- ---- -----
Balance at June 30, 1999.................. 8,139,579 12,366 553,177 6 270 (67)
Exercise of stock options (unaudited)..... 7,150 -- 15
Amortization of deferred compensation
(unaudited)............................. 10
Comprehensive income (unaudited):
Net income..............................
Foreign currency translation
adjustment............................
Comprehensive income....................
--------- ------- ---------- ---- ---- -----
Balance at January 1, 2000 (unaudited).... 8,139,579 $12,366 560,327 $ 6 $285 $ (57)
========= ======= ========== ==== ==== =====

<CAPTION>
NOTES ACCUMULATED TOTAL
RECEIVABLE COMPREHENSIVE OTHER STOCKHOLDERS'
FROM INCOME ACCUMULATED COMPREHENSIVE EQUITY
STOCKHOLDERS (LOSS) DEFICIT INCOME (DEFICIT)
------------- --------------- ------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
Balance at June 30, 1996.................. $ -- $ (7,292) $914 $(5,341)
Issuance of common stock.................. 37
Accretion of redeemable preferred stock to
redemption value........................ (741) (741)
Comprehensive income (loss):
Net loss................................ $(4,270) (4,270) (4,270)
Foreign currency translation
adjustment............................ (269) (269) (269)
-------
Comprehensive loss...................... (4,539)
----- ======= -------- ---- -------
Balance at June 30, 1997.................. -- (12,303) 645 (10,584)
Accretion of redeemable preferred stock to
redemption value........................ (80) (80)
Issuance of common stock in exchange for
redemption rights of outstanding
preferred stock......................... 77
Exchange of class A convertible preferred
stock for series A convertible preferred
stock, which was redesignated as series
C-2 convertible preferred stock......... 8,382
Exchange of convertible preferred stock
for series B convertible preferred
stock, which was redesignated as series
C-3 convertible preferred stock......... 1,943
Redesignation of common stock as series
C-1 convertible preferred stock......... --
Comprehensive income:
Net income.............................. 189 189 189
Foreign currency translation
adjustment............................ 107 107 107
-------
Comprehensive income.................... 296
----- ======= -------- ---- -------
Balance at June 30, 1998.................. -- (12,194) 752 34
Conversion of promissory notes to series
C-3 convertible preferred stock......... 890
Issuance of common stock.................. (198) --
Exercise of stock options................. 1
Deferred compensation associated with
stock options........................... --
Amortization of deferred compensation..... 10
Comprehensive income:
Net income.............................. 481 481 481
Foreign currency translation
adjustment............................ (146) (146) (146)
-------
Comprehensive income.................... 335
----- ======= -------- ---- -------
Balance at June 30, 1999.................. (198) (11,713) 606 1,270
Exercise of stock options (unaudited)..... 15
Amortization of deferred compensation
(unaudited)............................. 10
Comprehensive income (unaudited):
Net income.............................. 433 433 433
Foreign currency translation
adjustment............................ 35 35 35
-------
Comprehensive income.................... $ 468
----- ======= -------- ---- -------
Balance at January 1, 2000 (unaudited).... $(198) $(11,280) $641 $ 1,763
===== ======== ==== =======
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-5
<PAGE>
MOLDFLOW CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS

(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
---------------------------
YEAR ENDED JUNE 30, JANUARY 2, JANUARY 1,
------------------------------ 1999 2000
1997 1998 1999 (UNAUDITED) (UNAUDITED)
-------- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)......................................... $(4,270) $ 189 $ 481 $ 203 $ 433
Adjustments to reconcile to net cash provided by (used in)
operating activities:
Loss on disposal of fixed assets........................ -- -- 18 7 8
Depreciation and amortization........................... 3,138 810 881 426 417
Provision for doubtful accounts......................... (95) 256 29 9 7
Foreign exchange losses................................. 122 51 97 134 56
Common stock issued for services........................ 37 -- -- -- --
Changes in assets and liabilities:
Accounts receivable................................... (4) (1,901) (7) (88) (23)
Prepaid expenses, other current assets and
inventories......................................... 361 (47) 209 383 (382)
Accounts payable...................................... (463) 122 437 134 (208)
Accrued expenses...................................... (82) 889 (1,104) (1,048) 24
Deferred revenue...................................... 643 442 374 (284) (189)
Other assets.......................................... 5 (40) (209) (205) 67
------- ------- ------- ------- ------
Net cash provided by (used in) operating
activities........................................ (608) 771 1,206 (329) 210
------- ------- ------- ------- ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of fixed assets................................. (723) (729) (863) (683) (391)
Proceeds from fixed asset disposals....................... -- -- 9 -- 4
Acquisition of business, net of cash acquired............. (431) -- -- -- --
------- ------- ------- ------- ------
Net cash used in investing activities............... (1,154) (729) (854) (683) (387)
------- ------- ------- ------- ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes payable to stockholder.... 542 460 -- -- --
Borrowings on bank notes payable.......................... 1,060 1,495 1,412 349 1,000
Payments on bank notes payable............................ (78) (1,124) (2,120) (56) (803)
Payments on capital lease obligations..................... (86) (115) (200) (99) (78)
Proceeds from issuance of common stock.................... -- -- 1 1 15
------- ------- ------- ------- ------
Net cash provided by (used in) financing
activities........................................ 1,438 716 (907) 195 134
------- ------- ------- ------- ------
Effect of exchange rate changes on cash and cash
equivalents............................................... (305) (67) 95 41 131
------- ------- ------- ------- ------
NET INCREASE (DECREASE) IN CASH............................. (629) 691 (460) (776) 88
Cash and cash equivalents, beginning of period.............. 1,638 1,009 1,700 1,700 1,240
------- ------- ------- ------- ------
Cash and cash equivalents, end of period.................... $ 1,009 $ 1,700 $ 1,240 $ 924 $1,328
======= ======= ======= ======= ======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest.................................... $ 145 $ 183 $ 225 $ 80 $ 69
Cash paid for income taxes................................ 416 112 157 52 109
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:
Acquisition of fixed assets under capital leases.......... $ 88 $ 18 $ -- $ -- $ 4
Conversion of notes payable to stockholder into series C-3
convertible preferred stock............................. -- -- 890 890 --
Issuance of common stock in exchange for notes
receivable.............................................. -- -- 198 198 --
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-6
<PAGE>
MOLDFLOW CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION AND NATURE OF BUSINESS

Moldflow Corporation (the "Company") was incorporated in Delaware, USA in
January 1997. The Company was formed as the successor corporation to Moldflow
International Pty. Ltd. ("MIPL"), an Australian corporation that had been
incorporated in March 1994. On August 5, 1997, the stockholders of MIPL effected
a reorganization of that company's shares, resulting in MIPL becoming a wholly
owned subsidiary of the Company, and the stockholders of MIPL becoming
stockholders of the Company (Note 7). Given the carryover of the stockholders'
interests in MIPL to the Company, these consolidated financial statements
present together the financial position and results of operations of MIPL and
the Company before and after the reorganization.

The Company was formed to design, develop, manufacture and market computer
software applications for the design, engineering and manufacture of injection
molded plastic parts and, as such, revenues are derived from the plastic design
and manufacturing industry. The Company sells its products primarily to
customers in the United States, Europe, Asia and Australia.

The Company's fiscal year end is June 30. References to 1997, 1998 or 1999
mean the fiscal year ended June 30, unless otherwise indicated. During the
fiscal year, the Company follows a schedule in which each interim quarterly
period ends on the Saturday of the thirteenth full week of the reporting period.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company
and all of its wholly owned subsidiaries. All significant intercompany balances
and transactions have been eliminated in the consolidated financial statements.

FOREIGN CURRENCY TRANSLATION

Assets and liabilities of international subsidiaries, whose functional
currency is the local currency, are translated at the rates in effect at the
balance sheet date and translation adjustments are recorded in stockholders'
equity. Statement of operations amounts are translated at the average rate for
the year. Foreign currency transaction gains and losses are included in other
income and expense.

CASH AND CASH EQUIVALENTS

All highly liquid investments purchased with a maturity of three months or
less are considered to be cash equivalents. The Company invests excess cash
primarily in over-night investments held at major financial institutions.
Accordingly, these investments are subject to minimal credit and market risk and
are reported at cost, which approximates fair value.

ACCOUNTS RECEIVABLE, CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS

Financial instruments which potentially expose the Company to concentrations
of credit risk include only accounts receivable. The Company's customer base
consists of a large number of geographically dispersed customers. The Company
maintains reserves for potential credit losses on accounts receivable and such
losses, in the aggregate, have not exceeded management expectations.

Revenue of $2,206,000 (15% of total revenue), $2,074,000 (13% of total
revenue) and $1,888,000 (9% of total revenue) was attributable to one customer
in fiscal 1997, 1998 and 1999, respectively. At June 30, 1998 and 1999, accounts
receivable from that customer accounted for

F-7
<PAGE>
MOLDFLOW CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
$462,000 (10% of total accounts receivable) and $153,000 (3% of total accounts
receivable), respectively.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist of cash and cash equivalents,
short-term investments, accounts receivable, accounts payable, accrued expenses,
deferred revenue, and long-term debt. The carrying amounts of these instruments
at June 30, 1999 approximate their fair values.

INVENTORIES

Inventories are predominantly finished goods and are stated at the lower of
cost, using the first-in, first-out method, or market.

FIXED ASSETS

Fixed assets are recorded at cost and are depreciated using the
straight-line method over their estimated useful lives. Fixed assets held under
capital leases are stated at the lower of the fair market value of the related
asset or the present value of the minimum lease payments at the inception of the
lease and are amortized using the straight-line method over the shorter of the
life of the related asset or the term of the lease.

IMPAIRMENT OF LONG-LIVED ASSETS

In accordance with Statement of Financial Accounting Standards ("SFAS")
No. 121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived
Assets to be Disposed Of," the Company records impairment losses on long-lived
assets used in operations when indicators of impairment are present and the
undiscounted cash flows estimated to be generated by those assets are less than
the assets' carrying amount. Through June 30, 1999, the Company had not
recognized an impairment loss on its long-lived assets.

REVENUE RECOGNITION

Revenue is derived from the licensing of computer software products and from
services consisting of maintenance and support, consulting, material testing and
training. Effective July 1, 1998, the Company adopted the guidelines of
Statement of Position (SoP) 97-2, "Software Revenue Recognition" ("SoP 97-2"),
which provides guidance on applying generally accepted accounting principles in
recognizing revenue on software transactions.

The Company recognizes revenue from sales of software licenses upon product
shipment and upon receipt of a signed purchase order or contract, provided that
the license fee is fixed and determinable, collection is probable and all other
revenue recognition criteria of SoP 97-2 are met. The Company's software
products do not require significant modification or customization. Installation
of the products is generally routine, requires insignificant effort and is not
essential to the functionality of the product. The Company recognizes revenue
from maintenance and support ratably over the contract period and from training
and other related services as the services are performed.

F-8
<PAGE>
MOLDFLOW CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
SOFTWARE DEVELOPMENT COSTS

Costs associated with the research and development of the Company's products
are expensed as incurred. Costs associated with the development of computer
software are expensed prior to establishing technological feasibility, as
defined by SFAS No. 86, "Accounting for the Costs of Computer Software to be
Sold, Leased, or Otherwise Marketed," and capitalized thereafter until
commercial release of the software products. Software development costs eligible
for capitalization have not been significant to date.

ADVERTISING COSTS

The Company expenses the cost of advertising as incurred, or as appropriate,
the first time advertising takes place. Advertising expense for the years ended
June 30, 1997, 1998 and 1999 was $252,000, $207,000 and $741,000, respectively.

ACCOUNTING FOR STOCK-BASED COMPENSATION

The Company accounts for stock-based compensation to employees in accordance
with Accounting Principles Board Opinion ("APB") No. 25, "Accounting for Stock
Issued to Employees," and related interpretation. Accordingly, compensation
expense is recorded for options issued to employees in fixed amounts to the
extent that the fixed exercise prices are less than the fair market value of the
Company's common stock at the date of grant. The Company follows the disclosure
requirements of SFAS No. 123, "Accounting for Stock-Based Compensation"
(Note 9). All stock-based awards to non-employees are accounted for at their
fair value in accordance with SFAS No. 123.

NET INCOME (LOSS) PER COMMON SHARE--HISTORICAL

The Company computes net income (loss) per common share in accordance with
SFAS No. 128, "Earnings Per Share," ("SFAS 128") and SEC Staff Accounting
Bulletin No. 98 ("SAB 98"). Under the provisions of SFAS 128 and SAB 98, basic
earnings per common share is computed by dividing net income (loss) available to
common stockholders by the weighted-average number of common shares outstanding.
Diluted earnings per common share is computed by dividing net income (loss) by
the weighted-average number of common shares outstanding and, when dilutive, all
potential common equivalent shares outstanding including restricted stock,
options and warrants. The dilutive effect of options and warrants to purchase
common stock is determined under the treasury stock method using the average
fair value of common stock for the period (Note 10).

NET INCOME PER COMMON SHARE--PRO FORMA (UNAUDITED)

Pro forma net income per common share for the year ended June 30, 1999 and
the six months ended January 1, 2000 is calculated assuming that the automatic
conversion of all convertible preferred stock outstanding had occurred at
July 1, 1998 and July 1, 1999, respectively (Note 7). The calculation of pro
forma net income per common share for the year ended June 30, 1999 does not
include 411,000 potential shares of common stock equivalents, as their inclusion
would be antidilutive. The calculation of pro forma net income per common share
for the six months ended January 1, 2000 does not include 289,000 potential
shares of common stock equivalents, as their inclusion would be antidilutive.

F-9
<PAGE>
MOLDFLOW CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
SEGMENT AND GEOGRAPHIC INFORMATION

As required, the Company adopted SFAS No. 131, "Disclosure about Segments of
an Enterprise and Related Information," on July 1, 1998 (Note 15). SFAS No. 131
establishes standards for reporting information on operating segments in interim
and annual financial statements. SFAS No. 131 relates to disclosure only and had
no impact on the Company's consolidated financial position or results of
operations.

COMPREHENSIVE INCOME

As required, the Company adopted SFAS No. 130, "Reporting Comprehensive
Income" on July 1, 1998. Under SFAS No. 130, the Company is required to display
comprehensive income and its components as part of the Company's full set of
financial statements. The measurement and presentation of net income did not
change. Comprehensive income is comprised of net income and other comprehensive
income. Other comprehensive income includes certain changes in equity that are
excluded from net income. At June 30, 1999, accumulated other comprehensive
income was comprised solely of cumulative foreign currency translation
adjustments. The individual components of comprehensive income are reflected in
the consolidated statement of stockholders' equity for the years ended June 30,
1997, 1998 and 1999.

UNAUDITED INTERIM FINANCIAL STATEMENTS

The interim consolidated financial statements and related notes as of
January 1, 2000 and for the six month periods ended January 2, 1999 and
January 1, 2000 are unaudited. In the opinion of the Company's management, the
unaudited interim consolidated financial statements include all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the financial position and results of operations for these
interim periods. The results of operations for the six months ended January 1,
2000 are not necessarily indicative of the results of operations for the year
ended June 30, 2000 or any other future period.

UNAUDITED PRO FORMA BALANCE SHEET

Under the terms of the Company's convertible preferred stock (Note 7), all
such preferred stock will be converted automatically into 5,488,450 shares of
common stock in connection with an initial public offering of common stock.
Also, the holder of an outstanding warrant to purchase common stock (Note 6) has
committed to exercise the warrant in connection with the initial public offering
of common stock; the warrant is exercisable for 20,833 shares of common stock at
$7.20 per share. The unaudited pro forma balance sheet reflects the conversion
of the preferred stock and the exercise of the warrant as if the conversion and
exercise had occurred on January 1, 2000.

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 revenue and expenses during the reporting
period. Actual results could differ from those estimates.

F-10
<PAGE>
MOLDFLOW CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
RECENT ACCOUNTING PRONOUNCEMENTS

In December 1998, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued Statement of Position
No. 98-9, "Modification of SOP No. 97-2, Software Revenue Recognition, with
Respect to Certain Transactions" ("SOP 98-9"). SOP 98-9 amends SOP 97-2 to
require recognition of revenue using the "residual method" in circumstances
outlined in SOP 98-9. Under the residual method, revenue is recognized as
follows: (1) the total fair value of undelivered elements, as indicated by
vendor specific objective evidence, is deferred and subsequently recognized in
accordance with the relevant sections of SOP 97-2 and (2) the difference between
the total arrangement fee and the amount deferred for the undelivered elements
is recognized as revenue related to the delivered elements. SOP 98-9 is
effective for transactions entered in fiscal years beginning after March 15,
1999 (fiscal 2000 for the Company). Also, the provisions of SOP 97-2 that were
deferred by SOP 98-4 will continue to be deferred until the date SOP 98-9
becomes effective. The Company does not expect that the adoption of SOP 98-9
will have a significant impact on the Company's results of operations or
financial position.

In June 1998, the Financial Accounting Standard Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133").
SFAS 133 establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts (collectively referred to as "derivatives"), and for hedging
activities. SFAS 133, as amended by SFAS 137, is effective for all fiscal
quarters of all years beginning after June 15, 2000, with earlier application
encouraged. The Company does not currently use derivative instruments or engage
in hedging activities.

3. FIXED ASSETS

Fixed assets consist of the following (dollars in thousands):

<TABLE>
<CAPTION>
ESTIMATED
USEFUL JUNE 30,
LIFE -------------------
(YEARS) 1998 1999
--------- -------- --------
<S> <C> <C> <C>
Land........................................... -- $ 522 $ 562
Buildings...................................... 30 1,275 1,392
Equipment...................................... 5-7 1,724 2,149
Computer equipment............................. 3-5 1,276 1,491
Furniture and fixtures......................... 7-10 240 493
Vehicles....................................... 3-7 20 --
Computers and equipment under capital leases... 3-7 657 708
Leasehold improvements......................... -- 20
------- -------
5,714 6,815
Less--accumulated depreciation and
amortization................................. (2,736) (3,705)
------- -------
$ 2,978 $ 3,110
======= =======
</TABLE>

Depreciation expense, including amortization of assets under capital leases,
was $768,000, $726,000 and $881,000 for the years ended June 30, 1997, 1998 and
1999, respectively. Accumulated amortization for assets held under capital
leases was $342,000, $425,000 and $596,000 at June 30, 1997, 1998 and 1999,
respectively.

F-11
<PAGE>
MOLDFLOW CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. ACCRUED EXPENSES

Accrued expenses consist of the following (in thousands):

<TABLE>
<CAPTION>
JUNE 30,
-------------------
1998 1999
-------- --------
<S> <C> <C>
Employee wages and commissions............................. $ 411 $ 565
Employee leave costs....................................... 685 604
Employee retirement costs.................................. 389 344
Professional fees.......................................... 189 591
Other...................................................... 1,865 731
------ ------
$3,539 $2,835
====== ======
</TABLE>

5. NOTES PAYABLE TO STOCKHOLDERS

In January 1997, certain subsidiaries of the Company entered into loan
agreements with stockholders of the Company which provided the Company with a
maximum borrowing amount of $1,073,000. At June 30, 1998, amounts outstanding
under the notes were $890,000 with accrued interest of $107,000. Interest
expense incurred by the Company under these agreements in the year ended
June 30, 1998 was $85,000.

On July 6, 1998, the Company converted the outstanding principal balance of
the notes of $890,000 into 698,609 shares of the Company's series C-3
convertible preferred stock. Accrued interest of $107,000 was paid in cash upon
conversion.

6. BANK NOTES PAYABLE

LINES OF CREDIT

In April 1998, the Company entered into an agreement with a bank for a
revolving credit facility totaling $3,750,000. In November 1998, the overall
facility was reduced to $3,250,000. Borrowings under the facility are secured by
certain assets of the Company and its Australian subsidiaries, and by a standby
letter of credit issued by an Australian bank. Available borrowings under the
line are computed based upon a percentage of domestic and foreign accounts
receivable and the value of the standby letter of credit in the amount of
$754,000. The line bears interest at the rate of prime plus 1.25% (9.0% at
June 30, 1999) and prime plus 1.50% (9.25% at June 30, 1999) on the domestic and
foreign lines, respectively, and was subject to a commitment fee of one half of
one percent. All outstanding principal plus accrued interest was due in
October 1999.

At June 30, 1998 and 1999, borrowings under the facility were $1,475,000 and
$767,000, respectively. The agreement contains covenants which, among other
matters, restrict or limit the ability of the Company to pay dividends, incur
indebtedness, merge, acquire or sell assets. The Company must also maintain
certain financial ratios regarding liquidity, profitability and net worth, among
other restrictions. At June 30, 1999, the Company was in compliance with these
covenants.

F-12
<PAGE>
MOLDFLOW CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. BANK NOTES PAYABLE (CONTINUED)

In connection with the facility, the Company issued warrants to purchase up
to 20,833 shares of the Company's common stock. These warrants are immediately
exercisable at $7.20 per share and have an expiration date of April 2005. The
value ascribed to these warrants was determined by management using the
Black-Scholes pricing model with the following assumptions: risk-free interest
rate of 5.8%; expected life of 7 years; expected volatility of 100%; and no
dividend yield. The resulting value of the warrants was not significant.

UNAUDITED--On October 22, 1999, the term of the facility was extended to
December 31, 2000. All other significant provisions of the facility remained
unchanged. In addition, the holder of the warrant has committed to exercise the
warrant in connection with the initial public offering of common stock.

EQUIPMENT LOANS

At June 30, 1998 and 1999, the Company had $62,000 and $65,000,
respectively, outstanding under various equipment term loans. The loans bear
interest at variable rates and require monthly payments of principal and
interest through 2000. At June 30, 1998 and 1999, the long-term portion of the
loans amounted to $12,000 and $0, respectively, and are included in other
long-term liabilities.

SECURED LOAN

At June 30, 1997, the Company had $1,217,000 outstanding under a secured
line of credit which was collateralized by real estate and substantially all
other assets of the Company. In April 1998, in connection with the revolving
credit facility described above, the note was repaid in full.

7. CONVERTIBLE PREFERRED STOCK

On June 30, 1997, the Board of Directors of MIPL voted to enter into an
agreement with its stockholders and with the Company, whereby MIPL would
reacquire all of its outstanding and issued shares and issue an equal number of
common and convertible preferred shares to the Company. Simultaneously under the
arrangement, the former stockholders of MIPL would become stockholders of the
Company. Upon execution of the share exchange on August 5, 1997, the Company
effectively reorganized and MIPL became a wholly owned subsidiary of the
Company. The exchange resulted in the issuance by the Company of common stock,
series A convertible preferred stock, and series B convertible preferred stock.

Prior to the exchange, the MIPL preferred stockholders' redemption rights
were removed. As consideration for the removal of these redemption rights, these
stockholders received 29,167 common shares of MIPL which were valued at $77,000.

On March 9, 1998, the Company redesignated the previously issued common,
series A convertible preferred and series B convertible preferred into shares of
series C-1, C-2 and C-3 convertible preferred stock, respectively. In addition,
on that date, the Company increased the number of authorized common shares from
4,166,667 to 8,333,333 and increased the number of all classes of authorized
convertible preferred shares from 5,732,032 to 8,254,386.

F-13
<PAGE>
MOLDFLOW CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. CONVERTIBLE PREFERRED STOCK (CONTINUED)

On July 6, 1998, the Company converted the outstanding principal balance of
$890,000 in notes payable to stockholders of the Company into 698,609 shares of
newly designated series C-3 convertible preferred stock.

Convertible preferred stock consists of the following (amounts in thousands,
except share data):

<TABLE>
<CAPTION>
JUNE 30,
-------------------
1998 1999
-------- --------
<S> <C> <C>
Series C-1 convertible preferred stock, $0.01 par value;
4,918,616 shares authorized, issued and outstanding at
June 30, 1998 and 1999 (liquidation preference of
$7,181 at June 30, 1999)............................... $ 1,151 $ 1,151

Series C-2 convertible preferred stock, $0.01 par value;
1,855,688 shares authorized, issued and outstanding at
June 30, 1998 and 1999 (liquidation preference of
$10,058 at June 30, 1999).............................. 8,382 8,382

Series C-3 convertible preferred stock, $0.01 par value;
1,480,082 shares authorized; 666,666 and 1,365,275
shares issued and outstanding at June 30, 1998 and
1999, respectively (liquidation preference of $1,993 at
June 30, 1999)......................................... 1,943 2,833
------- -------
$11,476 $12,366
======= =======
</TABLE>

The series C-1, C-2 and C-3 convertible preferred stock have the following
characteristics:

VOTING

Each holder of the series C-1, C-2 and C-3 convertible preferred stock is
entitled to the number of votes equal to the number of whole shares of common
stock into which such holders' shares are convertible. The holders of the
series C-1, C-2 and C-3 convertible preferred stock shall vote together with the
holders of common stock as a single class.

DIVIDENDS

The holders of the series C-1, C-2 and C-3 convertible preferred stock are
entitled to dividends when and if declared by the Board of Directors subject to
any preferential dividend rights of any other then outstanding series of
preferred stock. In addition, the holders of series C-1, C-2 and C-3 convertible
preferred stock are entitled to receive a payment equal to any dividend declared
or paid by the Company in respect to common stock for each share of common stock
into which the convertible preferred stock is then convertible.

LIQUIDATION PREFERENCE

In the event of any liquidation, dissolution, or winding up of the affairs
of the Company, the holders of the series C-1, C-2 and C-3 convertible preferred
stock shall rank equally among themselves and be entitled to be paid out of the
assets of the Company available for distribution prior and in preference to the
holders of common stock.

F-14
<PAGE>
MOLDFLOW CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. CONVERTIBLE PREFERRED STOCK (CONTINUED)
The holders of the series C-1, C-2 and C-3 convertible preferred stock are
entitled to receive upon liquidation an amount equal to $1.46 per share, $5.42
per share and $1.46 per share, respectively, plus all accrued and unpaid
dividends. After the payment of all preferential amounts, the series C-1, C-2
and C-3 preferred stockholders and any other class ranking equal shall be
entitled to receive, on a pro-rata basis with the holders of the common stock,
the remaining funds and assets of the Company available for distribution to its
stockholders.

CONVERSION

Each share of the series C-1, C-2 and C-3 preferred stock is convertible, at
the option of the holder, into common stock of the Company based on a formula
which currently would result in a 1-for-0.41667 exchange for the series C-1 and
C-3 holders and a 1-for-1.54668 exchange for the series C-2 holders. All shares
of series C-1, C-2 and C-3 preferred stock will automatically convert into
common stock in connection with an initial public offering of common stock.

8. COMMON STOCK

Each share of common stock entitles the holder to one vote on all matters
submitted to a vote of the Company's stockholders. Common stockholders are
entitled to dividends when and if declared by the Board of Directors, subject to
the preferential rights of the series C-1, C-2 and C-3 preferred stockholders.

At June 30, 1999, the Company had 6,202,178 shares of its common stock
reserved for issuance upon the conversion of the series C-1, C-2 and C-3
preferred stock, warrants and instruments issued under the Company's Equity
Incentive Plan.

On July 1, 1998, the Company issued 551,287 shares of its common stock to
certain officers and senior managers of the Company for a cash purchase price of
$198,000. In connection with this issuance, the employees entered into Stock
Restriction Agreements that contain restrictions on the sale of the shares by
the employees and loan agreements evidenced by promissory notes bearing interest
at 5.77% and maturing on June 30, 2003. The shares purchased by the employees
under the Stock Restriction Agreements vest on varying schedules through fiscal
year 2003.

9. STOCK OPTION PLAN

In August 1997, the Company adopted the 1997 Equity Incentive Plan (the
"Plan") which provides for the grant of incentive stock options, non-qualified
stock options, stock awards and stock purchase rights for the purchase of up to
931,303 shares of the Company's common stock by officers, employees, consultants
and directors of the Company. In April 1999, the number of shares available
under the Plan was increased to 1,537,158 shares. The Board of Directors is
responsible for administration of the Plan. The Board determines the term of
each option, the option exercise price, the number of shares for which each
option is granted and the rate at which each option is exercisable. Incentive
stock options may be granted to any officer or employee at an exercise price per
share of not less than the fair value per common share on the date of the grant
(not less than 110% of fair value in the case of holders of more than 10% of the
Company's voting stock) and with a term not to exceed ten years from the date of
the grant (five years for incentive stock options granted to holders of more
than 10% of the Company's voting stock). Non-qualified stock options may be
granted to any officer, employee, consultant or director at an exercise price
per share of not less than the book value per share.

F-15
<PAGE>
MOLDFLOW CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. STOCK OPTION PLAN (CONTINUED)
In January 1999 an amendment was made to certain employee stock options
which resulted in a determinable measurement date. Deferred compensation of
$77,000 was recorded, in accordance with APB No. 25, and will be amortized over
the related vesting period. Related compensation expense of $10,000 was recorded
during the year ended June 30, 1999.

Except for the options noted above, no compensation cost has been recognized
for employee stock-based compensation for the years ended June 30, 1997, 1998
and 1999. Had compensation cost been determined based on the fair value at the
grant dates for awards in 1997, 1998 and 1999 consistent with the provisions of
SFAS No. 123, the Company's net income (loss) available to common stockholders
would have been the pro forma amounts indicated below. Because options vest over
several years and additional option grants are expected to be made in future
years, the pro forma results are not representative of the pro forma results for
future years.

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
------------------------------
1997 1998 1999
-------- -------- --------
(IN THOUSANDS EXCEPT PER
SHARE DATA)
<S> <C> <C> <C>
Net income (loss) available to common stockholders:
As reported....................................... $(5,011) $ 109 $ 481
Pro forma......................................... (5,011) (58) 462
Net income (loss) per common share:
Basic--as reported................................ $ -- $ -- $1.82
Pro forma basic................................... -- -- 1.74
Diluted--as reported.............................. -- 0.04 0.08
Pro forma diluted................................. -- -- 0.07
</TABLE>

The fair value of each option grant was estimated on the date of grant under
the minimum value method using the Black-Scholes option-pricing model with the
following assumptions for grants: no dividend yield; volatility of 0.001%;
risk-free interest rates of 5.8%, 5.8% and 4.6% for 1997, 1998 and 1999,
respectively; and expected option life of 8 years.

A summary of the status of the Company's stock options as of June 30, 1998
and 1999 and MIPL's stock options as of June 30, 1997, and changes during the
years then ended, is presented below:

<TABLE>
<CAPTION>
1997 1998 1999
------------------- --------------------- --------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
-------- -------- ---------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year..... 62,500 $7.80 -- $ -- 795,624 $2.45
Granted.............................. -- -- 1,267,277 1.15 375,938 4.44
Exercised............................ -- -- -- -- (553,177) 0.36
Canceled............................. (62,500) 7.80 (471,653) 2.45 (52,280) 0.36
-------- ---------- ---------
Outstanding at end of year........... -- -- 795,624 2.45 566,105 3.07
======== ========== =========
Options exercisable at end of year... -- 254,392 68,382
Weighted average fair value of
options granted during the year.... $ -- $ 0.41 $ 1.37
Options available for future grant... -- 135,679 417,877
</TABLE>

F-16
<PAGE>
MOLDFLOW CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. STOCK OPTION PLAN (CONTINUED)
In conjunction with the redesignation of the Company's common and preferred
stock in March 1998 (Note 7), 390,842 options with an exercise price of $2.64
were exchanged for 697,910 options with an exercise price of $0.36. The exercise
price at the time of the exchange was considered the fair market value of the
common stock of the Company subsequent to the redesignation. All other terms of
the new options remained consistent with the terms of the exchanged options.

The following table summarizes information about stock options outstanding
at June 30, 1999:

<TABLE>
<CAPTION>
WEIGHTED AVERAGE
REMAINING
CONTRACTUAL LIFE SHARES
EXERCISE PRICE SHARES (YEARS) EXERCISABLE
- -------------- -------- ---------------- -----------
<S> <C> <C> <C>
$0.36...................................... 196,751 6.2 68,382
$0.72-1.20................................. 101,958 7.1 --
$4.80-6.00................................. 267,396 7.8 --
------- ------
$0.36-6.00................................. 566,105 7.1 68,382
======= ======
</TABLE>

10. NET INCOME (LOSS) PER COMMON SHARE

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
----------------------------------
1997 1998 1999
-------- ---------- ----------
(IN THOUSANDS EXCEPT SHARE AND PER
SHARE DATA)
<S> <C> <C> <C>
Net income (loss)......................... $(4,270) $ 189 $ 481
Accretion on preferred stock.............. 741 80 --
------- ---------- ----------
Net income (loss) available to common
stockholders............................ $(5,011) $ 109 $ 481
======= ========== ==========
Weighted average shares used in computing
net income (loss) per common share--
basic................................... -- -- 264,731
------- ---------- ----------
Effect of dilutive securities:
Restricted stock...................... -- -- 286,741
Employee stock options................ -- 34,207 162,264
Convertible preferred stock........... -- 5,193,717 5,452,064
------- ---------- ----------
Dilutive potential common shares........ -- 5,227,924 5,901,069
------- ---------- ----------
Weighted average shares used in computing
net income (loss) per common share--
diluted................................. -- 5,227,924 6,165,800
======= ========== ==========
Net income (loss) per common
share--basic............................ $ -- $ -- $ 1.82
Net income (loss) per common share--
diluted................................. $ -- $ 0.04 $ 0.08
</TABLE>

Under the provisions of SFAS 128, the computation of basic and diluted net
income (loss) per common share has been adjusted retroactively for all periods
presented to reflect the redesignation of the Company's common and preferred
stock in March 1998 (Note 7). As a result of this treatment

F-17
<PAGE>
MOLDFLOW CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. NET INCOME (LOSS) PER COMMON SHARE (CONTINUED)
of the redesignation, the Company had no common stock outstanding prior to
June 30, 1998 for purposes of computing net income (loss) per common share.
Accordingly, basic net income (loss) per common share was zero for the years
ended June 30, 1997 and 1998.

Options and warrants to purchase 680,000 and 432,000 shares of common stock
were outstanding for the years ended June 30, 1998 and 1999, respectively, but
were not included in the calculation of diluted net income per common share, as
their inclusion would be antidilutive.

11. INCOME TAXES

The income (loss) before income taxes consists of the following (in
thousands):

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
------------------------------
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Domestic income (loss)............................. $ 1,030 $(57) $(3,335)
Foreign income (loss).............................. (4,929) 409 3,992
------- ---- -------
Income (loss) before taxes....................... $(3,899) $352 $ 657
======= ==== =======
</TABLE>

The provision for income taxes consists of the following (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
------------------------------
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Current:
Federal................................................... $ 14 $ 10 $ 5
State..................................................... 41 47 18
Foreign................................................... 316 184 153
------- ---- -------
Total current........................................... 371 241 176
------- ---- -------
Deferred:
Federal................................................... -- (78) --
State..................................................... -- -- --
Foreign................................................... -- -- --
------- ---- -------
Total deferred.......................................... -- (78) --
------- ---- -------
$ 371 $163 $ 176
======= ==== =======
</TABLE>

The reconciliation of the provision for income taxes computed at the U.S.
federal statutory tax rate to the actual provision is as follows (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
------------------------------
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Statutory federal rate of 34%............................... $(1,326) $120 $223
Foreign withholding taxes................................... 323 36 79
State income taxes, net of federal benefit.................. 29 (51) 12
Permanent differences....................................... 516 11 (94)
Change in valuation allowance............................... 881 27 (54)
Foreign tax rate differential............................... 5 35 20
Other....................................................... (57) (15) (10)
------- ---- ----
$ 371 $163 $176
======= ==== ====
</TABLE>

F-18
<PAGE>
MOLDFLOW CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11. INCOME TAXES (CONTINUED)

The deferred tax assets and liabilities consist of the following (in
thousands):

<TABLE>
<CAPTION>
JUNE 30,
-------------------
1998 1999
-------- --------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards....................... $ 4,071 $ 4,472
Foreign tax credits.................................... 311 326
Accrued expenses not deductible for tax purposes....... 239 133
Revenue deferred for financial purposes................ 1,628 1,614
Other.................................................. 327 274
------- -------
Gross deferred tax assets............................ 6,576 6,819
Deferred tax asset valuation allowance................. (6,293) (6,536)
------- -------
Total deferred tax assets............................ 283 283
Deferred tax liabilities................................. (205) (205)
------- -------
Net deferred tax assets.............................. $ 78 $ 78
======= =======
</TABLE>

At June 30, 1999, the Company had available federal, state and foreign net
operating loss carryforwards of approximately $4,375,000, $3,037,000 and
$7,844,000, respectively. These carryforwards expire at various times through
2014 if not utilized. Under the provisions of the U.S. Internal Revenue Code,
certain substantial changes in the Company's ownership may limit the amount of
federal net operating loss carryforwards and tax credit carryforwards which
could be utilized annually to offset federal future taxable income and taxes
payable.

Under generally accepted accounting principles, the benefit associated with
future deductible differences is recognized if it is more likely than not that
the benefit will be realized. Management believes that, based on the Company's
historical results of operations, it is more likely than not that a substantial
amount of the Company's deferred tax assets will not be realized. Accordingly,
the Company has recorded a valuation allowance of $6,293,000 and $6,536,000 at
June 30, 1998 and 1999, respectively. Management believes that the net deferred
tax asset represents management's best estimate, based upon the weight of
available evidence, of the deferred tax asset that will be realized. If such
evidence were to change, based upon near-term operating results and longer-term
projections, the amount of the valuation allowance recorded against the gross
deferred tax asset may be decreased or increased.

12. BENEFIT PLANS

401(K) SAVINGS PLAN

The Company has established a retirement savings plan under Section 401(k)
of the U.S. Internal Revenue Code (the "401(k) Plan"). The 401(k) Plan covers
substantially all U.S. based employees of the Company who meet minimum age and
service requirements, and allows Participants to defer a portion of their annual
compensation on a pre-tax basis. Matching contributions to the 401(k) Plan may
be made at the discretion of the Company. The Company contributed $87,000,
$132,000 and $175,000 to the 401(k) Plan in the years ended June 30, 1997, 1998
and 1999, respectively.

F-19
<PAGE>
MOLDFLOW CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12. BENEFIT PLANS (CONTINUED)
SUPERANNUATION PLAN

Employees of the Company's Australian subsidiary are covered by a defined
contribution Super-annuation Plan. The Superannuation Plan covers substantially
all Australian employees and, under Australian law, the Company is required to
contribute 7% of taxable compensation to this plan. The Company contributed
$226,000, $157,000 and $201,000 to the Superannuation Plan in the years ended
June 30, 1997, 1998 and 1999, respectively.

13. COMMITMENTS AND CONTINGENCIES

LEASE COMMITMENTS

The Company leases certain of its office space and certain office equipment
under noncancelable operating leases which expire at various dates through 2009.
The Company also leases computers and other equipment under capital leases that
expire through 2001. Future minimum lease commitments at June 30, 1999 are as
follows (in thousands):

<TABLE>
<CAPTION>
OPERATING CAPITAL
YEAR ENDING JUNE 30, LEASES LEASES
- -------------------- --------- --------
<S> <C> <C>
2000...................................................... $ 958 $206
2001...................................................... 817 11
2002...................................................... 443 --
2003...................................................... 190 --
2004...................................................... 177 --
Thereafter................................................ 729 --
------ ----
$3,314 217
======
Less: portion representing interest 15
----
$202
====
</TABLE>

Total rent expense under these operating leases was $297,000, $515,000 and
$664,000 for the years ended June 30, 1997, 1998 and 1999, respectively.

LITIGATION

On February 17, 1999, the Company filed suit against a former employee and
the individual's current employer, a competitor of the Company, seeking
immediate and permanent injunctive relief in connection with the theft and
misappropriation of the Company's proprietary trade secrets. Specifically, the
suit alleges, among other things, (i) misappropriation of trade secrets,
proprietary information, unfair competition and civil conspiracy, (ii) breach of
contract, implied covenant of good faith and fiduciary duty, and (iii) fraud
against the individual in his actions to breach his fiduciary duties. The
complaint seeks permanent injunction against the defendants, actual
consequential and punitive damages, and recovery of all legal costs.

Counterclaims, and amendments thereto, have been filed against the Company,
alleging that the Company (i) breached certain federal antitrust laws and
(ii) committed defamation and trade libel. The Company has moved to dismiss
these amended counterclaims. While the outcome of these

F-20
<PAGE>
MOLDFLOW CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. COMMITMENTS AND CONTINGENCIES (CONTINUED)
matters cannot be predicted with certainty, the Company believes that these
counterclaims are without merit.

During fiscal 1999, the Company incurred legal expenses of $620,000 during
the prosecution of the above referenced trade secret litigation. These expenses
have been included in litigation expenses in the consolidated statement of
operations. Management anticipates that further material expenditures will be
incurred at least through fiscal 2000 in pursuit of the Company's claims and in
defending against the counterclaims.

UNAUDITED--In connection with the trade secret litigation described above,
during the six months ended January 1, 2000, the Company incurred legal expenses
of $530,000 reflecting current period legal costs incurred to pursue its claims
regarding theft of trade secrets and to defend against the other parties'
counterclaims. All aspects of the litigation are currently being held in
abeyance upon agreement of the parties, in connection with the Company's pending
acquisition of the other party (Note 16). If the acquisition is completed, this
litigation will be dismissed with prejudice by the agreement of all parties. If
for any reason the acquisition of the other party is not completed, the Company
expects that the litigation will resume. In the event that the litigation
resumes, the Company intends to vigorously pursue its claims and defend against
the remaining counterclaims. In such event, the Company anticipates that it will
continue to incur legal costs to pursue its claims and to defend against the
counterclaims. The Company estimates that its possible costs to defend against
the counterclaims could range from $0 to $1,600,000.

14. RESEARCH AND DEVELOPMENT ARRANGEMENT

During 1994, the Company entered into a research and development arrangement
(the "Arrangement") with an unrelated third party. Under the terms of the
Arrangement, the Company received payments for (i) a license for certain of the
Company's technology and (ii) future research activities relating to the
licensed technology as agreed to by the parties. The Company accounted for the
Arrangement under SFAS No. 68, "Research and Development Arrangements," and,
accordingly, the amount of the Company's potential future obligation to provide
security and to subscribe for shares in the third party was recorded as unearned
revenue on the consolidated balance sheet. The part of the funds originally paid
to the Company that might have been required to satisfy the Company's potential
security and subscription obligation was held in a restricted cash account and
was classified as a long-term asset on the consolidated balance sheet. The
Company's potential security and subscription obligation was limited to the
amount of restricted cash on deposit. At June 30, 1998, the restricted cash and
potential security and subscription obligation amounted to $3,982,000. The
restricted cash was held in an interest bearing account in an Australian bank.
The interest earned on this account was used to satisfy the Company's
requirement to make minimum royalty payments to the third party, who had a right
of set-off against the accumulated interest. Interest income and license fees of
$270,000, $235,000 and $155,000 for the years ended June 30, 1997, 1998 and
1999, respectively, and have been offset against each other in the consolidated
statement of operations.

In April 1999, the Company and the third party concluded that the project
was technically infeasible. Subsequently, under the terms of the Arrangement,
the Company subscribed the funds held as restricted cash for shares in the third
party, which used those funds to repay its borrowing. Involvement of the third
party's original shareholders in the Arrangement was then terminated.

F-21
<PAGE>
MOLDFLOW CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

15. SEGMENT AND GEOGRAPHIC INFORMATION

The Company is engaged in one industry segment: the development, marketing
and support of software products for the plastic design and manufacturing
industry.

The Company licenses its products to customers throughout the world. Sales
and marketing operations outside the United States are conducted principally
through the Company's foreign sales subsidiaries in Europe and Asia.

The Company's principal software development facility is located in
Australia and additional development facilities are located in the United States
and the United Kingdom.

Geographic information regarding the Company's operations was as follows (in
thousands):

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 1997
---------------------------------------------------
ASIA/AUSTRALIA USA EUROPE CONSOLIDATED
-------------- -------- -------- ------------
<S> <C> <C> <C> <C>
Revenue from unaffiliated
customers:
Software licenses............... $2,767 $1,810 $2,166 $ 6,743
Services........................ 2,954 2,392 2,734 8,080
------ ------ ------ -------
Total......................... $5,721 $4,202 $4,900 $14,823
====== ====== ====== =======
Fixed assets, net................. $3,119 $ 234 $ 206 $ 3,559
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 1998
---------------------------------------------------
ASIA/AUSTRALIA USA EUROPE CONSOLIDATED
-------------- -------- -------- ------------
<S> <C> <C> <C> <C>
Revenue from unaffiliated
customers:
Software licenses............... $2,945 $2,443 $3,126 $ 8,514
Services........................ 2,067 3,078 2,730 7,875
------ ------ ------ -------
Total......................... $5,012 $5,521 $5,856 $16,389
====== ====== ====== =======
Fixed assets, net................. $2,325 $ 396 $ 257 $ 2,978
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 1999
---------------------------------------------------
ASIA/AUSTRALIA USA EUROPE CONSOLIDATED
-------------- -------- -------- ------------
<S> <C> <C> <C> <C>
Revenue from unaffiliated
customers:
Software licenses............... $3,156 $3,904 $5,178 $12,238
Services........................ 1,856 3,070 3,057 7,983
------ ------ ------ -------
Total......................... $5,012 $6,974 $8,235 $20,221
====== ====== ====== =======
Fixed assets, net................. $2,363 $ 408 $ 339 $ 3,110
</TABLE>

16. SUBSEQUENT EVENTS

On January 20, 2000, the Board of Directors approved a 2.4-to-1 reverse
stock split of the Company's common stock to be effective prior to the effective
date of the registration statement related to the Company's planned initial
public offering of common stock. All share and per share

F-22
<PAGE>
MOLDFLOW CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

16. SUBSEQUENT EVENTS (CONTINUED)
information in the accompanying consolidated financial statements and notes has
been retroactively restated to reflect the effect of this reverse stock split.

In addition, the Board of Directors approved an amendment to the Company's
certificate of incorporation to take effect prior to the effective date of the
registration statement, increasing the authorized capital stock to 60,000,000
shares of common stock and 5,000,000 shares of preferred stock, each with a par
value of $0.01 per share.

Also on January 20, 2000, the Board of Directors approved the Moldflow
Corporation 2000 Stock Option and Incentive Plan with an authorization of up to
2,000,000 shares of common stock and the Moldflow Corporation Employee Stock
Purchase Plan with an authorization of up to 500,000 shares of common stock.

UNAUDITED--On February 11, 2000, the Company entered into a definitive
agreement to acquire Advanced CAE Technology, Inc., which does business as
"C-Mold." The purchase price will be $11.0 million in cash and the Company
estimates that it will incur $200,000 in related acquisition expenses.
Completion of the acquisition is subject to satisfaction of a number of
conditions, including the Company's ability to obtain satisfactory financing for
the transaction.

F-23
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Stockholders of Advanced CAE Technology, Inc.

In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of stockholders' equity and of cash flows
present fairly, in all material respects, the financial position of Advanced CAE
Technology, Inc. and its subsidiaries at September 30, 1999 and 1998, and the
results of their operations and their cash flows for the years ended September
30, 1999 and 1998, in conformity with generally accepted accounting principles.
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 of these statements in accordance with
generally accepted auditing standards, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatements. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.

PricewaterhouseCoopers LLP

Boston, Massachusetts
February 11, 2000

F-24
<PAGE>
ADVANCED CAE TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
SEPTEMBER 30,
------------------- DECEMBER 31,
1998 1999 1999
-------- -------- ------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $2,600 $2,648 $2,003
Marketable securities..................................... 393 521 686
Accounts receivable, net of allowance for doubtful
accounts of $189, $185 and $173 at September 30, 1998
and 1999 and December 31, 1999 (unaudited).............. 1,360 1,056 1,329
Refundable income taxes................................... 126 61 61
Prepaids and other current assets......................... 255 285 271
Deferred taxes............................................ 71 187 187
------ ------ ------

Total current assets.................................... 4,805 4,758 4,537

Fixed assets, net........................................... 2,469 2,394 2,373
Other assets................................................ 80 384 393
------ ------ ------

Total assets............................................ $7,354 $7,536 $7,303
====== ====== ======

LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt......................... $ 46 $ 48 $ 48
Accounts payable.......................................... 72 177 141
Accrued expenses.......................................... 705 773 682
Deferred revenue.......................................... 1,255 1,660 1,548
------ ------ ------

Total current liabilities............................... 2,078 2,658 2,419

Long term debt, net of current portion...................... 1,112 1,097 1,092
Other liabilities........................................... 11 11 1
------ ------ ------

Total liabilities....................................... 3,201 3,766 3,512
------ ------ ------

Minority interest........................................... 296 337 344
------ ------ ------

Commitments and contingencies (Note 11)

Stockholders' equity:
Common stock, $0.001 par value; 10,000,000 shares
authorized; 4,111,326, 4,113,476 and 4,113,476 shares
issued and 3,979,374, 3,946,303 and 3,941,373 shares
outstanding, at September 30, 1998 and 1999 and December
31, 1999 (unaudited), respectively...................... 4 4 4
Additional paid-in capital................................ 628 706 706
Retained earnings......................................... 3,411 2,747 2,583
Accumulated other comprehensive income.................... 11 230 416
Treasury stock............................................ (197) (254) (262)
------ ------ ------

Total stockholders' equity.............................. 3,857 3,433 3,447
------ ------ ------

Total liabilities, minority interest and stockholders'
equity................................................ $7,354 $7,536 $7,303
====== ====== ======
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-25
<PAGE>
ADVANCED CAE TECHNOLOGY, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
SEPTEMBER 30, DECEMBER 31,
------------------- -------------------
1998 1999 1998 1999
-------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenue:
Software licenses....................................... $3,919 $3,772 $ 619 $ 774
Services................................................ 3,417 3,896 995 1,027
------ ------ ------ ------

Total revenue......................................... 7,336 7,668 1,614 1,801
------ ------ ------ ------

Costs and expenses:
Cost of software licenses revenue....................... 122 149 26 60
Cost of services revenue................................ 1,437 1,635 402 395
Research and development................................ 1,155 1,314 293 354
Selling and marketing................................... 2,924 3,389 781 862
General and administrative.............................. 1,127 1,416 453 234
Litigation.............................................. -- 490 -- 196
------ ------ ------ ------

Total operating expenses.............................. 6,765 8,393 1,955 2,101
------ ------ ------ ------

Income (loss) from operations............................. 571 (725) (341) (300)

Interest income........................................... 99 100 22 25
Interest expense.......................................... (164) (157) (13) (13)
Other income (loss), net.................................. (7) (18) (9) (10)
------ ------ ------ ------

Income (loss) before income taxes and minority
interest............................................ 499 (800) (341) (298)

Provision (benefit) for income taxes...................... 138 (209) (150) (146)
------ ------ ------ ------

Income (loss) before minority interest.................. 361 (591) (191) (152)

Minority interest in income of consolidated
subsidiaries............................................ 54 73 12 12
------ ------ ------ ------

Net income (loss)......................................... $ 307 $ (664) $ (203) $ (164)
====== ====== ====== ======
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-26
<PAGE>
ADVANCED CAE TECHNOLOGY, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
ACCUMULATED
COMMON STOCK ADDITIONAL OTHER COMPREHENSIVE
--------------------- PAID-IN RETAINED COMPREHENSIVE INCOME
SHARES PAR VALUE CAPITAL EARNINGS INCOME (LOSS)
--------- --------- ---------- --------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1997............... 3,960,524 $4 $458 $3,156 $ 176

Purchase of treasury stock.................. (63,028)
Stock donation.............................. 72
Issuance of common stock under employee
stock purchase plan....................... 81,878 -- 98
Cash distribution........................... (52)
Comprehensive income (loss):
Net income................................ 307 $ 307
Unrealized loss on marketable
securities.............................. (5) (5)
Foreign currency translation adjustment... (160) (160)
-----
Total comprehensive income................ 142
--------- -- ---- ------ ----- =====
Balance at September 30, 1998............... 3,979,374 4 628 3,411 11

Purchase of treasury stock.................. (35,221)
Stock donation.............................. 75
Issuance of common stock under employee
stock purchase plan....................... 2,150 -- 3
Comprehensive income (loss):
Net loss.................................. (664) (664)
Unrealized gain on marketable
securities.............................. 129 129
Foreign currency translation adjustment... 90 90
-----
Total comprehensive loss.................. (445)
--------- -- ---- ------ ----- =====
Balance at September 30, 1999............... 3,946,303 4 706 2,747 230

Purchase of treasury stock (unaudited)...... (4,930)
Comprehensive income (loss):
Net loss (unaudited)...................... (164) (164)
Unrealized gain on marketable securities
(unaudited)............................. 165 165
Foreign currency translation adjustment
(unaudited)............................. 21 21
-----
Total comprehensive income (unaudited).... $ 22
--------- -- ---- ------ ----- =====
Balance at December 31, 1999 (unaudited).... 3,941,373 $4 $706 $2,583 $ 416
========= == ==== ====== =====

TOTAL
TREASURY STOCKHOLDERS'
STOCK EQUITY
--------- -------------
<S> <C> <C>
Balance at September 30, 1997............... $(100) $3,694
Purchase of treasury stock.................. (97) (97)
Stock donation.............................. 72
Issuance of common stock under employee
stock purchase plan....................... 98
Cash distribution........................... (52)
Comprehensive income (loss):
Net income................................ 307
Unrealized loss on marketable
securities.............................. (5)
Foreign currency translation adjustment... (160)

Total comprehensive income................
----- ------
Balance at September 30, 1998............... (197) 3,857
Purchase of treasury stock.................. (57) (57)
Stock donation.............................. 75
Issuance of common stock under employee
stock purchase plan....................... 3
Comprehensive income (loss):
Net loss.................................. (664)
Unrealized gain on marketable
securities.............................. 129
Foreign currency translation adjustment... 90

Total comprehensive loss..................
----- ------
Balance at September 30, 1999............... (254) 3,433
Purchase of treasury stock (unaudited)...... (8) (8)
Comprehensive income (loss):
Net loss (unaudited)...................... (164)
Unrealized gain on marketable securities
(unaudited)............................. 165
Foreign currency translation adjustment
(unaudited)............................. 21

Total comprehensive income (unaudited)....
----- ------
Balance at December 31, 1999 (unaudited).... $(262) $3,447
===== ======
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-27
<PAGE>
ADVANCED CAE TECHNOLOGY, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
SEPTEMBER 30, DECEMBER 31,
------------------- -------------------
1998 1999 1998 1999
-------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)......................................... $ 307 $ (664) $ (203) $ (164)
Adjustments to reconcile to net cash used:
Stock donation expense.................................. 72 75 -- --
Depreciation and amortization........................... 292 307 61 52
Deferred taxes.......................................... 57 (247) -- --
Minority interest income................................ 54 72 12 12
Provision for doubtful accounts......................... (10) (6) (3) (3)
Unrealized gain (loss) on marketable securities......... (5) 128 81 165
Changes in assets and liabilities:
Accounts receivable................................... (31) 306 44 (90)
Prepaid expenses and other current assets............. (33) 35 11 (145)
Accounts payable...................................... (113) 107 12 (53)
Accrued expenses...................................... 80 183 (391) (321)
Deferred revenue...................................... 87 295 96 (125)
Other assets.......................................... 22 (306) 16 28
------ ------ ------ ------
Net cash provided by (used in) operating
activities........................................ 779 285 (264) (644)
------ ------ ------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of fixed assets................................. (214) (198) (4) (20)
Sale of marketable securities............................. 307 -- -- --
------ ------ ------ ------
Net cash provided by (used in) investing
activities........................................ 93 (198) (4) (20)
------ ------ ------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long term debt................................ (121) (13) (17) (9)
Partnership distributions................................. (23) (23) -- --
Repurchase of common stock................................ (97) (56) -- (8)
Proceeds from issuance of common stock.................... 98 3 -- --
------ ------ ------ ------
Net cash used in financing activities............... (143) (89) (17) (17)
------ ------ ------ ------
Effect of exchange rate changes on cash and cash
equivalents............................................... 8 50 29 36
------ ------ ------ ------
NET INCREASE (DECREASE) IN CASH............................. 737 48 (256) (645)

Cash and cash equivalents, beginning of period.............. 1,863 2,600 2,600 2,648
------ ------ ------ ------
Cash and cash equivalents, end of period.................... $2,600 $2,648 $2,344 $2,003
====== ====== ====== ======

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest.................................... $ 157 $ 164 $ 25 $ 23
Cash paid for income taxes................................ 106 10 9 9
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-28
<PAGE>
ADVANCED CAE TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION AND NATURE OF BUSINESS

Advanced CAE Technology, Inc., doing business as C-Mold (the "Company"), was
incorporated in New York, USA, in February 1986. The Company is engaged in the
development and sale of software for plastic injection molding simulation in the
polymer processing industry. The Company sells its products primarily to
customers in the United States, Europe and Asia.

The Company's fiscal year end is September 30. References to 1997, 1998 or
1999 mean the fiscal year ended September 30, unless otherwise indicated.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries: AC Technology Europe B.V., Plastic Moulding
Consultants, Ltd., C-MOLD Singapore Pte. Ltd. and C-MOLD Scandinavia A.B.; its
99 percent-owned subsidiary, Advanced CAE Technology Pacific; its
84 percent-owned subsidiary, AC Technology Enterprise, Ltd.; and its
28 percent-owned subsidiary, ACT Partnership, which is consolidated because it
is controlled by the Company. All significant intercompany balances and
transactions have been eliminated in the consolidated financial statements.

FOREIGN CURRENCY TRANSLATION

CASH AND CASH EQUIVALENTS

All highly liquid investments purchased with a maturity of three months or
less are considered to be cash equivalents. Accordingly, these items are subject
to minimal credit and market risk and are reported at cost, which approximates
fair value.

MARKETABLE SECURITIES

All of the Company's marketable securities are classified as
available-for-sale securities and are valued at market value at September 30,
1998 and 1999. Unrealized gains and losses on these securities are included as
components of comprehensive income and are reflected in the consolidated
statement of stockholders' equity.

ACCOUNTS RECEIVABLE, CONCENTRATION OF CREDIT RISK AND SIGNIFICANT CUSTOMERS

Financial instruments that potentially expose the Company to concentrations
of credit risk include accounts receivable. The Company's customer base consists
of a large number of geographically dispersed customers. The Company maintains
reserves for potential credit losses on accounts receivable and such losses, in
the aggregate, have not exceeded management expectations.

F-29
<PAGE>
ADVANCED CAE TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue of $1,286,000 (18% of total revenue) and $773,000 (10% of total
revenue) was attributable to one customer in fiscal 1998 and 1999, respectively.
At September 30, 1998 and 1999, accounts receivable from that customer accounted
for $353,000 (23% of total accounts receivable) and $81,000 (7% of total
accounts receivable), respectively.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist of cash and cash equivalents,
marketable securities, accounts receivable, accounts payable, accrued expenses,
deferred revenue and debt. The carrying amounts of these instruments at
September 30, 1998 and 1999 approximate their fair values.

FIXED ASSETS

Fixed assets are recorded at cost and are depreciated using an accelerated
method over their estimated useful lives.

IMPAIRMENT OF LONG-LIVED ASSETS

In accordance with Statement of Financial Accounting Standards ("SFAS") No.
121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets
to be Disposed Of," the Company records impairment losses on long-lived assets
used in operations when indicators of impairment are present and the
undiscounted cash flows estimated to be generated by those assets are less than
the assets' carrying amount. Through September 30, 1999, the Company had not
recognized an impairment loss on its long-lived assets.

REVENUE RECOGNITION

Revenue is derived from the licensing of computer software products and from
services consisting of maintenance and support, consulting, material testing and
training. The Company has adopted the guidelines of Statement of Position 97-2,
"Software Revenue Recognition" ("SoP 97-2"), which provides guidance on applying
generally accepted accounting principles in recognizing revenue on software
transactions.

SOFTWARE DEVELOPMENT COSTS

F-30
<PAGE>
ADVANCED CAE TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Computer Software to be Sold, Leased, or Otherwise Marketed," and capitalized
thereafter until commercial release of the software products. Software
development costs eligible for capitalization have not been significant to date.

ADVERTISING COSTS

The Company expenses as incurred costs of producing advertising and
sales-related collateral materials. Other production costs associated with
direct mail programs, placement costs associated with magazine or other printed
media and all direct costs associated with trade shows and other sales related
events are expensed when the related direct mail is sent, advertising space is
used or the event is held. Advertising expense for the years ended
September 30, 1998 and 1999 was $60,000 and $67,000, respectively.

ACCOUNTING FOR STOCK-BASED COMPENSATION

The Company accounts for stock-based compensation to employees in accordance
with Accounting Principles Board Opinion ("APB") No. 25, "Accounting for Stock
Issued to Employees," and related interpretation. Accordingly, compensation
expense is recorded for options issued to employees in fixed amounts to the
extent that the fixed exercise prices are less than the fair market value of the
Company's common stock at the date of grant. The Company follows the disclosure
requirements of SFAS No. 123, "Accounting for Stock-Based Compensation"
(Note 8). All stock-based awards to non-employees are accounted for at their
fair value in accordance with SFAS No. 123.

SEGMENT AND GEOGRAPHIC INFORMATION

The Company has adopted SFAS No. 131, "Disclosure about Segments of an
Enterprise and Related Information" (Note 15). SFAS No. 131 establishes
standards for reporting information on operating segments in interim and annual
financial statements. SFAS No. 131 relates to disclosure only and had no impact
on the Company's consolidated financial position or results of operations.

COMPREHENSIVE INCOME

The Company has adopted SFAS No. 130, "Reporting Comprehensive Income."
Under SFAS No. 130, the Company is required to display comprehensive income and
its components as part of the Company's full set of financial statements. The
measurement and presentation of net income did not change. Comprehensive income
is comprised of net income and other comprehensive income. Other comprehensive
income includes certain changes in equity that are excluded from net income. At
September 30, 1999, accumulated other comprehensive income was comprised of
cumulative foreign currency translation adjustments and unrealized gains and
losses on marketable securities. The individual components of comprehensive
income are reflected in the consolidated statement of stockholders' equity for
the years ended September 30, 1997, 1998 and 1999.

UNAUDITED INTERIM FINANCIAL STATEMENTS

The interim consolidated financial statements as of December 31, 1999 and
for the three month periods ended December 31, 1998 and 1999 are unaudited. In
the opinion of the Company's management, the unaudited interim consolidated
financial statements include all adjustments,

F-31
<PAGE>
ADVANCED CAE TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
consisting only of normal recurring adjustments, necessary for a fair
presentation of the financial position and results of operations for these
interim periods. The results of operations for the three months ended
December 31, 1999 are not necessarily indicative of the results of operations
for the year ended September 30, 2000 or any other future period.

USE OF ESTIMATES

RECENT ACCOUNTING PRONOUNCEMENTS

F-32
<PAGE>
ADVANCED CAE TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. MARKETABLE SECURITIES

The amortized cost and estimated market value of marketable securities were
as follows (in thousands):

<TABLE>
<CAPTION>
SEPTEMBER 30,
-------------------
1998 1999
-------- --------
<S> <C> <C>
Amortized cost.............................................. $200 $200
Gross unrealized gains...................................... 193 321
---- ----
Market value................................................ $393 $521
==== ====
</TABLE>

4. FIXED ASSETS

Fixed assets consist of the following (dollars in thousands):

<TABLE>
<CAPTION>
ESTIMATED
USEFUL SEPTEMBER 30,
LIFE -------------------
(YEARS) 1998 1999
--------- -------- --------
<S> <C> <C> <C>
Land............................................ -- $ 531 $ 555
Buildings and improvements...................... 7 - 39 1,694 1,709
Laboratory equipment............................ 5 308 310
Computer equipment.............................. 5 1,269 1,252
Furniture and fixtures.......................... 7 562 574
Software........................................ 3 130 201
------ -------
4,494 4,601
Less--accumulated depreciation and
amortization.................................. (2,025) (2,207)
------ -------
$2,469 $ 2,394
====== =======
</TABLE>

Total depreciation and amortization expense was $292,000 and $307,000 for
the years ended September 30, 1998 and 1999, respectively.

5. ACCRUED EXPENSES

Accrued expenses consist of the following (in thousands):

<TABLE>
<CAPTION>
SEPTEMBER 30,
-------------------
1998 1999
-------- --------
<S> <C> <C>
Accrued commissions......................................... $ 33 $ 60
Accrued payroll and vacation................................ 180 212
Accrued income tax payable.................................. 118 50
Other accrued expenses...................................... 374 451
---- ----
$705 $773
==== ====
</TABLE>

F-33
<PAGE>
ADVANCED CAE TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. LONG TERM DEBT

Long term debt consists of a mortgage loan on the Ithaca, New York facility,
a term loan on the Louisville, Kentucky facility and a mortgage loan on the
Taipei, Taiwan facility.

The mortgage loan for the Ithaca facility is a 30-year mortgage for $328,000
due in 2019. The unpaid balance on the mortgage loan was $233,000 at
September 30, 1999. The interest rate on the mortgage loan is adjustable
annually and is set 300 basis points over the one-year Treasury bill rate (8.0%
at September 30, 1999). Monthly interest and principal payments are $2,000. The
mortgage loan is guaranteed up to approximately $100,000 by certain officers of
the Company. The mortgage is secured by all real property in Ithaca. The
mortgage also contains certain subjective covenants including a material adverse
change clause. The Company was in compliance with these covenants at
September 30, 1999.

During 1994, the Company entered into a Revised and Replacement Letter loan
agreement (the Agreement) with a bank. The Agreement made available to the
Company a 10-year term loan due in 2005 for an amount not to exceed $650,000.
The unpaid balance was $621,000 at September 30, 1999. The purpose of the
Agreement was to finance the construction of the Company's facility in
Louisville. The Agreement has an adjustable interest rate defined at the prime
rate (8.25% at September 30, 1999). The Agreement is to be repaid in equal
monthly payments of $6,000. Each payment will be applied first to interest with
the remainder applied to principal. Based on the current monthly payments of
$6,000 and an interest rate of 8.25%, the Company will be required to make a
final payment of approximately $490,000 in the year 2005. The Agreement is
secured by the real property located in Louisville. The Company was in
compliance with the related debt covenants at September 30, 1999.

The mortgage loan for the Taiwan facility was refinanced during fiscal 1997
and is due in 2012. At September 30, 1999, the unpaid balance on the mortgage
was $291,000. The interest rate on the mortgage loan is adjusted annually (8.4%
at September 30, 1999). Monthly interest and principal payments are $4,000. The
mortgage loan is secured with the property of a subsidiary of the Company.

Future principal payments for long-term debt as of September 30, 1999 are as
follows (in thousands):

<TABLE>
<CAPTION>
FISCAL YEAR
- -----------
<S> <C>
2000........................................................ $ 48
2001........................................................ 52
2002........................................................ 57
2003........................................................ 62
2004........................................................ 67
Thereafter.................................................. 858
------
1,145
Less: current portion....................................... 48
------
$1,097
======
</TABLE>

F-34
<PAGE>
ADVANCED CAE TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. COMMON STOCK

Each share of the Company's $0.001 par value common stock entitles the
holder to one vote on all matters submitted to a vote of the Company's
stockholders. Common stockholders are entitled to dividends when and if declared
by the board of directors.

In October 1995, a founding stockholder of the Company donated
238,000 shares of common stock back to the Company for distribution to its
employees. The shares are to be equally divided over five consecutive years and
distributed equally to eligible employees. These distributions were effected on
January 1, 1996, 1997, 1998 and 1999 and the final distribution will be made on
January 1, 2000. If an employee decides not to accept the donated shares, those
shares will carryover and be evenly distributed over the remaining years. Any
unclaimed shares in the year 2000 will be returned to the donor. As of
September 30 1999, 46,654 shares remain undistributed.

During 1998 and 1999, the Company repurchased 63,028 and 35,221 shares,
respectively, of common stock from existing stockholders for $97,000 and
$57,000, respectively. As of September 30, 1999, the Company had repurchased an
aggregate of 167,173 shares for treasury.

8. STOCK OPTION PLAN

In fiscal 1992, the Company adopted the Advanced CAE Technology, Inc. Stock
Option Plan (the "Plan") which provides for the grant of incentive stock
options, non-qualified stock options, stock awards and stock purchase rights for
the purchase of up to 2,000,000 shares of the Company's common stock by
officers, employees, consultants and directors of the Company. The Board of
Directors is responsible for administration of the Plan. The term of each option
shall be determined by a committee selected by the Board of Directors, but in no
event shall an option be exercisable after the expiration of 5 years from the
date on which it is granted. Each option may include, at the discretion of the
committee, a vesting period following the grant of any option during which all
or any part of such option remains forfeitable and cannot be exercised. All
options shall provide for full and immediate vesting in the event that the
Company disposes of all or substantially all of its assets as an entity and
dissolves, consolidates or merges into another corporation and not be the
resulting or surviving corporation. The Board of Directors of the Company may at
any time suspend or terminate the Plan or may amend it from time to time.

Under APB 25, no compensation cost has been recognized for employee
stock-based compensation for the years ended September 30, 1998 and 1999. Had
compensation cost been determined based on the fair value at the grant dates for
awards in 1998 and 1999 consistent with the provisions of SFAS No. 123, the
Company's net income (loss) would have been the pro forma amounts indicated
below. Because options vest over several years and additional option grants are
expected to be made in future years, the pro forma results are not
representative of the pro forma results for future years.

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-------------------------
1998 1999
----------- -----------
(IN THOUSANDS)
<S> <C> <C>
Net income (loss):
As reported...................................... $307 $(664)
Pro forma........................................ 264 (690)
</TABLE>

F-35
<PAGE>
ADVANCED CAE TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. STOCK OPTION PLAN (CONTINUED)

The fair value of each option grant was estimated on the date of grant under
the minimum value method using the Black-Scholes option-pricing model with the
following assumptions for grants: no dividend yield; volatility of 0.001%;
risk-free interest rates of 5.1% and 5.1% for 1998 and 1999, respectively; and
expected option life of 5 years.

A summary of the status of the Company's stock options as of September 30,
1998 and 1999 and changes during the years then ended is presented below:

<TABLE>
<CAPTION>
1998 1999
--------------------- ---------------------
WEIGHTED WEIGHTED
AVERAGE AVERAGE
EXERCISE EXERCISE
SHARES PRICE SHARES PRICE
---------- -------- ---------- --------
<S> <C> <C> <C> <C>
Outstanding at beginning of year................ 526,769 $1.35 350,719 $1.46
Granted......................................... 35,800 1.58 21,200 1.60
Exercised....................................... (173,800) 1.17 (3,913) 1.48
Canceled........................................ (38,050) 1.49 (9,788) 1.56
---------- ----------

Outstanding at end of year...................... 350,719 1.46 358,218 1.46
========== ==========

Options exercisable at end of year.............. 146,427 233,343
Weighted average fair value of options granted
during the year............................... $ 1.22 $ 1.23
Options available for future grant.............. 1,649,283 1,641,784
</TABLE>

The following table summarizes information about stock options outstanding
at September 30, 1999:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
REMAINING
CONTRACTUAL
LIFE SHARES
SHARES (YEARS) EXERCISABLE
EXERCISE PRICE -------- ----------- -----------
<S> <C> <C> <C>
$1.20 - 1.32................................................ 96,418 1.03 96,418
$1.50 - 1.53................................................ 219,400 2.38 129,025
$1.60....................................................... 42,400 4.13 7,900
------- -------
$1.20 - $1.60............................................... 358,218 2.22 233,343
======= =======
</TABLE>

F-36
<PAGE>
ADVANCED CAE TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. INCOME TAXES

Income (loss) before income taxes and minority interest consists of the
following (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
-------------------
1998 1999
-------- --------
<S> <C> <C>
Domestic.................................................... $241 $(1,029)
Foreign..................................................... 258 229
---- -------
$499 $ (800)
</TABLE>

The income tax provision (benefit) consists of the following (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
-------------------
1998 1999
-------- --------
<S> <C> <C>
Current:
Federal................................................... $ 21 $ (70)
State..................................................... 23 49
Foreign................................................... 56 59
---- -----
Total current............................................. 100 38
---- -----
Deferred:
Federal................................................... 48 (210)
State..................................................... (10) (37)
---- -----
Total deferred taxes (benefit)............................ 38 (247)
---- -----
Total taxes (benefit)..................................... $138 $(209)
==== =====
</TABLE>

The reconciliation of the provision for income taxes computed at the U.S.
federal statutory tax rate to the actual provision is as follows (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
-------------------
1998 1999
-------- --------
<S> <C> <C>
Statutory federal rate of 34%............................... $170 $(272)
State income taxes, net of federal effect................... 9 8
Foreign tax rate differential............................... (32) (19)
Permanent differences....................................... 1 12
Change in valuation allowance............................... 30 81
Other....................................................... (40) (19)
---- -----
$138 $(209)
==== =====
</TABLE>

F-37
<PAGE>
ADVANCED CAE TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. INCOME TAXES (CONTINUED)
Net deferred tax assets consist of the following (in thousands):

<TABLE>
<CAPTION>
SEPTEMBER 30,
-------------------
1998 1999
-------- --------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards.......................... $ -- $ 194
Tax credits............................................... 234 349
Accrued expenses not deductible for tax purposes.......... 79 109
Other..................................................... 5 8
-------- --------
Gross deferred tax assets............................... 318 660

Deferred tax asset valuation allowance...................... (230) (311)
-------- --------
Total deferred tax assets................................. 88 349
Deferred tax liabilities.................................... (4) (18)
-------- --------
Net deferred tax assets................................... 84 331
======== ========
</TABLE>

Under generally accepted accounting principles, the benefit associated with
future deductible differences is recognized if it is more likely than not that
the benefit will be realized. Management believes that, based on the Company's
historical results of operations, it is more likely than not that a portion of
the Company's deferred tax assets will not be realized. Accordingly, the Company
has recorded a valuation allowance of $230,000 and $311,000 at September 30,
1998 and 1999, respectively. Management believes that the net deferred tax asset
represents management's best estimate, based upon the weight of available
evidence, of the deferred tax asset that will be realized. If such evidence were
to change, based upon near-term operating results and longer-term projections,
the amount of the valuation allowance recorded against the gross deferred tax
asset may be decreased or increased.

As of September 30, 1999, the Company has approximately $293,000 in foreign
tax credits available to offset future income tax and $500,000 in federal net
operating loss carryforwards to offset future taxable income, which begin to
expire in 2019. Under the provisions of the U.S. Internal Revenue Code, certain
substantial changes in the Company's ownership may limit the amount of federal
net operating loss carryforwards and tax credit carryforwards which could be
utilized annually to offset future federal taxable income and taxes payable.

No provision was made in fiscal 1999 for U.S. income taxes on the
undistributed earnings of the foreign subsidiaries, as it is the Company's
intention to utilize those earnings in the foreign operations.

10. BENEFIT PLANS

401(K) SAVINGS PLAN

The Company has established a retirement savings plan under Section 401(k)
of the U.S. Internal Revenue Code (the "401(k) Plan"). The 401(k) Plan covers
substantially all U.S. based employees of the Company who meet minimum age and
service requirements and allows participants to defer a portion of their annual
compensation on a pre-tax basis. Company contributions to the 401(k) Plan may be
made at the discretion of the Board of Directors. Employer contributions were
$23,000 and $20,000 for the years ending September 30, 1998 and 1999,
respectively. Company contributions to the plan are vested according to the
following schedule: 20 percent after two years of service and an additional
20 percent in each successive year. After six years of service, employees are
100 percent vested.

F-38
<PAGE>
ADVANCED CAE TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. BENEFIT PLANS (CONTINUED)
PROFIT SHARING PLAN

The Company sponsors a profit sharing plan for all eligible employees. The
amount and distribution of profit sharing is at the sole discretion of the Board
of Directors. Profit sharing expense was $80,000 and $0 for the years ending
September 30, 1998 and 1999, respectively.

BONUS PLAN

The Company also sponsors a bonus plan for employees who, during the
preceding 12 months, have performed substantially above and beyond their
expected level of performance. The amount and distribution of these bonuses is
at the sole discretion of the Board of Directors. The Company paid $3,000 and $0
for the years ending September 30, 1998 and 1999, respectively.

11. COMMITMENTS AND CONTINGENCIES

LEASE COMMITMENTS

The Company leases certain equipment under non-cancelable operating leases
that expire at various dates through 2001. Lease expense for the years ended
September 30, 1998 and 1999 under these leases was $110,000 and $59,000,
respectively.

Future minimum annual lease payments as of September 30, 1999 are as follows
(in thousands):

<TABLE>
<CAPTION>
YEAR ENDING SEPTEMBER 30,
- -------------------------
<S> <C>
2000.................................................. $34
2001.................................................. 1
---
$35
===
</TABLE>

LITIGATION

On February 17, 1999, suit was filed against the Company and one of its
employees by a competitor. The plaintiff is seeking immediate and permanent
injunctive relief in connection with the alleged theft and misappropriation of
the competitor's proprietary trade secrets. Specifically, the suit alleges,
among other things, (i) misappropriation of trade secrets, proprietary
information, unfair competition and civil conspiracy, (ii) breach of contract,
implied covenant of good faith and fiduciary duty, and (iii) fraud against the
individual in his actions to breach his fiduciary duties. The complaint seeks a
permanent injunction against the Company, actual, consequential and punitive
damages, and recovery of all legal costs.

Counterclaims, and amendments thereto, have been filed by the Company,
alleging that the competitor (i) breached certain federal antitrust laws and
(ii) committed defamation and trade libel. The competitor has moved to dismiss
these amended counterclaims.

Through February 11, 2000, based on the stage of developments with the
claims asserted against the Company and the Company's counterclaims, the Company
has not been able to reasonably estimate the amount of possible losses, if any,
related to this litigation. On February 11, 2000, the Company entered a
definitive agreement to be acquired by the counterparty in this litigation
(Note 13). Accordingly, this litigation is being held in abeyance in connection
with the pending acquisition. If the acquisition is completed, this litigation
will be dismissed with prejudice by the agreement of all parties. If for any
reason the acquisition is not completed, management expects that the litigation
will resume.

F-39
<PAGE>
ADVANCED CAE TECHNOLOGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12. SEGMENT AND GEOGRAPHIC INFORMATION

The Company conducts and manages its business in one industry segment: the
development, marketing and support of software products for plastic injection
molding simulation in the polymer processing industry.

Geographic information regarding the Company's operations was as follows (in
thousands):

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1998
---------------------------------------------
USA EUROPE ASIA CONSOLIDATED
-------- -------- -------- ------------
<S> <C> <C> <C> <C>
Revenue from unaffiliated customers:
Software licenses......................................... $2,150 $1,181 $588 $3,919
Services.................................................. 2,712 520 185 3,417
------ ------ ---- ------
Total................................................... $4,862 $1,701 $773 $7,336
====== ====== ==== ======
Fixed assets, net........................................... $1,899 $ 67 $503 $2,469
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30, 1999
---------------------------------------------
USA EUROPE ASIA CONSOLIDATED
-------- -------- -------- ------------
<S> <C> <C> <C> <C>
Revenue from unaffiliated customers:
Software licenses......................................... $1,802 $1,343 $627 $3,772
Services.................................................. 2,890 797 209 3,896
------ ------ ---- ------
Total................................................... $4,692 $2,140 $836 $7,668
====== ====== ==== ======
Fixed assets, net........................................... $1,788 $ 80 $526 $2,394
</TABLE>

Revenues above for the USA include $1,344,000 and $806,000 of export sales
in the years ended September 30, 1998 and 1999, respectively.

13. SUBSEQUENT EVENT--PENDING ACQUISITION

On February 11, 2000, the Company entered into a definitive agreement to be
acquired by Moldflow Corporation ("Moldflow.") The purchase price will be
$11.0 million in cash. Completion of the acquisition is subject to satisfaction
of a number of conditions, including Moldflow's ability to obtain satisfactory
financing for the transaction.

F-40
<PAGE>
MOLDFLOW CORPORATION

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

BASIS OF PRESENTATION

The following unaudited pro forma combined balance sheet gives effect to the
pending acquisition by Moldflow Corporation (the "Company") of all of the stock
of Advanced CAE Technology, Inc., doing business as "C-Mold," as if it had
occurred on January 1, 2000. The unaudited pro forma combined statement of
operations gives effect to the pending acquisition as if it had occurred on
July 1, 1998. These statements are based on the actual historical financial
statements of the Company and C-Mold, and the estimates and assumptions set
forth below and in the notes to the unaudited pro forma combined financial
information.

The Company's fiscal year ends on June 30 while C-Mold's fiscal year ends on
September 30. The unaudited pro forma combined statement of operations for the
year ended June 30, 1999 combines the Company's actual results for its year
ended June 30, 1999 with C-Mold's actual results for its year ended
September 30, 1999. The unaudited pro forma combined statement of operations for
the six months ended January 1, 2000 combines the Company's and C-Mold's actual
results for the six months ended January 1, 2000.

The acquisition is subject to the terms of a definitive agreement between
the parties dated February 11, 2000. Completion of the transaction is subject to
the satisfaction of a number of conditions, including the Company's ability to
obtain satisfactory financing for the transaction. Under the definitive
agreement, the Company will pay $11.0 million in cash for all of the outstanding
common stock and options to acquire common stock of C-Mold.

The acquisition will be accounted for using the purchase method of
accounting and accordingly, the purchase price was allocated to the assets and
liabilities assumed based upon management's estimates of fair value, with any
excess purchase price being allocated to goodwill and other intangible assets.
The pro forma adjustments related to the purchase price allocation represent
management's best estimate of the effects of the pending acquisition and are
subject to adjustment upon completion of independent valuation analyses to be
obtained in connection with the closing of the transaction.

The pro forma adjustments are based upon estimates, currently available
information and certain assumptions that management deems appropriate. The
unaudited pro forma combined financial information presented herein is not
necessarily indicative of the results the Company would have obtained had such
events occurred on July 1, 1998, as assumed for purposes of the combined
statement of operations, or on January 1, 2000, as assumed for purposes of the
combined balance sheet, or of the future results of the Company. The unaudited
pro forma combined financial information should be read in conjunction with the
audited financial statements and notes thereto of each of the Company and C-Mold
included elsewhere in this prospectus.

F-41
<PAGE>
MOLDFLOW CORPORATION

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

(IN THOUSANDS)

<TABLE>
<CAPTION>
JANUARY 1, 2000
---------------------------------------------------
MOLDFLOW PRO FORMA
CORPORATION C-MOLD ADJUSTMENTS COMBINED
----------- -------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.......................... $ 1,328 $ 2,003 $ 137 (a) $ 3,468
Marketable securities.............................. -- 686 -- 686
Accounts receivable, net........................... 4,534 1,329 -- 5,863
Prepaid expenses and other current assets.......... 1,290 519 -- 1,809
-------- ------- ------- --------

Total current assets............................. 7,152 4,537 137 11,826

3,026 2,373 5,474
Fixed assets, net.................................... (595)(a)
670 (b)

Goodwill and other intangible assets................. -- -- 7,714 (d) 7,714
Other assets......................................... 386 393 -- 779
-------- ------- ------- --------

Total assets..................................... $ 10,564 $ 7,303 $ 7,926 $ 25,793
======== ======= ======= ========

LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS'
EQUITY
Current liabilities:
Current debt obligations........................... $ 1,149 $ 48 $ -- $ 1,197
Accounts payable................................... 1,202 141 -- 1,343
Accrued expenses................................... 3,102 682 750 (c) 4,534
Deferred revenue................................... 3,310 1,548 -- 4,858
-------- ------- ------- --------

Total current liabilities........................ 8,763 2,419 750 11,932

Long term debt, net of current portion............... -- 1,092 (233)(a) 859
Other long term liabilities.......................... 38 1 -- 39
-------- ------- ------- --------

Total liabilities................................ 8,801 3,512 517 12,830
-------- ------- ------- --------

Minority interest.................................... -- 344 (344)(a) --
-------- ------- ------- --------

Stockholders' equity:

12,657 710 23,857
Common stock and additional paid-in capital........ (710)(e)
11,200 (f)
(11,280) 2,583 (11,280)
Retained earnings (accumulated deficit)............ 119 (a)
(2,702)(e)

Other stockholders' equity......................... 386 154 (154)(e) 386
-------- ------- ------- --------

Total stockholders' equity....................... 1,763 3,447 7,753 12,963
-------- ------- ------- --------

Total liabilities, minority interest and
stockholders' equity............................... $ 10,564 $ 7,303 $ 7,926 $ 25,793
======== ======= ======= ========
</TABLE>

The accompanying notes are an integral part of this unaudited pro forma
combined financial information.

F-42
<PAGE>
MOLDFLOW CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 1999
----------------------------------------------------
MOLDFLOW PRO FORMA
CORPORATION C-MOLD ADJUSTMENTS COMBINED
------------ -------- ------------ -----------
<S> <C> <C> <C> <C>
Revenue:
Software licenses................................. $12,238 $3,772 $ -- $16,010
Services.......................................... 7,983 3,896 -- 11,879
------- ------ ------- -------
Total revenue................................... 20,221 7,668 -- 27,889
------- ------ ------- -------
Costs and expenses:
Cost of software licenses revenue................. 378 149 -- 527
Cost of services revenue.......................... 1,319 1,635 -- 2,954
Research and development.......................... 3,466 1,314 -- 4,780
Selling and marketing............................. 9,673 3,389 -- 13,062
General and administrative........................ 3,839 1,416 -- 5,255
Litigation........................................ 620 490 (1,110)(a) --
Amortization of goodwill and other intangible
assets.......................................... -- -- 1,543 (b) 1,543
------- ------ ------- -------
Total operating expenses........................ 19,295 8,393 433 28,121
------- ------ ------- -------
Income (loss) from operations....................... 926 (725) (433) (232)
Interest and other income (expense), net............ (269) (75) -- (344)
------- ------ ------- -------
Income (loss) before income taxes and minority
interest...................................... 657 (800) (433) (576)
Minority interest in income of consolidated
subsidiaries...................................... -- 73 (73)(c) --
Provision (benefit) for income taxes................ 176 (209) (174) (207)
------- ------ ------- -------
Net income (loss)................................... $ 481 $ (664) $ (186) $ (369)
======= ====== ======= =======
Net income (loss) per common share (d):
Basic............................................. $ 1.82 $ (0.33)
Diluted........................................... $ 0.08 $ (0.33)
Shares used in computing net income (loss)
per common share (d):
Basic............................................. 265 1,127
Diluted........................................... 6,166 1,127

<CAPTION>
SIX MONTHS ENDED JANUARY 1, 2000
----------------------------------------------------
MOLDFLOW PRO FORMA
CORPORATION C-MOLD ADJUSTMENTS COMBINED
------------ -------- ------------ -----------
<S> <C> <C> <C> <C>
Revenue:
Software licenses................................. $ 6,651 $1,832 $ -- $ 8,483
Services.......................................... 4,853 2,104 -- 6,957
------- ------ ----- -------
Total revenue................................... 11,504 3,936 -- 15,440
------- ------ ----- -------
Costs and expenses:
Cost of software licenses revenue................. 322 132 -- 454
Cost of services revenue.......................... 491 658 -- 1,149
Research and development.......................... 1,709 701 -- 2,410
Selling and marketing............................. 5,811 1,698 -- 7,509
General and administrative........................ 2,277 525 -- 2,802
Litigation........................................ 530 461 (991)(a) --
Amortization of goodwill and other intangible
assets.......................................... -- -- 772 (b) 772
------- ------ ----- -------
Total operating expenses........................ 11,140 4,175 (219) 15,096
------- ------ ----- -------
Income (loss) from operations....................... 364 (239) 219 344
Interest and other income (expense), net............ (103) (103) -- (206)
------- ------ ----- -------
Income (loss) before income taxes and minority
interest...................................... 261 (342) 219 138
Minority interest in income of consolidated
subsidiaries...................................... -- 24 (24)(c) --
Provision (benefit) for income taxes................ (172) (36) 88 (120)
------- ------ ----- -------
Net income (loss)................................... $ 433 $ (330) $ 155 $ 258
======= ====== ===== =======
Net income (loss) per common share (d):
Basic............................................. $ 1.18 $ 0.21
Diluted........................................... $ 0.07 $ 0.04
Shares used in computing net income (loss)
per common share (d):
Basic............................................. 367 1,229
Diluted........................................... 6,311 7,173
</TABLE>

The accompanying notes are an integral part of this unaudited pro forma combined
financial information.

F-43
<PAGE>
MOLDFLOW CORPORATION

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

1. UNAUDITED PRO FORMA COMBINED BALANCE SHEET

The accompanying unaudited pro forma combined balance sheet has been
prepared as if the acquisition had occurred on January 1, 2000 and reflects the
following determination and allocation of the purchase price (in thousands):

<TABLE>
<S> <C>
Purchase price:
Purchase consideration--cash.............................. $11,000
Direct acquisition expenses............................... 200
-------
Total purchase price.................................... $11,200
=======
Tangible assets and liabilities:
Cash and cash equivalents................................. $ 2,140
Marketable securities..................................... 686
Accounts receivable, net.................................. 1,329
Prepaid expenses and other current assets................. 519
Fixed assets.............................................. 2,448
Other assets.............................................. 393
Current portion of long term debt......................... (48)
Accounts payable.......................................... (141)
Accrued expenses.......................................... (1,432)
Deferred revenue.......................................... (1,548)
Other long-term liabilities............................... (1)
Long-term debt, net of current portion.................... (859)
-------
Net tangible assets..................................... 3,486

Goodwill and other intangible assets...................... 7,714
-------
Total purchase price.................................... $11,200
=======
</TABLE>

The purchase accounting allocation summarized above is reflected in the
following pro forma adjustments to the unaudited pro forma combined balance
sheet:

(a) Immediately prior to the acquisition, C-Mold will sell its 28% interest in
the ACT Partnership for cash proceeds of approximately $206,000. Because
C-Mold controlled the ACT Partnership, it historically has been treated as a
consolidated subsidiary. These adjustments are to record the sale, including
receipt of the sale proceeds, removal of the assets and liabilities of the
ACT Partnership previously consolidated with C-Mold and elimination of the
related minority interest.

(b) To increase the fixed assets to their estimated fair value, preliminarily
based on a real estate tax appraisal for the land and building located in
Kentucky. Upon completion of the acquisition, the Company will obtain an
independent professional appraisal of the fixed assets acquired.

(c) To record a liability for severance costs related to C-Mold employees
following the acquisition and C-Mold's legal costs in connection with the
transaction, equal to the cap on such costs agreed to in the definitive
agreement.

(d) Upon completion of the acquisition, the Company will obtain an independent
professional valuation of identifiable intangible assets acquired.
Preliminarily, the Company expects such identifiable intangible assets to
include primarily five-year non-compete covenants with all members of senior
management, the founders and board members of C-Mold, all of whom will

F-44
<PAGE>
MOLDFLOW CORPORATION

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

1. UNAUDITED PRO FORMA COMBINED BALANCE SHEET (CONTINUED)

not be employed by the Company and C-Mold's workforce in-place which will be
retained by the Company. To a lesser extent, the Company also expects the
identifiable intangible assets to include existing software technology and
products, customer base, and in-process research and development. After
allocation to the identifiable intangible assets, any remaining intangible
value will be attributed to goodwill. For preliminary pro forma purchase
price allocation purposes, pending the independent professional valuation,
the Company has grouped all of the value attributable to intangible assets
together with goodwill, as reflected in this pro forma adjustment.

(e) To eliminate the historical stockholders' equity accounts of C-Mold.

(f) To record the common stock assumed to be issued to fund the total purchase
price of $11.2 million. The Company expects to use the proceeds from its
planned initial public offering of common stock, at an assumed offering
price of $13.00 per share, to fund the acquisition.

2. UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

The accompanying unaudited pro forma combined statement of operations has
been prepared as if the acquisition had occurred on July 1, 1998 and reflects
the following pro forma adjustments and the related tax effects:

(a) To eliminate the impact of litigation expenses incurred in connection
with the litigation pending between the Company and C-Mold, which
commenced in February 1999. Pursuant to the terms of the definitive
agreement, pending the successful completion of the acquisition, this
litigation will be dismissed with prejudice by the agreement of all
parties.

(b) Reflects amortization of the acquired goodwill and other intangible
assets, assuming an average useful life of five years. Upon completion
of the independent professional valuation and final allocation of the
purchase price, specific identifiable intangible assets and any residual
goodwill will be amortized over useful lives directly attributable to
the assets. Preliminarily, the Company expects the intangible assets to
have the following useful lives: non-compete covenants--5 years;
workforce in-place--4 years; existing software technology and
products--3 to 5 years; customer base--3 years; and goodwill--7 years.

(d) The pro forma combined net income (loss) per common share reflects the
issuance of 861,538 shares of common stock, at an assumed initial public
offering price of $13.00 per share, to fund the acquisition as if such
shares were issued on July 1, 1998.

F-45
<PAGE>

[Inside Back Cover]

The inside back cover page has the words "Polaroid Corporation" at the
top and the following paragraphs below next to a photo of a digital camera:

Polaroid Corporation, a producer of instant and digital imaging
products, recently used our MPA product in the design of its new
digital microscope camera product. Among the many challenges faced
by Polaroid in designing their product was the modification of an
existing mold used to produce the camera's shutter.

/X/ Polaroid estimated that the use of our MPA product reduced their
overall product development time by 50% and enabled them to take the
digital microscope camera product from concept to market in only nine
months.

/X/ Polaroid design engineers were able to verify that the existing mold
could be modified to reflect the design of the new shutter and
produce parts of acceptable quality.

The middle third of the page has the words "Hewlett-Packard Company" at
the top and the following paragraphs below next to a photo of a computer
printer:

Hewlett-Packard Company used our MPI product in the design of a recent
model in its HP Deskjet line of inkjet computer printers. Approximately
60% to 80% of the mechanical parts used in these printers are injection
molded plastic parts. After using our MPI product, Hewlett-Packard
determined that the cavity through which plastic was fed into the mold
for one of its parts was wider than necessary and resulted in the mold
taking longer to fill with plastic.

/X/ Hewlett-Packard was able to modify the mold by narrowing the cavity,
resulting in a reduction in the amount of time required to produce
each part by approximately 15 seconds, or 30%.

/X/ Hewlett-Packard estimated that this time savings would reduce their
annual production costs by $1.1 million.

The bottom third of the page has the words "Montblanc-Simplo GmbH at the
top and the following paragraphs below next to a photo of a pen:

Montblanc-Simplo GmbH designs and sells the Montblanc brand of premium
pens. Montblanc-Simplo employs injection molding to manufacture the outer
casings of many styles of pens. Their machine operators were experiencing
difficulty identifying the precise machine operating conditions.

/X/ Montblanc has been able to reduce the scrap rate of pen casings by
50% without significantly altering the time required to manufacture
each casing.

/X/ Montblanc estimated that it has been able to reduce its production
set-up times and reset-up times by approximately 60% with an
equivalent reduction in wasted material.

In the bottom right corner of the page is Moldflow's logo.
<PAGE>
3,000,000 Shares

[LOGO]

Common Stock

---------------------

PROSPECTUS

---------------------

Adams, Harkness & Hill, Inc.
A.G. Edwards & Sons, Inc.

-----------------

You should rely only on information contained in this prospectus. We have
not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell, and seeking offers to
buy, shares of common stock only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus is accurate only as of
the date of this prospectus, regardless of the time of delivery of this
prospectus or any sale of our common stock.

Until , all dealers that buy, sell or trade in our common
stock, whether or not participating in this offering, may be required to deliver
a prospectus. This is in addition to the dealer's obligation to deliver a
prospectus when acting as an underwriter and with respect to its unsold
allotments or subscriptions.

------------------------

, 2000
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the estimated expenses payable by us in
connection with the offering (excluding underwriting discounts and commissions):

<TABLE>
<CAPTION>
NATURE OF EXPENSE AMOUNT
- ----------------- ----------
<S> <C>
SEC Registration Fee........................................ $ 12,752
NASD Filing Fee............................................. 5,330
Nasdaq National Market Listing Fee.......................... 75,625
Accounting Fees and Expenses................................ *
Legal Fees and Expenses..................................... *
Printing Expenses........................................... *
Blue Sky Qualification Fees and Expenses.................... 15,000
Transfer Agent's Fee........................................ *
Miscellaneous............................................... *
----------
TOTAL..................................................... $1,500,000
==========
</TABLE>

The amounts set forth above, except for the Securities and Exchange
Commission, National Association of Securities Dealers, Inc. and Nasdaq National
Market fees, are in each case estimated.

- ------------------------

* To be completed by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

In accordance with Section 145 of the Delaware General Corporation Law,
Article VII of our certificate of incorporation provides that no director of
Moldflow shall be personally liable to Moldflow or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability
(1) for any breach of the director's duty of loyalty to Moldflow or its
stockholders, (2) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (3) in respect of unlawful
dividend payments or stock redemptions or repurchases, or (4) for any
transaction from which the director derived an improper personal benefit. In
addition, our first amended and restated certificate of incorporation provides
that if the Delaware General Corporation Law is amended to authorize the further
elimination or limitation of the liability of directors, 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.

Article V of our by-laws provides for indemnification by Moldflow of its
officers and certain non-officer employees under certain circumstances against
expenses, including attorneys' fees, judgments, fines and amounts paid in
settlement, reasonably incurred in connection with the defense or settlement of
any threatened, pending or completed legal proceeding in which any such person
is involved by reason of the fact that such person is or was an officer or
employee of the registrant if such person acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best interests of
Moldflow, and, with respect to criminal actions or proceedings, if such person
had no reasonable cause to believe his or her conduct was unlawful.

II-1
<PAGE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

Set forth in chronological order below is information regarding the number
of shares of capital stock issued by Moldflow since our formation. Also included
is the consideration, if any, received by Moldflow for such shares. There was no
public offering in any such transaction and we believe that each transaction was
exempt from the registration requirements of the Securities Act of 1933, as
amended, by reason of Section 4(2) thereof, based on the private nature of the
transactions and the financial sophistication of the purchasers, all of whom had
access to complete information concerning Moldflow and acquired the securities
for investment and not with a view to the distribution thereof. In addition, we
believe that the transactions described below with respect to issuances and
option grants to our employees and consultants were exempt from the registration
requirements of said Act by reason of Section 4(2) of said Act or Rule 701
promulgated thereunder.

(a) Issuance of Capital Stock

(i) In August 1997, in connection with its reorganization Moldflow
issued 4,918,616 shares of its common stock, 1,855,688 shares of
its series A convertible preferred stock and 666,666 shares of its
series B convertible preferred stock to the shareholders of
Moldflow International Pty. Ltd., an Australian corporation, in
exchange for all of the outstanding capital stock of Moldflow
International.

(ii) In March 1998, Moldflow's shares of common stock, series A
convertible preferred stock and series B convertible preferred
stock were redesignated as series C-1 convertible preferred stock,
series C-2 convertible preferred stock and series C-3 convertible
preferred stock.

(iii) In April 1998, Moldflow granted warrants to purchase 20,833 shares
of its common stock to Silicon Valley Bank at an exercise price of
$7.20 per share.

(iv) In July 1998, Moldflow sold 551,285 shares of its common stock for
an aggregate purchase price of $198,463.35 which was paid by
promissory notes. These shares are subject to stock restriction
agreements.

(v) In July 1998, Moldflow issued 698,609 shares of its series C-3
convertible preferred stock in connection with the conversion into
equity of the outstanding principal balance of approximately
$890,000 under stockholder loan agreements.

(vi) In April 1999, Moldflow issued 327 shares of its common stock upon
the exercise of previously granted stock options at an aggregate
exercise price of $117.75.

(vii) In June 1999, Moldflow issued 1,562 shares of its common stock
upon the exercise of previously granted stock options at an
aggregate exercise price of $562.50.

(viii) In July 1999, Moldflow issued 74 shares of its common stock upon
the exercise of previously granted stock options at an aggregate
exercise price of $26.85.

(ix) In August 1999, Moldflow issued 2,715 shares of its common stock
upon the exercise of previously granted stock options at an
aggregate exercise price of $1,240.65.

(x) In September 1999, Moldflow issued 327 shares of its common stock
upon the exercise of previously granted stock options at an
aggregate exercise price of $136.50.

(xi) In October 1999, Moldflow issued 2,900 shares of its common stock
upon the exercise of previously granted stock options at an
aggregate exercise price of $1,607.10.

(xii) In November 1999, Moldflow issued 52 shares of its common stock
upon the exercise of previously granted stock options at an
aggregate exercise price of $37.50.

(xiii) In December 1999, Moldflow issued 2,117 shares of its common stock
upon the exercise of previously granted stock options at an
aggregate exercise price of $1,006.80.

II-2
<PAGE>
(xiv) In January 2000, Moldflow issued 4,080 shares of its common stock
upon the exercise of previously granted stock options at an
aggregate exercise price of $1,798.20.

(xv) In February 2000, Moldflow issued 6,778 shares of its common stock
upon the exercise of previously granted stock options at an
aggregate exercise price of $3,217.30.

(b) Grants of Stock Options

(i) As of March 1, 2000, options to purchase 599,900 shares of common
stock were outstanding under Moldflow's 1997 Equity Incentive Plan
of which options to purchase 116,086 shares are exercisable within
60 days of such date. All such options were granted between August
1997 and March 1, 2000 to officers, directors, employees and
consultants of Moldflow.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) EXHIBITS. The following is a complete list of exhibits filed or
incorporated by reference as part of this Registration Statement.

*1.1 Form of Underwriting Agreement

+2.1 Agreement and Plan of Merger, dated February 11, 2000, by
and among the Registrant, Moldflow Merger Corp. (a
subsidiary of the Registrant), Advanced CAE Technology, Inc.
d/b/a C-Mold ("C-Mold") and certain stockholders of C-Mold.
(Excluding schedules and exhibits which the Registrant
agrees to furnish supplementally to the Commission upon
request.)

3.1 Form of Second Amended and Restated Certificate of
Incorporation of the Registrant.

3.2 Form of Third Amended and Restated Certificate of
Incorporation of the Registrant.

3.3 Form of Amended and Restated By-laws of the Registrant.

*4.1 Specimen certificate for shares of Common Stock, $.01 par
value, of the Registrant.

5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of
the securities offered.

+10.1 Indenture of Lease, dated October 15, 1996, between Moldflow
Pty. Ltd and Mortimer B. Zuckerman and Edward H. Linde,
Trustees of 91 Hartwell Avenue Trust, which relates to space
in a certain building known as, and with an address at, 91
Hartwell Avenue, Lexington, Massachusetts.

+10.2 Acknowledgment of Assumption of Lease, dated June 28, 1999,
by and among Boston Properties Limited Partnership (as
successor-in-interest to the Trustees of 91 Hartwell Avenue
Trust), Moldflow Pty. Ltd and the Registrant.

+10.3 Stock Purchase Agreement, dated August 25, 1998, among
Ampersand Specialty Materials and Chemicals III Limited
Partnership ("Ampersand III"), Ampersand Specialty Materials
and Chemicals Companion Fund III Limited Partnership
("Ampersand III CF"), JTC Investment Management Pty. Ltd.
("JTC") and Westpac Custodian Nominees Limited (as nominee
for NJI No. 1(A) Investment Fund and NJI No. 1(B) Investment
Fund) ("Westpac").

+10.4 Shareholders Agreement, dated July 18, 1997 ("Shareholders
Agreement"), by and among the Registrant, Thomas Investments
Australia Pty. Ltd. ("Thomas"), Helmet Investments Australia
Pty. Ltd. ("Helmet"), Floatflow Pty. Ltd. ("Floatflow"),
JTC, Westpac, Ampersand Specialty Materials and Chemicals II
Limited Partnership ("Ampersand II"), Ampersand III,
Ampersand III CF and Mazza & Riley, Inc.
</TABLE>

II-3
<PAGE>

<TABLE>
<C> <S>
+10.5 First Amendment to Shareholders Agreement, dated October 24,
1997.

+10.6 Amended and Restated Credit Agreement, dated January 28,
1998 ("Amended and Restated Credit Agreement"), by and among
the Registrant, Thomas, Helmet, Floatflow, JTC, Westpac,
Ampersand II, Ampersand III and Ampersand III CF.

+10.7 First Amendment to Amended and Restated Credit Agreement,
dated August 25, 1998.

+10.8 Termination of Amended and Restated Credit Agreement.

+10.9 Loan Agreement, dated April 23, 1998, by and among Silicon
Valley Bank, the Registrant, Moldflow International Pty.
Ltd. and Moldflow Pty. Ltd.

+10.10 Loan Document Modification Agreement No. 2, dated
November 30, 1998, by and between Silicon Valley Bank and
the Registrant.

+10.11 Amendment to Loan Modification Agreement No. 2, dated
January 19, 1999, by and between Silicon Valley Bank and the
Registrant.

+10.12 Loan Document Modification Agreement No. 3, dated as of
June 1, 1999, by and between Silicon Valley Bank and the
Registrant.

+10.13 Loan Document Modification Agreement No. 4, dated as of
October 22, 1999, by and between Silicon Valley Bank and the
Registrant.

+10.14 Warrant to Purchase Common Stock, dated April 23, 1998,
issued by the Registrant to Silicon Valley Bank.

+10.15 Stock Restriction Agreement, dated July 1, 1998, between the
Registrant and Marc J. L. Dulude.

+10.16 Amended and Restated Promissory Note, dated September 9,
1999, issued by Marc J. L. Dulude in favor of the
Registrant.

+10.17 Stock Restriction Agreement, dated July 1, 1998, between the
Registrant and Suzanne E. Rogers.

+10.18 Amended and Restated Promissory Note, dated September 9,
1999, issued by Suzanne E. Rogers in favor of the
Registrant.

+10.19 Stock Restriction Agreement, dated July 1, 1998, between the
Registrant and Kenneth R. Welch.

+10.20 Amended and Restated Promissory Note, dated September 9,
1999, issued by Kenneth R. Welch in favor of the Registrant.

+10.21 Stock Restriction Agreement, dated July 1, 1998, between the
Registrant and Richard M. Underwood.

+10.22 Amended and Restated Promissory Note, dated September 9,
1999, issued by Richard M. Underwood in favor of the
Registrant.

+10.23 Service Agreement, dated July 1, 1994, between Moldflow Pty.
Ltd. and A. Roland Thomas.

+10.24 Letter Amendment, dated June 30, 1997, to Service Agreement
between Moldflow Pty. Ltd. and A. Roland Thomas.

+10.25 Letter Amendment, dated July 1, 1999, to Service Agreement
between Moldflow Pty. Ltd. and A. Roland Thomas.

+10.26 Loan Agreement, dated July 1, 1999 between Moldflow Pty.
Ltd, and A. Roland Thomas.

10.27 Moldflow Corporation 2000 Stock Option and Incentive Plan.

10.28 Form of Incentive Stock Option Agreement under the Moldflow
Corporation 2000 Stock Option and Incentive Plan.
</TABLE>

II-4

<PAGE>

<TABLE>
<C> <S>
10.29 Form of Non-Qualified Stock Option Agreement for Company
Employees under the Moldflow Corporation 2000 Stock Option
and Incentive Plan.

10.30 Moldflow Corporation Employee Stock Purchase Plan.

+10.31 Moldflow Corporation 1997 Equity Incentive Plan.

+10.32 Form of Incentive Stock Option Agreement under the Moldflow
Corporation 1997 Equity Incentive Plan.

+10.33 Form of Non-Qualified Stock Option Agreement under the
Moldflow Corporation 1997 Equity Incentive Plan.

+10.34 Form of Non-Qualified Stock Option Agreement for Australian
employees under the Moldflow Corporation 1997 Equity
Incentive Plan.

10.35 Employment Agreement, dated February 1, 2000, between the
Registrant and Marc J. L. Dulude.

10.36 Employment Agreement, dated February 1, 2000, between the
Registrant and Suzanne E. Rogers.

10.37 Employment Agreement, dated February 1, 2000, between the
Registrant and Kenneth R. Welch.

10.38 Employment Agreement, dated February 1, 2000, between the
Registrant and Richard M. Underwood.

*10.39 Employment Agreement, dated , between the
Registrant and A. Roland Thomas.

*10.40 Form of Director Indemnification Agreement to be entered
into between the Registrant and each non-employee director.

10.41 Form of Non-Qualified Stock Option Agreement for
Non-Employee Directors under the Moldflow Corporation 2000
Stock Option and Incentive Plan.

21.1 Subsidiaries of the Registrant.

23.1 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit
5.1 hereto).

23.2 Consent of PricewaterhouseCoopers LLP.

+24.1 Powers of Attorney.

27.1 Financial Data Schedule.
</TABLE>

- ------------------------

* To be filed by amendment to this registration statement.

+ Previously filed.

II-5
<PAGE>
(b) FINANCIAL STATEMENT SCHEDULES

II. Valuation and Qualifying Accounts

All other schedules have been omitted because they are not required or
because the required information is given in the consolidated financial
statements or notes to those statements.

ITEM 17. UNDERTAKINGS

The undersigned registrant 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
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant 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 registrant 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 Act and will be governed by the final adjudication of
such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, 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 registrant 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 of 1933, 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
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston, on March 1, 2000.

<TABLE>
<S> <C> <C>
MOLDFLOW CORPORATION

BY: /S/ SUZANNE E. ROGERS
-----------------------------------------
Suzanne E. Rogers
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
</TABLE>

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
President, Chief Executive
*** Officer and Director
------------------------------------------- (Principal Executive March 1, 2000
Marc J. L. Dulude Officer)

Vice President and Chief
/s/ SUZANNE E. ROGERS Financial Officer
------------------------------------------- (Principal Financial March 1, 2000
Suzanne E. Rogers Officer and Principal
Accounting Officer)

*** Director
------------------------------------------- March 1, 2000
A. Roland Thomas

*** Director
------------------------------------------- March 1, 2000
Charles D. Yie

*** Director
------------------------------------------- March 1, 2000
Julian H. Beale

*** Director
------------------------------------------- March 1, 2000
Richard A. Charpie
</TABLE>

II-7
<PAGE>

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
*** Director
------------------------------------------- March 1, 2000
Roger Brooks

*** Director
------------------------------------------- March 1, 2000
Robert P. Schechter
</TABLE>

<TABLE>
<S> <C> <C> <C>
*** /s/ SUZANNE E. ROGERS
--------------------------------------
Suzanne E. Rogers
ATTORNEY-IN-FACT
</TABLE>

II-8
<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- --------------------- -----------
<C> <S>
*1.1 Form of Underwriting Agreement
+2.1 Agreement and Plan of Merger, dated February 11, 2000, by
and among the Registrant, Moldflow Merger Corp. (a
subsidiary of the Registrant), Advanced CAE Technology, Inc.
d/b/a C-Mold ("C-Mold") and certain stockholders of C-Mold.
(Excluding schedules and exhibits which the Registrant
agrees to furnish supplementally to the Commission upon
request.)
3.1 Form of Second Amended and Restated Certificate of
Incorporation of the Registrant.
3.2 Form of Third Amended and Restated Certificate of
Incorporation of the Registrant.
3.3 Form of Amended and Restated By-laws of the Registrant.
*4.1 Specimen certificate for shares of Common Stock, $.01 par
value, of the Registrant.
5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of
the securities offered.
+10.1 Indenture of Lease, dated October 15, 1996, between Moldflow
Pty. Ltd and Mortimer B. Zuckerman and Edward H. Linde,
Trustees of 91 Hartwell Avenue Trust, which relates to space
in a certain building known as, and with an address at, 91
Hartwell Avenue, Lexington, Massachusetts.
+10.2 Acknowledgment of Assumption of Lease, dated June 28, 1999,
by and among Boston Properties Limited Partnership (as
successor-in-interest to the Trustees of 91 Hartwell Avenue
Trust), Moldflow Pty. Ltd and the Registrant.
+10.3 Stock Purchase Agreement, dated August 25, 1998, among
Ampersand Specialty Materials and Chemicals III Limited
Partnership ("Ampersand III"), Ampersand Specialty Materials
and Chemicals Companion Fund III Limited Partnership
("Ampersand III CF"), JTC Investment Management Pty. Ltd.
("JTC") and Westpac Custodian Nominees Limited (as nominee
for NJI No. 1(A) Investment Fund and NJI No. 1(B) Investment
Fund) ("Westpac").
+10.4 Shareholders Agreement, dated July 18, 1997 ("Shareholders
Agreement"), by and among the Registrant, Thomas Investments
Australia Pty. Ltd. ("Thomas"), Helmet Investments Australia
Pty. Ltd. ("Helmet"), Floatflow Pty. Ltd. ("Floatflow"),
JTC, Westpac, Ampersand Specialty Materials and Chemicals II
Limited Partnership ("Ampersand II"), Ampersand III,
Ampersand III CF and Mazza & Riley, Inc.
+10.5 First Amendment to Shareholders Agreement, dated October 24,
1997.
+10.6 Amended and Restated Credit Agreement, dated January 28,
1998 ("Amended and Restated Credit Agreement"), by and among
the Registrant, Thomas, Helmet, Floatflow, JTC, Westpac,
Ampersand II, Ampersand III and Ampersand III CF.
+10.7 First Amendment to Amended and Restated Credit Agreement,
dated August 25, 1998.
+10.8 Termination of Amended and Restated Credit Agreement.
+10.9 Loan Agreement, dated April 23, 1998, by and among Silicon
Valley Bank, the Registrant, Moldflow International Pty.
Ltd. and Moldflow Pty. Ltd.
+10.10 Loan Document Modification Agreement No. 2, dated
November 30, 1998, by and between Silicon Valley Bank and
the Registrant.
+10.11 Amendment to Loan Modification Agreement No. 2, dated
January 19, 1999, by and between Silicon Valley Bank and the
Registrant.
+10.12 Loan Document Modification Agreement No. 3, dated as of
June 1, 1999, by and between Silicon Valley Bank and the
Registrant.
+10.13 Loan Document Modification Agreement No. 4, dated as of
October 22, 1999, by and between Silicon Valley Bank and the
Registrant.
+10.14 Warrant to Purchase Common Stock, dated April 23, 1998,
issued by the Registrant to Silicon Valley Bank.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- --------------------- -----------
<C> <S>
+10.15 Stock Restriction Agreement, dated July 1, 1998, between the
Registrant and Marc J. L. Dulude.
+10.16 Amended and Restated Promissory Note, dated September 9,
1999, issued by Marc J. L. Dulude in favor of the
Registrant.
+10.17 Stock Restriction Agreement, dated July 1, 1998, between the
Registrant and Suzanne E. Rogers.
+10.18 Amended and Restated Promissory Note, dated September 9,
1999, issued by Suzanne E. Rogers in favor of the
Registrant.
+10.19 Stock Restriction Agreement, dated July 1, 1998, between the
Registrant and Kenneth R. Welch.
+10.20 Amended and Restated Promissory Note, dated September 9,
1999, issued by Kenneth R. Welch in favor of the Registrant.
+10.21 Stock Restriction Agreement, dated July 1, 1998, between the
Registrant and Richard M. Underwood.
+10.22 Amended and Restated Promissory Note, dated September 9,
1999, issued by Richard M. Underwood in favor of the
Registrant.
+10.23 Service Agreement, dated July 1, 1994, between Moldflow Pty.
Ltd. and A. Roland Thomas.
+10.24 Letter Amendment, dated June 30, 1997, to Service Agreement
between Moldflow Pty. Ltd. and A. Roland Thomas.
+10.25 Letter Amendment, dated July 1, 1999, to Service Agreement
between Moldflow Pty. Ltd. and A. Roland Thomas.
+10.26 Loan Agreement, dated July 1, 1999 between Moldflow Pty.
Ltd, and A. Roland Thomas.
10.27 Moldflow Corporation 2000 Stock Option and Incentive Plan.
10.28 Form of Incentive Stock Option Agreement under the Moldflow
Corporation 2000 Stock Option and Incentive Plan.
10.29 Form of Non-Qualified Stock Option Agreement for Company
Employees under the Moldflow Corporation 2000 Stock Option
and Incentive Plan.
10.30 Moldflow Corporation Employee Stock Purchase Plan.
+10.31 Moldflow Corporation 1997 Equity Incentive Plan.
+10.32 Form of Incentive Stock Option Agreement under the Moldflow
Corporation 1997 Equity Incentive Plan.
+10.33 Form of Non-Qualified Stock Option Agreement under the
Moldflow Corporation 1997 Equity Incentive Plan.
+10.34 Form of Non-Qualified Stock Option Agreement for Australian
employees under the Moldflow Corporation 1997 Equity
Incentive Plan.
10.35 Employment Agreement, dated February 1, 2000, between the
Registrant and Marc J. L. Dulude.
10.36 Employment Agreement, dated February 1, 2000, between the
Registrant and Suzanne E. Rogers.
10.37 Employment Agreement, dated February 1, 2000, between the
Registrant and Kenneth R. Welch.
10.38 Employment Agreement, dated February 1, 2000, between the
Registrant and Richard M. Underwood.
*10.39 Employment Agreement, dated , between the
Registrant and A. Roland Thomas.
*10.40 Form of Director Indemnification Agreement to be entered
into between the Registrant and each non-employee director.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- --------------------- -----------
<C> <S>
10.41 Form of Non-Qualified Stock Option Agreement for
Non-Employee Directors under the Moldflow Corporation 2000
Stock Option and Incentive Plan.
21.1 Subsidiaries of the Registrant.
23.1 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit
5.1 hereto).
23.2 Consent of PricewaterhouseCoopers LLP.
+24.1 Powers of Attorney.
27.1 Financial Data Schedule.
</TABLE>

- ------------------------

* To be filed by amendment to this registration statement.

+ Previously filed.
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE

To the Board of Directors
and Stockholders of Moldflow Corporation

Our audits of the consolidated financial statements referred to in our report
dated August 20, 1999, except as to Note 16 for which the date is January 20,
2000, appearing in the Prospectus constituting part of this Registration
Statement on Form S-1 of Moldflow Corporation also included an audit of the
financial statement schedule listed in Item 16(b) of this Form S-1. In our
opinion, this financial statement schedule presents fairly, in all material
respects, the information set forth therein when read in conjunction with the
related consolidated financial statements.

PricewaterhouseCoopers LLP

Boston, Massachusetts
August 20, 1999

S-1
<PAGE>

SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS OF MOLDFLOW CORPORATION

<TABLE>
<CAPTION>
BEGINNING ENDING
ITEM BALANCE ADDITIONS DEDUCTIONS BALANCE
---- --------- --------- ---------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
For the year ended June 30, 1997:
Allowance for doubtful accounts............ $1,274 22(a) (949)(b) $ 347
Deferred tax asset valuation allowance..... 6,394 1,334(a) (350)(c) 7,378

For the year ended June 30, 1998:
Allowance for doubtful accounts............ 347 275(a) (83)(b) 539
Deferred tax asset valuation allowance..... 7,378 5(a) (1,090)(c) 6,293

For the year ended June 30, 1999:
Allowance for doubtful accounts............ 539 33(a) (340)(b) 232
Deferred tax asset valuation allowance..... 6,293 416(a) (173)(c) 6,536
</TABLE>

- ------------------------

(a) Additional provisions and foreign currency translation effects.

(b) Specific write-offs and foreign currency translation effects.

(c) Utilization of net operating losses, reductions in other deferred tax assets
and foreign currency translation effects.

S-2

<PAGE>

Exhibit 3.1

FORM OF

SECOND AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

MOLDFLOW CORPORATION

Moldflow Corporation, a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), hereby certifies as follows:

1. The name of the Corporation is Moldflow Corporation. The date of the
filing of its original Certificate of Incorporation with the Secretary of State
of the State of Delaware was January 15, 1997 (the "Original Certificate").

2. This Second Amended and Restated Certificate of Incorporation (the
"Certificate") amends, restates and integrates the provisions of the Amended and
Restated Certificate of Incorporation that was filed with the Secretary of State
of the State of Delaware on March 11, 1998 (the "Amended and Restated
Certificate"), and was duly adopted in accordance with the provisions of
Sections 242 and 245 of the Delaware General Corporation Law (the "DGCL").

3. The text of the Amended and Restated Certificate is hereby amended
and restated in its entirety to provide as herein set forth in full.

ARTICLE I

The name of the Corporation is Moldflow Corporation.

ARTICLE II

The address of the Corporation's registered office in the State of
Delaware is c/o The Corporation Trust Company, 1209 Orange Street in the City of
Wilmington, County of New Castle. The name of its registered agent at such
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 DGCL.

<PAGE>

ARTICLE IV

CAPITAL STOCK

The total number of shares of capital stock which the Corporation shall
have authority to issue is seventy-three million one hundred thirty-nine
thousand five hundred seventy-nine (73,139,579) shares, of which (i) sixty
million (60,000,000) shares shall be a class designated as common stock, par
value $.01 per share (the "Common Stock"), (ii) four million nine hundred
eighteen thousand six hundred sixteen (4,918,616) shares shall be a class and
series designated as Series C-1 Convertible Preferred Stock, par value $.01 per
share (the "Series C- 1 Preferred Stock"), (iii) one million eight hundred
fifty-five thousand six hundred eighty-eight (1,855,688) shares shall be a class
and series designated as Series C-2 Convertible Preferred Stock, par value $.01
per share (the "Series C-2 Preferred Stock"), (iv) one million three hundred
sixty-five thousand two hundred seventy-five (1,365,275) shares shall be a class
and series designated as Series C-3 Convertible Preferred Stock, par value $.01
per share (the "Series C-3 Preferred Stock" and, together with the Series C-1
Preferred Stock and the Series C-2 Preferred Stock, the "Class C Preferred
Stock"), and (v) five million (5,000,000) shares shall be a class designated as
undesignated preferred stock, par value $.01 per share (the "Undesignated
Preferred Stock" and, together with the Class C Preferred Stock, the "Preferred
Stock").

The number of authorized shares of the class of Undesignated Preferred
Stock may from time to time be increased or decreased (but not below the number
of shares outstanding) by the affirmative vote of the holders of a majority of
the outstanding shares of Common Stock entitled to vote, without a vote of the
holders of the Preferred Stock (subject to the terms of the Class C Preferred
Stock and except as otherwise provided in any certificate of designations of any
series of Undesignated Preferred Stock).

The powers, preferences and rights of, and the qualifications,
limitations and restrictions upon, each class or series of stock shall be
determined in accordance with, or as set forth below in, this Article IV.

A. COMMON STOCK

Subject to all the rights, powers and preferences of the Preferred
Stock and except as provided by law or in this Article IV (or in any certificate
of designations of any series of Undesignated Preferred Stock):

<PAGE>

Certificate (or on any amendment to a certificate of designations of
any series of Undesignated Preferred Stock) that alters or changes the
powers, preferences, rights or other terms of one or more outstanding
series of Undesignated Preferred Stock if the holders of such affected
series are entitled to vote, either separately or together with the
holders of one or more other such series, on such amendment pursuant to
this Certificate (or pursuant to a certificate of designations of any
series of Undesignated Preferred Stock) or pursuant to the DGCL;

(b) dividends may be declared and paid or set apart for
payment upon the Common Stock out of any assets or funds of the
Corporation legally available for the payment of dividends, but only
when and as declared by the Board of Directors of the Corporation (the
"Board of Directors") or any authorized committee thereof; and

(c) upon the voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, the net assets of the Corporation
shall be distributed pro rata to the holders of the Common Stock.

B. DESIGNATED PREFERRED STOCK

Except as otherwise set forth below or required by law, the shares of
each of the Series C-1 Preferred Stock, Series C-2 Preferred Stock and Series
C-3 Preferred Stock shall have the same rights, preferences, powers, privileges,
restrictions, qualifications and limitations.

1. DIVIDENDS. Dividends may be declared and paid on the Class C
Preferred Stock from funds lawfully available therefor as and when determined by
the Board of Directors and subject to any preferential dividend rights of any
other then outstanding series of Preferred Stock. In addition to the foregoing,
the holders of the Class C Preferred Stock shall be entitled to receive a
payment equal to any dividend declared or paid by the Corporation in respect of
the Common Stock for each share of Common Stock into which the shares of Class C
Preferred Stock are convertible (as adjusted from time to time pursuant to
Section 4 hereof).

2. LIQUIDATION, DISSOLUTION OR WINDING UP.

(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of
Class C Preferred Stock then outstanding shall be entitled to be paid
out of the assets of the Corporation available for distribution to its
stockholders, after and subject to the payment in full of all amounts
required to be distributed to the holders of any other class or series
of stock of the Corporation ranking on liquidation prior and in
preference to the Class C Preferred Stock (collectively referred to as
"Senior Preferred Stock"), but before any payment shall be made to the
holders of Common Stock or any other class or series of stock ranking
on liquidation junior to the Class C Preferred Stock (such Common Stock
and other stock being collectively referred to as "Junior Stock") by
reason of their ownership thereof, an amount equal to $1.46 per share
for each share of Series C-1

<PAGE>

Preferred Stock, $5.42 per share for each share of Series C-2 Preferred
Stock, and $1.46 per share for each share of Series C-3 Preferred Stock
(subject to appropriate adjustment in the event of any stock dividend,
stock split, combination or other similar recapitalization affecting
such shares) (with respect to each series of Class C Preferred Stock,
the "Preference Amount"), plus any accrued but unpaid dividends with
respect thereof. If, upon any such liquidation, dissolution or winding
up of the Corporation, the remaining assets of the Corporation
available for distribution to its shareholders shall be insufficient to
pay the holders of shares of Class C Preferred Stock the full
preferential amount to which they shall be entitled, the holders of
shares of Class C Preferred Stock and any class or series of stock
ranking on liquidation on a parity with the Class C Preferred Stock
shall share ratably in any distribution of the remaining assets and
funds of the Corporation in proportion to the respective amounts which
would otherwise be payable in respect of the shares held by them upon
such distribution if all amounts payable on or with respect to such
shares were paid in full.

(b) After the payment of all preferential amounts required to
be paid to the holders of Senior Preferred Stock, Class C Preferred
Stock and any other class or series of stock of the Corporation ranking
on liquidation on a parity with the Class C Preferred Stock, upon the
dissolution, liquidation or winding up of the Corporation, the holders
of shares of Class C Preferred Stock and Junior Stock then outstanding
shall be entitled to receive, on a pro-rata basis (based, in the case
of any convertible securities, on the number of shares of Common Stock
into which such convertible securities are then convertible), the
remaining funds and assets of the Corporation available for
distribution to its shareholders.

(c) The merger or consolidation of the Corporation into or
with another corporation, or the sale of all or substantially all the
assets of the Corporation, shall be deemed to be a liquidation,
dissolution or winding up of the Corporation for purposes of this
Section 2 upon the prior written consent or affirmative vote of at
least 60% of the then outstanding shares of Class C Preferred Stock,
voting (on an as converted basis) together as a single class. The
amount deemed distributed to the holders of Class C Preferred Stock
upon any such merger or consolidation shall be the cash or the value of
the property, rights or securities distributed to such holders by the
acquiring person, firm or other entity. The value of such property,
rights or other securities shall be determined in good faith by the
Board of Directors of the Corporation.

3. VOTING.

(a) Each holder of outstanding shares of Class C Preferred
Stock shall be entitled to the number of votes equal to the number of
whole shares of Common Stock into which the shares of Class C Preferred
Stock held by such holder are convertible (as adjusted from time to
time pursuant to Section 4 hereof) at the time of the taking of any
such vote, at each meeting of stockholders of the Corporation (and
written actions of stockholders in lieu of meetings) with respect to
any and all matters presented to the

<PAGE>

stockholders of the Corporation for their action or consideration.
Except as provided by law or by the provisions establishing any other
series of Preferred Stock, holders of Class C Preferred Stock shall
vote together with the holders of Common Stock as a single class.

(b) The Corporation shall not amend, alter or repeal the
preferences, special rights or other powers of the Class C Preferred
Stock so as to affect adversely the rights and the privileges attached
to the Class C Preferred Stock, without the written consent or
affirmative vote of the holders of not less than 60% of the then
outstanding shares of Class C Preferred Stock, given in writing or by
vote at a meeting, consenting or voting (as the case may be) separately
as a class and all provisions of the Corporation's ByLaws for general
meetings shall apply to any separate general meeting except that the
quorum for a separate meeting shall not be less than two persons
holding shares or representing by proxy three-quarters of the issued
shares of the class affected and that any holder of the shares of the
class present in person or by proxy may demand a poll. For this
purpose, without limiting the generality of the foregoing, the
authorization or issuance of any series of Preferred Stock with
preference or priority over the Class C Preferred Stock as to the right
to receive either dividends or amounts distributable upon liquidation,
dissolution or winding up of the Corporation shall be deemed to affect
adversely rights or privileges attached to the Class C Preferred Stock,
and the authorization or issuance of any series of Preferred Stock on a
parity with Class C Preferred Stock as to the right to receive either
dividends or amounts distributable upon liquidation, dissolution or
winding up of the Corporation shall be deemed to affect adversely the
rights and privileges attached to the Class C Preferred Stock. The
number of authorized shares of Class C Preferred Stock may be increased
or decreased (but not below the number of shares then outstanding) by
the affirmative vote of the holders of a majority of the then
outstanding shares of the Common Stock, Class C Preferred Stock, and
all other classes or series of stock of the Corporation entitled to
vote thereon, voting as a single class.

4. OPTIONAL CONVERSION. The holders of the Class C Preferred Stock
shall have conversion rights as follows (the "Conversion Rights"):

(a) RIGHT TO CONVERT. Each share of Class C Preferred Stock
shall be convertible, at the option of the holder thereof, at any time
and from time to time, into five-twelfths of one share of Common Stock
for each share of Series C-1 Preferred Stock, 1.5466833 shares of
Common Stock for each share of Series C-2 Preferred Stock (based on the
aggregate number of shares of Series C-2 Preferred Stock held by the
holder), and five-twelfths of one share of Common Stock for each share
of Series C-3 Preferred Stock.

In the event of a liquidation, dissolution or winding up of
the Corporation, the Conversion Rights shall terminate at the close of
business on the first full day preceding the date fixed for the payment
of any amounts distributable on liquidation, dissolution

<PAGE>

or winding up to the holders of Class C Preferred Stock. The
Corporation shall give the holders of Class C Preferred Stock thirty
(30) days' prior notice of the date fixed for such payment.

(b) FRACTIONAL SHARES. No fractional shares of Common Stock
shall be issued upon conversion of the Class C Preferred Stock. In lieu
of any fractional shares to which the holder would otherwise be
entitled, the Corporation shall pay cash equal to such fraction
multiplied by the fair market value of the Common Stock, as determined
in good faith by the Corporation's Board of Directors.

(i) In order for a holder of Class C Preferred Stock
to convert shares of Class C Preferred Stock into shares of
Common Stock, such holder shall surrender the certificate or
certificates for such shares of Class C Preferred Stock, at
the office of the transfer agent for the Class C Preferred
Stock (or at the principal office of the Corporation if the
Corporation serves as its own transfer agent), together with
written notice that such holder elects to convert all or any
number of the shares of the Class C Preferred Stock
represented by such certificate or certificates. Such notice
shall state such holder's name which shall appear on the
certificate or certificates for shares of Common Stock to be
issued. If required by the Corporation, certificates
surrendered for conversion shall be endorsed or accompanied by
a written instrument or instruments of transfer, in form
satisfactory to the Corporation, duly executed by the
registered holder or his or its attorney duly authorized in
writing. The date of receipt of such certificates and notice
by the transfer agent (or by the Corporation if the
Corporation serves as its own transfer agent) shall be the
conversion date ("Conversion Date"). The Corporation shall, as
soon as practicable after the Conversion Date and in any event
not more than seven (7) days after the Conversion Date, issue
and deliver at such office to such holder of Class C Preferred
Stock a certificate or certificates for the number of shares
of Common Stock to which such holder shall be entitled,
together with cash in lieu of any fraction of a share, and all
accrued but unpaid dividends.

(ii) The Corporation shall at all times when the
Class C Preferred Stock is outstanding, reserve and keep
available out of its authorized but unissued stock, for the
purpose of effecting the conversion of the Class C Preferred
Stock, such number of its duly authorized shares of Common
Stock as shall from time to time be sufficient to effect the
conversion of all outstanding Class C Preferred Stock.

(iii) Upon any such conversion, no additional shares
shall be allotted for any accrued and unpaid dividends on the
Class C Preferred Stock surrendered

<PAGE>

for conversion or on the Common Stock delivered upon
conversion, which dividends shall be paid in accordance with
clause (iv) below.

(iv) All shares of Class C Preferred Stock which
shall have been surrendered for conversion as herein provided
shall no longer be deemed to be outstanding and all rights
with respect to such shares, including the rights, if any, to
receive notices and to vote, shall immediately cease and
terminate on the Conversion Date, except only the right of the
holders thereof to receive shares of Common Stock in exchange
therefor and payment of any accrued and unpaid dividends
thereon. Any shares of Class C Preferred Stock so converted
shall be retired and canceled and shall not be reissued, and
the Corporation may from time to time take such appropriate
action as may be necessary to reduce the authorized Class C
Preferred Stock accordingly.

(d) ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the
Corporation shall, at any time or from time to time after the date
hereof, effect a subdivision of the outstanding Common Stock without
similarly effecting a subdivision of the Class C Preferred Stock, the
number of shares of Common Stock into which a share of Class C
Preferred is then convertible shall be proportionately increased. If
the Corporation shall, at any time or from time to time after the date
hereof, combine the outstanding shares of Common Stock, without
similarly combining the Class C Preferred Stock, the number of shares
of Common Stock into which a share of Class C Preferred Stock is then
convertible shall be proportionately decreased. Any adjustment under
this paragraph shall become effective at the close of business on the
date the subdivision or combination becomes effective.

(e) ADJUSTMENT FOR CERTAIN DIVIDENDS AND DISTRIBUTIONS. In the
event the Corporation at any time or from time to time after March 9,
1998, shall make, issue or fix a record date for the determination of
holders of Common Stock entitled to receive a dividend or other
distribution payable in additional shares of Common Stock, then and in
each such event, the holders of Class C Preferred Stock shall be
entitled, at the time of conversion of such Class C Preferred Stock, to
the number of shares of Common Stock that they would have received had
the Class C Preferred Stock been converted into Common Stock on the
record date for such dividend or other distribution and, within seven
(7) days after the conversion of any shares of Class C Preferred Stock,
the Corporation shall send to the holders of Class C Preferred Stock so
converting such shares a certificate representing the number of
additional shares of Common Stock to which such holders are entitled
pursuant to this Subsection.

(f) NO IMPAIRMENT. The Corporation will not, by amendment of
its Certificate of Incorporation or By-laws or through any
reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Corporation, but will at all
times

<PAGE>

in good faith assist in the carrying out of all the provisions of this
Section 4 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of
the Class C Preferred Stock against impairment.

(g) CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of the conversion of the Class C Preferred
Stock pursuant to this Section 4, the Corporation at its expense shall
promptly compute such adjustment or readjustment in accordance with the
terms hereof and furnish to each holder of Class C Preferred Stock a
certificate setting forth such adjustment or readjustment and showing
in detail the facts upon which such adjustment or readjustment is
based. The Corporation shall, upon the written request at any time of
any holder of Class C Preferred Stock, furnish or cause to be furnished
to such holder a similar certificate setting forth (i) such adjustments
and readjustments and (ii) the number of shares of Common Stock and the
amount, if any, of other property which then would be received upon the
conversion of Class C Preferred Stock.

5. NOTICE OF RECORD DATE. In the event:

(a) that the Corporation declares a dividend (or any other
distribution) on its Common Stock payable in Common Stock or other
securities of the Corporation;

(b) that the Corporation splits, subdivides or combines its
outstanding shares of Common Stock;

(c) of any reclassification of the Common Stock of the
Corporation (other than a stock split, subdivision or combination of
its outstanding shares of Common Stock or a stock dividend or stock
distribution thereon), or of any consolidation or merger of the
Corporation into or with another corporation, or of the sale of all or
substantially all of the assets of the Corporation; or

(d) of the involuntary or voluntary dissolution, liquidation
or winding up of the Corporation;

then the Corporation shall cause to be filed at its principal office or at the
office of the transfer agent of the Class C Preferred Stock, and shall cause to
be mailed to the holders of the Class C Preferred Stock at their last addresses
as shown on the records of the Corporation or such transfer agent, at least ten
(10) days prior to the record date specified in (i) below or twenty (20) days
before the date specified in (ii) below, a notice stating

(i) the record date of such dividend, distribution,
stock split, subdivision or combination, or, if a record is
not to be taken, the date as of which the holders of Common
Stock of record to be entitled to such dividend, distribution,
stock split, subdivision or combination are to be determined,
or

<PAGE>

(ii) the date on which such reclassification,
consolidation, merger, sale, dissolution, liquidation or
winding up is expected to become effective, and the date as of
which it is expected that holders of Common Stock of record
shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such
reclassification, consolidation, merger, sale, dissolution or
winding up.

6. MANDATORY CONVERSION UPON PUBLIC OFFERING. As of and immediately
prior to the closing of the Corporation's first firm commitment public offering
pursuant to an effective registration statement under Securities Act of 1933,
provided that the shares of Common Stock covered by such registration statement
are listed for trading on either The Nasdaq Stock Market, Inc.'s National Market
or an internationally recognized stock exchange, each outstanding share of Class
C Preferred Stock shall automatically be converted into the number of shares of
Common Stock determined pursuant to Section 4. Upon such conversion, (i) each
converted share of Class C Preferred Stock shall be canceled, retired and
eliminated from the shares which the Corporation shall be authorized to issue
and such shares of Class C Preferred Stock shall not be reissued, and (ii) the
provisions of this Second Amended and Restated Certificate of Incorporation
regarding Class C Preferred Stock shall have no further force and effect and
shall be deemed to be deleted from this Second Amended and Restated Certificate
of Incorporation and any other references to Class C Preferred Stock in this
Second Amended and Restated Certificate of Incorporation or any other agreement
to which the Corporation is a party shall be deemed to refer to the same number
of shares of Common Stock. The Corporation may from time to time take such
appropriate corporate action as may be necessary to reduce the authorized number
of shares of the Class C Preferred Stock. Until presented and surrendered for
cancellation following such conversion, each certificate for shares of Class C
Preferred Stock outstanding shall be deemed to represent the number of shares of
Common Stock determined in accordance with this paragraph, and upon such
presentation and surrender each holder of a certificate or certificates for such
Class C Preferred Stock shall be entitled to receive a certificate for the
appropriate number of shares of Common Stock and cash as provided in Subsection
4(b) in respect of any fraction of a share of Common Stock otherwise issuable
upon such conversion.

C. UNDESIGNATED PREFERRED STOCK

The Board of Directors or any authorized committee thereof is expressly
authorized, to the fullest extent permitted by law, to provide for the issuance
of the shares of Undesignated Preferred Stock in one or more series of such
stock, and by filing a certificate pursuant to applicable law of the State of
Delaware, to establish or change from time to time the number of shares of each
such series, and to fix the designations, powers, including voting powers, full
or limited, or no voting powers, preferences and the relative, participating,
optional or other special rights of the shares of each series and any
qualifications, limitations and restrictions thereof.

<PAGE>

ARTICLE V

STOCKHOLDER ACTION

1. ACTION WITHOUT MEETING. Except as otherwise provided herein, any
action required or permitted to be taken by the stockholders of the Corporation
at any annual or special meeting of stockholders of the Corporation must be
effected at a duly called annual or special meeting of stockholders and may not
be taken or effected by a written consent of stockholders in lieu thereof.

2. SPECIAL MEETINGS. Except as otherwise required by statute and
subject to the rights, if any, of the holders of any series of Undesignated
Preferred Stock, special meetings of the stockholders of the Corporation may be
called only by the Board of Directors acting pursuant to a resolution approved
by the affirmative vote of a majority of the Directors then in office. Only
those matters set forth in the notice of the special meeting may be considered
or acted upon at a special meeting of stockholders of the Corporation.

ARTICLE VI

DIRECTORS

1. GENERAL. The business and affairs of the Corporation shall
be managed by or under the direction of the Board of Directors except as
otherwise provided herein or required by law.

2. ELECTION OF DIRECTORS. Election of Directors need not be by written
ballot unless the By-laws of the Corporation (the "By-laws") shall so provide.

3. NUMBER OF DIRECTORS; TERM OF OFFICE. The number of Directors of the
Corporation shall be fixed solely and exclusively by resolution duly adopted
from time to time by the Board of Directors. The Directors, other than those who
may be elected by the holders of any series or class of Preferred Stock, shall
be classified, with respect to the term for which they severally hold office,
into three classes, as nearly equal in number as reasonably possible. The
initial Class I Directors of the Corporation shall be A. Roland Thomas, Charles
D. Yie and Robert P. Schechter; the initial Class II Directors of the
Corporation shall be Julian H. Beale and Marc J. L. Dulude; and the initial
Class III Directors of the Corporation shall be Roger Brooks and Richard A.
Charpie. The initial Class I Directors shall serve for a term expiring at the
annual meeting of stockholders to be held in 2000, the initial Class II
Directors shall serve for a term expiring at the annual meeting of stockholders
to be held in 2001, and the initial Class III Directors shall serve for a term
expiring at the annual meeting of stockholders to be held in 2002. At each
annual meeting of stockholders, Directors elected to succeed those Directors
whose terms expire shall be elected for a term of office to expire at the third
succeeding annual meeting of stockholders after their election. Notwithstanding
the

<PAGE>

foregoing, the Directors elected to each class shall hold office until their
successors are duly elected and qualified or until their earlier resignation or
removal.

Notwithstanding the foregoing, whenever, pursuant to the provisions of
Article IV of this Certificate, the holders of any one or more series or class
of Preferred Stock shall have the right, voting separately as a series or
together with holders of other such series, to elect Directors at an annual or
special meeting of stockholders, the election, term of office, filling of
vacancies and other features of such directorships shall be governed by the
terms of this Certificate and any certificate of designations applicable
thereto.

4. VACANCIES. Subject to the rights, if any, of the holders of any
series or class of Preferred Stock to elect Directors and to fill vacancies in
the Board of Directors relating thereto, any and all vacancies in the Board of
Directors, however occurring, including, without limitation, by reason of an
increase in size of the Board of Directors, or the death, resignation,
disqualification or removal of a Director, shall be filled solely and
exclusively by the affirmative vote of a majority of the remaining Directors
then in office, even if less than a quorum of the Board of Directors, and not by
the stockholders. Any Director appointed in accordance with the preceding
sentence shall hold office for the remainder of the full term of the class of
Directors in which the new directorship was created or the vacancy occurred and
until such Director's successor shall have been duly elected and qualified or
until his or her earlier resignation or removal. Subject to the rights, if any,
of the holders of any series or class of Preferred Stock to elect Directors,
when the number of Directors is increased or decreased, the Board of Directors
shall, subject to Article VI.3 hereof, determine the class or classes to which
the increased or decreased number of Directors shall be apportioned; PROVIDED,
HOWEVER, that no decrease in the number of Directors shall shorten the term of
any incumbent Director.

5. REMOVAL. Subject to the rights, if any, of any series or class of
Preferred Stock to elect Directors and to remove any Director whom the holders
of any such stock have the right to elect, any Director (including persons
elected by Directors to fill vacancies in the Board of Directors) may be removed
from office (i) only with cause and (ii) only by the affirmative vote of the
holders of 75% or more of the shares then entitled to vote at an election of
Directors. At least forty-five (45) days prior to any meeting of stockholders at
which it is proposed that any Director be removed from office, written notice of
such proposed removal and the alleged grounds thereof shall be sent to the
Director whose removal will be considered at the meeting.

ARTICLE VII

LIMITATION OF LIABILITY

<PAGE>

stockholders, (b) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) under Section 174 of
the DGCL or (d) for any transaction from which the Director derived an improper
personal benefit. If the DGCL is amended after the effective date of this
Certificate to authorize corporate action further eliminating or limiting the
personal liability of Directors, then the liability of a Director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the DGCL, as so amended.

Any repeal or modification of this Article VII by either of (i) the
stockholders of the Corporation or (ii) an amendment to the DGCL, shall not
adversely affect any right or protection existing at the time of such repeal or
modification with respect to any acts or omissions occurring before such repeal
or modification of a person serving as a Director at the time of such repeal or
modification.

ARTICLE VIII

AMENDMENT OF BY-LAWS

1. AMENDMENT BY DIRECTORS. Except as otherwise provided by law, the
By-laws of the Corporation may be amended or repealed by the Board of Directors
by the affirmative vote of a majority of the Directors then in office.

2. AMENDMENT BY STOCKHOLDERS. The By-laws of the Corporation may be
amended or repealed at any annual meeting of stockholders, or special meeting of
stockholders called for such purpose as provided in the By-laws, by the
affirmative vote of at least 75% of the shares present in person or represented
by proxy at such meeting and entitled to vote on such amendment or repeal,
voting together as a single class; PROVIDED, HOWEVER, that if the Board of
Directors recommends that stockholders approve such amendment or repeal at such
meeting of stockholders, such amendment or repeal shall only require the
affirmative vote of the majority of the shares present in person or represented
by proxy at such meeting and entitled to vote on such amendment or repeal,
voting together as a single class.

ARTICLE IX

AMENDMENT OF CERTIFICATE OF INCORPORATION

<PAGE>

meeting of stockholders called expressly for such purpose; PROVIDED, HOWEVER,
that the affirmative vote of not less than 75% of the outstanding shares
entitled to vote on such amendment or repeal, and the affirmative vote of not
less than 75% of the outstanding shares of each class entitled to vote thereon
as a class, shall be required to amend or repeal any provision of Article V,
Article VI, Article VII or Article IX of this Certificate.

[End of Text]

<PAGE>

THIS SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION is
executed as of this ____ day of [MARCH], 2000.

MOLDFLOW CORPORATION

By:
-------------------------------------
Marc J. L. Dulude
President and Chief Executive Officer

<PAGE>

Exhibit 3.2

FORM OF

THIRD AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

MOLDFLOW CORPORATION

Moldflow Corporation, a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), hereby certifies as follows:

2. This Third Amended and Restated Certificate of Incorporation (the
"Certificate") amends, restates and integrates the provisions of the Second
Amended and Restated Certificate of Incorporation that was filed with the
Secretary of State of the State of Delaware on [MARCH ___, 2000] (the "Second
Amended and Restated Certificate"), and was duly adopted in accordance with the
provisions of Sections 242 and 245 of the Delaware General Corporation Law (the
"DGCL").

3. The text of the Second Amended and Restated Certificate is hereby
amended and restated in its entirety to provide as herein set forth in full.

ARTICLE I

The name of the Corporation is Moldflow Corporation.

ARTICLE II

ARTICLE III

The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the DGCL.

<PAGE>

ARTICLE IV

CAPITAL STOCK

The total number of shares of capital stock which the Corporation shall
have authority to issue is sixty-five million (65,000,000) shares, of which (i)
sixty million (60,000,000) shares shall be a class designated as common stock,
par value $.01 per share (the "Common Stock"), and (ii) five million (5,000,000)
shares shall be a class designated as undesignated preferred stock, par value
$.01 per share (the "Undesignated Preferred Stock").

The number of authorized shares of the class of Undesignated Preferred
Stock may from time to time be increased or decreased (but not below the number
of shares outstanding) by the affirmative vote of the holders of a majority of
the outstanding shares of Common Stock entitled to vote, without a vote of the
holders of the Undesignated Preferred Stock (except as otherwise provided in any
certificate of designations of any series of Undesignated Preferred Stock).

A. COMMON STOCK

Subject to all the rights, powers and preferences of the
Undesignated Preferred Stock and except as provided by law or in this Article IV
(or in any certificate of designations of any series of Undesignated Preferred
Stock):

(a) the holders of the Common Stock shall have the
exclusive right to vote for the election of directors of the Corporation (the
"Directors") and on all other matters requiring stockholder action, each
outstanding share entitling the holder thereof to one vote on each matter
properly submitted to the stockholders of the Corporation for their vote;
PROVIDED, HOWEVER, that, except as otherwise required by law, holders of Common
Stock, as such, shall not be entitled to vote on any amendment to this
Certificate (or on any amendment to a certificate of designations of any series
of Undesignated Preferred Stock) that alters or changes the powers, preferences,
rights or other terms of one or more outstanding series of Undesignated
Preferred Stock if the holders of such affected series are entitled to vote,
either separately or together as a class with the holders of one or more other
such series, on such amendment pursuant to this Certificate (or pursuant to a
certificate of designations of any series of Undesignated Preferred Stock) or
pursuant to the DGCL;

(b) dividends may be declared and paid or set apart
for payment upon the Common Stock out of any assets or funds of the Corporation
legally available for the payment of dividends, but only when and as declared by
the Board of Directors of the Corporation (the "Board of Directors") or any
authorized committee thereof; and

<PAGE>

(c) upon the voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the net assets
of the Corporation shall be distributed pro rata to the holders of the
Common Stock.

B. UNDESIGNATED PREFERRED STOCK

ARTICLE V

STOCKHOLDER ACTION

ARTICLE VI

DIRECTORS

1. GENERAL. The business and affairs of the Corporation shall be
managed by or under the direction of the Board of Directors except as otherwise
provided herein or required by law.

2. ELECTION OF DIRECTORS. Election of Directors need not be by written
ballot unless the By-laws of the Corporation (the "By-laws") shall so provide.

<PAGE>

3. NUMBER OF DIRECTORS; TERM OF OFFICE. The number of Directors of the
Corporation shall be fixed solely and exclusively by resolution duly adopted
from time to time by the Board of Directors. The Directors, other than those who
may be elected by the holders of any series of Undesignated Preferred Stock,
shall be classified, with respect to the term for which they severally hold
office, into three classes, as nearly equal in number as reasonably possible.
The initial Class I Directors of the Corporation shall be A. Roland Thomas,
Charles D. Yie and Robert P. Schechter; the initial Class II Directors of the
Corporation shall be Julian H. Beale and Marc J. L. Dulude; and the initial
Class III Directors of the Corporation shall be Roger Brooks and Richard A.
Charpie. The initial Class I Directors shall serve for a term expiring at the
annual meeting of stockholders to be held in 2000, the initial Class II
Directors shall serve for a term expiring at the annual meeting of stockholders
to be held in 2001, and the initial Class III Directors shall serve for a term
expiring at the annual meeting of stockholders to be held in 2002. At each
annual meeting of stockholders, Directors elected to succeed those Directors
whose terms expire shall be elected for a term of office to expire at the third
succeeding annual meeting of stockholders after their election. Notwithstanding
the foregoing, the Directors elected to each class shall hold office until their
successors are duly elected and qualified or until their earlier resignation or
removal.

Notwithstanding the foregoing, whenever, pursuant to the provisions of
Article IV of this Certificate, the holders of any one or more series of
Undesignated Preferred Stock shall have the right, voting separately as a series
or together with holders of other such series, to elect Directors at an annual
or special meeting of stockholders, the election, term of office, filling of
vacancies and other features of such directorships shall be governed by the
terms of this Certificate and any certificate of designations applicable
thereto.

4. VACANCIES. Subject to the rights, if any, of the holders of any
series of Undesignated Preferred Stock to elect Directors and to fill vacancies
in the Board of Directors relating thereto, any and all vacancies in the Board
of Directors, however occurring, including, without limitation, by reason of an
increase in size of the Board of Directors, or the death, resignation,
disqualification or removal of a Director, shall be filled solely and
exclusively by the affirmative vote of a majority of the remaining Directors
then in office, even if less than a quorum of the Board of Directors, and not by
the stockholders. Any Director appointed in accordance with the preceding
sentence shall hold office for the remainder of the full term of the class of
Directors in which the new directorship was created or the vacancy occurred and
until such Director's successor shall have been duly elected and qualified or
until his or her earlier resignation or removal. Subject to the rights, if any,
of the holders of any series of Undesignated Preferred Stock to elect Directors,
when the number of Directors is increased or decreased, the Board of Directors
shall, subject to Article VI.3 hereof, determine the class or classes to which
the increased or decreased number of Directors shall be apportioned; PROVIDED,
HOWEVER, that no decrease in the number of Directors shall shorten the term of
any incumbent Director. In the event of a vacancy in the Board of Directors, the
remaining Directors, except as otherwise provided by law, shall exercise the
powers of the full Board of Directors until the vacancy is filled.

<PAGE>

5. REMOVAL. Subject to the rights, if any, of any series of
Undesignated Preferred Stock to elect Directors and to remove any Director whom
the holders of any such stock have the right to elect, any Director (including
persons elected by Directors to fill vacancies in the Board of Directors) may be
removed from office (i) only with cause and (ii) only by the affirmative vote of
the holders of 75% or more of the shares then entitled to vote at an election of
Directors. At least forty-five (45) days prior to any meeting of stockholders at
which it is proposed that any Director be removed from office, written notice of
such proposed removal and the alleged grounds thereof shall be sent to the
Director whose removal will be considered at the meeting.

ARTICLE VII

LIMITATION OF LIABILITY

A Director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a Director, except for liability (a) for any breach of the Director's
duty of loyalty to the Corporation or its stockholders, (b) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (c) under Section 174 of the DGCL or (d) for any transaction
from which the Director derived an improper personal benefit. If the DGCL is
amended after the effective date of this Certificate to authorize corporate
action further eliminating or limiting the personal liability of Directors, then
the liability of a Director of the Corporation shall be eliminated or limited to
the fullest extent permitted by the DGCL, as so amended.

ARTICLE VIII

AMENDMENT OF BY-LAWS

<PAGE>

Directors recommends that stockholders approve such amendment or repeal at such
meeting of stockholders, such amendment or repeal shall only require the
affirmative vote of the majority of the shares present in person or represented
by proxy at such meeting and entitled to vote on such amendment or repeal,
voting together as a single class.

ARTICLE IX

AMENDMENT OF CERTIFICATE OF INCORPORATION

The Corporation reserves the right to amend or repeal this Certificate
in the manner now or hereafter prescribed by statute and this Certificate, and
all rights conferred upon stockholders herein are granted subject to this
reservation. Whenever any vote of the holders of voting stock is required to
amend or repeal any provision of this Certificate, and in addition to any other
vote of holders of voting stock that is required by this Certificate or by law,
such amendment or repeal shall require the affirmative vote of the majority of
the outstanding shares entitled to vote on such amendment or repeal, and the
affirmative vote of the majority of the outstanding shares of each class
entitled to vote thereon as a class, at a duly constituted meeting of
stockholders called expressly for such purpose; PROVIDED, HOWEVER, that the
affirmative vote of not less than 75% of the outstanding shares entitled to vote
on such amendment or repeal, and the affirmative vote of not less than 75% of
the outstanding shares of each class entitled to vote thereon as a class, shall
be required to amend or repeal any provision of Article V, Article VI, Article
VII or Article IX of this Certificate.

[End of Text]

<PAGE>

THIS THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION is
executed as of this ____ day of [MARCH], 2000.

MOLDFLOW CORPORATION

By:
-------------------------------------
Marc J. L. Dulude
President and Chief Executive Officer

<PAGE>

Exhibit 3.3

FORM OF

AMENDED AND RESTATED

BY-LAWS

MOLDFLOW CORPORATION
(the "Corporation")

ARTICLE I

STOCKHOLDERS

SECTION 1. ANNUAL MEETING. The annual meeting of stockholders (any such
meeting being referred to in these By-laws as an "Annual Meeting") shall be held
at the hour, date and place within or without the United States which is fixed
by the Board of Directors, which time, date and place may subsequently be
changed at any time by vote of the Board of Directors. If no Annual Meeting has
been held for a period of thirteen months after the Corporation's last Annual
Meeting, a special meeting in lieu thereof may be held, and such special meeting
shall have, for the purposes of these By-laws or otherwise, all the force and
effect of an Annual Meeting. Any and all references hereafter in these By-laws
to an Annual Meeting or Annual Meetings also shall be deemed to refer to any
special meeting(s) in lieu thereof.

SECTION 2. NOTICE OF STOCKHOLDER BUSINESS AND NOMINATIONS.

(a) ANNUAL MEETINGS OF STOCKHOLDERS.

(1) Nominations of persons for election to the Board of
Directors of the Corporation and the proposal of business to be
considered by the stockholders may be made at an Annual Meeting (a)
pursuant to the Corporation's notice of 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
notice provided for in this By-law, who is entitled to vote at the
meeting, who is present (in person or by proxy) at the meeting and who
complies with the notice procedures set forth in this By-law. In
addition to the other requirements set forth in this By-law, for any
proposal of business to be considered at an Annual Meeting, it must be
a proper subject for action by stockholders of the Corporation under
Delaware law.

(2) For nominations or other business to be properly brought
before an Annual Meeting by a stockholder pursuant to clause (c) of
paragraph (a)(1) of this By-law, the stockholder must have given timely
notice thereof in writing to the Secretary of the Corporation. To be
timely, a stockholder's notice shall be delivered to

<PAGE>

the Secretary at the principal executive offices of the Corporation not
later than the close of business on the ninetieth (90th) day nor
earlier than the close of business on the one hundred twentieth (120th)
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 advanced by more than thirty (30) days before or
delayed by 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 one hundred twentieth (120th) day
prior to such Annual Meeting and not later than the close of business
on the later of the ninetieth (90th) day prior to such Annual Meeting
or the tenth (10th) day following the day on which public announcement
of the date of such meeting is first made. Notwithstanding anything to
the contrary provided herein, for the first Annual Meeting following
the initial public offering of common stock of the Corporation, a
stockholder's notice shall be timely if delivered to the Secretary at
the principal executive offices of the Corporation not later than the
close of business on the later of the ninetieth (90th) day prior to the
scheduled date of such Annual Meeting or the tenth (10th) day following
the day on which public announcement of the date of such Annual Meeting
is first made or sent 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 in an election
contest, or is otherwise required, in each case pursuant to Regulation
14A under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and Rule 14a-11 thereunder (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, any material
interest in such business of such stockholder and the beneficial owner,
if any, on whose behalf the proposal is made, and the names and
addresses of other stockholders known by the stockholder proposing such
business to support such proposal, and the class and number of shares
of the Corporation's capital stock beneficially owned by such other
stockholders; and (c) as to the stockholder giving the notice and the
beneficial owner, if any, on whose behalf the nomination or proposal is
made (i) the name and address of such stockholder, as they appear on
the Corporation's books, and of such beneficial owner, and (ii) the
class and number of shares of the Corporation which are owned
beneficially and of record by such stockholder and such beneficial
owner.

(3) Notwithstanding anything in the second sentence of
paragraph (a)(2) of this By-law 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 naming all
of the nominees for director or specifying the size of the increased
Board of Directors made by the Corporation at least eighty-five (85)
days prior to the first anniversary of the preceding year's Annual
Meeting, a stockholder's notice required by

<PAGE>

this By-law 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 at the principal executive offices 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) GENERAL.

(1) Only such persons who are nominated in accordance with the
provisions of this By-law shall be eligible for election and to serve
as directors and only such business shall be conducted at an Annual
Meeting as shall have been brought before the meeting in accordance
with the provisions of this By-law. The Board of Directors or a
designated committee thereof shall have the power to determine whether
a nomination or any business proposed to be brought before the meeting
was made in accordance with the provisions of this By-law. If neither
the Board of Directors nor such designated committee makes a
determination as to whether any stockholder proposal or nomination was
made in accordance with the provisions of this By-law, the presiding
officer of the Annual Meeting shall have the power and duty to
determine whether the stockholder proposal or nomination was made in
accordance with the provisions of this By-law. If the Board of
Directors or a designated committee thereof or the presiding officer,
as applicable, determines that any stockholder proposal or nomination
was not made in accordance with the provisions of this By-law, such
proposal or nomination shall be disregarded and shall not be presented
for action at the Annual Meeting.

(2) For purposes of this By-law, "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 Section 13, 14 or 15(d) of the Exchange
Act.

(3) Notwithstanding the foregoing provisions of this By-law, 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 in this By-law. Nothing in this By-law shall be
deemed to affect any rights of (i) stockholders to request inclusion of
proposals in the Corporation's proxy statement pursuant to Rule 14a-8
under the Exchange Act or (ii) the holders of any series of
Undesignated Preferred Stock to elect directors under specified
circumstances.

SECTION 3. SPECIAL MEETINGS. Except as otherwise required by statute
and subject to the rights, if any, of the holders of any series of Undesignated
Preferred Stock, special meetings of the stockholders of the Corporation may be
called only by the Board of Directors acting pursuant to a resolution approved
by the affirmative vote of a majority of the Directors

<PAGE>

then in office. Only those matters set forth in the notice of the special
meeting may be considered or acted upon at a special meeting of stockholders of
the Corporation.

SECTION 4. NOTICE OF MEETINGS; ADJOURNMENTS. A written notice of each
Annual Meeting stating the hour, date and place of such Annual Meeting shall be
given not less than ten (10) days nor more than sixty (60) days before the
Annual Meeting, to each stockholder entitled to vote thereat by delivering such
notice to such stockholder or by mailing it, postage prepaid, addressed to such
stockholder at the address of such stockholder as it appears on the
Corporation's stock transfer books. Such notice shall be deemed to be given when
hand delivered to such address or deposited in the mail so addressed, with
postage prepaid.

Notice of all special meetings of stockholders shall be given in the
same manner as provided for Annual Meetings, except that the written notice of
all special meetings shall state the purpose or purposes for which the meeting
has been called.

Notice of an Annual Meeting or special meeting of stockholders need not
be given to a stockholder if a written waiver of notice is signed before or
after such meeting by such stockholder or if such stockholder attends such
meeting, unless such attendance was for the express purpose of objecting at the
beginning of the meeting to the transaction of any business because the meeting
was not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of, any Annual Meeting or special meeting of stockholders need
be specified in any written waiver of notice.

The Board of Directors may postpone and reschedule any previously
scheduled Annual Meeting or special meeting of stockholders and any record date
with respect thereto, regardless of whether any notice or public disclosure with
respect to any such meeting has been sent or made pursuant to Section 2 of this
Article I of these By-laws or otherwise. In no event shall the public
announcement of an adjournment, postponement or rescheduling of any previously
scheduled meeting of stockholders commence a new time period for the giving of a
stockholder's notice under Section 2 of this Article I of these By-laws.

When any meeting is convened, the presiding officer may adjourn the
meeting if (a) no quorum is present for the transaction of business, (b) the
Board of Directors determines that adjournment is necessary or appropriate to
enable the stockholders to consider fully information which the Board of
Directors determines has not been made sufficiently or timely available to
stockholders, or (c) the Board of Directors determines that adjournment is
otherwise in the best interests of the Corporation. When any Annual Meeting or
special meeting of stockholders is adjourned to another hour, date or place,
notice need not be given of the adjourned meeting other than an announcement at
the meeting at which the adjournment is taken of the hour, date and place to
which the meeting is adjourned; 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, notice of the adjourned meeting shall be given
to each stockholder of record entitled to vote thereat and each stockholder who,
by law or under the

<PAGE>

Certificate of Incorporation of the Corporation (as same may hereafter be
amended and/or restated, the "Certificate") or these By-laws, is entitled to
such notice.

SECTION 5. QUORUM. A majority of the shares entitled to vote, present
in person or represented by proxy, shall constitute a quorum at any meeting of
stockholders. If less than a quorum is present at a meeting, the holders of
voting stock representing a majority of the voting power present at the meeting
or the presiding officer may adjourn the meeting from time to time, and the
meeting may be held as adjourned without further notice, except as provided in
Section 5 of this Article I. At such adjourned meeting at which a quorum is
present, any business may be transacted which might have been transacted at the
meeting as originally noticed. The stockholders present at a duly constituted
meeting may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.

SECTION 6. VOTING AND PROXIES. Stockholders shall have one vote for
each share of stock entitled to vote owned by them of record according to the
stock ledger of the Corporation, unless otherwise provided by law or by the
Certificate. Stockholders may vote either (i) in person, (ii) by written proxy
or (iii) by a transmission permitted by Section 212 of the Delaware General
Corporation Law (the "DGCL"). Any copy, facsimile telecommunication or other
reliable reproduction of the writing or transmission permitted by Section 212 of
the DGCL may be substituted for or used in lieu of the original writing or
transmission for any and all purposes for which the original writing or
transmission could be used, provided that such copy, facsimile telecommunication
or other reproduction shall be a complete reproduction of the entire original
writing or transmission. Proxies shall be filed in accordance with the
procedures established for the meeting of stockholders. Except as otherwise
limited therein or as otherwise provided by law, proxies authorizing a person to
vote at a specific meeting shall entitle the persons authorized thereby to vote
at any adjournment of such meeting, but they shall not be valid after final
adjournment of such meeting. A proxy with respect to stock held in the name of
two or more persons shall be valid if executed by or on behalf of any one of
them unless at or prior to the exercise of the proxy the Corporation receives a
specific written notice to the contrary from any one of them.

SECTION 7. ACTION AT MEETING. When a quorum is present at any meeting
of stockholders, any matter before any such meeting (other than an election of a
director or directors) shall be decided by a majority of the votes properly cast
for and against such matter, except where a larger vote is required by law, by
the Certificate or by these By-laws. Any election of directors by stockholders
shall be determined by a plurality of the votes properly cast on the election of
directors. The Corporation shall not directly or indirectly vote any shares of
its own stock; provided, however, that the Corporation may vote shares which it
holds in a fiduciary capacity to the extent permitted by law.

SECTION 8. STOCKHOLDER LISTS. The Secretary or an Assistant Secretary
(or the Corporation's transfer agent or other person authorized by these By-laws
or by law) shall

<PAGE>

prepare and make, at least ten (10) days before every Annual Meeting or special
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
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 hour, date and place of the
meeting during the whole time thereof, and may be inspected by any stockholder
who is present.

SECTION 9. PRESIDING OFFICER. The Chairman of the Board, if one is
elected, or if not elected or in his or her absence, the President, shall
preside at all Annual Meetings or special meetings of stockholders and shall
have the power, among other things, to adjourn such meeting at any time and from
time to time, subject to Sections 5 and 6 of this Article I. The order of
business and all other matters of procedure at any meeting of the stockholders
shall be determined by the presiding officer.

SECTION 10. INSPECTORS OF ELECTIONS. The Corporation shall, in advance
of any meeting of stockholders, appoint one or more inspectors to act at the
meeting and make a written report thereof. The Corporation may designate one or
more persons as alternate inspectors to replace any inspector who fails to act.
If no inspector or alternate is able to act at a meeting of stockholders, the
presiding officer shall appoint one or more inspectors to act at the meeting.
Any inspector may, but need not, be an officer, employee or agent of the
Corporation. Each inspector, before entering upon the discharge of his or her
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. The inspectors shall perform such duties as are required by the DGCL,
including the counting 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. The presiding officer may review all
determinations made by the inspectors, and in so doing the presiding officer
shall be entitled to exercise his or her sole judgment and discretion and he or
she shall not be bound by any determinations made by the inspectors. All
determinations by the inspectors and, if applicable, the presiding officer,
shall be subject to further review by any court of competent jurisdiction.

ARTICLE II

DIRECTORS

SECTION 1. POWERS. The business and affairs of the Corporation shall be
managed by or under the direction of the Board of Directors except as otherwise
provided by the Certificate or required by law.

<PAGE>

SECTION 2. NUMBER AND TERMS. The number of directors of the Corporation
shall be fixed solely by resolution duly adopted from time to time by the Board
of Directors. The directors shall hold office in the manner provided in the
Certificate.

SECTION 3. QUALIFICATION. No director need be a stockholder of the
Corporation.

SECTION 4. VACANCIES. Vacancies in the Board of Directors shall be
filled in the manner provided in the Certificate.

SECTION 5. REMOVAL. Directors may be removed from office in the manner
provided in the Certificate.

SECTION 6. RESIGNATION. A director may resign at any time by giving
written notice to the Chairman of the Board, if one is elected, the President or
the Secretary. A resignation shall be effective upon receipt, unless the
resignation otherwise provides.

SECTION 7. REGULAR MEETINGS. The regular annual meeting of the Board of
Directors shall be held, without notice other than this Section 7, on the same
date and at the same place as the Annual Meeting following the close of such
meeting of stockholders. Other regular meetings of the Board of Directors may be
held at such hour, date and place as the Board of Directors may by resolution
from time to time determine and publicize by means of reasonable notice given to
any director who is not present at the meeting at which such resolution is
adopted.

SECTION 8. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called, orally or in writing, by or at the request of a majority of the
directors, the Chairman of the Board, if one is elected, or the President. The
person calling any such special meeting of the Board of Directors may fix the
hour, date and place thereof.

SECTION 9. NOTICE OF MEETINGS. Notice of the hour, date and place of
all special meetings of the Board of Directors shall be given to each director
by the Secretary or an Assistant Secretary, or in case of the death, absence,
incapacity or refusal of such persons, by the Chairman of the Board, if one is
elected, or the President or such other officer designated by the Chairman of
the Board, if one is elected, or the President. Notice of any special meeting of
the Board of Directors shall be given to each director in person, by telephone,
or by facsimile, electronic mail or other form of electronic communication, sent
to his or her business or home address, at least twenty-four (24) hours in
advance of the meeting, or by written notice mailed to his or her business or
home address, at least forty-eight (48) hours in advance of the meeting. Such
notice shall be deemed to be delivered when hand delivered to such address, read
to such director by telephone, deposited in the mail so addressed, with postage
thereon prepaid if mailed, dispatched or transmitted if faxed, telexed or
telecopied, or when delivered to the telegraph company if sent by telegram.

<PAGE>

A written waiver of notice signed before or after a meeting by a
director and filed with the records of the meeting shall be deemed to be
equivalent to notice of the meeting. The attendance of a director at a meeting
shall constitute a waiver of notice of such meeting, except where a director
attends a meeting for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because such meeting is not lawfully
called or convened. Except as otherwise required by law, by the Certificate or
by these By-laws, neither the business to be transacted at, nor the purpose of,
any meeting of the Board of Directors need be specified in the notice or waiver
of notice of such meeting.

SECTION 10. QUORUM. At any meeting of the Board of Directors, a
majority of the total number of directors then in office shall constitute a
quorum for the transaction of business, but if less than a quorum is present at
a meeting, a majority of the directors present may adjourn the meeting from time
to time, and the meeting may be held as adjourned without further notice, except
as provided in Section 9 of this Article II. Any business which might have been
transacted at the meeting as originally noticed may be transacted at such
adjourned meeting at which a quorum is present. For purposes of this section,
the total number of directors includes any unfilled vacancies on the Board of
Directors.

SECTION 11. ACTION AT MEETING. At any meeting of the Board of Directors
at which a quorum is present, the vote of a majority of the directors present
shall constitute action by the Board of Directors, unless otherwise required by
law, by the Certificate or by these By-laws.

SECTION 12. ACTION BY CONSENT. Any action required or permitted to be
taken at any meeting of the Board of Directors may be taken without a meeting if
all members of the Board of Directors consent thereto in writing. Such written
consent shall be filed with the records of the meetings of the Board of
Directors and shall be treated for all purposes as a vote at a meeting of the
Board of Directors.

SECTION 13. MANNER OF PARTICIPATION. Directors may participate in
meetings of the Board of Directors by means of conference telephone or similar
communications equipment by means of which all directors participating in the
meeting can hear each other, and participation in a meeting in accordance
herewith shall constitute presence in person at such meeting for purposes of
these By-laws.

SECTION 14. COMMITTEES. The Board of Directors, by vote of a majority
of the directors then in office, may elect from its number one or more
committees, including, without limitation, an Executive Committee, a
Compensation Committee, a Stock Option Committee and an Audit Committee, and may
delegate thereto some or all of its powers except those which by law, by the
Certificate or by these By-laws may not be delegated. Except as the Board of
Directors may otherwise determine, any such committee may make rules for the
conduct of its business, but unless otherwise provided by the Board of Directors
or in such rules, its business shall be conducted so far as possible in the same
manner as is provided by

<PAGE>

these By-laws for the Board of Directors. All members of such committees shall
hold such offices at the pleasure of the Board of Directors. The Board of
Directors may abolish any such committee at any time. Any committee to which the
Board of Directors delegates any of its powers or duties shall keep records of
its meetings and shall report its action to the Board of Directors.

SECTION 15. COMPENSATION OF DIRECTORS. Directors shall receive such
compensation for their services as shall be determined by a majority of the
Board of Directors, or a designated committee thereof, provided that directors
who are serving the Corporation as employees and who receive compensation for
their services as such, shall not receive any salary or other compensation for
their services as directors of the Corporation.

ARTICLE III

OFFICERS

SECTION 1. ENUMERATION. The officers of the Corporation shall consist
of a President, a Treasurer, a Secretary and such other officers, including,
without limitation, a Chairman of the Board of Directors, a Chief Executive
Officer and one or more Vice Presidents (including Executive Vice Presidents or
Senior Vice Presidents), Assistant Vice Presidents, Assistant Treasurers and
Assistant Secretaries, as the Board of Directors may determine.

SECTION 2. ELECTION. At the regular annual meeting of the Board of
Directors following the Annual Meeting, the Board of Directors shall elect the
President, the Treasurer and the Secretary. Other officers may be elected by the
Board of Directors at such regular annual meeting of the Board of Directors or
at any other regular or special meeting.

SECTION 3. QUALIFICATION. No officer need be a stockholder or a
director. Any person may occupy more than one office of the Corporation at any
time. Any officer may be required by the Board of Directors to give bond for the
faithful performance of his or her duties in such amount and with such sureties
as the Board of Directors may determine.

SECTION 4. TENURE. Except as otherwise provided by the Certificate or
by these By-laws, each of the officers of the Corporation shall hold office
until the regular annual meeting of the Board of Directors following the next
Annual Meeting and until his or her successor is elected and qualified or until
his or her earlier resignation or removal.

SECTION 5. RESIGNATION. Any officer may resign by delivering his or her
written resignation to the Corporation addressed to the President or the
Secretary, and such resignation shall be effective upon receipt unless it is
specified to be effective at some other time or upon the happening of some other
event.

<PAGE>

SECTION 6. REMOVAL. Except as otherwise provided by law, the Board of
Directors may remove any officer with or without cause by the affirmative vote
of a majority of the directors then in office.

SECTION 7. ABSENCE OR DISABILITY. In the event of the absence or
disability of any officer, the Board of Directors may designate another officer
to act temporarily in place of such absent or disabled officer.

SECTION 8. VACANCIES. Any vacancy in any office may be filled for the
unexpired portion of the term by the Board of Directors.

SECTION 9. PRESIDENT. The President shall, subject to the direction of
the Board of Directors, have general supervision and control of the
Corporation's business. If there is no Chairman of the Board or if he or she is
absent, the President shall preside, when present, at all meetings of
stockholders and of the Board of Directors. The President shall have such other
powers and perform such other duties as the Board of Directors may from time to
time designate.

SECTION 10. CHAIRMAN OF THE BOARD. The Chairman of the Board, if one is
elected, shall preside, when present, at all meetings of the stockholders and of
the Board of Directors. The Chairman of the Board shall have such other powers
and shall perform such other duties as the Board of Directors may from time to
time designate.

SECTION 11. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer, if
one is elected, shall have such powers and shall perform such duties as the
Board of Directors may from time to time designate.

SECTION 12. VICE PRESIDENTS AND ASSISTANT VICE PRESIDENTS. Any Vice
President (including any Executive Vice President or Senior Vice President) and
any Assistant Vice President shall have such powers and shall perform such
duties as the Board of Directors or the Chief Executive Officer may from time to
time designate.

SECTION 13. TREASURER AND ASSISTANT TREASURERS. The Treasurer shall,
subject to the direction of the Board of Directors and except as the Board of
Directors or the Chief Executive Officer may otherwise provide, have general
charge of the financial affairs of the Corporation and shall cause to be kept
accurate books of account. The Treasurer shall have custody of all funds,
securities, and valuable documents of the Corporation. He or she shall have such
other duties and powers as may be designated from time to time by the Board of
Directors or the Chief Executive Officer.

Any Assistant Treasurer shall have such powers and perform such duties
as the Board of Directors or the Chief Executive Officer may from time to time
designate.

<PAGE>

SECTION 14. SECRETARY AND ASSISTANT SECRETARIES. The Secretary shall
record all the proceedings of the meetings of the stockholders and the Board of
Directors (including committees of the Board) in books kept for that purpose. In
his or her absence from any such meeting, a temporary secretary chosen at the
meeting shall record the proceedings thereof. The Secretary shall have charge of
the stock ledger (which may, however, be kept by any transfer or other agent of
the Corporation). The Secretary shall have custody of the seal of the
Corporation, and the Secretary, or an Assistant Secretary, shall have authority
to affix it to any instrument requiring it, and, when so affixed, the seal may
be attested by his or her signature or that of an Assistant Secretary. The
Secretary shall have such other duties and powers as may be designated from time
to time by the Board of Directors or the Chief Executive Officer. In the absence
of the Secretary, any Assistant Secretary may perform his or her duties and
responsibilities.

Any Assistant Secretary shall have such powers and perform such duties
as the Board of Directors or the Chief Executive Officer may from time to time
designate.

SECTION 15. OTHER POWERS AND DUTIES. Subject to these By-laws and to
such limitations as the Board of Directors may from time to time prescribe, the
officers of the Corporation shall each have such powers and duties as generally
pertain to their respective offices, as well as such powers and duties as from
time to time may be conferred by the Board of Directors or the Chief Executive
Officer.

ARTICLE IV

CAPITAL STOCK

SECTION 1. CERTIFICATES OF STOCK. Each stockholder shall be entitled to
a certificate of the capital stock of the Corporation in such form as may from
time to time be prescribed by the Board of Directors. Such certificate shall be
signed by the Chairman of the Board of Directors, the President or a Vice
President and by the Treasurer or an Assistant Treasurer, or the Secretary or an
Assistant Secretary. The Corporation seal and the signatures by the
Corporation's officers, the transfer agent or the registrar may be facsimiles.
In case any officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed on such certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the Corporation with the same effect as if he or she were such
officer, transfer agent or registrar at the time of its issue. Every certificate
for shares of stock which are subject to any restriction on transfer and every
certificate issued when the Corporation is authorized to issue more than one
class or series of stock shall contain such legend with respect thereto as is
required by law.

SECTION 2. TRANSFERS. Subject to any restrictions on transfer and
unless otherwise provided by the Board of Directors, shares of stock may be
transferred only on the books of the Corporation by the surrender to the
Corporation or its transfer agent of the certificate

<PAGE>

theretofore properly endorsed or accompanied by a written assignment or power of
attorney properly executed, with transfer stamps (if necessary) affixed, and
with such proof of the authenticity of signature as the Corporation or its
transfer agent may reasonably require.

SECTION 3. RECORD HOLDERS. Except as may otherwise be required by law,
by the Certificate or by these By-laws, the Corporation shall be entitled to
treat the record holder of stock as shown on its books as the owner of such
stock for all purposes, including the payment of dividends and the right to vote
with respect thereto, regardless of any transfer, pledge or other disposition of
such stock, until the shares have been transferred on the books of the
Corporation in accordance with the requirements of these By-laws.

SECTION 4. RECORD DATE. 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 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 a record date, which record
date shall not precede the date upon which the resolution fixing the record date
is adopted by the Board of Directors, and which record date: (a) in the case of
determination of stockholders entitled to vote at any meeting of stockholders,
shall, unless otherwise required by law, not be more than sixty nor less than
ten (10) days before the date of such meeting and (b) in the case of any other
action, shall not be more than sixty (60) days prior to such other action. If no
record date is fixed: (i) the record date for determining stockholders entitled
to notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held and (ii) the record date for determining stockholders
for any other purpose shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating thereto.

SECTION 5. REPLACEMENT OF CERTIFICATES. In case of the alleged loss,
destruction or mutilation of a certificate of stock, a duplicate certificate may
be issued in place thereof, upon such terms as the Board of Directors may
prescribe.

ARTICLE V

INDEMNIFICATION

SECTION 1. DEFINITIONS. For purposes of this Article:

(a) "Corporate Status" describes the status of a person who is serving
or has served (i) as a Director of the Corporation, (ii) as an Officer of the
Corporation, or (iii) as a director, partner, trustee, officer, employee or
agent of any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise which such person is or was serving at the
request of the Corporation. For purposes of this Section 1(a), an Officer or
Director of the

<PAGE>

Corporation who is serving or has served as a director, partner, trustee,
officer, employee or agent of a Subsidiary shall be deemed to be serving at the
request of the Corporation;

(b) "Director" means any person who serves or has served the
Corporation as a director on the Board of Directors of the Corporation;

(c) "Disinterested Director" means, with respect to each Proceeding in
respect of which indemnification is sought hereunder, a Director of the
Corporation who is not and was not a party to such Proceeding;

(d) "Expenses" means all reasonable attorneys' fees, retainers, court
costs, transcript costs, fees of expert witnesses, private investigators and
professional advisors (including, without limitation, accountants and investment
bankers), travel expenses, duplicating costs, printing and binding costs, costs
of preparation of demonstrative evidence and other courtroom presentation aids
and devices, costs incurred in connection with document review, organization,
imaging and computerization, telephone charges, postage, delivery service fees,
and all other disbursements, costs or expenses of the type customarily incurred
in connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, settling or otherwise
participating in, a Proceeding;

(e) "Non-Officer Employee" means any person who serves or has served as
an employee or agent of the Corporation, but who is not or was not a Director or
Officer;

(f) "Officer" means any person who serves or has served the Corporation
as an officer appointed by the Board of Directors of the Corporation;

(g) "Proceeding" means any threatened, pending or completed action,
suit, arbitration, alternate dispute resolution mechanism, inquiry,
investigation, administrative hearing or other proceeding, whether civil,
criminal, administrative, arbitrative or investigative; and

(h) "Subsidiary" shall mean any corporation, partnership, limited
liability company, joint venture, trust or other entity of which the Corporation
owns (either directly or through or together with another Subsidiary of the
Corporation) either (i) a general partner, managing member or other similar
interest or (ii) (A) 50% or more of the voting power of the voting capital
equity interests of such corporation, partnership, limited liability company,
joint venture or other entity, or (B) 50% or more of the outstanding voting
capital stock or other voting equity interests of such corporation, partnership,
limited liability company, joint venture or other entity.

SECTION 2. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Subject to the
operation of Section 4 of this Article V of these By-laws, each Director and
Officer shall be indemnified and held harmless by the Corporation to the fullest
extent authorized by the DGCL, as the

<PAGE>

same exists or may hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the Corporation to provide
broader indemnification rights than such law permitted the Corporation to
provide prior to such amendment) against any and all Expenses, judgments,
penalties, fines and amounts reasonably paid in settlement that are incurred by
such Director or Officer or on such Director's or Officer's behalf in connection
with any threatened, pending or completed Proceeding or any claim, issue or
matter therein, which such Director or Officer is, or is threatened to be made,
a party to or participant in by reason of such Director's or Officer's Corporate
Status, if such Director or Officer acted in good faith and in a manner such
Director or Officer reasonably believed to be in or not opposed to the best
interests of the Corporation and, with respect to any criminal proceeding, had
no reasonable cause to believe his or her conduct was unlawful. The rights of
indemnification provided by this Section 2 shall continue as to a Director or
Officer after he or she has ceased to be a Director or Officer and shall inure
to the benefit of his or her heirs, executors, administrators and personal
representatives. Notwithstanding the foregoing, the Corporation shall indemnify
any Director or Officer seeking indemnification in connection with a Proceeding
initiated by such Director or Officer only if such Proceeding was authorized by
the Board of Directors of the Corporation, unless such Proceeding was brought to
enforce an Officer or Director's rights to Indemnification or, in the case of
Directors, advancement of Expenses under these By-laws in accordance with the
provisions set forth herein.

SECTION 3. INDEMNIFICATION OF NON-OFFICER EMPLOYEES. Subject to the
operation of Section 4 of this Article V of these By-laws, each Non-Officer
Employee may, in the discretion of the Board of Directors of the Corporation, be
indemnified by the Corporation to the fullest extent authorized by the DGCL, as
the same exists or may hereafter be amended, against any or all Expenses,
judgments, penalties, fines and amounts reasonably paid in settlement that are
incurred by such Non-Officer Employee or on such Non-Officer Employee's behalf
in connection with any threatened, pending or completed Proceeding, or any
claim, issue or matter therein, which such Non-Officer Employee is, or is
threatened to be made, a party to or participant in by reason of such
Non-Officer Employee's Corporate Status, if such Non-Officer Employee acted in
good faith and in a manner such Non-Officer Employee reasonably believed to be
in or not opposed to the best interests of the Corporation and, with respect to
any criminal proceeding, had no reasonable cause to believe his or her conduct
was unlawful. The rights of indemnification provided by this Section 3 shall
exist as to a Non-Officer Employee after he or she has ceased to be a
Non-Officer Employee and shall inure to the benefit of his or her heirs,
personal representatives, executors and administrators. Notwithstanding the
foregoing, the Corporation may indemnify any Non-Officer Employee seeking
indemnification in connection with a Proceeding initiated by such Non-Officer
Employee only if such Proceeding was authorized by the Board of Directors of the
Corporation.

SECTION 4. GOOD FAITH. Unless ordered by a court, no indemnification
shall be provided pursuant to this Article V to a Director, to an Officer or to
a Non-Officer Employee unless a determination shall have been made that such
person acted in good faith and in a

<PAGE>

manner such person reasonably believed to be in or not opposed to the best
interests of the Corporation and, with respect to any criminal Proceeding, such
person had no reasonable cause to believe his or her conduct was unlawful. Such
determination shall be made by (a) a majority vote of the Disinterested
Directors, even though less than a quorum of the Board of Directors, (b) a
committee comprised of Disinterested Directors, such committee having been
designated by a majority vote of the Disinterested Directors (even though less
than a quorum), (c) if there are no such Disinterested Directors, or if a
majority of Disinterested Directors so directs, by independent legal counsel in
a written opinion, or (d) by the stockholders of the Corporation.

SECTION 5. ADVANCEMENT OF EXPENSES TO DIRECTORS PRIOR TO FINAL
DISPOSITION.

(a) The Corporation shall advance all Expenses incurred by or on behalf
of any Director in connection with any Proceeding in which such Director is
involved by reason of such Director's Corporate Status within ten (10) days
after the receipt by the Corporation of a written statement from such Director
requesting such advance or advances from time to time, whether prior to or after
final disposition of such Proceeding. Such statement or statements shall
reasonably evidence the Expenses incurred by such Director and shall be preceded
or accompanied by an undertaking by or on behalf of such Director to repay any
Expenses so advanced if it shall ultimately be determined that such Director is
not entitled to be indemnified against such Expenses.

(b) If a claim for advancement of Expenses hereunder by a Director is
not paid in full by the Corporation within ten (10) days after receipt by the
Corporation of documentation of Expenses and the required undertaking, such
Director may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim and if successful in whole or in part,
such Director shall also be entitled to be paid the expenses of prosecuting such
claim. The failure of the Corporation (including its Board of Directors or any
committee thereof, independent legal counsel, or stockholders) to make a
determination concerning the permissibility of such advancement of Expenses
under this Article V shall not be a defense to the action and shall not create a
presumption that such advancement is not permissible. The burden of proving that
a Director is not entitled to an advancement of expenses shall be on the
Corporation.

(c) In any suit brought by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the Corporation shall be
entitled to recover such expenses upon a final adjudication that the Director
has not met any applicable standard for indemnification set forth in the DGCL.

<PAGE>

SECTION 6. ADVANCEMENT OF EXPENSES TO OFFICERS AND NON-OFFICER
EMPLOYEES PRIOR TO FINAL DISPOSITION.

(a) The Corporation may, at the discretion of the Board of Directors of
the Corporation, advance any or all Expenses incurred by or on behalf of any
Officer and Non-Officer Employee in connection with any Proceeding in which such
is involved by reason of the Corporate Status of such Officer or Non-Officer
Employee upon the receipt by the Corporation of a statement or statements from
such Officer or Non-Officer Employee requesting such advance or advances from
time to time, whether prior to or after final disposition of such Proceeding.
Such statement or statements shall reasonably evidence the Expenses incurred by
such Officer and Non-Officer Employee and shall be preceded or accompanied by an
undertaking by or on behalf of such to repay any Expenses so advanced if it
shall ultimately be determined that such Officer or Non-Officer Employee is not
entitled to be indemnified against such Expenses.

(b) In any suit brought by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the Corporation shall be
entitled to recover such expenses upon a final adjudication that the Officer or
Non-Officer Employee has not met any applicable standard for indemnification set
forth in the DGCL.

SECTION 7. CONTRACTUAL NATURE OF RIGHTS.

(a) The foregoing provisions of this Article V shall be deemed to be a
contract between the Corporation and each Director and Officer entitled to the
benefits hereof at any time while this Article V is in effect, and any repeal or
modification thereof shall not affect any rights or obligations then existing
with respect to any state of facts then or theretofore existing or any
Proceeding theretofore or thereafter brought based in whole or in part upon any
such state of facts.

(b) If a claim for indemnification of Expenses hereunder by a Director
or Officer is not paid in full by the Corporation within sixty (60) days after
receipt by the Corporation of a written claim for indemnification, such Director
or Officer may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim, and if successful in whole or in part,
such Director or Officer shall also be entitled to be paid the expenses of
prosecuting such claim. The failure of the Corporation (including its Board of
Directors or any committee thereof, independent legal counsel, or stockholders)
to make a determination concerning the permissibility of such indemnification
under this Article V shall not be a defense to the action and shall not create a
presumption that such indemnification is not permissible. The burden of proving
that a Director or Officer is not entitled to indemnification shall be on the
Corporation.

<PAGE>

(c) In any suit brought by a Director or Officer to enforce a right to
indemnification hereunder, it shall be a defense that such Director or Officer
has not met any applicable standard for indemnification set forth in the DGCL.

SECTION 8. NON-EXCLUSIVITY OF RIGHTS. The rights to indemnification and
advancement of Expenses set forth in this Article V shall not be exclusive of
any other right which any Director, Officer, or Non-Officer Employee may have or
hereafter acquire under any statute, provision of the Certificate or these
By-laws, agreement, vote of stockholders or Disinterested Directors or
otherwise.

SECTION 9. INSURANCE. The Corporation may maintain insurance, at its
expense, to protect itself and any Director, Officer or Non-Officer Employee
against any liability of any character asserted against or incurred by the
Corporation or any such Director, Officer or Non-Officer Employee, or arising
out of any such person's Corporate Status, whether or not the Corporation would
have the power to indemnify such person against such liability under the DGCL or
the provisions of this Article V.

ARTICLE VI

MISCELLANEOUS PROVISIONS

SECTION 1. FISCAL YEAR. The fiscal year of the Corporation shall be
determined by the Board of Directors.

SECTION 2. SEAL. The Board of Directors shall have power to adopt and
alter the seal of the Corporation.

SECTION 3. EXECUTION OF INSTRUMENTS. All deeds, leases, transfers,
contracts, bonds, notes and other obligations to be entered into by the
Corporation in the ordinary course of its business without director action may
be executed on behalf of the Corporation by the Chairman of the Board, if one is
elected, the President or the Treasurer or any other officer, employee or agent
of the Corporation as the Board of Directors or Executive Committee may
authorize.

SECTION 4. VOTING OF SECURITIES. Unless the Board of Directors
otherwise provides, the Chairman of the Board, if one is elected, the President
or the Treasurer may waive notice of and act on behalf of this Corporation, or
appoint another person or persons to act as proxy or attorney in fact for this
Corporation with or without discretionary power and/or power of substitution, at
any meeting of stockholders or shareholders of any other corporation or
organization, any of whose securities are held by this Corporation.

SECTION 5. RESIDENT AGENT. The Board of Directors may appoint a
resident agent upon whom legal process may be served in any action or proceeding
against the Corporation.

<PAGE>

SECTION 6. CORPORATE RECORDS. The original or attested copies of the
Certificate, By-laws and records of all meetings of the incorporators,
stockholders and the Board of Directors and the stock transfer books, which
shall contain the names of all stockholders, their record addresses and the
amount of stock held by each, may be kept outside the State of Delaware and
shall be kept at the principal office of the Corporation, at the office of its
counsel or at an office of its transfer agent or at such other place or places
as may be designated from time to time by the Board of Directors.

SECTION 7. CERTIFICATE. All references in these By-laws to the
Certificate shall be deemed to refer to the Amended and Restated Certificate of
Incorporation of the Corporation, as amended and in effect from time to time.

SECTION 8. AMENDMENT OF BY-LAWS.

(a) AMENDMENT BY DIRECTORS. Except as provided otherwise by law, these
By-laws may be amended or repealed by the Board of Directors by the affirmative
vote of a majority of the directors then in office.

(b) AMENDMENT BY STOCKHOLDERS. These By-laws may be amended or repealed
at any Annual Meeting, or special meeting of stockholders called for such
purpose, by the affirmative vote of at least 75% of the shares present in person
or represented by proxy at such meeting and entitled to vote on such amendment
or repeal, voting together as a single class; provided, however, that if the
Board of Directors recommends that stockholders approve such amendment or repeal
at such meeting of stockholders, such amendment or repeal shall only require the
affirmative vote of the majority of the shares present in person or represented
by proxy at such meeting and entitled to vote on such amendment or repeal,
voting together as a single class. Notwithstanding the foregoing, stockholder
approval shall not be required unless mandated by the Certificate, these
By-laws, or other applicable law.

Adopted January 20, 2000 and effective as of March ___, 2000.

<PAGE>

Exhibit 5.1

[LETTERHEAD OF GOODWIN, PROCTER & HOAR LLP]

March 1, 2000

Moldflow Corporation
91 Hartwell Avenue
Lexington, Massachusetts 02421

Ladies and Gentlemen:

Re: REGISTRATION STATEMENT ON FORM S-1

This opinion is delivered in our capacity as special counsel to
Moldflow Corporation (the "Company") in connection with the preparation and
filing with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, of a Registration Statement on Form S-1 (the
"Registration Statement") relating to 3,450,000 shares of Common Stock, par
value $.01 per share (the "Registered Shares"), including 3,000,000 primary
shares to be sold by the Company (the "Primary Shares"), and 181,656 shares
to be sold by the Company (the "Company Option Shares" and together with the
Primary Shares, the "Company Shares") and 268,344 shares to be sold by
certain stockholders of the Company (the "Stockholder Option Shares") which
the underwriters have an option to purchase solely for the purpose of
covering over-allotments. The Registered Shares are to be sold to the several
underwriters (the "Underwriters") of which Adams, Harkness & Hill, Inc. and
A.G. Edwards & Sons, Inc. are the representatives (the "Representatives")
pursuant to an Underwriting Agreement (the "Underwriting Agreement") to be
entered into between the Company and the Representatives of the Underwriters.

As counsel for the Company, we have examined the form of the
proposed Underwriting Agreement being filed as an exhibit to the Registration
Statement, the Company's Second Amended and Restated Certificate of
Incorporation and the Company's Amended and Restated By-laws, each as will be
in effect at the time of the issuance of the Registered Shares, and such
records, certificates and other documents of the Company as we have deemed
necessary or appropriate for the purposes of this opinion.

Based on the foregoing, we are of the opinion that (i) the
Stockholder Option Shares are duly authorized, legally issued, fully paid and
non-assessable by the Company under the Delaware General Corporation Law (the
"DGCL") and (ii) when the Underwriting Agreement is completed (including the
insertion therein of pricing terms) and executed by the Company and on behalf
of the Underwriters, and the Company Shares are sold to the Underwriters
and paid for pursuant to the terms of the Underwriting Agreement, the
Company Shares will be duly authorized, legally issued, fully paid and
non-assessable by the Company under the DGCL.

<PAGE>

Moldflow Corporation
March 1, 2000
Page 2

We hereby consent to being named as counsel to the Company in the
Registration Statement, to the references therein to our firm under the caption
"Validity of Common Stock," and to the inclusion of this opinion as an exhibit
to the Registration Statement.

Very truly yours,

/s/ GOODWIN, PROCTER & HOAR LLP

GOODWIN, PROCTER & HOAR LLP

<PAGE>

Exhibit 10.27
MOLDFLOW CORPORATION

2000 STOCK OPTION AND INCENTIVE PLAN

SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS

The name of the plan is the Moldflow Corporation 2000 Stock Option
and Incentive Plan (the "Plan"). The purpose of the Plan is to encourage and
enable the officers, employees, Independent Directors and other key persons
(including consultants) of Moldflow Corporation (the "Company") and its
Subsidiaries upon whose judgment, initiative and efforts the Company largely
depends for the successful conduct of its business to acquire a proprietary
interest in the Company. It is anticipated that providing such persons with a
direct stake in the Company's welfare will assure a closer identification of
their interests with those of the Company, thereby stimulating their efforts
on the Company's behalf and strengthening their desire to remain with the
Company.

The following terms shall be defined as set forth below:

"ACT" means the Securities Act of 1933, as amended, and the rules
and regulations thereunder.

"ADMINISTRATOR" is defined in Section 2(a).

"AWARD" or "AWARDS," except where referring to a particular category
of grant under the Plan, shall include Incentive Stock Options, Non-Qualified
Stock Options, Stock Appreciation Rights, Deferred Stock Awards, Restricted
Stock Awards, Unrestricted Stock Awards, Performance Share Awards and
Dividend Equivalent Rights.

"BOARD" means the Board of Directors of the Company.

"CHANGE OF CONTROL" is defined in Section 17.

"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.

"COMMITTEE" means the Committee of the Board referred to in Section 2.

"COVERED EMPLOYEE" means an employee who is a "Covered Employee"
within the meaning of Section 162(m) of the Code.

"DEFERRED STOCK AWARD" means Awards granted pursuant to Section 8.

"DIVIDEND EQUIVALENT RIGHT" means Awards granted pursuant to
Section 12.

<PAGE>

"EFFECTIVE DATE" means the date on which the Plan is approved by
stockholders as set forth in Section 19.

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.

"FAIR MARKET VALUE" of the Stock on any given date means the fair
market value of the Stock determined in good faith by the Administrator;
provided, however, that if the Stock is admitted to quotation on the National
Association of Securities Dealers Automated Quotation System ("Nasdaq"),
Nasdaq National System or a national securities exchange, the determination
shall be made by reference to market quotations. If there are no market
quotations for such date, the determination shall be made by reference to the
last date preceding such date for which there are market quotations; provided
further, however, that if the date for which Fair Market Value is determined
is the first day when trading prices for the Stock are reported on Nasdaq or
on a national securities exchange, the Fair Market Value shall be the "Price
to the Public" (or equivalent) set forth on the cover page for the final
prospectus relating to the Company's Initial Public Offering.

"INCENTIVE STOCK OPTION" means any Stock Option designated and
qualified as an "incentive stock option" as defined in Section 422 of the
Code.

"INDEPENDENT DIRECTOR" means a member of the Board who is not also
an employee of the Company or any Subsidiary.

"INITIAL PUBLIC OFFERING" means the consummation of the first fully
underwritten, firm commitment public offering pursuant to an effective
registration statement under the Act, other than on Forms S-4 or S-8 or their
then equivalents, covering the offer and sale by the Company of its equity
securities, or such other event as a result of or following which the Stock
shall be publicly held.

"NON-QUALIFIED STOCK OPTION" means any Stock Option that is not an
Incentive Stock Option.

"OPTION" or "STOCK OPTION" means any option to purchase shares of Stock
granted pursuant to Section 5.

"PERFORMANCE SHARE AWARD" means Awards granted pursuant to Section 10.

"PERFORMANCE CYCLE" means one or more periods of time, which may be
of varying and overlapping durations, as the Administrator may select, over
which the attainment of one or more performance criteria will be measured for
the purpose of determining a grantee's right to and the payment of a
Performance Share Award, Restricted Stock Award or Deferred Stock Award.

<PAGE>

"RESTRICTED STOCK AWARD" means Awards granted pursuant to Section 7.

"STOCK" means the Common Stock, par value $.01 per share, of the
Company, subject to adjustments pursuant to Section 3.

"STOCK APPRECIATION RIGHT" means any Award granted pursuant to
Section 6.

"SUBSIDIARY" means any corporation or other entity (other than the
Company) in any unbroken chain of corporations or other entities beginning
with the Company if each of the corporations or entities (other than the last
corporation or entity in the unbroken chain) owns stock or other interests
possessing fifty percent (50%) or more of the economic interest or the total
combined voting power of all classes of stock or other interests in one of
the other corporations or entities in the chain.

"UNRESTRICTED STOCK AWARD" means any Award granted pursuant to
Section 9.

SECTION 2. ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO
SELECT GRANTEES AND DETERMINE AWARDS

(a) COMMITTEE. The Plan shall be administered by either the Board or a
committee of not less than two Independent Directors (in either case, the
"Administrator").

(b) POWERS OF ADMINISTRATOR. The Administrator shall have the power and
authority to grant Awards consistent with the terms of the Plan, including the
power and authority:

(i) to select the individuals to whom Awards may from time to
time be granted;

(ii) to determine the time or times of grant, and the extent,
if any, of Incentive Stock Options, Non-Qualified Stock Options, Stock
Appreciation Rights, Restricted Stock Awards, Deferred Stock Awards,
Unrestricted Stock Awards, Performance Share Awards and Dividend
Equivalent Rights, or any combination of the foregoing, granted to any
one or more grantees;

(iii) to determine the number of shares of Stock to be covered
by any Award;

(iv) to determine and modify from time to time the terms and
conditions, including restrictions, not inconsistent with the terms of
the Plan, of any Award, which terms and conditions may differ among
individual Awards and grantees, and to approve the form of written
instruments evidencing the Awards;

(v) to accelerate at any time the exercisability or vesting of
all or any portion of any Award;

<PAGE>

(vi) subject to the provisions of Section 5(a)(ii), to extend
at any time the period in which Stock Options may be exercised;

(vii) to determine at any time whether, to what extent, and
under what circumstances distribution or the receipt of Stock and other
amounts payable with respect to an Award shall be deferred either
automatically or at the election of the grantee and whether and to what
extent the Company shall pay or credit amounts constituting interest
(at rates determined by the Administrator) or dividends or deemed
dividends on such deferrals; and

(viii) at any time to adopt, alter and repeal such rules,
guidelines and practices for administration of the Plan and for its own
acts and proceedings as it shall deem advisable; to interpret the terms
and provisions of the Plan and any Award (including related written
instruments); to make all determinations it deems advisable for the
administration of the Plan; to decide all disputes arising in
connection with the Plan; and to otherwise supervise the administration
of the Plan.

All decisions and interpretations of the Administrator shall be binding
on all persons, including the Company and Plan grantees.

(c) DELEGATION OF AUTHORITY TO GRANT AWARDS. The Administrator, in
its discretion, may delegate to the Chief Executive Officer of the Company
all or part of the Administrator's authority and duties with respect to the
granting of Awards at Fair Market Value, to individuals who are not subject
to the reporting and other provisions of Section 16 of the Exchange Act or
"covered employees" within the meaning of Section 162(m) of the Code. The
Chief Executive Officer shall be deemed a one-person committee of the Board.
Any such delegation by the Administrator shall include a limitation as to the
amount of Awards that may be granted during the period of the delegation and
shall contain guidelines as to the determination of the exercise price of any
Stock Option or Stock Appreciation Right, the conversion ratio or price of
other Awards and the vesting criteria. The Administrator may revoke or amend
the terms of a delegation at any time but such action shall not invalidate
any prior actions of the Administrator's delegate or delegates that were
consistent with the terms of the Plan.

(d) INDEMNIFICATION. Neither the Board nor the Committee, nor any
member of either or any delegatee thereof, shall be liable for any act,
omission, interpretation, construction or determination made in good faith in
connection with the Plan, and the members of the Board and the Committee (and
any delegatee thereof) shall be entitled in all cases to indemnification and
reimbursement by the Company in respect of any claim, loss, damage or expense
(including, without limitation, reasonable attorneys' fees) arising or resulting
therefrom to the fullest extent permitted by law and/or under any directors' and
officers' liability insurance coverage which may be in effect from time to time.

<PAGE>

SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION

(a) STOCK ISSUABLE. Subject to adjustment as provided in Section
3(b), the maximum number of shares of Stock reserved and available for
issuance under the Plan shall be such aggregate number of shares of Stock as
does not exceed the sum of (i) 2,000,000 shares; plus (ii) as of each June 30
and December 31 following the closing of the Company's initial public
offering, an additional positive number equal to twenty percent (20%) of the
shares of Stock issued by the Company during the six-month period then ended
(excluding shares issued in the Company's initial public offering); provided,
however, that the maximum number of shares of Stock for which Incentive Stock
Options may be granted under the Plan shall not exceed 2,000,000 shares. For
purposes of this limitation, the shares of Stock underlying any Awards which
are forfeited, canceled, reacquired by the Company, satisfied without the
issuance of Stock or otherwise terminated (other than by exercise) shall be
added back to the shares of Stock available for issuance under the Plan.
Subject to such overall limitation, shares of Stock may be issued up to such
maximum number pursuant to any type or types of Award; provided, however,
that from and after the date grants under the Plan become subject to Section
162(m) of the Code, Stock Options or Stock Appreciation Rights with respect
to no more than 1,000,000 shares of Stock may be granted to any one
individual grantee during any one calendar year period. The shares available
for issuance under the Plan may be authorized but unissued shares of Stock or
shares of Stock reacquired by the Company and held in its treasury.

(b) CHANGES IN STOCK. Subject to Section 3(c) hereof, if, as a result
of any reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other similar change in the Company's capital
stock, the outstanding shares of Stock are increased or decreased or are
exchanged for a different number or kind of shares or other securities of the
Company, or additional shares or new or different shares or other securities of
the Company or other non-cash assets are distributed with respect to such shares
of Stock or other securities, or, if, as a result of any merger or
consolidation, sale of all or substantially all of the assets of the Company,
the outstanding shares of Stock are converted into or exchanged for a different
number or kind of securities of the Company or any successor entity (or a parent
or subsidiary thereof), the Administrator shall make an appropriate or
proportionate adjustment in (i) the maximum number of shares reserved for
issuance under the Plan, (ii) the number of Stock Options or Stock Appreciation
Rights that can be granted to any one individual grantee and the maximum number
of shares that may be granted under a Performance-based Award, (iii) the number
and kind of shares or other securities subject to any then outstanding Awards
under the Plan, (iv) the repurchase price per share subject to each outstanding
Restricted Stock Award, and (v) the price for each share subject to any then
outstanding Stock Options and Stock Appreciation Rights under the Plan, without
changing the aggregate exercise price (i.e., the exercise price multiplied by
the number of Stock Options and Stock Appreciation Rights) as to which such
Stock Options and Stock Appreciation Rights remain exercisable. The adjustment
by the Administrator shall be final, binding and conclusive. No fractional
shares of Stock shall be issued under the Plan resulting from any such
adjustment, but the Administrator in its discretion may make a cash payment in
lieu of fractional shares.

<PAGE>

The Administrator may also adjust the number of shares subject to
outstanding Awards and the exercise price and the terms of outstanding Awards to
take into consideration material changes in accounting practices or principles,
extraordinary dividends, acquisitions or dispositions of stock or property or
any other event if it is determined by the Administrator that such adjustment is
appropriate to avoid distortion in the operation of the Plan, provided that no
such adjustment shall be made in the case of an Incentive Stock Option, without
the consent of the grantee, if it would constitute a modification, extension or
renewal of the Option within the meaning of Section 424(h) of the Code.

(c) MERGERS AND OTHER TRANSACTIONS. In the case of and subject to
the consummation of (i) the dissolution or liquidation of the Company, (ii)
the sale of all or substantially all of the assets of the Company on a
consolidated basis to an unrelated person or entity, (iii) a merger,
reorganization or consolidation in which the outstanding shares of Stock are
converted into or exchanged for a different kind of securities of the
successor entity and the holders of the Company's outstanding voting power
immediately prior to such transaction do not own a majority of the
outstanding voting power of the successor entity immediately upon completion
of such transaction, or (iv) the sale of all of the Stock of the Company to
an unrelated person or entity (in each case, a "Sale Event"), the Plan and
all outstanding Awards granted hereunder shall terminate, unless provision is
made in connection with the Sale Event in the sole discretion of the parties
thereto for the assumption or continuation of Awards theretofore granted by
the successor entity, or the substitution of such Awards with new Awards of
the successor entity or parent thereof, with appropriate adjustment as to the
number and kind of shares and, if appropriate, the per share exercise prices,
as such parties shall agree (after taking into account any acceleration
hereunder). The Administrator, in its discretion, may specify in any
particular Award or determine in connection with any Sale Event that: (x) any
Options and Stock Appreciation Rights that are not exercisable immediately
prior to the effective time of the Sale Event shall become fully exercisable
as of the effective time of the Sale Event; and/or (y) any other Awards shall
become fully vested and nonforfeitable as of the effective time of the Sale
Event.

Notwithstanding anything to the contrary in this Section 3.2(c), in the
event of a Sale Event pursuant to which holders of the Stock of the Company will
receive upon consummation thereof a cash payment for each share surrendered in
the Sale Event, the Company shall have the right, but not the obligation, to
make or provide for a cash payment to the grantees holding Options and Stock
Appreciation Rights, in exchange for the cancellation thereof, in an amount
equal to the difference between (A) the value as determined by the Administrator
of the consideration payable per share of Stock pursuant to the Sale Event (the
"Sale Price") times

<PAGE>

the number of shares of Stock subject to outstanding Options and Stock
Appreciation Rights (to the extent then exercisable at prices not in excess of
the Sale Price) and (B) the aggregate exercise price of all such outstanding
Options and Stock Appreciation Rights.

(d) SUBSTITUTE AWARDS. The Administrator may grant Awards under the
Plan in substitution for stock and stock based awards held by employees,
directors or other key persons of another corporation in connection with the
merger or consolidation of the employing corporation with the Company or a
Subsidiary or the acquisition by the Company or a Subsidiary of property or
stock of the employing corporation. The Administrator may direct that the
substitute awards be granted on such terms and conditions as the Administrator
considers appropriate in the circumstances. Any substitute Awards granted under
the Plan shall not count against the share limitation set forth in Section 3(a).

SECTION 4. ELIGIBILITY

Grantees under the Plan will be such full or part-time officers and
other employees, Independent Directors and key persons (including consultants
and prospective employees) of the Company and its Subsidiaries as are selected
from time to time by the Administrator in its sole discretion.

SECTION 5. STOCK OPTIONS

Any Stock Option granted under the Plan shall be in such form as the
Administrator may from time to time approve.

Stock Options granted under the Plan may be either Incentive Stock
Options or NonQualified Stock Options. Incentive Stock Options may be granted
only to employees of the Company or any Subsidiary that is a "subsidiary
corporation" within the meaning of Section 424(f) of the Code. To the extent
that any Option does not qualify as an Incentive Stock Option, it shall be
deemed a Non-Qualified Stock Option.

No Incentive Stock Option shall be granted under the Plan after
February 24, 2010.

(a) STOCK OPTIONS GRANTED TO EMPLOYEES AND KEY PERSONS. The
Administrator in its discretion may grant Stock Options to eligible employees
and key persons of the Company or any Subsidiary. Stock Options granted pursuant
to this Section 5(a) shall be subject to the following terms and conditions and
shall contain such additional terms and conditions, not inconsistent with the
terms of the Plan, as the Administrator shall deem desirable. If the
Administrator so determines, Stock Options may be granted in lieu of cash
compensation at the optionee's election, subject to such terms and conditions as
the Administrator may establish.

(i) EXERCISE PRICE. The exercise price per share for the Stock
covered by a Stock Option granted pursuant to this Section 5(a) shall
be determined by the Administrator at the time of grant but shall not
be less than one hundred percent

<PAGE>

(100%) of the Fair Market Value on the date of grant in the case of
Incentive Stock Options, or eighty-five percent (85%) of the Fair
Market Value on the date of grant, in the case of Non-Qualified Stock
Options (other than options granted in lieu of cash compensation). If
an employee owns or is deemed to own (by reason of the attribution
rules of Section 424(d) of the Code) more than ten percent (10%) of the
combined voting power of all classes of stock of the Company or any
parent or subsidiary corporation and an Incentive Stock Option is
granted to such employee, the option price of such Incentive Stock
Option shall be not less than one hundred ten percent (110%) of the
Fair Market Value on the grant date.

(ii) OPTION TERM. The term of each Stock Option shall be fixed
by the Administrator, but no Stock Option shall be exercisable more
than ten (10) years after the date the Stock Option is granted. If an
employee owns or is deemed to own (by reason of the attribution rules
of Section 424(d) of the Code) more than ten percent (10%) of the
combined voting power of all classes of stock of the Company or any
parent or subsidiary corporation and an Incentive Stock Option is
granted to such employee, the term of such Stock Option shall be no
more than five (5) years from the date of grant.

(iii) EXERCISABILITY; RIGHTS OF A STOCKHOLDER. Stock Options
shall become exercisable at such time or times, whether or not in
installments, as shall be determined by the Administrator at or after
the grant date. The Administrator may at any time accelerate the
exercisability of all or any portion of any Stock Option. An optionee
shall have the rights of a stockholder only as to shares acquired upon
the exercise of a Stock Option and not as to unexercised Stock Options.

(iv) METHOD OF EXERCISE. Stock Options may be exercised in
whole or in part, by giving written notice of exercise to the Company,
specifying the number of shares to be purchased. Payment of the
purchase price may be made by one or more of the following methods to
the extent provided in the Option Award agreement:

(A) In cash, by certified or bank check or other
instrument acceptable to the Administrator;

(B) Through the delivery (or attestation to the
ownership) of shares of Stock that have been purchased by the
optionee on the open market or that have been beneficially
owned by the optionee for at least six (6) months and are not
then subject to restrictions under any Company plan. Such
surrendered shares shall be valued at Fair Market Value on the
exercise date;

(C) By the optionee delivering to the Company a
properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company
cash or a check payable and acceptable to the Company for the
purchase price; provided that in the event the optionee
chooses to pay the

<PAGE>

purchase price as so provided, the optionee and the broker
shall comply with such procedures and enter into such
agreements of indemnity and other agreements as the
Administrator shall prescribe as a condition of such payment
procedure; or

(D) By the optionee delivering to the Company a
promissory note if the Board has expressly authorized the loan
of funds to the optionee for the purpose of enabling or
assisting the optionee to effect the exercise of his Stock
Option; provided that at least so much of the exercise price
as represents the par value of the Stock shall be paid other
than with a promissory note if otherwise required by state
law.

Payment instruments will be received subject to collection. The
delivery of certificates representing the shares of Stock to be
purchased pursuant to the exercise of a Stock Option will be contingent
upon receipt from the optionee (or a purchaser acting in his stead in
accordance with the provisions of the Stock Option) by the Company of
the full purchase price for such shares and the fulfillment of any
other requirements contained in the Option Award agreement or
applicable provisions of laws. In the event an optionee chooses to pay
the purchase price by previously-owned shares of Stock through the
attestation method, the number of shares of Stock transferred to the
optionee upon the exercise of the Stock Option shall be net of the
number of shares attested to.

(v) ANNUAL LIMIT ON INCENTIVE STOCK OPTIONS. To the extent
required for "incentive stock option" treatment under Section 422 of
the Code, the aggregate Fair Market Value (determined as of the time of
grant) of the shares of Stock with respect to which Incentive Stock
Options granted under this Plan and any other plan of the Company or
its parent and subsidiary corporations become exercisable for the first
time by an optionee during any calendar year shall not exceed $100,000.
To the extent that any Stock Option exceeds this limit, it shall
constitute a Non-Qualified Stock Option.

(b) RELOAD OPTIONS. At the discretion of the Administrator, Options
granted under the Plan may include a "reload" feature pursuant to which an
optionee exercising an option by the delivery of a number of shares of Stock in
accordance with Section 5(a)(iv)(B) hereof would automatically be granted an
additional Option (with an exercise price equal to the Fair Market Value of the
Stock on the date the additional Option is granted and with such other terms as
the Administrator may provide) to purchase that number of shares of Stock equal
to the sum of (i) the number delivered to exercise the original Option and (ii)
the number withheld to satisfy tax liabilities, with an Option term equal to the
remainder of the original Option term unless the Administrator otherwise
determines in the Award agreement for the original Option grant.

<PAGE>

(i) AUTOMATIC GRANT OF OPTIONS.

(A) Each person who is an Independent Director on the
effective date of the Initial Public Offering shall be granted
a Non-Qualified Stock Option to acquire 10,000 shares of
Stock.

(B) Each Independent Director who is first elected to
serve as a Director after the Initial Public Offering shall be
granted, on the fifth business day after his election, a
Non-Qualified Stock Option to acquire 10,000 shares of Stock.

(C) Each Independent Director who is serving as
Director of the Company on the fifth business day after every
second annual meeting of shareholders, beginning with the 2002
annual meeting, shall automatically be granted on such day a
Non-Qualified Stock Option to acquire 10,000 shares of Stock.

(D) The exercise price per share for the Stock
covered by a Stock Option granted under this Section 5(c)
shall be equal to the Fair Market Value of the Stock on the
date the Stock Option is granted.

(E) The Administrator, in its discretion, may grant
additional NonQualified Stock Options to Independent
Directors. Any such grant may vary among individual
Independent Directors.

(ii) EXERCISE; TERMINATION.

(A) Unless otherwise determined by the Administrator,
an Option granted under Section 5(c) shall be exercisable as
to fifty percent (50%) of the shares of Stock covered thereby
as of the first anniversary of the grant date, and shall
become exercisable as to the remaining fifty percent (50%) of
the shares of Stock covered thereby as of the second
anniversary of the grant date. An Option issued under this
Section 5(c) shall not be exercisable after the expiration of
ten (10) years from the date of grant.

(B) Options granted under this Section 5(c) may be
exercised only by written notice to the Company specifying the
number of shares to be purchased. Payment of the full purchase
price of the shares to be purchased may be made by one or more
of the methods specified in Section 5(a)(iv). An optionee
shall have the rights of a stockholder only as to shares
acquired upon the exercise of a Stock Option and not as to
unexercised Stock Options.

<PAGE>

(d) NON-TRANSFERABILITY OF OPTIONS. No Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution and all Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee, or by the optionee's legal
representative or guardian in the event of the optionee's incapacity.
Notwithstanding the foregoing, the Administrator, in its sole discretion, may
provide in the Award agreement regarding a given Option that the optionee may
transfer his Non-Qualified Stock Options to members of his immediate family, to
trusts for the benefit of such family members, or to partnerships in which such
family members are the only partners, provided that the transferee agrees in
writing with the Company to be bound by all of the terms and conditions of this
Plan and the applicable Option.

SECTION 6. STOCK APPRECIATION RIGHTS.

(a) NATURE OF STOCK APPRECIATION RIGHTS. A Stock Appreciation Right is
an Award entitling the recipient to receive an amount in cash or shares of Stock
or a combination thereof having a value equal to the excess of the Fair Market
Value of the Stock on the date of exercise over the exercise price Stock
Appreciation Right, which price shall not be less than eighty-five percent (85%)
of the Fair Market Value of the Stock on the date of grant (or more than the
option exercise price per share, if the Stock Appreciation Right was granted in
tandem with a Stock Option) multiplied by the number of shares of Stock with
respect to which the Stock Appreciation Right shall have been exercised, with
the Administrator having the right to determine the form of payment.

(b) GRANT AND EXERCISE OF STOCK APPRECIATION RIGHTS. Stock Appreciation
Rights may be granted by the Administrator in tandem with, or independently of,
any Stock Option granted pursuant to Section 5 of the Plan. In the case of a
Stock Appreciation Right granted in tandem with a Non-Qualified Stock Option,
such Stock Appreciation Right may be granted either at or after the time of the
grant of such Option. In the case of a Stock Appreciation Right granted in
tandem with an Incentive Stock Option, such Stock Appreciation Right may be
granted only at the time of the grant of the Option.

A Stock Appreciation Right or applicable portion thereof granted in
tandem with a Stock Option shall terminate and no longer be exercisable upon the
termination or exercise of the related Option.

(c) TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS. Stock
Appreciation Rights shall be subject to such terms and conditions as shall be
determined from time to time by the Administrator, subject to the following:

(i) Stock Appreciation Rights granted in tandem with Options
shall be exercisable at such time or times and to the extent that the
related Stock Options shall be exercisable.

<PAGE>

(ii) Upon exercise of a Stock Appreciation Right, the
applicable portion of any related Option shall be surrendered.

(iii) All Stock Appreciation Rights shall be exercisable
during the grantee's lifetime only by the grantee or the grantee's
legal representative.

SECTION 7. RESTRICTED STOCK AWARDS

(a) NATURE OF RESTRICTED STOCK AWARDS. A Restricted Stock Award is an
Award entitling the recipient to acquire, at such purchase price as determined
by the Administrator, shares of Stock subject to such restrictions and
conditions as the Administrator may determine at the time of grant ("Restricted
Stock"). Conditions may be based on continuing employment (or other service
relationship) and/or achievement of pre-established performance goals and
objectives. The grant of a Restricted Stock Award is contingent on the grantee
executing the Restricted Stock Award agreement. The terms and conditions of each
such agreement shall be determined by the Administrator, and such terms and
conditions may differ among individual Awards and grantees.

(b) RIGHTS AS A STOCKHOLDER. Upon execution of a written instrument
setting forth the Restricted Stock Award and payment of any applicable purchase
price, a grantee shall have the rights of a stockholder with respect to the
voting of the Restricted Stock, subject to such conditions contained in the
written instrument evidencing the Restricted Stock Award. Unless the
Administrator shall otherwise determine, certificates evidencing the Restricted
Stock shall remain in the possession of the Company until such Restricted Stock
is vested as provided in Section 7(d) below, and the grantee shall be required,
as a condition of the grant, to deliver to the Company a stock power endorsed in
blank.

(c) RESTRICTIONS. Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein or in the Restricted Stock Award agreement. If a
grantee's employment (or other service relationship) with the Company and its
Subsidiaries terminates for any reason, the Company shall have the right to
repurchase Restricted Stock that has not vested at the time of termination at
its original purchase price, from the grantee or the grantee's legal
representative.

(d) VESTING OF RESTRICTED STOCK. The Administrator at the time of grant
shall specify the date or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which the
non-transferability of the Restricted Stock and the Company's right of
repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or
the attainment of such pre-established performance goals, objectives and other
conditions, the shares on which all restrictions have lapsed shall no longer be
Restricted Stock and shall be deemed "vested." Except as may otherwise be
provided by the Administrator either in the Award agreement or, subject to
Section 15 below, in writing after the Award agreement is issued, a grantee's
rights in any shares of Restricted Stock that have not vested shall
automatically terminate upon the grantee's termination of employment (or other
service

<PAGE>

relationship) with the Company and its Subsidiaries and such shares shall be
subject to the Company's right of repurchase as provided in Section 7(c) above.

(e) WAIVER, DEFERRAL AND REINVESTMENT OF DIVIDENDS. The Restricted
Stock Award agreement may require or permit the immediate payment, waiver,
deferral or investment of dividends paid on the Restricted Stock.

SECTION 8. DEFERRED STOCK AWARDS

(a) NATURE OF DEFERRED STOCK AWARDS. A Deferred Stock Award is an Award
of phantom stock units to a grantee, subject to restrictions and conditions as
the Administrator may determine at the time of grant. Conditions may be based on
continuing employment (or other service relationship) and/or achievement of
pre-established performance goals and objectives. The grant of a Deferred Stock
Award is contingent on the grantee executing the Deferred Stock Award agreement.
The terms and conditions of each such agreement shall be determined by the
Administrator, and such terms and conditions may differ among individual Awards
and grantees. At the end of the deferral period, the Deferred Stock Award, to
the extent vested, shall be paid to the grantee in the form of shares of Stock.

(b) ELECTION TO RECEIVE DEFERRED STOCK AWARDS IN LIEU OF COMPENSATION.
The Administrator may, in its sole discretion, permit a grantee to elect to
receive a portion of the cash compensation or Restricted Stock Award otherwise
due to such grantee in the form of a Deferred Stock Award. Any such election
shall be made in writing and shall be delivered to the Company no later than the
date specified by the Administrator and in accordance with rules and procedures
established by the Administrator. The Administrator shall have the sole right to
determine whether and under what circumstances to permit such elections and to
impose such limitations and other terms and conditions thereon as the
Administrator deems appropriate.

(c) RIGHTS AS A STOCKHOLDER. During the deferral period, a grantee
shall have no rights as a stockholder; provided, however, that the grantee may
be credited with Dividend Equivalent Rights with respect to the phantom stock
units underlying his Deferred Stock Award, subject to such terms and conditions
as the Administrator may determine.

(d) RESTRICTIONS. A Deferred Stock Award may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of during the deferral
period.

(e) TERMINATION. Except as may otherwise be provided by the
Administrator either in the Award agreement or, subject to Section 15 below, in
writing after the Award agreement is issued, a grantee's right in all Deferred
Stock Awards that have not vested shall automatically terminate upon the
grantee's termination of employment (or cessation of service relationship) with
the Company and its Subsidiaries for any reason.

<PAGE>

SECTION 9. UNRESTRICTED STOCK AWARDS

GRANT OR SALE OF UNRESTRICTED STOCK. The Administrator may, in its sole
discretion, grant (or sell at par value or such higher purchase price determined
by the Administrator) an Unrestricted Stock Award to any grantee pursuant to
which such grantee may receive shares of Stock free of any restrictions
("Unrestricted Stock") under the Plan. Unrestricted Stock Awards may be granted
in respect of past services or other valid consideration, or in lieu of cash
compensation due to such grantee.

SECTION 10. PERFORMANCE SHARE AWARDS

(a) NATURE OF PERFORMANCE SHARE AWARDS. A Performance Share Award is an
Award entitling the recipient to acquire shares of Stock upon the attainment of
specified performance goals. The Administrator may make Performance Share Awards
independent of or in connection with the granting of any other Award under the
Plan. The Administrator in its sole discretion shall determine whether and to
whom Performance Share Awards shall be made, the performance goals, the periods
during which performance is to be measured, and all other limitations and
conditions.

(b) RIGHTS AS A STOCKHOLDER. A grantee receiving a Performance Share
Award shall have the rights of a stockholder only as to shares actually received
by the grantee under the Plan and not with respect to shares subject to the
Award but not actually received by the grantee. A grantee shall be entitled to
receive a stock certificate evidencing the acquisition of shares of Stock under
a Performance Share Award only upon satisfaction of all conditions specified in
the Performance Share Award agreement (or in a performance plan adopted by the
Administrator).

(c) TERMINATION. Except as may otherwise be provided by the
Administrator either in the Award agreement or, subject to Section 15 below, in
writing after the Award agreement is issued, a grantee's rights in all
Performance Share Awards shall automatically terminate upon the grantee's
termination of employment (or cessation of service relationship) with the
Company and its Subsidiaries for any reason.

(d) ACCELERATION, WAIVER, ETC. At any time prior to the grantee's
termination of employment (or other service relationship) by the Company and its
Subsidiaries, the Administrator may in its sole discretion accelerate, waive or,
subject to Section 15, amend any or all of the goals, restrictions or conditions
applicable to a Performance Share Award.

SECTION 11. PERFORMANCE-BASED AWARDS TO COVERED EMPLOYEES

Notwithstanding anything to the contrary contained herein, if any
Restricted Stock Award, Deferred Stock Award or Performance Share Award granted
to a Covered Employee is intended to qualify as "Performance-based Compensation"
under Section 162(m) of the Code

<PAGE>

and the regulations promulgated thereunder (a "Performance-based Award"), such
Award shall comply with the provisions set forth below:

(a) PERFORMANCE CRITERIA. The performance criteria used in performance
goals governing Performance-based Awards granted to Covered Employees may
include any or all of the following: (i) the Company's return on equity, assets,
capital or investment, (ii) pre-tax or after-tax profit levels of the Company or
any Subsidiary, a division, an operating unit or a business segment of the
Company, or any combination of the foregoing; (iii) cash flow, funds from
operations or similar measure; (iv) total shareholder return; (v) changes in the
market price of the Stock; (vi) sales or market share; or (vii) earnings per
share.

(b) GRANT OF PERFORMANCE-BASED AWARDS. With respect to each
Performance-based Award granted to a Covered Employee, the Committee shall
select, within the first ninety (90) days of a Performance Cycle (or, if
shorter, within the maximum period allowed under Section 162(m) of the Code) the
performance criteria for such grant, and the achievement targets with respect to
each performance criterion (including a threshold level of performance below
which no amount will become payable with respect to such Award). Each
Performance-based Award will specify the amount payable, or the formula for
determining the amount payable, upon achievement of the various applicable
performance targets. The performance criteria established by the Committee may
be (but need not be) different for each Performance Cycle and different goals
may be applicable to Performance-based Awards to different Covered Employees.

(c) PAYMENT OF PERFORMANCE-BASED AWARDS. Following the completion of a
Performance Cycle, the Committee shall meet to review and certify in writing
whether, and to what extent, the performance criteria for the Performance Cycle
have been achieved and, if so, to also calculate and certify in writing the
amount of the Performance-based Awards earned for the Performance Cycle. The
Committee shall then determine the actual size of each Covered Employee's
Performance-based Award, and, in doing so, may reduce or eliminate the amount of
the Performance-based Award for a Covered Employee if, in its sole judgment,
such reduction or elimination is appropriate.

(d) MAXIMUM AWARD PAYABLE. The maximum Performance-based Award
payable to any one Covered Employee under the Plan for a Performance Cycle is
500,000 Shares (subject to adjustment as provided in Section 3(b) hereof).

SECTION 12. DIVIDEND EQUIVALENT RIGHTS

(a) DIVIDEND EQUIVALENT RIGHTS. A Dividend Equivalent Right is an Award
entitling the grantee to receive credits based on cash dividends that would have
been paid on the shares of Stock specified in the Dividend Equivalent Right (or
other award to which it relates) if such shares had been issued to and held by
the grantee. A Dividend Equivalent Right may be granted hereunder to any grantee
as a component of another Award or as a freestanding award. The terms and
conditions of Dividend Equivalent Rights shall be specified in the Award

<PAGE>

agreement. Dividend equivalents credited to the holder of a Dividend Equivalent
Right may be paid currently or may be deemed to be reinvested in additional
shares of Stock, which may thereafter accrue additional equivalents. Any such
reinvestment shall be at Fair Market Value on the date of reinvestment or such
other price as may then apply under a dividend reinvestment plan sponsored by
the Company, if any. Dividend Equivalent Rights may be settled in cash or shares
of Stock or a combination thereof, in a single installment or installments. A
Dividend Equivalent Right granted as a component of another Award may provide
that such Dividend Equivalent Right shall be settled upon exercise, settlement,
or payment of, or lapse of restrictions on, such other award, and that such
Dividend Equivalent Right shall expire or be forfeited or annulled under the
same conditions as such other award. A Dividend Equivalent Right granted as a
component of another Award may also contain terms and conditions different from
such other award.

(b) INTEREST EQUIVALENTS. Any Award under this Plan that is settled in
whole or in part in cash on a deferred basis may provide in the grant for
interest equivalents to be credited with respect to such cash payment. Interest
equivalents may be compounded and shall be paid upon such terms and conditions
as may be specified by the grant.

(c) TERMINATION. Except as may otherwise be provided by the
Administrator either in the Award agreement or, subject to Section 15 below, in
writing after the Award agreement is issued, a grantee's rights in all Dividend
Equivalent Rights or interest equivalents shall automatically terminate upon the
grantee's termination of employment (or cessation of service relationship) with
the Company and its Subsidiaries for any reason.

SECTION 13. TAX WITHHOLDING

(a) PAYMENT BY GRANTEE. Each grantee shall, no later than the date as
of which the value of an Award or of any Stock or other amounts received
thereunder first becomes includable in the gross income of the grantee for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Administrator regarding payment of, any Federal, state, or
local taxes of any kind required by law to be withheld with respect to such
income. The Company and its Subsidiaries shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to the grantee. The Company's obligation to deliver stock certificates to
any grantee is subject to and conditioned on tax obligations being satisfied by
the grantee.

(b) PAYMENT IN STOCK. Subject to approval by the Administrator, a
grantee may elect to have the minimum required tax withholding obligation
satisfied, in whole or in part, by (i) authorizing the Company to withhold from
shares of Stock to be issued pursuant to any Award a number of shares with an
aggregate Fair Market Value (as of the date the withholding is effected) that
would satisfy the withholding amount due, or (ii) transferring to the Company
shares of Stock owned by the grantee with an aggregate Fair Market Value (as of
the date the withholding is effected) that would satisfy the withholding amount
due.

<PAGE>

SECTION 14. TRANSFER, LEAVE OF ABSENCE, ETC.

For purposes of the Plan, the following events shall not be deemed a
termination of employment:

(a) a transfer to the employment of the Company from a Subsidiary or
from the Company to a Subsidiary, or from one Subsidiary to another; or

(b) an approved leave of absence for military service or sickness, or
for any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the
Administrator otherwise so provides in writing.

SECTION 15. AMENDMENTS AND TERMINATION

The Board may, at any time, amend or discontinue the Plan and the
Administrator may, at any time, amend or cancel any outstanding Award for the
purpose of satisfying changes in law or for any other lawful purpose, but no
such action shall adversely affect rights under any outstanding Award without
the holder's consent. If and to the extent determined by the Administrator to be
required by the Code to ensure that Incentive Stock Options granted under the
Plan are qualified under Section 422 of the Code or to ensure that compensation
earned under Awards qualifies as performance-based compensation under Section
162(m) of the Code, if and to the extent intended to so qualify, Plan amendments
shall be subject to approval by the Company stockholders entitled to vote at a
meeting of stockholders. Nothing in this Section 15 shall limit the
Administrator's authority to take any action permitted pursuant to Section 3(c).

SECTION 16. STATUS OF PLAN

With respect to the portion of any Award that has not been exercised
and any payments in cash, Stock or other consideration not received by a
grantee, a grantee shall have no rights greater than those of a general creditor
of the Company unless the Administrator shall otherwise expressly determine in
connection with any Award or Awards. In its sole discretion, the Administrator
may authorize the creation of trusts or other arrangements to meet the Company's
obligations to deliver Stock or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the foregoing sentence.

<PAGE>

SECTION 17. CHANGE OF CONTROL PROVISIONS

(a) With respect to any Change of Control as defined in this Section
17, the Administrator, in its discretion, may specify in any Award or determine
in connection with any Change of Control that:

(i) Each outstanding Stock Option and Stock Appreciation Right
shall automatically become fully exercisable; and/or

(ii) Any conditions and restrictions on each outstanding
Restricted Stock Award, Deferred Stock Award and Performance Share Award.

(b) "Change of Control" shall mean the occurrence of any one of the
following events:

(i) any "Person," as such term is used in Sections 13(d) and
14(d) of the Act (other than the Company, any of its Subsidiaries, or
any trustee, fiduciary or other person or entity holding securities
under any employee benefit plan or trust of the Company or any of its
Subsidiaries), together with all "affiliates" and "associates" (as such
terms are defined in Rule 12b-2 under the Act) of such person, shall
become the "beneficial owner" (as such term is defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company
representing forty percent (40%) or more of the combined voting power
of the Company's then outstanding securities having the right to vote
in an election of the Company's Board of Directors ("Voting
Securities") (in such case other than as a result of an acquisition of
securities directly from the Company); or

(ii) persons who, as of the Effective Date, constitute the
Company's Board of Directors (the "Incumbent Directors") cease for any
reason, including, without limitation, as a result of a tender offer,
proxy contest, merger or similar transaction, to constitute at least a
majority of the Board, provided that any person becoming a director of
the Company subsequent to the Effective Date shall be considered an
Incumbent Director if such person's election was approved by or such
person was nominated for election by either (A) a vote of at least a
majority of the Incumbent Directors or (B) a vote of at least a
majority of the Incumbent Directors who are members of a nominating
committee comprised, in the majority, of Incumbent Directors; but
provided further, that any such person whose initial assumption of
office is in connection with an actual or threatened election contest
relating to the election of members of the Board of Directors or other
actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board, including by reason of
agreement intended to avoid or settle any such actual or threatened
contest or solicitation, shall not be considered an Incumbent Director;
or

<PAGE>

(iii) the approval by the stockholders of the Company of a
consolidation, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Company (a "Corporate
Transaction") or if consummation of such Corporate Transaction is
subject, at the time of such approval by stockholders, to the consent
of any government or governmental agency, obtaining of such consent
(either explicitly or implicitly by consummation); excluding , however,
a Corporate Transaction in which the stockholders of the Company
immediately prior to the Corporate Transaction, would, immediately
after the Corporate Transaction, beneficially own (as such term is
defined in Rule 13d-3 under the Act), directly or indirectly, shares
representing in the aggregate more than fifty percent (50%) of the
voting shares of the corporation issuing cash or securities in the
Corporate Transaction (or of its ultimate parent corporation, if any);
or

(iv) the approval by the stockholders of any plan or proposal
for the liquidation or dissolution of the Company.

Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (i) solely as the
result of an acquisition of securities by the Company which, by reducing the
number of shares of Voting Securities outstanding, increases the proportionate
number of shares of Voting Securities beneficially owned by any person to forty
percent (40%) or more of the combined voting power of all then outstanding
Voting Securities; PROVIDED, HOWEVER, that if any person referred to in this
sentence shall thereafter become the beneficial owner of any additional shares
of Voting Securities (other than pursuant to a stock split, stock dividend, or
similar transaction or as a result of an acquisition of securities directly from
the Company) and immediately thereafter beneficially owns forty percent (40%) or
more of the combined voting power of all then outstanding Voting Securities,
then a "Change of Control" shall be deemed to have occurred for purposes of the
foregoing clause (i).

SECTION 18. GENERAL PROVISIONS

(a) NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS. The
Administrator may require each person acquiring Stock pursuant to an Award to
represent to and agree with the Company in writing that such person is acquiring
the shares without a view to distribution thereof.

No shares of Stock shall be issued pursuant to an Award until all
applicable securities law and other legal and stock exchange or similar
requirements have been satisfied. The Administrator may require the placing of
such stop-orders and restrictive legends on certificates for Stock and Awards as
it deems appropriate.

(b) DELIVERY OF STOCK CERTIFICATES. Stock certificates to grantees
under this Plan shall be deemed delivered for all purposes when the Company or a
stock transfer agent of the

<PAGE>

Company shall have mailed such certificates in the United States mail, addressed
to the grantee, at the grantee's last known address on file with the Company.

(c) OTHER COMPENSATION ARRANGEMENTS; NO EMPLOYMENT RIGHTS. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of this
Plan and the grant of Awards do not confer upon any employee any right to
continued employment with the Company or any Subsidiary.

(d) TRADING POLICY RESTRICTIONS. Option exercises and other Awards
under the Plan shall be subject to such Company's insider trading policy, as in
effect from time to time.

(e) LOANS TO GRANTEES. The Company shall have the authority to make
loans to grantees of Awards hereunder (including to facilitate the purchase of
shares) and shall further have the authority to issue shares for promissory
notes hereunder.

(f) DESIGNATION OF BENEFICIARY. Each grantee to whom an Award has been
made under the Plan may designate a beneficiary or beneficiaries to exercise any
Award or receive any payment under any Award payable on or after the grantee's
death. Any such designation shall be on a form provided for that purpose by the
Administrator and shall not be effective until received by the Administrator. If
no beneficiary has been designated by a deceased grantee, or if the designated
beneficiaries have predeceased the grantee, the beneficiary shall be the
grantee's estate.

SECTION 19. EFFECTIVE DATE OF PLAN

This Plan shall become effective upon approval by the holders of a
majority of the votes cast at a meeting of stockholders at which a quorum is
present. Subject to such approval by the stockholders and to the requirement
that no Stock may be issued hereunder prior to such approval, Stock Options and
other Awards may be granted hereunder on and after adoption of this Plan by the
Board.

SECTION 20. GOVERNING LAW

This Plan and all Awards and actions taken thereunder shall be governed
by, and construed in accordance with, the laws of the State of Delaware, applied
without regard to conflict of law principles.

DATE APPROVED BY BOARD OF DIRECTORS: January 20, 2000

DATE APPROVED BY STOCKHOLDERS: February 24, 2000

DOCSC\811092.3

<PAGE>

<PAGE>
Exhibit 10.28
INCENTIVE STOCK OPTION AGREEMENT

UNDER THE MOLDFLOW CORPORATION
2000 STOCK OPTION AND INCENTIVE PLAN

Name of Optionee:_____________________________
No. of Option Shares:___________________________
Option Exercise Price per Share:_$USD ____________________________________

Grant Date:____________________
Grant Number:_________________
Expiration Date:_____________________________________

Pursuant to the Moldflow Corporation 2000 Stock Option and Incentive
Plan (the "Plan") as amended through the date hereof, Moldflow Corporation (the
"Company") hereby grants to the Optionee named above an option (the "Stock
Option") to purchase on or prior to the Expiration Date specified above all or
part of the number of shares of Common Stock, par value $.01 per share (the
"Stock") of the Company specified above at the Option Exercise Price per Share
specified above subject to the terms and conditions set forth herein and in the
Plan.

1. VESTING SCHEDULE. No portion of this Stock Option may be exercised
until such portion shall have vested. This Stock Option shall be vested and
exercisable with respect to the following number of Option Shares on the dates
indicated:

NUMBER OF
OPTION SHARES EXERCISABLE* VESTING DATE
<S> <C>

------------- ------------

</TABLE>

Once vested, this Stock Option shall continue to be exercisable at any
time or times prior to the close of business on the Expiration Date, subject to
the provisions hereof and of the Plan.

2. MANNER OF EXERCISE.

(a) The Optionee may exercise this Option only in the
following manner: from time to time on or prior to the Expiration Date of this
Option, the Optionee may give written notice to the Companyof his or her
election to purchase some or all of the vested Option Shares purchasable at the
time of such notice. This notice shall specify the number of Option Shares to be
purchased.

<PAGE>

Optionee for at least six months; (iii) by the Optionee delivering to the
Company a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company cash or a check
payable and acceptable to the Company to pay the option purchase price, provided
that in the event the Optionee chooses to pay the option purchase price as so
provided, the Optionee and the broker shall comply with such procedures and
enter into such agreements of indemnity and other agreements as the
Administrator shall prescribe as a condition of such payment procedure; or (iv)
a combination of (i), (ii) and (iii) above. Payment instruments will be received
subject to collection.

The delivery of certificates representing the Option Shares will be
contingent upon the Company's receipt from the Optionee of full payment for the
Option Shares, as set forth above and any agreement, statement or other evidence
that the Company may require to satisfy itself that the issuance of Stock to be
purchased pursuant to the exercise of Options under the Plan and any subsequent
resale of the shares of Stock will be in compliance with applicable laws and
regulations.

(b) Certificates for the shares of Stock purchased upon
exercise of this Stock Option shall be issued and delivered to the Optionee upon
compliance to the satisfaction of the Administrator with all requirements under
applicable laws or regulations in connection with such issuance and with the
requirements hereof and of the Plan. The determination of the Administrator as
to such compliance shall be final and binding on the Optionee. The Optionee
shall not be deemed to be the holder of, or to have any of the rights of a
holder with respect to, any shares of Stock subject to this Stock Option unless
and until this Stock Option shall have been exercised pursuant to the terms
hereof, the Company shall have issued and delivered the shares to the Optionee,
and the Optionee's name shall have been entered as the stockholder of record on
the books of the Company. Thereupon, the Optionee shall have full voting,
dividend and other ownership rights with respect to such shares of Stock.

(c) Notwithstanding any other provision hereof or of the Plan,
no portion of this Stock Option shall be exercisable after the Expiration Date
hereof.

3. TERMINATION OF EMPLOYMENT. If the Optionee's employment by the
Company or a Subsidiary (as defined in the Plan) is terminated, the period
within which to exercise the Option may be subject to earlier termination as set
forth below.

(a) TERMINATION DUE TO DEATH. If the Optionee's employment
terminates by reason of death, any Option held by the Optionee shall become
fully exercisable and may thereafter be exercised by the Optionee's legal
representative or legatee for a period of 12 months from the date of death or
until the Expiration Date, if earlier.

(b) TERMINATION DUE TO DISABILITY. If the Optionee's
employment terminates by reason of Disability (as defined below), any Option
held by the Optionee shall become fully exercisable and may thereafter be
exercised by the Optionee for a period of twelve (12) months from the date of
termination or until the Expiration Date, if earlier. The death of the Optionee
during the twelve (12) month period provided in this Section 3(b) shall extend
such period for another twelve (12) months from the date of death or until the
Expiration Date, if earlier. The term "Disability" shall mean that condition
described in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended
(the "Code"). In the event of a dispute, the determination of Disability will be
made by the Administrator (as defined in Section 2(a) of the Plan) in good faith
and with the advice of a physician competent in the area to which such
Disability relates.

(c) TERMINATION FOR CAUSE. If the Optionee's employment
terminates for Cause (as defined below), any Option held by the Optionee shall
terminate immediately and be of no further force and effect. The term "Cause"
shall mean a vote of the Board (as defined in the Plan) resolving that the
Optionee should be dismissed as a result of: (i) the commission of any act by
the Optionee constituting financial dishonesty against the Company (which act
would be chargeable as a crime under applicable law); (ii) the Optionee's
engaging in any other act of dishonesty, fraud, intentional misrepresentation,
moral turpitude, illegality or harassment which, as

<PAGE>

determined in good faith by the Board, would (A) materially adversely affect the
business or the reputation of the Company with its current or prospective
customers, suppliers, lenders and/or other third parties with whom it does or
might do business, or (B) expose the Company to a risk of civil or criminal
legal damages, liabilities or penalties; (iii) the repeated failure by the
Optionee to follow the directives of the Company's chief executive officer or
Board; or (iv) any material misconduct, violation of the Company's policies, or
willful and deliberate non-performance of duty by the Optionee in connection
with the business affairs of the Company.

(d) OTHER TERMINATION. If the Optionee's employment terminates
for any reason other than death, Disability, or Cause, and unless otherwise
determined by the Administrator, any Option held by the Optionee may be
exercised, to the extent exercisable on the date of termination, for a period of
three (3) months from the date of termination or until the Expiration Date, if
earlier. Any Option that is not exercisable at such time shall terminate
immediately and be of no further force or effect.

The Administrator's determination of the reason for termination of the
Optionee's employment shall be conclusive and binding on the Optionee and his or
her representatives or legatees.

4. INCORPORATION OF PLAN. Notwithstanding anything herein to the
contrary, this Stock Option shall be subject to and governed by all the terms
and conditions of the Plan. Capitalized terms in this Agreement shall have the
meaning specified in the Plan, unless a different meaning is specified herein.

5. TRANSFERABILITY. This Agreement is personal to the Optionee, is
non-assignable and is not transferable in any manner, by operation of law or
otherwise, other than by will or the laws of descent and distribution. This
Stock Option is exercisable, during the Optionee's lifetime, only by the
Optionee, and thereafter, only by the Optionee's legal representative or
legatee.

6. STATUS OF THE STOCK OPTION. This Stock Option is intended to qualify
as an "incentive stock option" under Section 422 of the Code, but the Company
does not represent or warrant that this Option qualifies as such. The Optionee
should consult with his or her own tax advisors regarding the tax effects of
this Option and the requirements necessary to obtain favorable income tax
treatment under Section 422 of the Code, including, but not limited to, holding
period requirements. If the Optionee intends to dispose or does dispose (whether
by sale, gift, transfer or otherwise) of any Option Shares within the one-year
period beginning on the date after the transfer of such shares to him or her, or
within the two-year period beginning on the day after the grant of this Stock
Option, he or she will notify the Company within 30 days after such disposition.

7. MISCELLANEOUS.

(a) Notice hereunder shall be given to the Company at its
principal place of business, and shall be given to the Optionee at the address
set forth below, or in either case at such other address as one party may
subsequently furnish to the other party in writing.

(b) This Stock Option does not confer upon the Optionee any
rights with respect to continuance of employment by the Company or any
Subsidiary.

<PAGE>

(c) Pursuant to Section 15 of the Plan, the Administrator may
at any time amend or cancel any outstanding portion of this Stock Option, but no
such action may be taken which adversely affects the Optionee's rights under
this Agreement without the Optionee's consent.

MOLDFLOW CORPORATION

By:
------------------------------------
Name:
Title:

The foregoing Agreement is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned.

Dated:
------------------------ ------------------------------------
Optionee's Signature

Optionee's name and address:

------------------------------------

<PAGE>

Exhibit 10.29

NON-QUALIFIED STOCK OPTION AGREEMENT
FOR COMPANY EMPLOYEES

UNDER THE MOLDFLOW CORPORATION
2000 STOCK OPTION AND INCENTIVE PLAN

Name of Optionee:________________________________
No. of Option Shares:_____________________________
Option Exercise Price per Share:$USD___________________
Grant Date:______________________________
Grant Number:____________________________
Expiration Date:_________________________________

1. VESTING SCHEDULE. No portion of this Stock Option may be exercised
until such portion shall have vested. AdministratorThis Stock Option shall be
vested and exercisable with respect to the following number of Option Shares on
the dates indicated:

<TABLE>
<CAPTION>
NUMBER OF
OPTION SHARES EXERCISABLE VESTING DATE
<S> <C>

------------------- (---%) ------------

-------------------- (---%) ------------

-------------------- (---%) ------------
</TABLE>

Once vested, this Stock Option shall continue to be exercisable at any
time or times prior to the close of business on the Expiration Date, subject to
the provisions hereof and of the Plan.

2. MANNER OF EXERCISE.

(a) The Optionee may exercise this Option only in the
following manner: from time to time on or prior to the Expiration Date of this
Option, the Optionee may give written notice to the Company of his or her
election to purchase some or all of the vested Option Shares purchasable at the
time of such notice. This notice shall specify the number of Option Shares to be
purchased.

<PAGE>

(b) Certificates for shares of Stock purchased upon exercise
of this Stock Option shall be issued and delivered to the Optionee upon
compliance to the satisfaction of the Administrator with all requirements under
applicable laws or regulations in connection with such issuance and with the
requirements hereof and of the Plan. The determination of the Administrator as
to such compliance shall be final and binding on the Optionee. The Optionee
shall not be deemed to be the holder of, or to have any of the rights of a
holder with respect to, any shares of Stock subject to this Stock Option unless
and until this Stock Option shall have been exercised pursuant to the terms
hereof, the Company shall have issued and delivered the shares to the Optionee,
and the Optionee's name shall have been entered as the stockholder of record on
the books of the Company. Thereupon, the Optionee shall have full voting,
dividend and other ownership rights with respect to such shares of Stock.

(c) Notwithstanding any other provision hereof or of the Plan,
no portion of this Stock Option shall be exercisable after the Expiration Date
hereof.

(a) TERMINATION DUE TO DEATH. If the Optionee's employment
terminates by reason of death, any Option held by the Optionee shall become
fully exercisable and may thereafter be exercised by the Optionee's legal
representative or legatee for a period of twelve (12) months from the date of
death or until the Expiration Date, if earlier.

<PAGE>

(d) OTHER TERMINATION. If the Optionee's employment terminates
for any reason other than death, Disability or Cause, and unless otherwise
determined by the Administrator, any Option held by the Optionee may be
exercised, to the extent exercisable on the date of termination, for a period of
three (3) months from the date of termination or until the Expiration Date, if
earlier. Any Option that is not exercisable at such time shall terminate
immediately and be of no further force or effect.

The Administrator's determination of the reason for termination of the
Optionee's employment shall be conclusive and binding on the Optionee and his or
her representatives or legatees.

6. TAX WITHHOLDING. The Optionee shall, not later than the date as of
which the exercise of this Stock Option becomes a taxable event for Federal
income tax purposes, pay to the Company or make arrangements satisfactory to the
Administrator for payment of any Federal, state, and local taxes required by law
to be withheld on account of such taxable event. The Optionee may elect to have
such tax withholding obligation satisfied, in whole or in part, by (i)
authorizing the Company to withhold from shares of Stock to be issued, or (ii)
transferring to the Company, a number of shares of Stock with an aggregate Fair
Market Value that would satisfy the withholding amount due.

7. MISCELLANEOUS.

(b) This Stock Option does not confer upon the Optionee any
rights with respect to continuance of employment by the Company or any
Subsidiary.

MOLDFLOW CORPORATION

By:
----------------------------------------
Name:
Title:

<PAGE>

The foregoing Agreement is hereby accepted and the terms and conditions
thereof hereby agreed to by the undersigned.

Dated:
---------------------------- ----------------------------------
Optionee's Signature

Optionee's name and address:

----------------------------------

<PAGE>

Exhibit 10.30

MOLDFLOW CORPORATION

EMPLOYEE STOCK PURCHASE PLAN

The purpose of the Moldflow Corporation Employee Stock Purchase Plan
("the Plan") is to provide eligible employees of Moldflow Corporation (the
"Company") and certain of its subsidiaries with opportunities to purchase shares
of the Company's common stock, par value $0.01 per share (the "Common Stock").
500,000 shares of Common Stock in the aggregate have been approved and reserved
for this purpose. The Plan is intended to constitute an "employee stock purchase
plan" within the meaning of Section 423(b) of the Internal Revenue Code of 1986,
as amended (the "Code"), and shall be interpreted in accordance with that
intent.

1. ADMINISTRATION. The Plan will be administered by the person or
persons (the "Administrator") appointed by the Company's Board of Directors (the
"Board") for such purpose. The Administrator has authority to make rules and
regulations for the administration of the Plan, and its interpretations and
decisions with regard thereto shall be final and conclusive. No member of the
Board or individual exercising administrative authority with respect to the Plan
shall be liable for any action or determination made in good faith with respect
to the Plan or any option granted hereunder.

2. OFFERINGS. The Company will make one or more offerings to eligible
employees to purchase Common Stock under the Plan ("Offerings"). The initial
Offering will begin on July 1, 2000 and will end on December 31, 2000 (the
"Initial Offering"). Thereafter, unless otherwise determined by the
Administrator, an Offering will begin on the first business day occurring on or
after each January 1 and July 1 and will end on the last business day occurring

<PAGE>

on or before the following June 30 and December 31, respectively. The
Administrator may, in its discretion, designate a different period for any
Offering, provided that no Offering shall exceed six (6) months in duration or
overlap any other Offering.

3. ELIGIBILITY. All employees of the Company (including employees who
are also directors of the Company) and all employees of each Designated
Subsidiary (as defined in Section 11) are eligible to participate in any one or
more of the Offerings under the Plan, provided that as of the first day of the
applicable Offering (the "Offering Date") they are customarily employed by the
Company or a Designated Subsidiary for more than twenty (20) hours a week.

4. PARTICIPATION. An employee eligible on any Offering Date may
participate in such Offering by submitting an enrollment form to his appropriate
payroll location at least fifteen (15) business days before the Offering Date
(or by such other deadline as shall be established for the Offering). The form
will (a) state a whole percentage to be deducted from his Compensation (as
defined in Section 11) per pay period, (b) authorize the purchase of Common
Stock for him in each Offering in accordance with the terms of the Plan and (c)
specify the exact name or names in which shares of Common Stock purchased for
him are to be issued pursuant to Section 10. An employee who does not enroll in
accordance with these procedures will be deemed to have waived his right to
participate. Unless an employee files a new enrollment form or withdraws from
the Plan, his deductions and purchases will continue at the same percentage of
Compensation for future Offerings, provided he remains eligible. Notwithstanding
the foregoing, participation in the Plan will neither be permitted nor be denied
contrary to the requirements of the Code.

<PAGE>

5. EMPLOYEE CONTRIBUTIONS. Each eligible employee may authorize payroll
deductions at a minimum of one percent (1%) up to a maximum of ten percent (10%)
of his Compensation for each pay period. The Company will maintain book accounts
showing the amount of payroll deductions made by each participating employee for
each Offering. No interest will accrue or be paid on payroll deductions.

6. DEDUCTION CHANGES. Except as may be determined by the Administrator
in advance of an Offering, an employee may not increase or decrease his payroll
deduction during any Offering, but may increase or decrease his payroll
deduction with respect to the next Offering (subject to the limitations of
Section 5) by filing a new enrollment form at least fifteen (15) business days
before the next Offering Date (or by such other deadline as shall be established
for the Offering). The Administrator may, in advance of any Offering, establish
rules permitting an employee to increase, decrease or terminate his payroll
deduction during an Offering.

7. WITHDRAWAL. An employee may withdraw from participation in the Plan
by delivering a written notice of withdrawal to his appropriate payroll
location. The employee's withdrawal will be effective as of the next business
day. Following an employee's withdrawal, the Company will promptly refund to him
his entire account balance under the Plan (after payment for any Common Stock
purchased before the effective date of withdrawal). Partial withdrawals are not
permitted. The employee may not begin participation again during the remainder
of the Offering, but may enroll in a subsequent Offering in accordance with
Section 4.

<PAGE>

8. GRANT OF OPTIONS. On each Offering Date, the Company will grant
to each eligible employee who is then a participant in the Plan an option
("Option") to purchase on the last day of such Offering (the "Exercise
Date"), at the Option Price hereinafter provided for, (a) a number of shares
of Common Stock, which number shall not exceed the number of whole shares
which is less than or equal to $12,500 divided by the closing price per share
of Common Stock on the Offering Date, or (b) such other lesser maximum number
of shares as shall have been established by the Administrator in advance of
the Offering. The purchase price for each share purchased under such Option
(the "Option Price") will be eighty-five percent (85%) of the Fair Market
Value of the Common Stock on the Offering Date or the Exercise Date,
whichever is less.

Notwithstanding the foregoing, no employee may be granted an option
hereunder if such employee, immediately after the option was granted, would be
treated as owning 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
Parent or Subsidiary (as defined in Section 11). For purposes of the preceding
sentence, the attribution rules of Section 424(d) of the Code shall apply in
determining the stock ownership of an employee, and all stock which the employee
has a contractual right to purchase shall be treated as stock owned by the
employee. In addition, no employee may be granted an Option which permits his
rights to purchase stock under the Plan, and any other employee stock purchase
plan of the Company and its Parents and Subsidiaries,

<PAGE>

to accrue at a rate which exceeds $25,000 of the fair market value of such stock
(determined on the option grant date or dates) for each calendar year in which
the Option is outstanding at any time. The purpose of the limitation in the
preceding sentence is to comply with Section 423(b)(8) of the Code.

9. EXERCISE OF OPTION AND PURCHASE OF SHARES. Each employee who
continues to be a participant in the Plan on the Exercise Date shall be deemed
to have exercised his Option on such date and shall acquire from the Company
such number of whole shares of Common Stock reserved for the purpose of the Plan
as his accumulated payroll deductions on such date will purchase at the Option
Price, subject to any other limitations contained in the Plan. Any amount
remaining in an employee's account at the end of an Offering solely by reason of
the inability to purchase a fractional share will be carried forward to the next
Offering; any other balance remaining in an employee's account at the end of an
Offering will be refunded to the employee promptly.

10. ISSUANCE OF CERTIFICATES. Certificates representing shares of
Common Stock purchased under the Plan may be issued only in the name of the
employee, in the name of the employee and another person of legal age as joint
tenants with rights of survivorship, or in the name of a broker authorized by
the employee to be his, or their, nominee for such purpose.

11. DEFINITIONS.

The term "Compensation" means the amount of base pay, prior to salary
reduction pursuant to either Section 125 or 401(k) of the Code, but excluding
overtime, commissions, incentive or bonus awards, allowances and reimbursements
for expenses such as relocation

<PAGE>

allowances or travel expenses, income or gains on the exercise of Company stock
options, and similar items.

The term "Designated Subsidiary" means any present or future Subsidiary
(as defined below) that has been designated by the Board to participate in the
Plan. The Board may so designate any Subsidiary, or revoke any such designation,
at any time and from time to time, either before or after the Plan is approved
by the stockholders.

The term "Fair Market Value of the Common Stock" on any given date
means the fair market value of the Common Stock determined in good faith by the
Administrator; PROVIDED, HOWEVER, that if the Common Stock is admitted to
quotation on the National Association of Securities Dealers Automated Quotation
System ("Nasdaq"), Nasdaq National System or national securities exchange, the
determination shall be made by reference to market quotations. If there are no
market quotations for such date, the determination shall be made by reference to
the last date preceding such date for which there are market quotations.

<PAGE>

The term "Parent" means a "parent corporation" with respect to the
Company, as defined in Section 424(e) of the Code.

The term "Subsidiary" means a "subsidiary corporation" with respect to
the Company, as defined in Section 424(f) of the Code.

12. RIGHTS ON TERMINATION OF EMPLOYMENT. If a participating employee's
employment terminates for any reason before the Exercise Date for any Offering,
no payroll deduction will be taken from any pay due and owing to the employee
and the balance in his account will be paid to him or, in the case of his death,
to his designated beneficiary as if he had withdrawn from the Plan under Section
7. An employee will be deemed to have terminated employment, for this purpose,
if the corporation that employs him, having been a Designated Subsidiary, ceases
to be a Subsidiary, or if the employee is transferred to any corporation other
than the Company or a Designated Subsidiary.

13. SPECIAL RULES. Notwithstanding anything herein to the contrary, the
Administrator may adopt special rules applicable to the employees of a
particular Designated Subsidiary, whenever the Administrator determines that
such rules are necessary or appropriate for the implementation of the Plan in a
jurisdiction where such Designated Subsidiary has employees; provided that such
rules are consistent with the requirements of Section 423(b) of the Code. Such
special rules may include (by way of example, but not by way of limitation) the
establishment of a method for employees of a given Designated Subsidiary to fund
the purchase of shares other than by payroll deduction, if the payroll deduction
method is prohibited by local law or is otherwise impracticable. Any special
rules established pursuant

<PAGE>

to this Section 13 shall, to the extent possible, result in the employees
subject to such rules having substantially the same rights as other participants
in the Plan.

14. OPTIONEES NOT STOCKHOLDERS. Neither the granting of an Option to an
employee nor the deductions from his pay shall constitute such employee a holder
of the shares of Common Stock covered by an Option under the Plan until such
shares have been purchased by and issued to him.

15. RIGHTS NOT TRANSFERABLE. Rights under the Plan are not transferable
by a participating employee other than by will or the laws of descent and
distribution, and are exercisable during the employee's lifetime only by the
employee.

16. APPLICATION OF FUNDS. All funds received or held by the Company
under the Plan may be combined with other corporate funds and may be used for
any corporate purpose.

17. ADJUSTMENT IN CASE OF CHANGES AFFECTING COMMON STOCK. In the event
of a subdivision of outstanding shares of Common Stock, or the payment of a
dividend in Common Stock, the number of shares approved for the Plan, and the
share limitation set forth in Section 8, shall be increased proportionately, and
such other adjustment shall be made as may be deemed equitable by the
Administrator. In the event of any other change affecting the Common Stock, such
adjustment shall be made as may be deemed equitable by the Administrator to give
proper effect to such event.

18. AMENDMENT OF THE PLAN. The Board may at any time, and from time to
time, amend the Plan in any respect, except that without the approval, within
twelve (12) months of such Board action, by the stockholders, no amendment shall
be made increasing the number of shares approved for the Plan or making any
other change that would require stockholder

<PAGE>

approval in order for the Plan, as amended, to qualify as an "employee stock
purchase plan" under Section 423(b) of the Code.

19. INSUFFICIENT SHARES. If the total number of shares of Common Stock
that would otherwise be purchased on any Exercise Date plus the number of shares
purchased under previous Offerings under the Plan exceeds the maximum number of
shares issuable under the Plan, the shares then available shall be apportioned
among participants in proportion to the amount of payroll deductions accumulated
on behalf of each participant that would otherwise be used to purchase Common
Stock on such Exercise Date.

20. TERMINATION OF THE PLAN. The Plan may be terminated at any time by
the Board. Upon termination of the Plan, all amounts in the accounts of
participating employees shall be promptly refunded.

21. GOVERNMENTAL REGULATIONS. The Company's obligation to sell and
deliver Common Stock under the Plan is subject to obtaining all governmental
approvals required in connection with the authorization, issuance, or sale of
such stock.

The Plan shall be governed by Delaware law except to the extent that
such law is preempted by federal law.

22. ISSUANCE OF SHARES. Shares may be issued upon exercise of an Option
from authorized but unissued Common Stock, from shares held in the treasury of
the Company, or from any other proper source.

23. TAX WITHHOLDING. Participation in the Plan is subject to any
minimum required tax withholding on income of the participant in connection with
the Plan. Each employee agrees, by entering the Plan, that the Company and its
Subsidiaries shall have the right to

<PAGE>

deduct any such taxes from any payment of any kind otherwise due to the
employee, including shares issuable under the Plan.

24. NOTIFICATION UPON SALE OF SHARES. Each employee agrees, by entering
the Plan, to give the Company prompt notice of any disposition of shares
purchased under the Plan where such disposition occurs within two (2) years
after the date of grant of the Option pursuant to which such shares were
purchased.

25. EFFECTIVE DATE AND APPROVAL OF SHAREHOLDERS. The Plan shall take
effect on the first day of the Company's Initial Public Offering, subject to
approval by the holders of a majority of the votes cast at a meeting of
stockholders at which a quorum is present or by written consent of stockholders.

DATE APPROVED BY BOARD OF DIRECTORS: January 20, 2000

DATE APPROVED BY STOCKHOLDERS: February 24, 2000

<PAGE>

Exhibit 10.35

EXECUTIVE EMPLOYMENT AGREEMENT

This EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made as of the
1st day of February, 2000 between MOLDFLOW CORPORATION, a Delaware corporation
(the "Company"), and MARC DULUDE ("Executive").

WHEREAS, the Company desires to employ Executive and Executive desires
to be employed by the Company on the terms contained herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

1. EMPLOYMENT. The term of this Agreement shall extend from the date hereof
(the "Commencement Date") until the first anniversary of the Commencement Date
and shall automatically be extended for one additional year on each anniversary
thereafter unless, not less than 30 days prior to each such date, either party
shall have given notice that it does not wish to extend this Agreement;
provided, further, that following a Change in Control the term of this Agreement
shall continue in effect for a period of not less than twelve (12) months beyond
the month in which the Change in Control occurred. The term of this Agreement
shall be subject to termination as provided in Paragraph 6 and may be referred
to herein as the "Period of Employment."

2. POSITION AND DUTIES. During the Period of Employment, Executive shall serve
as the President and Chief Executive Officer and shall be a member of the Board
of Directors, and shall have control over and responsibility for the day-to-day
business and affairs of the Company and shall have such other powers and duties
as may from time to time be prescribed by the Board of Directors of the Company
(the "Board"). Executive shall devote his full working time and efforts to the
business and affairs of the Company.

3. COMPENSATION AND RELATED MATTERS.

(a) BASE SALARY AND INCENTIVE COMPENSATION. Executive's initial annual
base salary shall be $215,000. Executive's base salary shall be redetermined
annually by the Board or a Committee thereof. The annual base salary, together
with the car allowance set forth in Subparagraph 3(c)(i), in effect at any given
time is referred to herein as "Base Salary." The Base Salary shall be payable in
a manner consistent with the general payroll policy of the Company. In addition
to Base Salary, Executive shall be eligible to participate in such incentive
compensation plans and Employee Benefit Plans as the Board or a Committee
thereof shall determine from time to time for senior executives of the Company.
As used herein, the term "Employee Benefit Plans" includes, without limitation,
each pension and retirement plan; supplemental pension, retirement and deferred
compensation plan; savings and profit-sharing plan; stock ownership plan; stock
purchase plan; stock option plan; life insurance plan; medical insurance plan;
disability plan; and health and accident plan or arrangement established and
maintained by the Company.

(b) VACATIONS. Executive shall be entitled to twenty (20) paid vacation
days in each fiscal year, which shall be accrued ratably during the fiscal year,
and Executive shall also be entitled to all paid holidays given by the Company
to its executives. Executive shall be entitled to additional vacation based on
any policy of the Company that provides for additional vacation based on years
of service or other criteria.

(c) ADDITIONAL BENEFITS. During the Period of Employment, Executive
shall be entitled to the following additional benefits:

(i) Executive shall receive a car allowance in an amount equal to
$1,000 per month.

<PAGE>

(ii) The Company will retain in force and effect and continue full
payment of the premiums with respect to a term life insurance
policy in the amount of $2.0 million payable to the spouse of
Executive.

(iii)The Company will purchase and / or maintain a supplemental
policy of long-term disability insurance for the Executive.

(d) INDEMNIFICATION AND DIRECTORS' AND OFFICERS' INSURANCE. During
Executive's employment and for the period of time following termination of the
Executive for any reason during which time Executive could be subject to any
claim based on his position in the Company, Executive shall receive the maximum
indemnification protection from the Company as permitted by the Company's
by-laws and shall receive directors' and officers' insurance coverage equivalent
to that which is provided to any other director or officer of the Company.

4. UNAUTHORIZED DISCLOSURE.

Executive acknowledges that in the course of his employment with the
Company (and, if applicable, its predecessors), he has and will become
acquainted with the Company's business affairs, information, trade secrets, and
other matters which are of a proprietary or confidential nature, including but
not limited to the Company's and its affiliates' and predecessors' operations,
business opportunities, price and cost information, finance, customer
information, product development information, business plans, various sales
techniques, manuals, letters, notebooks, procedures, reports, products,
processes, services, and other confidential information and knowledge
(collectively the "Confidential Information") concerning the Company's and its
affiliates' and predecessors' business. Executive understands and acknowledges
that such Confidential Information is confidential, and he agrees not to
disclose such Confidential Information to anyone outside the Company except to
the extent that (i) Executive deems such disclosure or use reasonably necessary
or appropriate in connection with performing his duties on behalf of the
Company; (ii) Executive is required by order of a court of competent
jurisdiction (by subpoena or similar process) to disclose or discuss any
Confidential Information, provided that in such case, Executive shall promptly
inform the Company of such event, shall cooperate with the Company in attempting
to obtain a protective order or to otherwise restrict such disclosure, and shall
only disclose Confidential Information to the minimum extent necessary to comply
with any such court order; or (iii) such Confidential Information becomes
generally known to and available for use in the Company's industry, other than
as a result of any action or inaction by Executive. Executive further agrees
that he will not during employment and/or at any time thereafter use such
Confidential Information in competing, directly or indirectly, with the Company.
At such time as Executive shall cease to be employed by the Company, he will
immediately turn over to the Company all Confidential Information, including
papers, documents, writings, electronically stored information, other property,
and all copies of them provided to or created by him during the course of his
employment with the Company. The foregoing provisions shall be binding upon
Executive's heirs, successors, and legal representatives and shall survive the
termination of this Agreement for any reason.

5. COVENANT NOT TO COMPETE. In consideration for Executive's employment by the
Company under the terms provided in this Agreement and as a means to aid in the
performance and enforcement of the terms of the provisions of Paragraph 4,
Executive agrees that:

(a) during the Period of Employment and for a period of twelve (12)
months thereafter, regardless of the reason for termination of employment,
Executive will not, directly or indirectly, as an owner, director, principal,
agent, officer, employee, partner, consultant, servant, or otherwise, carry on,
operate, manage, control, or become involved in any manner with any business,
operation, corporation, partnership, association, agency, or other person or
entity which is engaged in a business that is directly competitive with any of
the Company's products which are produced or in development by the Company as of
the date of Executive's termination of employment, anywhere in the world;
provided, however, that the foregoing shall not prohibit Executive from owning
up to one percent (1%) of the outstanding stock of a publicly held company
engaged in activities competitive with that of the Company; and

<PAGE>

(b) during the term of Executive's employment with the Company and for
a period of twelve (12) months thereafter, regardless of the reason for
termination of employment, Executive will not directly or indirectly solicit or
induce any present or future employee of the Company or any affiliate of the
Company to accept employment with Executive or with any business, operation,
corporation, partnership, association, agency, or other person or entity with
which Executive may be associated, and Executive will not knowingly employ or
cause any business, operation, corporation, partnership, association, agency, or
other person or entity with which Executive may be associated to employ any
present or future employee of the Company without providing the Company with ten
(10) days' prior written notice of such proposed employment.

Should Executive violate any of the provisions of this Paragraph, then
in addition to all other rights and remedies available to the Company at law or
in equity, the duration of this covenant shall automatically be extended for the
period of time from which Executive began such violation until he permanently
ceases such violation.

6. TERMINATION. Except for termination as specified in Subparagraph 6(a), any
termination of Executive's employment by the Company or any such termination by
Executive shall be communicated by written notice of termination to the other
party hereto. Executive's employment hereunder may be terminated without any
breach of this Agreement under the following circumstances:

(a) DEATH. Executive's employment hereunder shall terminate upon his
death.

(b) DISABILITY. If, as a result of Executive's incapacity due to
physical or mental illness, Executive shall have been absent from his duties
hereunder on a full-time basis for one hundred eighty (180) calendar days in the
aggregate in any twelve (12) month period, the Company may terminate Executive's
employment hereunder.

(c) TERMINATION BY COMPANY FOR CAUSE. At any time during the Period of
Employment, the Company may terminate Executive's employment hereunder for Cause
if such termination is approved by not less than a majority of the Board. For
purposes of this Agreement, "Cause" shall mean: (A) conduct by Executive
constituting a material act of willful misconduct in connection with the
performance of his duties; (B) criminal or civil conviction of Executive, a plea
of nolo contendere by Executive or conduct by Executive that would reasonably be
expected to result in material injury to the reputation of the Company if he
were retained in his position with the Company; (C) continued, willful and
deliberate non-performance by Executive of his duties hereunder (other than by
reason of Executive's physical or mental illness, incapacity or disability)
which has continued for more than thirty (30) days following written notice of
such non-performance from the Board; or (D) a breach by Executive of any of the
provisions contained in Paragraphs 4 and 5 of this Agreement.

(d) TERMINATION WITHOUT CAUSE. At any time during the Period of
Employment, the Company may terminate Executive's employment hereunder without
Cause if such termination is approved by a majority of the Company's Board of
Directors. Any termination by the Company of Executive's employment under this
Agreement which does not constitute a termination for Cause under Subparagraph
6(c) or result from the death or disability of the Executive under Subparagraph
6(a) or (b) shall be deemed a termination without Cause. If the Company provides
notice to Executive under Paragraph 1 that it does not wish to extend the Period
of Employment, such action shall be deemed a termination without Cause.

<PAGE>

and the failure of the Company to cure such breach within thirty (30) days after
written notice thereof by Executive; (E) the involuntary relocation of the
Company's offices at which Executive is principally employed or the involuntary
relocation of the offices of Executive's primary workgroup to a location more
than thirty (30) miles from such offices, or the requirement by the Company that
Executive be based anywhere other than the Company's offices at such location on
an extended basis, except for required travel on the Company's business to an
extent substantially consistent with Executive's business travel obligations; or
(F) the failure of the Company to obtain the agreement from any successor to the
Company to assume and agree to perform this Agreement as required by Paragraph
10.

(f) DATE OF TERMINATION. "Date of Termination" shall mean: (A) if
Executive's employment is terminated by his death, the date of his death; (B) if
Executive's employment is terminated under Subparagraph 6(b) or under
Subparagraph 6(c), the date on which Notice of Termination is given; (C) if
Executive's employment is terminated by the Company under Subparagraph 6(d),
thirty (30) days after the date on which a Notice of Termination is given; and
(D) if Executive's employment is terminated by Executive under Subparagraph
6(e), thirty (30) days after the date on which a Notice of Termination is given,
unless the Company cures the Good Reason event prompting the Executive to issue
a Notice of Termination.

7. COMPENSATION UPON TERMINATION OR DURING DISABILITY.

(a) If Executive's employment terminates by reason of his death, the
Company shall, within ninety (90) days of death, pay in a lump sum amount to
such person as Executive shall designate in a notice filed with the Company or,
if no such person is designated, to Executive's estate, Executive's accrued and
unpaid Base Salary to the date of his death, plus his accrued and unpaid
incentive compensation (including any bonus payment that is earned but
unauthorized), if any, under Subparagraph 3(a). Upon the death of Executive, (i)
all stock options which would otherwise vest over the next twelve (12) months
shall immediately vest in Executive's estate or other legal representatives and
become exercisable, and Executive's estate or other legal representatives shall
have twelve (12) months from the Date of Termination or the remaining option
term, if earlier, to exercise all such stock options granted to Executive and
(ii) all repurchase rights and other restrictions on the shares of Restricted
Stock held by the Executive which would otherwise lapse over the next twelve
(12) months shall immediately lapse. All other stock-based grants and awards
held by Executive shall be canceled upon the death of Executive in accordance
with their terms. For a period of one (1) year following the Date of
Termination, the Company shall pay such health and dental insurance premiums as
may be necessary to allow Executive's spouse and dependents to receive health
and dental insurance coverage substantially similar to coverage they received
immediately prior to the Date of Termination. In addition to the foregoing, any
payments to which Executive's spouse, beneficiaries, or estate may be entitled
under any employee benefit plan shall also be paid in accordance with the terms
of such plan or arrangement. Such payments, in the aggregate, shall fully
discharge the Company's obligations hereunder.

(b) During any period that Executive fails to perform his duties
hereunder as a result of incapacity due to physical or mental illness, Executive
shall continue to receive his accrued and unpaid Base Salary and accrued and
unpaid incentive compensation (including any bonus payment that is earned but
unauthorized), if any, under Subparagraph 3(a), until Executive's employment is
terminated due to disability in accordance with Subparagraph 6(b) or until
Executive terminates his employment in accordance with Subparagraph 6(e),
whichever first occurs. Upon the Date of Termination, (i) all stock options
which would otherwise vest over the next twelve (12) months shall immediately
vest and become exercisable, and Executive shall have twelve (12) months from
the Date of Termination or the remaining option term, if earlier, to exercise
all such stock options granted to Executive and (ii) all repurchase rights and
other restrictions on the shares of Restricted Stock held by the Executive which
would otherwise lapse over the next twelve (12) months shall immediately lapse.
All other stock-based grants and awards held by Executive shall vest or be
canceled upon the Date of Termination in accordance with their terms. For a
period of one (1) year following the Date of Termination, the Company shall pay
such health and dental insurance premiums as may be necessary to allow Executive
and Executive's spouse and dependents to receive health and dental insurance
coverage substantially similar to coverage they received prior to the Date of
Termination.

<PAGE>

(c) If Executive's employment is terminated by Executive other than for
Good Reason as provided in Subparagraph 6(e), then the Company shall, through
the Date of Termination, pay Executive his accrued and unpaid Base Salary at the
rate in effect at the time Notice of Termination is given. Thereafter, the
Company shall have no further obligations to Executive except as otherwise
expressly provided under this Agreement. In addition, all vested but unexercised
stock options held by Executive as of the Date of Termination must be exercised
by Executive within three (3) months following the Date of Termination or by the
end of the option term, if earlier. All other stock-based grants and awards held
by Executive shall vest or be canceled upon the Date of Termination in
accordance with their terms.

(d) If Executive terminates his employment for Good Reason as provided
in Subparagraph 6(e) or if Executive's employment is terminated by the Company
without Cause as provided in Subparagraph 6(d), then the Company shall, through
the Date of Termination, pay Executive his accrued and unpaid Base Salary at the
rate in effect at the time Notice of Termination is given and his accrued and
unpaid incentive compensation (including any bonus payment that is earned but
unauthorized), if any, under Subparagraph 3(a). In addition, subject to signing
by Executive of a general release of claims in a form and manner satisfactory to
the Company, the Company shall provide the following benefits to Executive:

(i) The Company shall pay Executive an amount equal one (1) times the sum
of Executive's Base Salary in effect on the Date of Termination (the
"Severance Amount"). The Severance Amount shall be paid out in accordance
with the Company's standard payroll practices. Notwithstanding the
foregoing, (i) if the Executive breaches any of the provisions contained in
Paragraphs 4 and 5 of this Agreement or (ii) if Executive obtains a
"Comparable Position", as defined herein, during the period over which the
Severance Amount is being paid, then all further payments of the Severance
Amount shall immediately cease. For purposes of this Agreement "Comparable
Position" means a full time executive management position with a similar
scope of duties and responsibilities as that described in Paragraph 2
hereof and an equivalent or better compensation package as that described
in Paragraph 3 hereof. The Executive shall have no obligation to seek or
accept a Comparable Position during the period over which the Severance
Amount is being paid.

(ii) Upon the Date of Termination, (i) all stock options which
would otherwise vest over the next twelve (12) months shall immediately
vest and become exercisable, and Executive shall have twelve (12) months
from the Date of Termination or the remaining option term, if earlier, to
exercise all such stock options granted to Executive and (ii) all
repurchase rights and other restrictions on the shares of Restricted Stock
held by the Executive which would otherwise lapse over the next twelve (12)
months shall immediately lapse. All other stock-based grants and awards
held by Executive shall be canceled upon the Termination Date in accordance
with their terms.

(iii) In addition to any other benefits to which Executive may
be entitled in accordance with the Company's then existing severance
policies, the Company shall, for a period of one (1) year commencing on the
Date of Termination, pay such health and dental insurance premiums as may
be necessary to allow Executive and Executive's spouse and dependents to
continue to receive health and dental insurance coverage substantially
similar to coverage they received prior to the Date of Termination.

(e) If Executive's employment is terminated by the Company for Cause as
provided in Subparagraph 6(c), then the Company shall, through the Date of
Termination, pay Executive his accrued and unpaid Base Salary at the rate in
effect at the time Notice of Termination is given. Thereafter, the Company shall
have no further obligations to Executive except as otherwise expressly provided
under this Agreement. In addition, all stock options held by Executive as of the
Date of Termination shall cease to vest as of the Date of Termination and
Executive shall have 30 days from the Date of Termination or the remaining
option term, if earlier, to exercise all such vested stock options. All other
stock-based grants and awards held by Executive shall be canceled upon the
Termination Date in accordance with their terms.

<PAGE>

(f) Nothing contained in the foregoing Subparagraphs 7(a) through 7(e)
shall be construed so as to affect Executive's rights or the Company's
obligations relating to agreements or benefits that are unrelated to termination
of employment.

8. CHANGE IN CONTROL BENEFIT. Upon a Change of Control of the Company the
following provisions shall apply in lieu of, and expressly supersede, the
provisions of Subparagraph 7(d).

(a) CHANGE IN CONTROL.

(i) In the event that the Executive terminates his employment
for Good Reason or if the Executive's employment is terminated by the
Company without Cause, the Company shall pay Executive an amount equal one
(1) times the sum of Executive's Base Salary (the "Severance Amount"). The
Severance Amount shall be paid out in accordance with the Company's
standard payroll practices. For purposes of this Agreement, "Base Salary"
shall mean the annual Base Salary in effect on the Date of Termination.
Notwithstanding the foregoing, if the Executive breaches any of the
provisions contained in Paragraphs 4 and 5 of this Agreement then all
further payments of the Severance Amount shall immediately cease.
Furthermore, in the event Executive terminates his employment for Good
Reason as provided in Subparagraph 6(e), he shall be entitled to the
Severance Amount only if he provides the Notice of Termination provided for
in Subparagraph 6(a) within sixty (60) days after the occurrence of the
event or events which constitute such Good Reason as specified in
Subparagraph 6(e); and

(ii) Notwithstanding anything to the contrary in any
applicable option agreement or stock-based award agreement, upon a Change
in Control, all stock options and other stock-based awards granted to
Executive by the Company shall immediately accelerate and become
exercisable or non-forfeitable as of the effective date of such Change in
Control. Executive shall also be entitled to any other rights and benefits
with respect to stock-related awards, to the extent and upon the terms
provided in the employee stock option or incentive plan or any agreement or
other instrument attendant thereto pursuant to which such options or awards
were granted; and

(iii) The Company shall, for a period of one (1) year
commencing on the Date of Termination, pay such health and dental insurance
premiums as may be necessary to allow Executive, Executive's spouse and
dependents to continue to receive health and dental insurance coverage
substantially similar to the coverage they received prior to the Date of
Termination.

(b) GROSS UP PAYMENT.

(i) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any compensation,
payment or distribution by the Company to or for the benefit of Executive,
whether paid or payable or distributed or distributable pursuant to the
terms of this Agreement or otherwise (the "Severance Payments"), would be
subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code"), or any interest or penalties are
incurred by Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then Executive shall be entitled to
receive an additional payment (a "Gross-Up Payment") such that the net
amount retained by Executive, after deduction of any Excise Tax on the
Severance Payments, any Federal, state, and local income tax, employment
tax and Excise Tax upon the payment provided by this subsection, and any
interest and/or penalties assessed with respect to such Excise Tax, shall
be equal to the Severance Payments.

(ii) Subject to the provisions of Subparagraph 8(b)(iii), all
determinations required to be made under this Subparagraph 8(b)(ii),
including whether a Gross-Up Payment is required and the amount of such
Gross-Up Payment, shall be made by PriceWaterhouseCoopers or any other
nationally recognized accounting firm selected by the Company (the
"Accounting Firm"), which shall provide

<PAGE>

detailed supporting calculations both to the Company and Executive within
fifteen (15) business days of the Date of Termination, if applicable, or at
such earlier time as is reasonably requested by the Company or Executive.
For purposes of determining the amount of the Gross-Up Payment, Executive
shall be deemed to pay federal income taxes at the highest marginal rate of
federal income taxation applicable to individuals for the calendar year in
which the Gross-Up Payment is to be made, and state and local income taxes
at the highest marginal rates of individual taxation in the state and
locality of Executive's residence on the Date of Termination, net of the
maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes. The initial Gross-Up Payment, if
any, as determined pursuant to this Subparagraph 8(b)(iii), shall be paid
to Executive within five (5) days of the receipt of the Accounting Firm's
determination. If the Accounting Firm determines that no Excise Tax is
payable by Executive, the Company shall furnish Executive with that
determination. Any determination by the Accounting Firm shall be binding
upon the Company and Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have
been made (an "Underpayment"). In the event that the Company exhausts its
remedies pursuant to Subparagraph 8(b)(iii) and Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred, consistent with
the calculations required to be made hereunder, and any such Underpayment,
and any interest and penalties imposed on the Underpayment and required to
be paid by Executive in connection with the proceedings described in
Subparagraph 8(b)(iii), shall be promptly paid by the Company to or for the
benefit of Executive.

(iii) Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require
the payment by the Company of the Gross-up Payment. Such notification shall
be given as soon as practicable but no later than ten (10) business days
after Executive knows of such claim and shall apprise the Company of the
nature of such claim and the date on which such claim is requested to be
paid. Executive shall not pay such claim prior to the expiration of the
30-day period following the date on which he gives such notice to the
Company (or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Company notifies Executive
in writing prior to the expiration of such period that it desires to
contest such claim, provided that the Company has set aside adequate
reserves to cover the Underpayment and any interest and penalties thereon
that may accrue, Executive shall:

(A) give the Company any information reasonably requested by the
Company relating to such claim,

(B) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney selected by the Company,

(D) permit the Company to participate in any proceedings relating
to such claim; provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and shall
indemnify and hold Executive harmless, on an after-tax basis, for any
Excise Tax or income tax, including interest and penalties with
respect thereto, imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing
provisions of this Subparagraph 8(b)(iii), the Company shall control
all proceedings taken in connection with such contest and, at its sole
option, may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct
Executive to pay the tax claimed and sue for a refund or

<PAGE>

contest the claim in any permissible manner, and Executive agrees to
prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however,
that if the Company directs Executive to pay such claim and sue for a
refund, the Company shall advance the amount of such payment to
Executive on an interest-free basis and shall indemnify and hold
Executive harmless, on an after-tax basis, from any Excise Tax or
income tax, including interest or penalties with respect thereto,
imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any
extension of the statute of limitations relating to payment of taxes
for the taxable year of Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be
payable hereunder and Executive shall be entitled to settle or
contest, as the case may be, any other issues raised by the Internal
Revenue Service or any other taxing authority.

(iv) If, after the receipt by Executive of an amount advanced
by the Company pursuant to Subparagraph 8(b)(iii), Executive becomes
entitled to receive any refund with respect to such claim, Executive shall
(subject to the Company's complying with the requirements of Subparagraph
8(b)(iii)) promptly pay to the Company the amount of such refund (together
with any interest paid or credited thereon after taxes applicable thereto).
If, after the receipt by Executive of an amount advanced by the Company
pursuant to Subparagraph 8(b)(iii), a determination is made that Executive
shall not be entitled to any refund with respect to such claim and the
Company does not notify Executive in writing of its intent to contest such
denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the
extent thereof, the amount of Gross-Up Payment required to be paid.

"CHANGE IN CONTROL" shall mean any of the following:

(a) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Act") (other
than the Company, any of its subsidiaries, or any trustee, fiduciary or
other person or entity holding securities under any employee benefit plan
or trust of the Company or any of its subsidiaries), together with all
"affiliates" and "associates" (as such terms are defined in Rule 12b-2
under the Act) of such person, shall become the "beneficial owner" (as such
term is defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing forty percent (40%)or more of either
(A) the combined voting power of the Company's then outstanding securities
having the right to vote in an election of the Company's Board ("Voting
Securities") or (B) the then outstanding shares of Company's common stock,
par value $0.01 per share ("Common Stock") (other than as a result of an
acquisition of securities directly from the Company); or

(b) persons who, as of the Commencement Date, constitute the
Company's Board (the "Incumbent Directors") cease for any reason,
including, without limitation, as a result of a tender offer, proxy
contest, merger or similar transaction, to constitute at least a majority
of the Board, provided that any person becoming a director of the Company
subsequent to the Commencement Date shall be considered an Incumbent
Director if such person's election was approved by or such person was
nominated for election by a vote of at least a majority of the Incumbent
Directors; but provided further, that any such person whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of members of the Board or other actual or
threatened solicitation of proxies or consents by or on behalf of a person
other than the Board, including by reason of agreement intended to avoid or
settle any such actual or threatened contest or solicitation, shall not be
considered an Incumbent Director; or

<PAGE>

(c) the stockholders of the Company shall approve (A) any
consolidation or merger of the Company where the stockholders of the
Company, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as such
term is defined in Rule 13d-3 under the Act), directly or indirectly,
shares representing in the aggregate more than fifty percent (50%) of the
voting shares of the Company issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if any),
(B) any sale, lease, exchange or other transfer (in one transaction or a
series of transactions contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of the Company or (C) any
plan or proposal for the liquidation or dissolution of the Company.

Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (a) solely as the
result of an acquisition of securities by the Company which, by reducing the
number of shares of Common Stock or other Voting Securities outstanding,
increases the proportionate number of shares beneficially owned by any person to
forty percent (40%) or more of either (A) the combined voting power of all of
the then outstanding Voting Securities or (B) Common Stock; PROVIDED, HOWEVER,
that if any person referred to in this sentence shall thereafter become the
beneficial owner of any additional shares of Voting Securities or Common Stock
(other than pursuant to a stock split, stock dividend, or similar transaction or
as a result of an acquisition of securities directly from the Company) and
immediately thereafter beneficially owns forty percent (40%) or more of either
(A) the combined voting power of all of the then outstanding Voting Securities
or (B) Common Stock, then a "Change of Control" shall be deemed to have occurred
for purposes of the foregoing clause (a).

9. NOTICE. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified mail, return receipt requested, postage prepaid, addressed as follows:

if to the Executive:
At his home address as shown
in the Company's personnel records;

if to the Company:
Moldflow Corporation
91 Hartwell Avenue
Lexington, MA 02421
Attention: Board of Directors of Moldflow Corporation

Copy to: Corporate Counsel

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

10. SUCCESSOR TO COMPANY. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company expressly to assume
and agree to perform this Agreement to the same extent that the Company would be
required to perform it if no succession had taken place. Failure of the Company
to obtain an assumption of this Agreement at or prior to the effectiveness of
any succession shall be a breach of this Agreement and shall constitute Good
Reason if the Executive elects to terminate employment.

11. MISCELLANEOUS. No provisions of this Agreement may be modified, waived, or
discharged unless such waiver, modification, or discharge is agreed to in
writing and signed by Executive and such officer of the Company as may be
specifically designated by the Board. No agreements or representations, oral or
otherwise, express or implied, unless specifically referred to herein, with
respect to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement. The validity, interpretation,
construction, and

<PAGE>

performance of this Agreement shall be governed by the laws of the Commonwealth
of Massachusetts (without regard to principles of conflicts of laws).

12. VALIDITY. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.

13. COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

14. ARBITRATION; OTHER DISPUTES. In the event of any dispute or controversy
arising under or in connection with this Agreement, the parties shall first try
in good faith for a period of 30 days to settle such dispute or controversy by
mediation under the applicable rules of the American Arbitration Association
before resorting to arbitration. Following such time period, the parties will
settle any remaining dispute or controversy exclusively by arbitration in
Boston, Massachusetts in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award in
any court having jurisdiction. Notwithstanding the above, the Company shall be
entitled to seek a restraining order or injunction in any court of competent
jurisdiction to prevent any continuation of any violation of Paragraph 4 or 5
hereof.

15. LITIGATION AND REGULATORY COOPERATION. During and after Executive's
employment, Executive shall reasonably cooperate with the Company in the defense
or prosecution of any claims or actions now in existence or which may be brought
in the future against or on behalf of the Company which relate to events or
occurrences that transpired while Executive was employed by the Company;
provided, however, that such cooperation shall not materially and adversely
affect Executive or expose Executive to an increased probability of civil or
criminal litigation. The Company shall also provide Executive with compensation
on an hourly basis (to be derived from his Base Salary) for requested litigation
and regulatory cooperation that occurs after his termination of employment, and
reimburse Executive for all costs and expenses incurred in connection with his
performance under this Paragraph 15, including, but not limited to, reasonable
attorneys' fees and costs.

IN WITNESS WHEREOF, the parties have executed this Agreement effective
on the date and year first above written.

MOLDFLOW CORPORATION

By: /s/ Charles D. Yie
---------------------
Its: Chairman of the Board
---------------------

EXECUTIVE

/s/ Marc Dulude
-------------------------
Marc Dulude

<PAGE>

Exhibit 10.36

EXECUTIVE EMPLOYMENT AGREEMENT

This EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made as of the
1st day of February, 2000 between MOLDFLOW CORPORATION, a Delaware corporation
(the "Company"), and SUZANNE ROGERS ("Executive").

WHEREAS, the Company desires to employ Executive and Executive desires
to be employed by the Company on the terms contained herein.

2. POSITION AND DUTIES. During the Period of Employment, Executive shall serve
as the Chief Financial Officer and Vice President of Finance and Administration
and shall have such duties as may from time to time be prescribed by the Chief
Executive Officer or the Board of Directors of the Company (the "Board").
Executive shall devote her full working time and efforts to the business and
affairs of the Company.

3. COMPENSATION AND RELATED MATTERS.

(a) BASE SALARY AND INCENTIVE COMPENSATION. Executive's initial annual
base salary shall be $133,000. Executive's base salary shall be redetermined
annually by the Chief Executive Officer, the Board or a Committee thereof. The
annual base salary in effect at any given time is referred to herein as "Base
Salary." The Base Salary shall be payable in a manner consistent with the
general payroll policy of the Company. In addition to Base Salary, Executive
shall be eligible to participate in such incentive compensation plans and
Employee Benefit Plans as the Board or a Committee thereof shall determine from
time to time for senior executives of the Company. As used herein, the term
"Employee Benefit Plans" includes, without limitation, each pension and
retirement plan; supplemental pension, retirement and deferred compensation
plan; savings and profit-sharing plan; stock ownership plan; stock purchase
plan; stock option plan; life insurance plan; medical insurance plan; disability
plan; and health and accident plan or arrangement established and maintained by
the Company.

(b) VACATIONS. Executive shall be entitled to fifteen (15) paid
vacation days in each fiscal year, which shall be accrued ratably during the
fiscal year, and Executive shall also be entitled to all paid holidays given by
the Company to its executives. Executive shall be entitled to additional
vacation based on any policy of the Company that provides for additional
vacation based on years of service or other criteria.

(c) ADDITIONAL BENEFITS. During the Period of Employment the Company
will purchase and / or maintain a supplemental policy of long-term disability
insurance for the Executive.

<PAGE>

protection from the Company as permitted by the Company's by-laws and shall
receive directors' and officers' insurance coverage equivalent to that which is
provided to any other director or officer of the Company.

4. UNAUTHORIZED DISCLOSURE.

Executive acknowledges that in the course of her employment with the
Company (and, if applicable, its predecessors), she has and will become
acquainted with the Company's business affairs, information, trade secrets, and
other matters which are of a proprietary or confidential nature, including but
not limited to the Company's and its affiliates' and predecessors' operations,
business opportunities, price and cost information, finance, customer
information, product development information, business plans, various sales
techniques, manuals, letters, notebooks, procedures, reports, products,
processes, services, and other confidential information and knowledge
(collectively the "Confidential Information") concerning the Company's and its
affiliates' and predecessors' business. Executive understands and acknowledges
that such Confidential Information is confidential, and she agrees not to
disclose such Confidential Information to anyone outside the Company except to
the extent that (i) Executive deems such disclosure or use reasonably necessary
or appropriate in connection with performing her duties on behalf of the
Company; (ii) Executive is required by order of a court of competent
jurisdiction (by subpoena or similar process) to disclose or discuss any
Confidential Information, provided that in such case, Executive shall promptly
inform the Company of such event, shall cooperate with the Company in attempting
to obtain a protective order or to otherwise restrict such disclosure, and shall
only disclose Confidential Information to the minimum extent necessary to comply
with any such court order; or (iii) such Confidential Information becomes
generally known to and available for use in the Company's industry, other than
as a result of any action or inaction by Executive. Executive further agrees
that she will not during employment and/or at any time thereafter use such
Confidential Information in competing, directly or indirectly, with the Company.
At such time as Executive shall cease to be employed by the Company, she will
immediately turn over to the Company all Confidential Information, including
papers, documents, writings, electronically stored information, other property,
and all copies of them provided to or created by him during the course of her
employment with the Company. The foregoing provisions shall be binding upon
Executive's heirs, successors, and legal representatives and shall survive the
termination of this Agreement for any reason.

<PAGE>

(a) DEATH. Executive's employment hereunder shall terminate upon her
death.

(b) DISABILITY. If, as a result of Executive's incapacity due to
physical or mental illness, Executive shall have been absent from her duties
hereunder on a full-time basis for one hundred eighty (180) calendar days in the
aggregate in any twelve (12) month period, the Company may terminate Executive's
employment hereunder.

(c) TERMINATION BY COMPANY FOR CAUSE. At any time during the Period of
Employment, the Company may terminate Executive's employment hereunder for Cause
if such termination is approved by not less than a majority of the Board. For
purposes of this Agreement, "Cause" shall mean: (A) conduct by Executive
constituting a material act of willful misconduct in connection with the
performance of her duties; (B) criminal or civil conviction of Executive, a plea
of nolo contendere by Executive or conduct by Executive that would reasonably be
expected to result in material injury to the reputation of the Company if he
were retained in her position with the Company; (C) continued, willful and
deliberate non-performance by Executive of her duties hereunder (other than by
reason of Executive's physical or mental illness, incapacity or disability)
which has continued for more than thirty (30) days following written notice of
such non-performance from the Board; or (D) a breach by Executive of any of the
provisions contained in Paragraphs 4 and 5 of this Agreement.

(e) TERMINATION BY EXECUTIVE. At any time during the Period of
Employment, Executive may terminate her employment hereunder for any reason,
including but not limited to Good Reason. If Executive provides notice to the
Company under Paragraph 1 that she does not wish to extend the Period of
Employment, such action shall be deemed a voluntary termination by Executive and
one without Good Reason. For purposes of this Agreement, "Good Reason" shall
mean: (A) a substantial diminution or other substantive adverse change, not
consented to by Executive, in the nature or scope of Executive's
responsibilities, authorities, powers, functions or duties; (B) any removal,
during the Period of Employment, from Executive of her title as set forth in
paragraph 2 of this Agreement; (C) an involuntary reduction in Executive's Base
Salary except for across-the-board reductions similarly affecting all or
substantially all management employees; (D) a breach by the Company of any of
its other material obligations under this Agreement and the failure of the
Company to cure such breach within thirty (30) days after written notice thereof
by Executive; (E) the involuntary relocation of the Company's offices at which
Executive is principally employed or the involuntary relocation of the offices
of Executive's primary workgroup to a location more than thirty (30) miles from
such offices, or the requirement by the Company that Executive be based anywhere
other than the Company's offices at such location on an extended basis, except
for required travel on the Company's business to an extent substantially
consistent with Executive's business travel obligations; or (F) the failure of
the Company to obtain the agreement from any successor to the Company to assume
and agree to perform this Agreement as required by Paragraph 10.

<PAGE>

(f) DATE OF TERMINATION. "Date of Termination" shall mean: (A) if
Executive's employment is terminated by her death, the date of her death; (B) if
Executive's employment is terminated under Subparagraph 6(b) or under
Subparagraph 6(c), the date on which Notice of Termination is given; (C) if
Executive's employment is terminated by the Company under Subparagraph 6(d),
thirty (30) days after the date on which a Notice of Termination is given; and
(D) if Executive's employment is terminated by Executive under Subparagraph
6(e), thirty (30) days after the date on which a Notice of Termination is given,
unless the Company cures the Good Reason event prompting the Executive to issue
a Notice of Termination.

7. COMPENSATION UPON TERMINATION OR DURING DISABILITY.

(a) If Executive's employment terminates by reason of her death, the
Company shall, within ninety (90) days of death, pay in a lump sum amount to
such person as Executive shall designate in a notice filed with the Company or,
if no such person is designated, to Executive's estate, Executive's accrued and
unpaid Base Salary to the date of her death, plus her accrued and unpaid
incentive compensation (including any bonus payment that is earned but
unauthorized), if any, under Subparagraph 3(a). Upon the death of Executive, (i)
all stock options which would otherwise vest over the next twelve (12) months
shall immediately vest in Executive's estate or other legal representatives and
become exercisable, and Executive's estate or other legal representatives shall
have twelve (12) months from the Date of Termination or the remaining option
term, if earlier, to exercise all such stock options granted to Executive and
(ii) all repurchase rights and other restrictions on the shares of Restricted
Stock held by the Executive which would otherwise lapse over the next twelve
(12) months shall immediately lapse. All other stock-based grants and awards
held by Executive shall be canceled upon the death of Executive in accordance
with their terms. For a period of one (1) year following the Date of
Termination, the Company shall pay such health and dental insurance premiums as
may be necessary to allow Executive's spouse and dependents to receive health
and dental insurance coverage substantially similar to coverage they received
immediately prior to the Date of Termination. In addition to the foregoing, any
payments to which Executive's spouse, beneficiaries, or estate may be entitled
under any employee benefit plan shall also be paid in accordance with the terms
of such plan or arrangement. Such payments, in the aggregate, shall fully
discharge the Company's obligations hereunder.

(b) During any period that Executive fails to perform her duties
hereunder as a result of incapacity due to physical or mental illness, Executive
shall continue to receive her accrued and unpaid Base Salary and accrued and
unpaid incentive compensation (including any bonus payment that is earned but
unauthorized), if any, under Subparagraph 3(a), until Executive's employment is
terminated due to disability in accordance with Subparagraph 6(b) or until
Executive terminates her employment in accordance with Subparagraph 6(e),
whichever first occurs. Upon the Date of Termination, (i) all stock options
which would otherwise vest over the next twelve (12) months shall immediately
vest and become exercisable, and Executive shall have twelve (12) months from
the Date of Termination or the remaining option term, if earlier, to exercise
all such stock options granted to Executive and (ii) all repurchase rights and
other restrictions on the shares of Restricted Stock held by the Executive which
would otherwise lapse over the next twelve (12) months shall immediately lapse.
All other stock-based grants and awards held by Executive shall vest or be
canceled upon the Date of Termination in accordance with their terms. For a
period of one (1) year following the Date of Termination, the Company shall pay
such health and dental insurance premiums as may be necessary to allow Executive
and Executive's spouse and dependents to receive health and dental insurance
coverage substantially similar to coverage they received prior to the Date of
Termination.

(c) If Executive's employment is terminated by Executive other than for
Good Reason as provided in Subparagraph 6(e), then the Company shall, through
the Date of Termination, pay Executive her accrued and unpaid Base Salary at the
rate in effect at the time Notice of Termination is given. Thereafter, the
Company shall have no further obligations to Executive except as otherwise
expressly provided under this Agreement. In addition, all vested but unexercised
stock options held by Executive as of the Date of Termination must be exercised
by Executive within three (3) months following the Date of Termination or by the
end of the option term, if earlier. All other stock-based grants and awards held
by Executive shall vest or be canceled upon the Date of Termination in
accordance with their terms.

<PAGE>

(d) If Executive terminates her employment for Good Reason as provided
in Subparagraph 6(e) or if Executive's employment is terminated by the Company
without Cause as provided in Subparagraph 6(d), then the Company shall, through
the Date of Termination, pay Executive her accrued and unpaid Base Salary at the
rate in effect at the time Notice of Termination is given and her accrued and
unpaid incentive compensation (including any bonus payment that is earned but
unauthorized), if any, under Subparagraph 3(a). In addition, subject to signing
by Executive of a general release of claims in a form and manner satisfactory to
the Company, the Company shall provide the following benefits to Executive:

(e) If Executive's employment is terminated by the Company for Cause as
provided in Subparagraph 6(c), then the Company shall, through the Date of
Termination, pay Executive her accrued and unpaid Base Salary at the rate in
effect at the time Notice of Termination is given. Thereafter, the Company shall
have no further obligations to Executive except as otherwise expressly provided
under this Agreement. In addition, all stock options held by Executive as of the
Date of Termination shall cease to vest as of the Date of Termination and
Executive shall have 30 days from the Date of Termination or the remaining
option term, if earlier, to exercise all such vested stock options. All other
stock-based grants and awards held by Executive shall be canceled upon the
Termination Date in accordance with their terms.

8. CHANGE IN CONTROL BENEFIT. Upon a Change of Control of the Company the
following provisions shall apply in lieu of, and expressly supersede, the
provisions of Subparagraph 7(d).

(a) CHANGE IN CONTROL.

<PAGE>

(i) In the event that the Executive terminates her employment
for Good Reason or if the Executive's employment is terminated by the
Company without Cause, the Company shall pay Executive an amount equal one
(1) times the sum of Executive's Base Salary (the "Severance Amount").
Notwithstanding the foregoing, if Executive obtains a "Comparable
Position", as defined herein, during the period over which the Severance
Amount is being paid, then all further payments of the Severance Amount
shall immediately cease; provided, however, that in any event the Executive
shall be entitled to a minimum of six (6) months of severance. The
Severance Amount shall be paid out in accordance with the Company's
standard payroll practices. For purposes of this Agreement, "Base Salary"
shall mean the annual Base Salary in effect on the Date of Termination.
Notwithstanding the foregoing, if the Executive breaches any of the
provisions contained in Paragraphs 4 and 5 of this Agreement then all
further payments of the Severance Amount shall immediately cease.
Furthermore, in the event Executive terminates her employment for Good
Reason as provided in Subparagraph 6(e), she shall be entitled to the
Severance Amount only if she provides the Notice of Termination provided
for in Subparagraph 6(a) within sixty (60) days after the occurrence of the
event or events which constitute such Good Reason as specified in
Subparagraph 6(e); and

(b) DEFINITIONS. For purposes of this Paragraph 8, the following
terms shall have the following meanings:

"CHANGE IN CONTROL" shall mean any of the following:

<PAGE>

the election of members of the Board or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than
the Board, including by reason of agreement intended to avoid or settle any
such actual or threatened contest or solicitation, shall not be considered
an Incumbent Director; or

if to the Executive:
At her home address as shown
in the Company's personnel records;

if to the Company:

Moldflow Corporation
91 Hartwell Avenue
Lexington, MA 02421
Attention: Chief Executive Officer

Copy to: Corporate Counsel

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

<PAGE>

as may be specifically designated by the Board. No agreements or
representations, oral or otherwise, express or implied, unless specifically
referred to herein, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement. The validity,
interpretation, construction, and performance of this Agreement shall be
governed by the laws of the Commonwealth of Massachusetts (without regard to
principles of conflicts of laws).

13. COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

15. LITIGATION AND REGULATORY COOPERATION. During and after Executive's
employment, Executive shall reasonably cooperate with the Company in the defense
or prosecution of any claims or actions now in existence or which may be brought
in the future against or on behalf of the Company which relate to events or
occurrences that transpired while Executive was employed by the Company;
provided, however, that such cooperation shall not materially and adversely
affect Executive or expose Executive to an increased probability of civil or
criminal litigation. The Company shall also provide Executive with compensation
on an hourly basis (to be derived from her Base Salary) for requested litigation
and regulatory cooperation that occurs after her termination of employment, and
reimburse Executive for all costs and expenses incurred in connection with her
performance under this Paragraph 15, including, but not limited to, reasonable
attorneys' fees and costs.

IN WITNESS WHEREOF, the parties have executed this Agreement effective
on the date and year first above written.

MOLDFLOW CORPORATION

By: /s/ Marc Dulude
-------------------
Its: President & CEO
-------------------

EXECUTIVE

/s/ Suzanne Rogers
------------------------
Suzanne Rogers

<PAGE>

Exhibit 10.37

EXECUTIVE EMPLOYMENT AGREEMENT

This EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made as of the
1st day of February, 2000 between MOLDFLOW CORPORATION, a Delaware corporation
(the "Company"), and KENNETH WELCH ("Executive").

WHEREAS, the Company desires to employ Executive and Executive desires
to be employed by the Company on the terms contained herein.

2. POSITION AND DUTIES. During the Period of Employment, Executive shall serve
as the Vice President of Marketing and shall have such duties as may from time
to time be prescribed by the Chief Executive Officer or the Board of Directors
of the Company (the "Board"). Executive shall devote his full working time and
efforts to the business and affairs of the Company.

3. COMPENSATION AND RELATED MATTERS.

(c) ADDITIONAL BENEFITS. During the Period of Employment the Company
will purchase and / or maintain a supplemental policy of long-term disability
insurance for the Executive.

<PAGE>

4. UNAUTHORIZED DISCLOSURE.

<PAGE>

(a) DEATH. Executive's employment hereunder shall terminate upon his
death.

(e) TERMINATION BY EXECUTIVE. At any time during the Period of
Employment, Executive may terminate his employment hereunder for any reason,
including but not limited to Good Reason. If Executive provides notice to the
Company under Paragraph 1 that he does not wish to extend the Period of
Employment, such action shall be deemed a voluntary termination by Executive and
one without Good Reason. For purposes of this Agreement, "Good Reason" shall
mean: (A) a substantial diminution or other substantive adverse change, not
consented to by Executive, in the nature or scope of Executive's
responsibilities, authorities, powers, functions or duties; (B) any removal,
during the Period of Employment, from Executive of his title as set forth in
paragraph 2 of this Agreement; (C) an involuntary reduction in Executive's Base
Salary except for across-the-board reductions similarly affecting all or
substantially all management employees; (D) a breach by the Company of any of
its other material obligations under this Agreement and the failure of the
Company to cure such breach within thirty (30) days after written notice thereof
by Executive; (E) the involuntary relocation of the Company's offices at which
Executive is principally employed or the involuntary relocation of the offices
of Executive's primary workgroup to a location more than thirty (30) miles from
such offices, or the requirement by the Company that Executive be based anywhere
other than the Company's offices at such location on an extended basis, except
for required travel on the Company's business to an extent substantially
consistent with Executive's business travel obligations; or (F) the failure of
the Company to obtain the agreement from any successor to the Company to assume
and agree to perform this Agreement as required by Paragraph 10.

<PAGE>

Termination is given; and (D) if Executive's employment is terminated by
Executive under Subparagraph 6(e), thirty (30) days after the date on which a
Notice of Termination is given, unless the Company cures the Good Reason event
prompting the Executive to issue a Notice of Termination.

7. COMPENSATION UPON TERMINATION OR DURING DISABILITY.

<PAGE>

effect at the time Notice of Termination is given and his accrued and
unpaid incentive compensation (including any bonus payment that is earned but
unauthorized), if any, under Subparagraph 3(a). In addition, subject to signing
by Executive of a general release of claims in a form and manner satisfactory to
the Company, the Company shall provide the following benefits to Executive:

8. CHANGE IN CONTROL BENEFIT. Upon a Change of Control of the Company the
following provisions shall apply in lieu of, and expressly supersede, the
provisions of Subparagraph 7(d).

(a) CHANGE IN CONTROL.

<PAGE>

period over which the Severance Amount is being paid, then all further
payments of the Severance Amount shall immediately cease; provided,
however, that in any event the Executive shall be entitled to a minimum of
six (6) months of severance. The Severance Amount shall be paid out in
accordance with the Company's standard payroll practices. For purposes of
this Agreement, "Base Salary" shall mean the annual Base Salary in effect
on the Date of Termination. Notwithstanding the foregoing, if the Executive
breaches any of the provisions contained in Paragraphs 4 and 5 of this
Agreement then all further payments of the Severance Amount shall
immediately cease. Furthermore, in the event Executive terminates his
employment for Good Reason as provided in Subparagraph 6(e), he shall be
entitled to the Severance Amount only if he provides the Notice of
Termination provided for in Subparagraph 6(a) within sixty (60) days after
the occurrence of the event or events which constitute such Good Reason as
specified in Subparagraph 6(e); and

(b) DEFINITIONS. For purposes of this Paragraph 8, the following terms
shall have the following meanings:

"CHANGE IN CONTROL" shall mean any of the following:

<PAGE>

if to the Executive:
At his home address as shown
in the Company's personnel records;

if to the Company:

Moldflow Corporation
91 Hartwell Avenue
Lexington, MA 02421
Attention: Chief Executive Officer

Copy to: Corporate Counsel

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

<PAGE>

performance of this Agreement shall be governed by the laws of the Commonwealth
of Massachusetts (without regard to principles of conflicts of laws).

13. COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

IN WITNESS WHEREOF, the parties have executed this Agreement effective
on the date and year first above written.

MOLDFLOW CORPORATION

By: /s/ Marc Dulude
-------------------
Its: President & CEO
-------------------

EXECUTIVE

/s/ Kenneth Welch
-------------------------
Kenneth Welch

<PAGE>

Exhibit 10.38

EXECUTIVE EMPLOYMENT AGREEMENT

This EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made as of the
1st day of February, 2000 between MOLDFLOW CORPORATION, a Delaware corporation
(the "Company"), and RICHARD UNDERWOOD ("Executive").

WHEREAS, the Company desires to employ Executive and Executive desires
to be employed by the Company on the terms contained herein.

2. POSITION AND DUTIES. During the Period of Employment, Executive shall serve
as the Vice President of Sales and shall have such duties as may from time to
time be prescribed by the Chief Executive Officer or the Board of Directors of
the Company (the "Board"). Executive shall devote his full working time and
efforts to the business and affairs of the Company.

3. COMPENSATION AND RELATED MATTERS.

(a) BASE SALARY AND INCENTIVE COMPENSATION. Executive's initial
annual base salary shall be $120,000. Executive's base salary shall be
redetermined annually by the Chief Executive Officer, the Board or a Committee
thereof. The annual base salary in effect at any given time is referred to
herein as "Base Salary." The Base Salary shall be payable in a manner consistent
with the general payroll policy of the Company. In addition to Base Salary,
Executive shall be eligible to receive sales commissions based on sales of the
Company's products and services at the rate that shall be set from time to time
by the Chief Executive Officer or the Board of Directors and shall participate
in such incentive compensation plans and Employee Benefit Plans as the Board or
a Committee thereof shall determine from time to time for senior executives of
the Company. As used herein, the term "Employee Benefit Plans" includes, without
limitation, each pension and retirement plan; supplemental pension, retirement
and deferred compensation plan; savings and profit-sharing plan; stock ownership
plan; stock purchase plan; stock option plan; life insurance plan; medical
insurance plan; disability plan; and health and accident plan or arrangement
established and maintained by the Company.

(c) ADDITIONAL BENEFITS. During the Period of Employment the Company
will purchase and / or maintain a supplemental policy of long-term disability
insurance for the Executive.

<PAGE>

subject to any claim based on his position in the Company, Executive shall
receive the maximum indemnification protection from the Company as permitted by
the Company's by-laws and shall receive directors' and officers' insurance
coverage equivalent to that which is provided to any other director or officer
of the Company.

4. UNAUTHORIZED DISCLOSURE.

(b) during the term of Executive's employment with the Company and
for a period of twelve (12) months thereafter, regardless of the reason for
termination of employment, Executive will not directly or indirectly solicit or
induce any present or future employee of the Company or any affiliate of the
Company to accept employment with Executive or with any business, operation,
corporation, partnership, association, agency, or other person or entity with
which Executive may be associated, and Executive will not knowingly employ or
cause any business, operation, corporation, partnership, association, agency, or
other person or entity with which Executive may be associated to employ any
present or future employee of the Company without providing the Company with ten
(10) days' prior written notice of such proposed employment.

<PAGE>

(a) DEATH. Executive's employment hereunder shall terminate upon his
death.

(c) TERMINATION BY COMPANY FOR CAUSE. At any time during the Period
of Employment, the Company may terminate Executive's employment hereunder for
Cause if such termination is approved by not less than a majority of the Board.
For purposes of this Agreement, "Cause" shall mean: (A) conduct by Executive
constituting a material act of willful misconduct in connection with the
performance of his duties; (B) criminal or civil conviction of Executive, a plea
of nolo contendere by Executive or conduct by Executive that would reasonably be
expected to result in material injury to the reputation of the Company if he
were retained in his position with the Company; (C) continued, willful and
deliberate non-performance by Executive of his duties hereunder (other than by
reason of Executive's physical or mental illness, incapacity or disability)
which has continued for more than thirty (30) days following written notice of
such non-performance from the Board; or (D) a breach by Executive of any of the
provisions contained in Paragraphs 4 and 5 of this Agreement.

<PAGE>

7. COMPENSATION UPON TERMINATION OR DURING DISABILITY.

(c) If Executive's employment is terminated by Executive other than
for Good Reason as provided in Subparagraph 6(e), then the Company shall,
through the Date of Termination, pay Executive his accrued and unpaid Base
Salary at the rate in effect at the time Notice of Termination is given.
Thereafter, the Company shall have no further obligations to Executive except as
otherwise expressly provided under this Agreement. In addition, all vested but
unexercised stock options held by Executive as of the Date of Termination must
be exercised by Executive within three (3) months following the Date of
Termination or by the end of the option term, if earlier. All other stock-based
grants and awards held by Executive shall vest or be canceled upon the Date of
Termination in accordance with their terms.

<PAGE>

(d) If Executive terminates his employment for Good Reason as
provided in Subparagraph 6(e) or if Executive's employment is terminated by the
Company without Cause as provided in Subparagraph 6(d), then the Company shall,
through the Date of Termination, pay Executive his accrued and unpaid Base
Salary at the rate in effect at the time Notice of Termination is given and his
accrued and unpaid incentive compensation (including any bonus payment that is
earned but unauthorized), if any, under Subparagraph 3(a). In addition, subject
to signing by Executive of a general release of claims in a form and manner
satisfactory to the Company, the Company shall provide the following benefits to
Executive:

(i) The Company shall pay Executive an amount equal one (1) times the
sum of Executive's Base Salary in effect on the Date of Termination
(the "Severance Amount"). The Severance Amount shall be paid out in
accordance with the Company's standard payroll practices.
Notwithstanding the foregoing, (i) if the Executive breaches any of
the provisions contained in Paragraphs 4 and 5 of this Agreement or
(ii) if Executive obtains a "Comparable Position", as defined herein,
during the period over which the Severance Amount is being paid, then
all further payments of the Severance Amount shall immediately cease.
For purposes of this Agreement "Comparable Position" means a full time
executive management position with a similar scope of duties and
responsibilities as that described in Paragraph 2 hereof and an
equivalent or better compensation package as that described in
Paragraph 3 hereof. The Executive shall have no obligation to seek or
accept a Comparable Position during the period over which the
Severance Amount is being paid.

(ii) Upon the Date of Termination, (i) all stock options which
would otherwise vest over the next twelve (12) months shall immediately
vest and become exercisable, and Executive shall have twelve (12)
months from the Date of Termination or the remaining option term, if
earlier, to exercise all such stock options granted to Executive and
(ii) all repurchase rights and other restrictions on the shares of
Restricted Stock held by the Executive which would otherwise lapse over
the next twelve (12) months shall immediately lapse. All other
stock-based grants and awards held by Executive shall be canceled upon
the Termination Date in accordance with their terms.

(iii) In addition to any other benefits to which Executive may
be entitled in accordance with the Company's then existing severance
policies, the Company shall, for a period of one (1) year commencing on
the Date of Termination, pay such health and dental insurance premiums
as may be necessary to allow Executive and Executive's spouse and
dependents to continue to receive health and dental insurance coverage
substantially similar to coverage they received prior to the Date of
Termination.

(e) If Executive's employment is terminated by the Company for Cause
as provided in Subparagraph 6(c), then the Company shall, through the Date of
Termination, pay Executive his accrued and unpaid Base Salary at the rate in
effect at the time Notice of Termination is given. Thereafter, the Company shall
have no further obligations to Executive except as otherwise expressly provided
under this Agreement. In addition, all stock options held by Executive as of the
Date of Termination shall cease to vest as of the Date of Termination and
Executive shall have 30 days from the Date of Termination or the remaining
option term, if earlier, to exercise all such vested stock options. All other
stock-based grants and awards held by Executive shall be canceled upon the
Termination Date in accordance with their terms.

(f) Nothing contained in the foregoing Subparagraphs 7(a) through
7(e) shall be construed so as to affect Executive's rights or the Company's
obligations relating to agreements or benefits that are unrelated to termination
of employment.

8. CHANGE IN CONTROL BENEFIT. Upon a Change of Control of the Company the
following provisions shall apply in lieu of, and expressly supersede, the
provisions of Subparagraph 7(d).

(a) CHANGE IN CONTROL.

<PAGE>

(i) In the event that the Executive terminates his employment
for Good Reason or if the Executive's employment is terminated by the
Company without Cause, the Company shall pay Executive an amount equal
one (1) times the sum of Executive's Base Salary (the "Severance
Amount"). Notwithstanding the foregoing, if Executive obtains a
"Comparable Position", as defined herein, during the period over which
the Severance Amount is being paid, then all further payments of the
Severance Amount shall immediately cease; provided, however, that in
any event the Executive shall be entitled to a minimum of six (6)
months of severance. The Severance Amount shall be paid out in
accordance with the Company's standard payroll practices. For purposes
of this Agreement, "Base Salary" shall mean the annual Base Salary in
effect on the Date of Termination. Notwithstanding the foregoing, if
the Executive breaches any of the provisions contained in Paragraphs 4
and 5 of this Agreement then all further payments of the Severance
Amount shall immediately cease. Furthermore, in the event Executive
terminates his employment for Good Reason as provided in Subparagraph
6(e), he shall be entitled to the Severance Amount only if he provides
the Notice of Termination provided for in Subparagraph 6(a) within
sixty (60) days after the occurrence of the event or events which
constitute such Good Reason as specified in Subparagraph 6(e); and

(ii) Notwithstanding anything to the contrary in any
applicable option agreement or stock-based award agreement, upon a
Change in Control, all stock options and other stock-based awards
granted to Executive by the Company shall immediately accelerate and
become exercisable or non-forfeitable as of the effective date of such
Change in Control. Executive shall also be entitled to any other
rights and benefits with respect to stock-related awards, to the
extent and upon the terms provided in the employee stock option or
incentive plan or any agreement or other instrument attendant thereto
pursuant to which such options or awards were granted; and

(iii) The Company shall, for a period of one (1) year
commencing on the Date of Termination, pay such health and dental
insurance premiums as may be necessary to allow Executive, Executive's
spouse and dependents to continue to receive health and dental
insurance coverage substantially similar to the coverage they received
prior to the Date of Termination.

(b) DEFINITIONS. For purposes of this Paragraph 8, the following
terms shall have the following meanings:

"CHANGE IN CONTROL" shall mean any of the following:

(a) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Act")
(other than the Company, any of its subsidiaries, or any trustee,
fiduciary or other person or entity holding securities under any
employee benefit plan or trust of the Company or any of its
subsidiaries), together with all "affiliates" and "associates" (as
such terms are defined in Rule 12b-2 under the Act) of such person,
shall become the "beneficial owner" (as such term is defined in Rule
13d-3 under the Act), directly or indirectly, of securities of the
Company representing forty percent (40%)or more of either (A) the
combined voting power of the Company's then outstanding securities
having the right to vote in an election of the Company's Board
("Voting Securities") or (B) the then outstanding shares of Company's
common stock, par value $0.01 per share ("Common Stock") (other than
as a result of an acquisition of securities directly from the
Company); or

<PAGE>

the election of members of the Board or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other
than the Board, including by reason of agreement intended to avoid or
settle any such actual or threatened contest or solicitation, shall
not be considered an Incumbent Director; or

(c) the stockholders of the Company shall approve (A) any
consolidation or merger of the Company where the stockholders of the
Company, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as
such term is defined in Rule 13d-3 under the Act), directly or
indirectly, shares representing in the aggregate more than fifty
percent (50%) of the voting shares of the Company issuing cash or
securities in the consolidation or merger (or of its ultimate parent
corporation, if any), (B) any sale, lease, exchange or other transfer
(in one transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or substantially all of
the assets of the Company or (C) any plan or proposal for the
liquidation or dissolution of the Company.

if to the Executive:
At his home address as shown
in the Company's personnel records;

if to the Company:

Moldflow Corporation
91 Hartwell Avenue
Lexington, MA 02421
Attention: Chief Executive Officer

Copy to: Corporate Counsel

or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

<PAGE>

13. COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.

IN WITNESS WHEREOF, the parties have executed this Agreement effective
on the date and year first above written.

MOLDFLOW CORPORATION

By: /s/ Marc Dulude
---------------------
Its: President & CEO
---------------------

EXECUTIVE

/s/ Richard Underwood
-------------------------
Richard Underwood

<PAGE>

Exhibit 10.41

NON-QUALIFIED STOCK OPTION AGREEMENT
FOR NON-EMPLOYEE DIRECTORS

UNDER THE MOLDFLOW CORPORATION
2000 STOCK OPTION AND INCENTIVE PLAN

Name of Optionee:__________________________
No. of Option Shares: __________
Option Exercise Price per Share:_______________
[FMV]
Grant Date:____________________ Grant Number:_______________________

Expiration Date:____________________

Pursuant to the Moldflow Corporation 2000 Stock Option and Incentive
Plan (the "Plan") as amended through the date hereof, Moldflow Corporation (the
"Company") hereby grants to the Optionee named above, who is a Director of the
Company but is not an employee of the Company, an option (the "Stock Option") to
purchase on or prior to the Expiration Date specified above all or part of the
number of shares of Common Stock, par value $.01 per share (the "Stock") of the
Company specified above at the Option Exercise Price per Share specified above
subject to the terms and conditions set forth herein and in the Plan.

1. VESTING. No portion of this Stock Option may be exercised until this
Stock Option shall have vested. Except as set forth below, this Stock Option
shall be vested and exercisable as to ________shares on the first anniversary of
the Grant Date and vested and exercisable as to ________shares on the second
anniversary of the Grant Date.

In the event of the termination of the Optionee's service as a director
of the Company because of Disability (as defined below) or death, this Stock
Option shall become immediately vested and exercisable in full, whether or not
vested and exercisable at such time. Once vested, this Stock Option shall
continue to be exercisable at any time or times prior to the close of business
on the Expiration Date, subject to the provisions hereof and of the Plan. The
term "Disability" shall mean that condition described in Section 22(e)(3) of the
Internal Revenue Code of 1986, as amended (the "Code"). In the event of a
dispute, the determination of Disability will be made by the Administrator (as
defined in Section 2(a) of the Plan) in good faith and with the advice of a
physician competent in the area to which such Disability relates.

2. EXERCISE OF STOCK OPTION.

(a) The Optionee may exercise this Option only in the following manner:
from time to time on or prior to the Expiration Date of this Option, the
Optionee may give written notice to the Company of his or her election to
purchase some or all of the vested Option Shares purchasable at the time of such
notice. This notice shall specify the number of Option Shares to be purchased.

Payment of the purchase price for the Option Shares may be made by one
or more of the following methods: (i) in cash, by certified or bank check or
other instrument acceptable to the Administrator; (ii) in the form of shares of
Stock that are not then subject to restrictions under any Company plan and that
have been held by the Optionee for at least six months; (iii) by the Optionee
delivering to the Company a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to the Company cash or
a check payable and acceptable to the Company to pay the option purchase price,
provided that in the event the Optionee chooses to pay the option purchase price
as so provided, the Optionee and the broker shall comply with such procedures
and enter into such agreements of indemnity and other agreements as the
Administrator shall prescribe as a condition of such payment procedure; or (iv)
a combination of (i), (ii) and (iii) above. Payment instruments will be received
subject to collection.

<PAGE>

(b) Certificates for shares of Stock purchased upon exercise
of this Stock Option shall be issued and delivered to the Optionee upon
compliance to the satisfaction of the Administrator with all requirements under
applicable laws or regulations in connection with such issuance and with the
requirements hereof and of the Plan. The determination of the Administrator as
to such compliance shall be final and binding on the Optionee. The Optionee
shall not be deemed to be the holder of the shares subject to this Stock Option,
or to have any of the rights of a holder, unless and until this Stock Option
shall have been exercised pursuant to the terms hereof, the Company shall have
issued and delivered the shares to the Optionee, and the Optionee's name shall
have been entered as the stockholder of record on the books of the Company.
Thereupon, the Optionee shall have full voting, dividend and other ownership
rights with respect to such shares of Stock.

(c) Notwithstanding any other provision hereof or of the Plan,
no portion of this Stock Option shall be exercisable after the Expiration Date
hereof.

3. TERMINATION AS DIRECTOR. If the Optionee ceases to be a Director of
the Company, the period within which to exercise the Stock Option may be subject
to earlier termination as set forth below.

(a) TERMINATION BY REASON OF DEATH. If the Optionee ceases to
be a Director by reason of death, any Stock Option held by the Optionee may be
exercised by his or her legal representative or legatee for a period of twelve
(12) months from the date of death or until the Expiration Date, if earlier.

(b) OTHER TERMINATION. If the Optionee ceases to be a Director
for any reason other than Cause or death, any Stock Option held by the Optionee
may be exercised for a period of three (3) months from the date of termination
or until the Expiration Date, if earlier.

6. MISCELLANEOUS.

(b) This Stock Option does not confer upon the Optionee any
rights with respect to continuance as a Director.

<PAGE>

MOLDFLOW CORPORATION

By:
---------------------------
Name:
Title:

The foregoing Agreement is hereby accepted and the terms and conditions thereof
hereby agreed to by the undersigned.

Dated: ------------------------------
--------------------------------- Optionee's Signature

Optionee's name and address:

------------------------------

<PAGE>

EXHIBIT 21.1

SUBSIDIARIES OF THE REGISTRANT

Moldflow International Pty. Ltd. (Australia)
Moldflow Pty Ltd. (Australia)
Moldflow Scandinavia AB (Sweden)
Moldflow Italia s.r.l. (Italy)
Moldflow Korea Limited (Korea)
Moldflow (Europe) Ltd. (United Kingdom)
Moldflow Vertriebs GmbH (Germany)
Moldflow Inc. (Connecticut)
Moldflow Guangzhou Ltd. (China)
Moldflow Mauritius Ltd. (Mauritius)
Moldflow Investments Pty. Ltd. (Australia)
Moldflow Japan KK (Japan)
Moldflow Singapore Pte. Ltd. (Singapore)
Moldflow France (France)
Radflow Pty. Ltd. (Australia)
Moldflow Merger Corp. (Delaware)

<PAGE>
Exhibit 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Form S-1 of our
reports dated August 20, 1999, except as to Note 16 for which the date is
January 20, 2000, relating to the consolidated financial statements and
financial statement schedule of Moldflow Corporation, which appear in such
Registration Statement. We also consent to the use in this Registration
Statement on Form S-1 of our report dated February 11, 2000, relating to the
consolidated financial statements of Advanced CAE Technology, Inc., which
appears in such Registration Statement. We also consent to the reference to us
under the heading "Experts" in such Registration Statement.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Boston, Massachusetts
March 1, 2000

<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MOLDFLOW
CORPORATION CONSOLIDATED BALANCE SHEET CONSOLIDATED STATEMENT OF OPERATIONS
</LEGEND>
<MULTIPLIER> 1,000

<S> <C> <C>
<PERIOD-TYPE> YEAR 6-MOS
<FISCAL-YEAR-END> JUN-30-1999 JUN-30-1999
<PERIOD-START> JUL-01-1998 JUL-01-1999
<PERIOD-END> JUN-30-1999 JAN-01-2000
<CASH> 1,240 1,328
<SECURITIES> 0 0
<RECEIVABLES> 4,676 4,771
<ALLOWANCES> (232) (237)
<INVENTORY> 84 99
<CURRENT-ASSETS> 6,590 7,152
<PP&E> 6,815 7,051
<DEPRECIATION> (3,705) (4,025)
<TOTAL-ASSETS> 10,247 10,564
<CURRENT-LIABILITIES> 8,698 8,763
<BONDS> 0 0
12,366 12,366
0 0
<COMMON> 6 6
<OTHER-SE> (11,102) (10,609)
<TOTAL-LIABILITY-AND-EQUITY> 10,247 10,564
<SALES> 12,238 6,651
<TOTAL-REVENUES> 20,221 11,504
<CGS> 378 322
<TOTAL-COSTS> 1,697 813
<OTHER-EXPENSES> 17,598 10,327
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 198 65
<INCOME-PRETAX> 657 261
<INCOME-TAX> 176 (172)
<INCOME-CONTINUING> 481 433
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 481 433
<EPS-BASIC> 1.82 1.18
<EPS-DILUTED> 0.08 0.07

</TABLE>