10-Q

FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2003

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file number 000-15578

CONCERTO SOFTWARE, INC.

(Exact name of registrant as specified in its charter)

Delaware	No. 02-0364368
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification Number)

6 Technology Park Drive

Westford, Massachusetts 01886

(Address of principal executive offices) (Zip Code)

Telephone: (978) 952-0200

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES     X     NO           

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).

YES            NO     X    

Indicate the number of shares outstanding of each of the issuer’s classes of common stock: Common Stock, par value $.10 per share, outstanding as of May 9, 2003: 11,478,503 shares.

CONCERTO SOFTWARE, INC. & SUBSIDIARIES

INDEX

Item 1.	Financial Statements:	Page No.
	Consolidated Balance Sheets as of March 31, 2003 and December 31, 2002	3
	Consolidated Statements of Operations for the Three Months Ended March 31, 2003 and 2002	4
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2003 and 2002	5
	Notes to Consolidated Financial Statements	6-11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12-15
Item 3.	Quantitative and Qualitative Disclosures About Market Risks	16-17
Item 4.	Controls and Procedures	18
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	19
Item 6.	Exhibits and Reports on Form 8-K	19
	Signatures	20
	Certifications	21-22

2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONCERTO SOFTWARE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Par Value)

ASSETS	March 31, 2003			December 31, 2002
	(Unaudited)			(Audited)
Current assets:
Cash and cash equivalents	$	16,259		$	19,289
Marketable securities		12,388			15,775
Accounts receivable, net of reserves of $3,496 and $3,183 in 2003 and 2002, respectively		19,067			17,234
Prepaid expenses and other current assets		4,702			5,536
Deferred tax assets		5,373			5,373
Total current assets		57,789			63,207
Property and equipment, net		8,259			7,910
Goodwill		17,182			17,182
Purchased intangible assets, net		4,927			5,369
Other assets		399			541
	$	88,556		$	94,209
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	7,688		$	7,015
Accrued expenses		9,703			15,467
Current portion of long-term debt		501			616
Deferred revenue		12,923			13,406
Total current liabilities		30,815			36,588
Long-term liabilities		985			84
Long-term debt		17			19
Total liabilities		31,817			36,607
Stockholders’ equity:
Common stock, $0.10 par value – Authorized – 30,000 shares Issued – 14,556 shares		1,456			1,456
Additional paid-in capital		82,703			82,809
Accumulated foreign currency translation adjustments		(479	)		(553	)
Retained earnings		2,165			1,690
		85,845			85,402
Treasury stock, 3,144 and 2,910 shares, at cost, in 2003 and 2002, respectively		(29,106	)		(27,800	)
Total stockholders’ equity		56,739			57,602
	$	88,556		$	94,209

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

3

PART I. FINANCIAL INFORMATION (continued)

ITEM 1. FINANCIAL STATEMENTS

CONCERTO SOFTWARE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, Except Per Share Data)

(Unaudited)

	Three Months Ended March 31,
	2003			2002
Product revenue	$	11,010		$	10,625
Service revenue		14,554			12,700
Total revenue		25,564			23,325
Cost of product revenue		2,627			2,014
Cost of service revenue		7,328			6,341
Total cost of revenue		9,955			8,355
Gross profit		15,609			14,970
Operating expenses:
Research, development and engineering		3,952			4,064
Selling, general and administrative		10,918			11,204
Amortization of purchased intangible assets		441			368
Merger and integration costs		—			3,112
Restructuring costs		—			2,030
Total operating expenses		15,311			20,778
Income (loss) from operations		298			(5,808	)
Interest expense		(18	)		(32	)
Other income		362			359
Income (loss) before provision for (benefit from) income taxes		642			(5,481	)
Provision for (benefit from) income taxes		167			(1,371	)
Net income (loss)	$	475		($	4,110	)
Earnings (loss) per share:
Basic	$	0.04		($	0.33	)
Diluted	$	0.04		($	0.33	)
Weighted average shares outstanding:
Basic		11,519			12,534
Diluted		11,617			12,534

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

4

PART I. FINANCIAL INFORMATION (continued)

ITEM 1. FINANCIAL STATEMENTS

CONCERTO SOFTWARE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

	Three Months Ended March 31,
	2003			2002
Cash Flows from Operating Activities:
Net income (loss)	$	475		($	4,110	)
Adjustments to reconcile net income (loss) to net cash used in operating activities—
Depreciation and amortization		1,378			1,220
Write-off of prepaid OEM software licenses		—			1,127
Deferred taxes		—			(1,370	)
Changes in current assets and liabilities (net of acquisition of CellIt, Inc.)—
Accounts receivable		(1,838	)		(2,773	)
Prepaid expenses and other current assets		853			(13	)
Accounts payable		671			878
Accrued expenses		(4,877	)		356
Deferred revenue		(481	)		1,807
Net cash used in operating activities		(3,819	)		(2,878	)
Cash Flows From Investing Activities:
Acquisition of CellIt, Inc., net of cash acquired		—			(10,931	)
Purchases of property and equipment		(1,306	)		(441	)
Decrease (increase) in other assets		143			(139	)
Purchases of marketable securities		(4,232	)		—
Maturities of marketable securities		7,619			19,092
Net cash provided by investing activities		2,224			7,581
Cash Flows From Financing Activities:
Payments of long term debt		(117	)		(2,077	)
Proceeds from exercise of stock options		1			296
Proceeds from employee stock purchase plan		145			163
Purchases of treasury stock		(1,559	)		(5,726	)
Net cash used in financing activities		(1,530	)		(7,344	)
Effect of exchange rate changes on cash and cash equivalents		95			(22	)
Net decrease in cash and cash equivalents		(3,030	)		(2,663	)
Cash and cash equivalents, beginning of period		19,289			20,105
Cash and cash equivalents, end of period	$	16,259		$	17,442
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for income taxes	$	62		$	49
Cash paid during the period for interest	$	18		$	32
Supplemental Schedule of Noncash Investing and Financing Activities:
Acquisition of CellIt, Inc:
Fair value of assets acquired	$	—		$	24,220
Less:
Cash paid		—			10,180
Fair value of common stock issued		—			5,287
Acquisition costs		—			1,325
Net liabilities assumed	$	—		$	7,428

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

5

PART 1. FINANCIAL INFORMATION (continued)

CONCERTO SOFTWARE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In Thousands, Except Per Share Data)

1.    Basis of Preparation

The unaudited consolidated financial statements presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles. The statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K, Commission File No. 000-15578, that was filed with the Securities and Exchange Commission on March 28, 2003. In the opinion of management, the accompanying consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company’s financial position and results of operations. The results of operations for the three-month period ended March 31, 2003 may not be indicative of the results that may be expected for the next quarter or the full fiscal year. On January 14, 2002 the Company acquired all of the outstanding stock of CellIt, Inc. (“CellIt”), by merging a wholly owned subsidiary of the Company into CellIt, with CellIt becoming a wholly owned subsidiary of the Company. CellIt’s assets and liabilities and results of operations have been included in the Company’s consolidated financial statements since the acquisition date.

2.    Principles of Consolidation

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

3.    Revenue Recognition

The Company generates software revenue from licensing the rights to use its software products. The Company also generates service revenues from the sale of product maintenance contracts and implementation, education and consulting services. The Company recognizes revenue in accordance with the provisions of the American Institute of Certified Public Accountants Statement of Position (SOP) No. 97-2, Software Revenue Recognition and SOP No. 98-9, Modification of SOP 97-2, Software Revenue Recognition, With Respect toCertain Transactions. Revenue from software license fees are generally recognized upon delivery provided that there are no significant post delivery obligations, persuasive evidence of an agreement exists, the fee is fixed or determinable and collection of the related receivable is probable. If acceptance is required beyond our standard published specifications, software license revenue is recognized upon customer acceptance.

6

PART 1. FINANCIAL INFORMATION (continued)

CONCERTO SOFTWARE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In Thousands, Except Per Share Data)

3.    Revenue Recognition (continued)

SOP 98-9 requires use of the residual method for recognition of revenues when vendor-specific objective evidence exists for undelivered elements but does not exist for the delivered elements of a multiple-element arrangement. In such circumstances, we defer the fair value of the undelivered elements and recognize, as revenue, the remaining value for the delivered elements.

Revenues for consulting, implementation and educational services are recognized over the period in which services are provided. Maintenance revenue is deferred at the time of software license shipment and is recognized ratably over the term of the support period, which is typically one year. Amounts collected prior to satisfying the revenue recognition criteria are reflected as deferred revenue in our balance sheet.

4.    Stock-Based Compensation

At March 31, 2003, the Company has six stock-based employee compensation plans. The Company accounts for those plans under the recognition and measurement principles of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations and adopted the disclosure only provisions of SFAS No. 123, Accounting for Stock-Based Compensation. Accordingly, no compensation cost has been recognized for its stock-based compensation plans under the fair value method as described in SFAS 123. In accordance with SFAS No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure, the following tables illustrate the assumptions used and the effect on net income (loss) and earnings per share if the Company had applied the fair value recognition provisions of SFAS No. 123 for all employee stock options granted using the Black-Scholes option pricing model prescribed by SFAS No. 123.

	Three Months Ended March 31,
	2003	2002
Risk-free interest rates	2.78%-3.05%	4.34%
Expected dividend yield	—	—
Expected lives	4.45 years	4.45 years
Expected volatility	72%	73%
Weighted average grant date fair value of options granted during the period	$3.25	$5.67
Weighted average remaining contractual life of options outstanding	7.00 years	7.45 years

7

PART 1. FINANCIAL INFORMATION (continued)

CONCERTO SOFTWARE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In Thousands, Except Per Share Data)

4.    Stock-Based Compensatin (continued)

	Three Months Ended March 31,
	2003			2002
Net income (loss) as reported	$	475		$	(4,110	)
Less: Total stock-based compensation expense determined under fair value based method for all awards		(1,392	)		(1,510	)
Pro forma net loss	$	(917	)	$	(5,620	)
Earnings (loss) per share as reported:
Basic	$	0.04		$	(0.33	)
Diluted	$	0.04		$	(0.33	)
Pro forma loss per share:
Basic	$	(0.08	)	$	(0.45	)
Diluted	$	(0.08	)	$	(0.45	)

The effects of applying SFAS No. 123 in the pro forma disclosure are not likely to be representative of the effects on reported net income (loss) for future years. Additional awards in future years are anticipated.

5.    Earnings per share

Basic earnings per share is calculated using the weighted average number of common shares outstanding. Diluted earnings per share is computed using the weighted average number of common shares outstanding and the effect of dilutive common stock options using the treasury stock method. A reconciliation of basic and diluted weighted average shares outstanding is as follows:

	Three Months Ended March 31,
	2003	2002
Basic weighted average shares outstanding	11,519	12,534
Effect of dilutive stock options	98	—
Diluted weighted average shares outstanding	11,617	12,534

8

PART 1. FINANCIAL INFORMATION (continued)

CONCERTO SOFTWARE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In Thousands, Except Per Share Data)

5.    Earnings per share (continued)

For the three months ended March 31, 2003 and 2002, 3,929 and 3,766 common equivalent shares, respectively, were not included in the diluted weighted average shares outstanding, as their effect would be antidilutive.

6.    Restructuring Costs

Cash payments related to the Company’s 2002 restructurings totaled $353 for the three months ended March 31, 2003. The Company anticipates that the remaining restructuring accrual will be substantially paid by August 2007.

A summary of the restructuring accrual activity during the period is as follows:

	Three Months Ended March 31, 2003
Balance, beginning of period	$	1,763
Provision		—
Severance payments		(275	)
Facilities related payments		(79	)
Balance, end of period	$	1,409

The Company anticipates that the remaining amount of the restructuring accrual will be paid through 2007 as follows:

2003	$	353
2004		286
2005		286
2006		286
2007		198
Total	$	1,409

9

PART 1. FINANCIAL INFORMATION (continued)

CONCERTO SOFTWARE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In Thousands, Except Per Share Data)

7.    Comprehensive Income (Loss)

The components of comprehensive income (loss) are as follows:

	Three Months Ended March 31,
	2003	2002
Net income (loss)	$475	($4,110	)
Foreign currency translation adjustments	74	(6	)
Comprehensive income (loss)	$549	($4,116	)

8.    Segment and Geographic Information

The Company has four primary product lines: its EnsemblePro^™ Unified Contact Center Platform (“EnsemblePro”); ContactPro^™; Ensemble^™ Customer Contact Suite (“Ensemble”) and Unison^® Call Management System (“Unison”). The following table represents the Company’s percentage of product revenue by product line for the three months ended March 31, 2003 and 2002:

	Three Months Ended March 31,
	2003		2002
Unison	52.8	%	68.0	%
Ensemble	16.1		23.4
ContactPro	2.5		6.3
EnsemblePro	19.2		—
Other	9.4		2.3
Total	100.0	%	100.0	%

Product revenue from international sources for the three months ended March 31, 2003 and 2002 totaled approximately $2.7 million and $3.6 million, respectively. The Company’s revenue from international sources was primarily generated from customers located in the United Kingdom, Europe and Asia/Pacific. Substantially all of the Company’s product revenue for the periods presented was shipped from its headquarters located in the United States.

10

PART 1. FINANCIAL INFORMATION (continued)

CONCERTO SOFTWARE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In Thousands, Except Per Share Data)

8.    Segment and Geographic Information (continued)

The following table represents the Company’s percentage of product revenue by geographic region for the three months ended March 31, 2003 and 2002:

	Three Months Ended March 31,
	2003		2002
U.S.	75.8	%	66.6	%
Asia/Pacific	14.2		20.5
U.K.	3.2		7.4
Europe	6.8		2.9
Other	—		2.6
Total	100.0	%	100.0	%

Substantially all of the Company’s assets are located in the United States.

9.    China Joint Venture

In late March 2003, the Company entered into a joint venture agreement with New World Xianlong Communication Limited to establish an operation in China, Concerto Software New World. The Company has a 50% equity interest in the joint venture, which was not operational in the first quarter of 2003, but is expected to commence operations in the second quarter of 2003.

11

PART I. FINANCIAL INFORMATION (continued)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAUTIONARY STATEMENTS

The Private Securities Litigation Reform Act of 1995 contains certain safe harbors regarding forward-looking statements. Statements set forth herein may contain “forward-looking” information that involves risks and uncertainties. Actual future financial or operating results may differ materially from such forward-looking statements. Statements indicating that the Company “expects,” “estimates,” “believes,” “is planning,” or “plans to” are forward-looking, as are other statements concerning future financial or operating results, product offerings or other events that have not yet occurred. There are several important factors that could cause actual results or events to differ materially from those anticipated by the forward-looking statements. Such factors are described in greater detail under Management’s Discussion and Analysis of Financial Condition and Results of Operations—Certain Factors That May Affect Future Results. Although the Company has sought to identify the most significant risks to its business, the Company cannot predict whether, or to what extent, any of such risks may be realized nor can there be any assurance that the Company has identified all possible issues that the Company may face.

Davox and Unison are registered trademarks of Concerto Software Inc. Concerto Software, CellIt, Ensemble, ContactPro, EnsemblePro and Lyricall are trademarks of Conerto Software, Inc. All other trade names and trademarks are those of their respective owners.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2003 and 2002

Total revenue for the three months ended March 31, 2003 increased approximately $2.2 millions or 9.6%, to $25.6 million compared to the same period in 2002.

Product revenue for the three months ended March 31, 2003 increased approximately $385,000, or 3.6%, to $11.0 million compared to the same period in 2002. The increase in product revenue for the three months ended March 31, 2003 is due primarily to the product revenue associated with the Company’s sales of EnsemblePro, which was released in December 2002 offset by a decrease in demand for the Company’s Unison, Ensemble and ContactPro products and a decrease in the product revenue contribution from our European operations. During the three month period ended March 31, 2003, EnsemblePro product revenue was approximately $2.1 million.

Cost of product revenue for the three months ended March 31, 2003 increased approximately $613,000, or 30.4%, to $2.6 million compared to the same period in 2002. As a

12

PART I. FINANCIAL INFORMATION (continued)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(continued)

percentage of product revenue, the cost of product revenue increased by 4.9% to 23.9% in the first quarter of 2003 compared to 19.0% for the same period in 2002. The decrease in product gross margin was due primarily to the mix of products sold during the three month period ended March 31, 2003, as the Company’s EnsemblePro product has a higher cost of hardware components than the Company’s Unison and Ensemble products. In addition, during the three months ended March 31, 2003, the Company resold third party software pursuant to an OEM relationship, which yielded a lower average overall gross margin than the Company’s proprietary products.

Service revenue for the first quarter of 2003 increased approximately $1.9 million, or 14.6%, to $14.6 million compared to the same period in 2002. The increase in service revenue for the three months ended March 31, 2003 was due primarily to increased implementation, professional services and educational services revenue combined with an increase in maintenance revenue as the Company’s customer base continues to grow.

Cost of service revenue for the three months ended March 31, 2003 increased approximately $987,000, or 15.6%, to $7.3 million compared to the same period in 2002. As a percentage of service revenue, the cost of service revenue increased by 0.5% to 50.4% for the three months ended March 31, 2003 compared to the same period in 2002. The increase in service cost of revenue for the three months ended March 31, 2003 was due primarily to an increase in outside consulting services of approximately $641,000 and an increase in payroll-related expenses of approximately $170,000 as a result of the increases in revenue compared to the same period in 2002, combined with an increase in other related operating expenses of approximately $167,000.

Research, development and engineering expenses for the three months ended March 31, 2003 decreased approximately $112,000, or 2.8%, to $4.0 million compared to the same period in 2002. The decrease in the first quarter of 2003 as compared to the same period in 2002 was primarily due to a decrease in overall occupancy charges allocated to research and development because of a reduction in the amount of office space utilized.

Selling, general and administrative (“SG&A”) expenses decreased by approximately $286,000, or 2.6%, to $10.9 million for the three months ended March 31, 2003 compared to the same period in 2002. As a result of reduced headcount, the net decrease in SG&A for the three months ended March 31, 2003 was primarily due to a $479,000 decrease in payroll-related expenses and a $216,000 reduction in travel costs, offset by a $433,000 increase in commissions earned compared, which was a result of the revenue increase compared to the same period in 2002.

In the three months ended March 31, 2003 and 2002, the Company recorded approximately $441,000 and $368,000, respectively, of amortization expense related to the purchased intangible assets from the acquisition of CellIt, Inc. in January 2002.

13

PART I. FINANCIAL INFORMATION (continued)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(continued)

Other income for the three months ended March 31, 2003 was derived primarily from the receipt of $225,000 from the sale of an investment, which the Company had previously written off its books and interest income from investments in commercial paper, corporate bonds, Eurodollar bonds, Federal Agency Issued Coupons, Taxable Auction Securities, Tax Advantage Auction Securities and similar financial instruments, net of investment fees. Other income increased 0.8% for the three months ended March 31, 2003 compared to the same period in 2002.

In accordance with generally accepted accounting principles, the Company provides for income taxes on an interim basis using its estimated annual effective income tax rate. For the three months ended March 31, 2003, the Company recorded income before income taxes of $642,000. As a result, during the first quarter of 2003, the Company recorded a provision of $167,000 for income taxes using a 26% effective tax rate. The effective tax rate of 26% is less than the combined statutory federal and state tax rates primarily as a result of the utilization of available net operating losses and tax credits.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2003, the Company’s principal sources of liquidity were its cash and cash equivalent balances of approximately $16.3 million, as well as its marketable securities of approximately $12.4 million. At December 31, 2002, the Company’s cash and cash equivalent balances were approximately $19.3 million and its marketable securities were approximately $15.8 million. The overall decrease of approximately $6.4 million in the total cash and marketable securities balances was due primarily to the payment of $2.5 million related to the January 2003 settlement of litigation with Manufacturing Administration and Management Systems, Inc. (“MAMS”) and associated legal fees, the purchase of $1.3 million of capital equipment and the repurchase 262,200 shares of the Company’s common stock under its stock repurchase program for approximately $1.6 million.

Net cash used in operating activities for the three months ended March 31, 2003 was approximately $3.8 million compared to $2.9 million for the same period in 2002. The increase in cash used in operating activities for the three months ended March 31, 2003 was due primarily to the payment of the above referenced MAMS settlement, payments of severance and leases in connection with the Company’s 2002 restructuring, lower customer deposits, a decrease in value added tax payable due to lower sales in Europe and the increased accounts receivable balance.

Net cash provided by investing activities for the three months ended March 31, 2003 was approximately $2.2 million compared to approximately $7.6 million for the same period in 2002. The Company converted approximately $3.4 million of investments in marketable securities to cash equivalents during the first three months of 2003, compared to the approximately $19.1 million during the same period in 2002, of which the Company used $10.9 million for the acquisition of CellIt. Property and equipment purchases were approximately $1.3 million during

14

PART I. FINANCIAL INFORMATION (continued)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(continued)

the first three months of 2003, compared to approximately $441,000 during the same period in 2002.

Net cash used in financing activities for the three months ended March 31, 2003 was approximately $1.6 million compared to approximately $7.3 million for the same period in 2002. The Company used only $1.6 million of cash to repurchase 262,000 shares of its common stock for the three months ended March 31, 2003 compared to using $5.7 million to repurchase 658,500 shares of its common stock for the same period in 2002. The Company also used approximately $2.0 million less for the service of long-term debt for the three months ended March 31, 2003 as compared to the same period in 2002, which was related to the assumption and retirement of debt associated with the CellIt merger. The Company received $313,000 less in proceeds for the sale of its common stock for the three months ended March 31, 2003 compared to the same period in 2002.

The Company’s contractual obligations for future payments as of March 31, 2003 were composed of operating leases for the various office spaces leased by the Company and capital equipment leases. A summary of the amounts due under these leases is as follows:

	Payments Due by Period (In Thousands)
Contractual Obligation	Less than 1 year		1-3 years		3-5 years		After 5 years		Total
Operating Leases	$	2,853	$	4,667	$	3,983	$	3,959	$	15,462
Capital Leases	$	530	$	17		—		—	$	547

Management believes, based on its current operating plan, that the Company’s existing cash and marketable securities balances and anticipated cash generated from operations are sufficient to meet the Company’s cash requirements for the next twelve months.

15

PART I. FINANCIAL INFORMATION (continued)

ITEM 3. QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISKS

ITEM 3:    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Derivative Financial Instruments, Other Financial Instruments, and Derivative Commodity Instruments.

As of March 31, 2003, the Company did not participate in any derivative financial instruments or other financial and commodity instruments for which fair value disclosure would be required under SFAS No. 107, “Disclosures about Fair Value of Financial Instruments”. The Company’s investments are primarily short-term, Euro dollars bonds, corporate bonds, investment-grade commercial paper, tax advantaged auctioned securities, and money market accounts that are carried on the Company’s books at amortized cost, which approximates fair market value. Accordingly, the Company has no quantitative information concerning the market risk of participating in such investments.

As of March 31, 2003, the Company did not participate in any derivative financial instruments or other financial and commodity instruments for which fair value disclosure would be required under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”.

Primary Market Risk Exposures.

The Company’s primary market risk exposures are interest rate risk and foreign currency exchange rate risk. The Company’s investment portfolio of cash equivalent and marketable securities is subject to interest rate fluctuations, but the Company believes this risk is immaterial due to the short-term nature of these investments.

The Company’s exposure to currency exchange rate fluctuations has been and is expected to continue to be insignificant since that the operations of its international subsidiaries are almost exclusively conducted in their respective local currencies. International subsidiary operating results are translated into U.S. dollars and consolidated for reporting purposes. The impact of currency exchange rate movements on intercompany transactions was $74,000 for the three months ended March 31, 2003. Currently, the Company does not engage in foreign currency hedging activities

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

In addition to historical information contained herein, this report contains forward-looking statements concerning future expected financial and operating results. The Company’s future actual results could differ materially from the forward-looking statements discussed or implied in this report because of risks or uncertainties including, but not limited to, the difficulty in the development, marketing or selling of the company’s solutions, difficulty with the recruitment and training of additional partners, risks associated with competition and competitive pricing pressures, technological change, the risk of not releasing products on time, new product introduction and market acceptance, stock price volatility, the ability to attract and retain key personnel, weakness in IT spending, weakness in the contact center market, general economic conditions in the United States and worldwide markets served by Concerto Software, delays as a

16

PART I. FINANCIAL INFORMATION (continued)

ITEM 3. QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISKS

(continued)

result of acts of terrorism, the war in Iraq and other geopolitical conflicts, or as a result of the Severe Acute Respiratory Syndrome virus (“SARS”), regulatory changes, including restrictions placed on predictive dialing, telemarketing and web technologies and those other factors discussed from time to time in the Company’s public reports filed with the Securities and Exchange Commission, such as those discussed under “Certain Factors That May Affect Future Results” in the Company’s quarterly reports on Form 10-Q and annual report on Form 10-K.

17

PART I. FINANCIAL INFORMATION (continued)

ITEM 4. CONTROLS AND PROCEDURES

ITEM 4:    CONTROLS AND PROCEDURES

a) Evaluation of disclosure controls and procedures.

The principal executive officer and principal financial officer have evaluated the disclosure controls and procedures as of a date within 90 days before the filing date of this quarterly report. Based on this evaluation they conclude that the disclosure controls and procedures effectively ensure that information required to be disclosed in our filings and submissions under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

b) Changes in internal controls

There have been no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the evaluation of the internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses.

18

PART II. OTHER INFORMATION

Item 1.     Legal Proceedings

There were no material changes since the Company’s Annual Report on Form 10-K for the period ended December 31, 2002.

Item 6.     Exhibits and Reports on Form 8-K

(a) Exhibits

Number	Description of Exhibit
10.30	Amended and Restated By-Laws of Concerto Software, Inc.
10.31	Restated Certificate of Incorporation of Concerto Software, Inc.
10.32	Severance Agreement for Paul R. Lucchese, Vice President, General Counsel and Secretary
10.33	Merger Success Fee Agreement for Alexander Tellez, Executive Vice President, Research and Development
99.1	Certification of James D. Foy, President & Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.2	Certification of Michael J. Provenzano, III, Vice President, Finance & Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(b)	Reports on Form 8-K

19

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: May 12, 2003	CONCERTO SOFTWARE, INC.
	By:	/s/    JAMES D. FOY
		James D. Foy Chief Executive Officer and President (Principal Executive Officer)

Date: May 12,  2003	By:	/s/    MICHAEL J. PROVENZANO III
		Michael J. Provenzano III Vice President of Finance and Chief Financial Officer (Principal Financial Officer)

20

CERTIFICATIONS

I, James D. Foy, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Concerto Software, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: May 12, 2003

    /s/ James D. Foy    

James D. Foy

President & CEO

21

I, Michael J. Provenzano, III, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Concerto Software, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: May 12, 2003

    /s/Michael J. Provenzano, III    

Michael J. Provenzano, III

Vice President Finance & CFO

22

EX-10.30

Exhibit 10.30

AMENDED AND RESTATED

BY-LAWS

OF

CONCERTO SOFTWARE, INC.

Effective as of May 6, 2003

BY-LAWS

TABLE OF CONTENTS

			Page
ARTICLE 1—Stockholders			1
	Section 1.1	Place of Meetings	1
	Section 1.2	Annual Meeting	1
	Section 1.3	Special Meetings	1
	Section 1.4	Notice of Meetings	1
	Section 1.5	Voting List	1
	Section 1.6	Quorum	2
	Section 1.7	Adjournments	2
	Section 1.8	Voting and Proxies	2
	Section 1.9	Action at Meeting	3
	Section 1.10	Introduction of Business at Meeting	3
	Section 1.11	Action without Meeting	6
ARTICLE 2—Directors			6
	Section 2.1	General Powers	6
	Section 2.2	Number; Election and Qualification	7
	Section 2.3	Terms in Office	7
	Section 2.4	Tenure	7
	Section 2.5	Vacancies	7
	Section 2.6	Resignation	7
	Section 2.7	Regular Meetings	8
	Section 2.8	Special Meetings	8
	Section 2.9	Notice of Special Meetings	8
	Section 2.10	Meetings by Telephone Conference Calls	8
	Section 2.11	Quorum	8
	Section 2.12	Action at Meeting	8
	Section 2.13	Action by Written Consent	8
	Section 2.14	Removal	9
	Section 2.15	Committees	9
	Section 2.16	Compensation of Directors	9
	Section 2.17	Amendments to Article	9
ARTICLE 3—Officers			10
	Section 3.1	Enumeration	10

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			Page
ARTICLE 3—Officers (continued)			10
	Section 3.2	Election	10
	Section 3.3	Qualification	10
	Section 3.4	Tenure	10
	Section 3.5	Resignation and Removal	10
	Section 3.6	Vacancies	10
	Section 3.7	Chairman of the Board and Vice-Chairman of the Board	10
	Section 3.8	President	11
	Section 3.9	Vice Presidents	11
	Section 3.10	Secretary and Assistant Secretaries	11
	Section 3.11	Treasurer and Assistant Treasurers	12
	Section 3.12	Salaries	12
	Section 3.13	Action with Respect to Securities of Other Corporations	12
ARTICLE 4—Indemnification			12
	Section 4.1	Actions, Suits and Proceedings other than by or in the Right of the Corporation	12
	Section 4.2	Actions or Suits by or in the Right of the Corporation	13
	Section 4.3	Indemnification for Expenses of Successful Party	13
	Section 4.4	Notification and Defense of Claim	14
	Section 4.5	Advance of Expenses	14
	Section 4.6	Procedure for Indemnification	15
	Section 4.7	Remedies	15
	Section 4.8	Subsequent Amendment	15
	Section 4.9	Other Rights	16
	Section 4.10	Partial Indemnification	16
	Section 4.11	Insurance	16
	Section 4.12	Merger or Consolidation	16
	Section 4.13	Savings Clause	16
	Section 4.14	Definitions	17
	Section 4.15	Subsequent Legislation	17
ARTICLE 5—Capital Stock			17
	Section 5.1	Issuance of Stock	17
	Section 5.2	Certificates of Stock	17
	Section 5.3	Transfers	17
	Section 5.4	Lost, Stolen or Destroyed Certificates	18
	Section 5.5	Record Date	18

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			Page
ARTICLE 6—General Provisions			18
	Section 6.1	Fiscal Year	18
	Section 6.2	Corporate Seal	18
	Section 6.3	Notices	19
	Section 6.4	Waiver of Notice	19
	Section 6.5	Evidence of Authority	19
	Section 6.6	Facsimile Signatures	19
	Section 6.7	Reliance upon Books, Reports and Records	19
	Section 6.8	Time Periods	19
	Section 6.9	Certificate of Incorporation	19
	Section 6.10	Transactions with Interested Parties	20
	Section 6.11	Severability	20
	Section 6.12	Pronouns	20
ARTICLE 7—Amendments			20
	Section 7.1	By the Board of Directors	20
	Section 7.2	By the Stockholders	20

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AMENDED AND RESTATED

BY-LAWS

OF

CONCERTO SOFTWARE, INC. (the “Corporation”)

ARTICLE 1—Stockholders

1.1    Place of Meetings.    All meetings of stockholders shall be held at such place within or without the State of Delaware as may be designated from time to time by the Chairman of the Board (if any), the board of directors of the Corporation (the “Board of Directors”) or the President or, if not so designated, at the registered office of the Corporation.

1.2    Annual Meeting.    The annual meeting of stockholders for the election of directors and for the transaction of such other business as may properly be brought before the meeting shall be held on a date to be fixed by the Chairman of the Board (if any), Board of Directors or the President (which date shall not be a legal holiday in the place where the meeting is to be held) at the time and place to be fixed by the Chairman of the Board, the Board of Directors or the President and stated in the notice of the meeting.

1.3    Special Meetings.    Special meetings of stockholders may be called at any time by the Chairman of the Board (if any), a majority of the Board of Directors or the President and shall be held at such place, on such date and at such time as shall be fixed by the Board of Directors or the person calling the meeting. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.

1.4    Notice of Meetings.    Except as otherwise provided by law, written notice of each meeting of stockholders, whether annual or special, shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting. The notices of all meetings shall state the place, date and hour of the meeting. The notice of a special meeting shall state, in addition, the purpose or purposes for which the meeting is called. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at his or her address as it appears on the records of the Corporation.

1.5    Voting List.    The officer who has charge of the stock ledger of the Corporation shall prepare, at least 10 days before every 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 10 days prior to the meeting, either at a place within the metropolitan area of the city where the meeting is to be held, which

place shall be specified in the notice of the meeting, or if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time of the meeting, and may be inspected by any stockholder who is present. This list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them.

1.6    Quorum.    Except as otherwise provided by (i) law, (ii) the Corporation’s Certificate of Incorporation, as such may be amended from time to time, or (iii) these Amended and Restated By-Laws, as such may be amended from time to time (the “Restated By-laws”), the holders of a majority of the shares of the capital stock of the Corporation issued and outstanding and entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of business. Shares held by brokers which such brokers are prohibited from voting (pursuant to their discretionary authority on behalf of beneficial owners of such shares who have not submitted a proxy with respect to such shares) on some or all of the matters before the stockholders, but which shares would otherwise be entitled to vote at the meeting (“Broker Non-Votes”) shall be counted, for the purpose of determining the presence or absence of a quorum, both (a) toward the total voting power of the shares of capital stock of the Corporation and (b) as being represented by proxy. If a quorum has been established for the purpose of conducting the meeting, a quorum shall be deemed to be present for the purpose of all votes to be conducted at such meeting, provided that where a separate vote by a class or classes, or series thereof, is required, a majority of the voting power of the shares of such class or classes, or series, present in person or represented by proxy shall constitute a quorum entitled to take action with respect to that vote on that matter. If a quorum shall fail to attend any meeting, the chairman of the meeting or the holders of a majority of the voting power of the shares of stock entitled to vote who are present, in person or by proxy, may adjourn the meeting to another place, date, or time.

1.7    Adjournments.    Any meeting of stockholders may be adjourned to any other time and to any other place at which a meeting of stockholders may be held under these Restated By-Laws by the stockholders present or represented at the meeting and entitled to vote, although less than a quorum, or, if no stockholder is present, by any officer entitled to preside at or to act as Secretary of such meeting. It shall not be necessary to notify any stockholder of any adjournment of less than 30 days if the time and place of the adjourned meeting are announced at the meeting at which adjournment is taken, unless after the adjournment a new record date is fixed for the adjourned meeting. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting.

1.8    Voting and Proxies.    At any meeting of the stockholders, each stockholder shall have one vote for each share of stock entitled to vote at such meeting held of record by such stockholder and a proportionate vote for each fractional share so held, unless otherwise provided in the Certificate of Incorporation. Each stockholder of record entitled to vote at a meeting of stockholders, or to express consent or dissent to corporate action in writing without a meeting (to the extent not otherwise prohibited by the Certificate of Incorporation or these Restated By-laws), may vote or express such consent or dissent in person or may authorize another person or persons to vote or act for such stockholder by written proxy executed by such stockholder or his

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or her authorized agent or by a transmission permitted by law and delivered to the Secretary of the Corporation. No such proxy shall be voted or acted upon after three years from the date of its execution, unless the proxy expressly provides for a longer period. Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to this Section 1.8 may be substituted 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 reproduction shall be a complete reproduction of the entire original writing or transmission.

In the election of directors, voting shall be by written ballot, and for any other action, voting need not be by ballot.

The Corporation may, and to the extent required by law or the Certificate of Incorporation, shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at such meeting and make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the person presiding at such meeting may, and to the extent required by law or the Certificate of Incorporation, shall, appoint one or more inspectors to act at such meeting. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability.

1.9    Action at Meeting.    When a quorum is present at any meeting of stockholders, the holders of a majority of the stock present or represented and voting on a matter (or if there are two or more classes of stock entitled to vote as separate classes, then in the case of each such class, the holders of a majority of the stock of that class present or represented and voting on such matter) shall decide any matter to be voted upon by the stockholders at such meeting (other than the election of directors), except when a different vote is required by express provision of law, the Certificate of Incorporation or these Restated By-Laws. Any election of directors by the stockholders shall be determined by a plurality of the votes cast by the stockholders entitled to vote at such election, except as otherwise provided by the Certificate of Incorporation. For the purposes of this paragraph, Broker Non-Votes represented at the meeting but not permitted to vote on a particular matter shall not be counted, with respect to the vote on such matter, in the number of (a) votes cast, (b) votes cast affirmatively, or (c) votes cast negatively.

1.10    Introduction of Business at Meetings.

A.    Annual Meetings of Stockholders.

(1)    Nominations of persons for election to the Board of Directors and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders (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

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for in this Section 1.10, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 1.10.

(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 Section 1.10, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and such other business must otherwise be a proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the one hundred twentieth (120th) day nor earlier than the close of business on the one hundred fiftieth (150th) day prior to the first anniversary of the date of the proxy statement delivered to stockholders in connection with the preceding year’s annual meeting; provided, however, that if either (i) the date of the annual meeting is more than thirty (30) days before or more than sixty (60) days after the first anniversary date of the preceding year’s annual meeting or (ii) no proxy statement was delivered to stockholders in connection with the preceding year’s annual meeting, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the ninetieth (90th) day prior to such annual meeting and not later than the close of business on the later of the sixtieth (60th) day prior to such annual meeting or the close of business on the tenth (10th) day following the day on which public announcement of the date of such meeting is first made by the Corporation. Such stockholder’s notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or reelection as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (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 capital stock of the Corporation that are owned beneficially and held of record by such stockholder and such beneficial owner.

(3)    Notwithstanding anything in the second sentence of paragraph (A)(2) of this Section 1.10 to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board of Directors at least seventy (70) days prior to the first anniversary of the preceding year’s annual meeting (or, if the annual meeting is held more than thirty (30) days before or sixty (60) days after such

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anniversary date, at least seventy (70) days prior to such annual meeting), a stockholder’s notice required by this Section 1.10 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 office of the Corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the Corporation.

B.    Special Meetings of Stockholders.    Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (a) by or at the direction of the Board of Directors or (b) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice of the special meeting, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 1.10. If the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by paragraph (A)(2) of this Section 1.10 shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the ninetieth (90th) day prior to such special meeting nor later than the later of (x) the close of business on the sixtieth (60th) day prior to such special meeting or (y) the close of business on the tenth (10th) day following the day on which public announcement is first made of the date of such special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting.

C.    General.

(1)    Only such persons who are nominated in accordance with the procedures set forth in this Section 1.10 shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 1.10. Except as otherwise provided by law, the Certificate of Incorporation or these Restated By-Laws, the chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 1.10 and, if any proposed nomination or business is not in compliance herewith, to declare that such defective proposal or nomination shall be disregarded.

(2)    For purposes of this Section 1.10, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press, PR Newswire, Reuters or comparable national news service or in a

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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 Section 1.10, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth herein. Nothing in this Section 1.10 shall be deemed to affect any rights (i) of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders of any series of Preferred Stock to elect directors under specified circumstances.

1.11    Action without Meeting.    Stockholders of the Corporation may not take any action by written consent in lieu of a meeting. Notwithstanding any other provision of law, the Certificate of Incorporation or these Restated By-Laws, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least seventy-five percent (75%) of the votes which all the stockholders would be entitled to cast at any annual election of directors shall be required to amend or repeal, or to adopt any provision inconsistent with, this Section 1.11.

ARTICLE 2—Directors

2.1    General Powers.    The business and affairs of the Corporation shall be managed by or under the direction of a Board of Directors, who may exercise all of the powers of the Corporation except as otherwise provided by law or the Certificate of Incorporation. In the event of a vacancy in the Board of Directors, the remaining directors, except as otherwise provided by law or the Certificate of Incorporation, may exercise the powers of the full Board of Directors until the vacancy is filled. Without limiting the foregoing, the Board of Directors may:

(a) declare dividends from time to time in accordance with law;

(b) purchase or otherwise acquire any property, rights or privileges on such terms as it shall determine;

(c) authorize the creation, making and issuance, in such form as it may determine, of written obligations of every kind, negotiable or non-negotiable, secured or unsecured, to borrow funds and guarantee obligations, and to do all things necessary in connection therewith;

(d) remove any officer of the Corporation with or without cause, and from time to time to devolve the powers and duties of any officer upon any other person for the time being;

(e) confer upon any officer of the Corporation the power to appoint, remove and suspend subordinate officers, employees and agents;

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(f) adopt from time to time such stock option, stock purchase, bonus or other compensation plans for directors, officers, employees, consultants and agents of the Corporation and its subsidiaries as it may determine;

(g) adopt from time to time such insurance, retirement, and other benefit plans for directors, officers, employees, consultants and agents of the Corporation and its subsidiaries as it may determine; and

(h) adopt from time to time regulations, not inconsistent herewith, for the management of the Corporation’s business and affairs.

2.2    Number; Election and Qualification.     The number of directors which shall constitute the whole Board of Directors shall be determined by resolution of the Board of Directors, but in no event shall be less than two. The number of directors may be decreased at any time and from time to time by a majority of the directors then in office, but only to eliminate vacancies existing by reason of the death, resignation, removal or expiration of the term of one or more directors. The directors shall be elected at the annual meeting of stockholders (or, if so determined by the Board of Directors pursuant to Section 1.10 hereof, at a special meeting of stockholders), by such stockholders as have the right to vote on such election. Directors need not be stockholders of the Corporation.

2.3    Terms in Office.    Each director shall hold office until the next annual meeting of stockholders.

2.4    Tenure.    Notwithstanding any provisions to the contrary contained herein, each director shall hold office until his or her successor is elected and qualified, or until his or her earlier death, resignation or removal.

2.5    Vacancies.    Unless and until filled by the stockholders, any vacancy in the Board of Directors, however occurring, including a vacancy resulting from an enlargement thereof, may be filled by vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director. A director elected to fill a vacancy shall be elected for the unexpired term of his or her predecessor in office, if any, and a director chosen to fill a position resulting from an increase in the number of directors shall hold office until the next election of directors and until his or her successor is elected and qualified, or until his or her earlier death, resignation or removal.

2.6    Resignation.    Any director may resign by delivering his or her written resignation to the Corporation at its principal office or to the President or Secretary. 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.

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2.7    Regular Meetings.    Regular meetings of the Board of Directors may be held without notice at such time and place, either within or without the State of Delaware, as shall be determined from time to time by the Board of Directors; provided that any director who is absent when such a determination is made shall be given notice of the determination.

2.8    Special Meetings.    Special meetings of the Board of Directors may be held at any time and place, within or without the State of Delaware, designated in a call by the Chairman of the Board (if any), the President, two or more directors, or by one director in the event that there is only a single director in office.

2.9    Notice of Special Meetings.    Notice of any special meeting of directors shall be given to each director by the Secretary or by the officer or one of the directors calling the meeting. Notice shall be duly given to each director (i) by giving notice to such director in person or by telephone at least 48 hours in advance of the meeting, (ii) by sending a telegram or delivering written notice by facsimile transmission or by hand, to his or her last known business or home address at least 48 hours in advance of the meeting, or (iii) by mailing written notice to his or her last known business or home address at least 72 hours in advance of the meeting. A notice or waiver of notice of a meeting of the Board of Directors need not specify the purposes of the meeting.

2.10    Meetings by Telephone Conference Calls.    Directors or any members of any committee designated by the Board of Directors may participate in a meeting of the Board of Directors or such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation by such means shall be deemed to constitute presence in person at such meeting.

2.11    Quorum.    A majority of the total number of the whole Board of Directors shall constitute a quorum at all meetings of the Board of Directors. In the event one or more of the directors shall be disqualified to vote at any meeting, then the required quorum shall be reduced by one for each such director so disqualified; provided, however, that in no case shall less than one-third (1/3) of the total number of the whole Board of Directors constitute a quorum. In the absence of a quorum at any such meeting, a majority of the directors present may adjourn the meeting from time to time without further notice other than announcement at the meeting, until a quorum shall be present.

2.12    Action at Meeting.    At any meeting of the Board of Directors at which a quorum is present, the vote of a majority of those present shall be sufficient to take any action, unless a different vote is specified by law, the Certificate of Incorporation or these Restated By-Laws.

2.13    Action by Written Consent.    Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee of the Board of Directors may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent to such action in writing, and the written consents are filed with the minutes of proceedings of the Board of Directors or committee.

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2.14    Removal.    Unless otherwise provided in the Certificate of Incorporation, any one or more or all of the directors may be removed (i) with cause only by the holders of at least a majority of the shares then entitled to vote at an election of directors or (ii) without cause only by the holders of at least seventy-five percent (75%) of the shares then entitled to vote at an election of directors.

2.15    Committees.    The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. In the absence or disqualification of a member of a committee, the member or members of such committee present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at such meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors and subject to the provisions of the General Corporation Law of the State of Delaware, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers which may require it. Each such committee shall keep minutes and make such reports as the Board of Directors may from time to time request. Except as the Board of Directors may otherwise determine or as provided herein, any committee may make rules for the conduct of its business, but unless otherwise provided by the directors or in such rules, its business shall be conducted as nearly as possible in the same manner as is provided in these Restated By-Laws for the Board of Directors. Adequate provisions shall be made for notice to members of all meeting of committees. Two-third (2/3) of the members of any committee shall constitute a quorum unless the committee shall consist of one (1) or two (2) members, in which event one (1) member shall constitute a quorum; and all matters shall be determined by a majority vote of the members present. Action may be taken by any committee without a meeting if all members thereof consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of such committee.

2.16    Compensation of Directors.    Directors may be paid such compensation for their services and such reimbursement for expenses of attendance at meetings as the Board of Directors may from time to time determine. No such payment shall preclude any director from serving the Corporation or any of its parent or subsidiary corporations in any other capacity and receiving compensation for such service.

2.17    Amendments to Article.    Notwithstanding any other provisions of law, the Certificate of Incorporation or these Restated By-Laws, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of a least seventy-five percent (75%) of the votes which all the stockholders would be entitled to cast at any annual election of directors shall be required to amend or repeal, or to adopt any provision inconsistent with, this Article 2.

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ARTICLE 3—Officers

3.1    Enumeration.    The officers of the Corporation shall consist of a President, a Secretary, a Treasurer and such other officers with such other titles as the Board of Directors shall determine, including, but not limited to, a Chairman of the Board, a Vice-Chairman of the Board, and one or more Vice Presidents, Assistant Treasurers and Assistant Secretaries. The Board of Directors may appoint such other officers as it may deem appropriate.

3.2    Election.    The President, Treasurer and Secretary shall be elected annually by the Board of Directors at its first meeting following the annual meeting of stockholders. Other officers may be appointed by the Chief Executive Officer, except that the Directors shall have the power to rescind any such appointment by a vote of a majority of the Directors then in office.

3.3    Qualification.    No officer need be a stockholder. Any two or more offices may be held by the same person.

3.4    Tenure.    Except as otherwise provided by law, by the Certificate of Incorporation or by these Restated By-Laws, each officer shall hold office until his or her successor is elected and qualified, unless a different term is specified in the vote choosing or appointing such officer, or until his or her earlier death, resignation or removal.

3.5    Resignation and Removal.    Any officer may resign by delivering his or her written resignation to the Chairman of the Board (if any), to the Board of Directors at a meeting thereof, to the Corporation at its principal office or to the President or Secretary. 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.

Any officer may be removed at any time, with or without cause, by either the President or by a vote of a majority of the entire number of directors then in office.

Except as the Board of Directors may otherwise determine, no officer who resigns or is removed shall have any right to any compensation as an officer for any period following his or her resignation or removal, or any right to damages on account of such removal, whether his or her compensation be by the month or by the year or otherwise, unless such compensation is expressly provided in a duly authorized written agreement with the Corporation.

3.6    Vacancies.    The Board of Directors may fill any vacancy occurring in any office for any reason and may, in its discretion, leave unfilled for such period as it may determine any offices other than those of President, Treasurer and Secretary. Each such successor shall hold office for the unexpired term of his predecessor and until his or her successor is elected and qualified, or until his or her earlier death, resignation or removal.

3.7    Chairman of the Board and Vice-Chairman of the Board.    The Chairman of the Board, if any, shall preside at all meetings of the Board of Directors and stockholders at

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which he or she is present and shall perform such duties and possess such powers as are designated by the Board of Directors. If the Board of Directors appoints a Vice-Chairman of the Board, he or she shall, in the absence or disability of the Chairman of the Board, perform the duties and exercise the powers of the Chairman of the Board and shall perform such other duties and possess such other powers as may from time to time be designated by the Board of Directors.

3.8    President.    The President shall, subject to the direction of the Board of Directors, have general charge and supervision of the business of the Corporation. Unless otherwise provided by the Board of Directors, and provided that there is no Chairman of the Board or that the Chairman and Vice-Chairman, if any, are not available, the President shall preside at all meetings of the stockholders, and, if a director, at all meetings of the Board of Directors. Unless the Board of Directors has designated another officer as the Chief Executive Officer, the President shall be the Chief Executive Officer of the Corporation. The President shall perform such other duties and shall have such other powers as the Board of Directors may from time to time prescribe. The President shall have the power to enter into contracts and otherwise bind the Corporation in matters arising in the ordinary course of the Corporation’s business.

3.9    Vice Presidents.    Any Vice President shall perform such duties and possess such powers as the Board of Directors or the President may from time to time prescribe. In the event of the absence, inability or refusal to act of the President, the Vice President (or if there shall be more than one, the Vice Presidents in the order determined by the Board of Directors) shall perform the duties of the President and, when so performing, shall have all the powers of and be subject to all the restrictions upon the President. The Board of Directors may assign to any Vice President the title of Executive Vice President, Senior Vice President or any other title selected by the Board of Directors. Unless otherwise determined by the Board of Directors, any Vice President shall have the power to enter into contracts and otherwise bind the Corporation in matters arising in the ordinary course of the Corporation’s business.

3.10    Secretary and Assistant Secretaries.    The Secretary shall perform such duties and shall have such powers as the Board of Directors or the President may from time to time prescribe. In addition, the Secretary shall perform such duties and have such powers as are incident to the office of secretary, including without limitation the duty and power to give notices of all meetings of stockholders and special meetings of the Board of Directors, to attend all meetings of stockholders and the Board of Directors and keep a record of the proceedings, to maintain a stock ledger and prepare lists of stockholders and their addresses as required, to be custodian of corporate records and the corporate seal and to affix and attest to the same on documents.

Any Assistant Secretary shall perform such duties and possess such powers as the Board of Directors, the President or the Secretary may from time to time prescribe. In the event of the absence, inability or refusal to act of the Secretary, the Assistant Secretary (or if there shall be more than one, the Assistant Secretaries in the order determined by the Board of Directors) shall perform the duties and exercise the powers of the Secretary.

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In the absence of the Secretary or any Assistant Secretary at any meeting of stockholders or directors, the person presiding at the meeting shall designate a temporary secretary to keep a record of the meeting.

3.11    Treasurer and Assistant Treasurers.    The Treasurer shall perform such duties and shall have such powers as the Board of Directors or the President may from time to time prescribe. In addition, the Treasurer shall perform such duties and have such powers as are incident to the office of treasurer, including without limitation the duty and power to keep and be responsible for all funds and securities of the Corporation, to deposit funds of the Corporation in depositories selected in accordance with these Restated By-Laws, to disburse such funds as ordered by the Board of Directors, to make proper accounts for such funds, and to render as required by the Board of Directors statements of all such transactions and of the financial condition of the Corporation.

The Assistant Treasurers shall perform such duties and possess such powers as the Board of Directors, the President or the Treasurer may from time to time prescribe. In the event of the absence, inability or refusal to act of the Treasurer, the Assistant Treasurer (or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors) shall perform the duties and exercise the powers of the Treasurer.

3.12    Salaries.    Officers of the Corporation shall be entitled to such salaries, compensation or reimbursement as shall be fixed or allowed from time to time by the Board of Directors.

3.13    Action with Respect to Securities of Other Corporations.    Unless otherwise directed by the Board of Directors, the President or any officer of the Corporation authorized by the President shall have power to vote and otherwise act on behalf of the Corporation, in person or by proxy, at any meeting of stockholders of or with respect to any action of stockholders of any other corporation in which the Corporation may hold securities and otherwise to exercise any and all rights and powers which this Corporation may possess by reason of its ownership of securities in such other corporation.

ARTICLE 4—Indemnification

4.1    Actions, Suits and Proceedings Other than by or in the Right of the Corporation.    The Corporation shall indemnify each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he is or was, or has agreed to become, a director or officer of the Corporation, or is or was serving, or has agreed to serve, at the request of the Corporation, as a director, officer or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise (including any employee benefit plan) (all such persons being referred to hereafter as an “Indemnitee”), or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on

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his behalf in connection with such action, suit or proceeding and any appeal therefrom, if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in, or not opposed to, the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Notwithstanding anything to the contrary in this Article, except as set forth in Section 4.6 below, the Corporation shall not indemnify an Indemnitee seeking indemnification in connection with a proceeding (or part thereof) initiated by the Indemnitee unless the initiation thereof was approved by the Board of Directors of the Corporation.

4.2.    Actions or Suits by or in the Right of the Corporation.    The Corporation shall indemnify any Indemnitee who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was, or has agreed to become, a director or officer of the Corporation, or is or was serving, or has agreed to serve, at the request of the Corporation, as a director, officer or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise (including any employee benefit plan), or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees) and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with such action, suit or proceeding and any appeal therefrom, if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses (including attorneys’ fees) which the Court of Chancery of Delaware or such other court shall deem proper.

4.3    Indemnification for Expenses of Successful Party.    Notwithstanding the other provisions of this Article, to the extent that an Indemnitee has been successful, on the merits or otherwise, in defense of any action, suit or proceeding referred to in Sections 4.1 and 4.2, or in defense of any claim, issue or matter therein, or on appeal from any such action, suit or proceeding, he shall be indemnified against all expenses (including attorneys’ fees) actually and reasonably incurred by him or on his behalf in connection therewith. Without limiting the foregoing, if any action, suit or proceeding is disposed of, on the merits or otherwise (including a disposition without prejudice), without (i) the disposition being adverse to the Indemnitee, (ii) an adjudication that the Indemnitee was liable to the Corporation, (iii) a plea of guilty or nolo contendere by the

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Indemnitee, (iv) an adjudication that the Indemnitee did not act in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and (v) with respect to any criminal proceeding, an adjudication that the Indemnitee had reasonable cause to believe his conduct was unlawful, the Indemnitee shall be considered for the purpose hereof to have been wholly successful with respect thereto.

4.4    Notification and Defense of Claim.    As a condition precedent to his right to be indemnified, the Indemnitee must notify the Corporation in writing as soon as practicable of any action, suit, proceeding or investigation involving him for which indemnity will or could be sought. With respect to any action, suit, proceeding or investigation of which the Corporation is so notified, the Corporation will be entitled to participate therein at its own expense and/or to assume the defense thereof at its own expense, with legal counsel reasonably acceptable to the Indemnitee. After notice from the Corporation to the Indemnitee of its election so to assume such defense, the Corporation shall not be liable to the Indemnitee for any legal or other expenses subsequently incurred by the Indemnitee in connection with such claim, other than as provided below in this Section 4.4. The Indemnitee shall have the right to employ his own counsel in connection with such claim, but the fees and expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shall be at the expense of the Indemnitee unless (i) the employment of counsel by the Indemnitee has been authorized by the Corporation, (ii) counsel to the Indemnitee shall have reasonably concluded that there may be a conflict of interest or position on any significant issue between the Corporation and the Indemnitee in the conduct of the defense of such action or (iii) the Corporation shall not in fact have employed counsel to assume the defense of such action, in each of which cases the fees and expenses of counsel for the Indemnitee shall be at the expense of the Corporation, except as otherwise expressly provided by this Article. The Corporation shall not be entitled, without the consent of the Indemnitee, to assume the defense of any claim brought by or in the right of the Corporation or as to which counsel for the Indemnitee shall have reasonably made the conclusion provided for in clause (ii) above.

4.5    Advance of Expenses.    Subject to the provisions of Section 4.6 below, in the event that the Corporation does not assume the defense pursuant to Section 4.4 of any action, suit, proceeding or investigation of which the Corporation receives notice under this Article, any expenses (including attorneys’ fees) incurred by an Indemnitee in defending a civil or criminal action, suit, proceeding or investigation or any appeal therefrom shall be paid by the Corporation in advance of the final disposition of such matter, provided, however, that the payment of such expenses incurred by an Indemnitee in advance of the final disposition of such matter shall be made only upon receipt of an undertaking by or on behalf of the Indemnitee to repay all amounts so advanced in the event that it shall ultimately be determined that the Indemnitee is not entitled to be indemnified by the Corporation as authorized in this Article. Such undertaking may be accepted without reference to the financial ability of such person to make such repayment.

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4.6    Procedure for Indemnification.    In order to obtain indemnification or advancement of expenses pursuant to Section 4.1, 4.2, 4.3 or 4.5, the Indemnitee shall submit to the Corporation a written request, including in such request such documentation and information as is reasonably available to the Indemnitee and is reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification or advancement of expenses. Any such indemnification or advancement of expenses shall be made promptly, and in any event within 60 days after receipt by the Corporation of the written request of the Indemnitee, unless with respect to requests under Section 4.1, 4.2 or 4.5 the Corporation determines, by clear and convincing evidence, within such 60-day period that the Indemnitee did not meet the applicable standard of conduct set forth in Section 4.1 or 4.2, as the case may be. Such determination shall be made in each instance by (a) a majority vote of the directors of the Corporation who are not at that time parties to the action, suit or proceeding in question (“Disinterested Directors”), even though less than a quorum, (b) by a committee of Disinterested Directors designated by a majority vote of Disinterested Directors, even though less than a quorum, (c) if there are no such Disinterested Directors, or if such Disinterested Directors so direct, by independent legal counsel (who may be regular legal counsel to the corporation) in a written opinion, (d) a majority vote of a quorum of the outstanding shares of stock of all classes entitled to vote for directors, voting as a single class, which quorum shall consist of stockholders who are not at that time parties to the action, suit or proceeding in question, or (e) a court of competent jurisdiction.

4.7    Remedies.    The right to indemnification or advances as granted by this Article shall be enforceable by the Indemnitee in any court of competent jurisdiction if the Corporation denies such request, in whole or in part, or if no disposition thereof is made within the 60-day period referred to above in Section 4.6. Unless otherwise provided by law, the burden of proving that the Indemnitee is not entitled to indemnification or advancement of expenses under this Article shall be on the Corporation. Neither the failure of the Corporation to have made a determination prior to the commencement of such action that indemnification is proper in the circumstances because the Indemnitee has met the applicable standard of conduct, nor an actual determination by the Corporation pursuant to Section 4.6 that the Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the Indemnitee has not met the applicable standard of conduct. The Indemnitee’s expenses (including attorneys’ fees) incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such proceeding shall also be indemnified by the Corporation.

4.8    Subsequent Amendment.    No amendment, termination or repeal of this Article or of the relevant provisions of the General Corporation Law of the State of Delaware or any other applicable laws shall affect or diminish in any way the rights of any Indemnitee to indemnification under the provisions hereof with respect to any action, suit, proceeding or investigation arising out of or relating to any actions, transactions or facts occurring prior to the final adoption of such amendment, termination or repeal.

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4.9    Other Rights.    The indemnification and advancement of expenses provided by this Article shall not be deemed exclusive of any other rights to which an Indemnitee seeking indemnification or advancement of expenses may be entitled under any law (common or statutory), agreement or vote of stockholders or Disinterested Directors or otherwise, both as to action in his official capacity and as to action in any other capacity while holding office for the Corporation, and shall continue as to an Indemnitee who has ceased to be a director or officer, and shall inure to the benefit of the estate, heirs, executors and administrators of the Indemnitee. Nothing contained in this Article shall be deemed to prohibit, and the Corporation is specifically authorized to enter into, agreements with officers and directors providing indemnification rights and procedures different from those set forth in this Article. In addition, the Corporation may, to the extent authorized from time to time by its Board of Directors, grant indemnification rights to other employees or agents of the Corporation or other persons serving the Corporation and such rights may be equivalent to, or greater or less than, those set forth in this Article.

4.10    Partial Indemnification.    If an Indemnitee is entitled under any provision of this Article to indemnification by the Corporation for some or a portion of the expenses (including attorneys’ fees), judgments, fines or amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with any action, suit, proceeding or investigation and any appeal therefrom but not, however, for the total amount thereof, the Corporation shall nevertheless indemnify the Indemnitee for the portion of such expenses (including attorneys’ fees), judgments, fines or amounts paid in settlement to which the Indemnitee is entitled.

4.11    Insurance.    The Corporation may purchase and maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise (including any employee benefit plan) against any expense, liability or loss incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the General Corporation Law of the State of Delaware.

4.12    Merger or Consolidation.    If the Corporation is merged into or consolidated with another corporation and the Corporation is not the surviving corporation, the surviving corporation shall assume the obligations of the Corporation under this Article with respect to any action, suit, proceeding or investigation arising out of or relating to any actions, transactions or facts occurring prior to the date of such merger or consolidation.

4.13    Savings Clause.    If this Article or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each Indemnitee as to any expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement in connection with any action, suit,

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proceeding or investigation, whether civil, criminal or administrative, including an action by or in the right of the Corporation, to the fullest extent permitted by an applicable portion of this Article that shall not have been invalidated and to the fullest extent permitted by applicable law.

4.14    Definitions.    Terms used herein and defined in Section 145(h) and Section 145(i) of the General Corporation Law of the State of Delaware shall have the respective meanings assigned to such terms in such Section 145(h) and Section 145(i).

4.15    Subsequent Legislation.    If the General Corporation Law of the State of Delaware is amended after adoption of this Article to expand further the indemnification permitted to Indemnitees, then the Corporation shall indemnify such persons to the fullest extent permitted by the General Corporation Law of the State of Delaware, as so amended.

ARTICLE 5—Capital Stock

5.1    Issuance of Stock.    Unless otherwise voted by the stockholders and subject to the provisions of the Certificate of Incorporation, the whole or any part of any unissued balance of the authorized capital stock of the Corporation or the whole or any part of any issued, authorized capital stock of the Corporation held in its treasury may be issued, sold, transferred or otherwise disposed of by vote of the Board of Directors in such manner, for such consideration and on such terms as the Board of Directors may determine.

5.2    Certificates of Stock.    Every holder of stock of the Corporation shall be entitled to have a certificate, in such form as may be prescribed by law and by the Board of Directors, certifying the number and class of shares owned by such stockholder in the Corporation. Each such certificate shall be signed by, or in the name of the Corporation by, the Chairman or Vice-Chairman, if any, of the Board of Directors, or the President or a Vice President, and the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation. Any or all of the signatures on such certificate may be a facsimile.

Each certificate for shares of stock which are subject to any restriction on transfer pursuant to the Certificate of Incorporation, the Restated By-Laws, applicable securities laws or any agreement among any number of shareholders or among such holders and the Corporation shall have conspicuously noted on the face or back of such certificate either the full text of such restriction or a statement of the existence of such restriction.

5.3    Transfers.    Except as otherwise established by rules and regulations adopted by the Board of Directors, and subject to applicable law, shares of stock may be transferred on the books of the Corporation by the surrender to the Corporation or its transfer agent of the certificate representing such shares, properly endorsed or accompanied by a written assignment or power of attorney properly executed, and with such proof of authority or the authenticity of signature as the Corporation or its transfer agent may reasonably require. Except as may be otherwise required by law, by the Certificate of Incorporation or by these Restated By-Laws, the

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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 to such stock, 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 Restated By-Laws.

5.4    Lost, Stolen or Destroyed Certificates.    The Corporation may issue a new certificate of stock in place of any previously issued certificate alleged to have been lost, stolen, or destroyed, upon such terms and conditions as the President may prescribe, including the presentation of reasonable evidence of such loss, theft or destruction and the giving of such indemnity as the President may require for the protection of the Corporation or any transfer agent or registrar.

5.5    Record Date.    The Board of Directors may fix in advance a date as a record date for the determination of the stockholders entitled to notice of or to vote at any meeting of stockholders or, to the extent permitted by the Certificate of Incorporation and these Restated By-laws, to express consent (or dissent) to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action. Such record date shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action to which such record date relates.

If no record date is fixed, 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 before the day on which notice is given, or, if notice is waived, at the close of business on the day before the day on which the meeting is held. The record date for determining stockholders entitled to express consent to corporate action in writing without a meeting (to the extent permitted by the Certificate of Incorporation and these Restated By-laws) when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent is expressed. 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 to such purpose.

A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

ARTICLE 6—General Provisions

6.1    Fiscal Year.    The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

6.2    Corporate Seal.    The corporate seal shall be in such form as shall be approved by the Board of Directors.

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6.3    Notices.    Except as otherwise specifically provided herein or required by law or the Certificate of Incorporation, all notices required to be given to any person pursuant to these Restated By-Laws shall be in writing and may in every instance be effectively given by hand delivery to the recipient thereof, by depositing such notice in the mails, postage paid, or by sending such notice by prepaid telegram or facsimile transmission. Any such notice shall be addressed to such person at his or her last known address as the same appears on the books of the Corporation. The time when such notice is received shall be deemed to be the time of the giving of the notice.

6.4    Waiver of Notice.    Whenever any notice whatsoever is required to be given by law, by the Certificate of Incorporation or by these Restated By-Laws, a waiver of such notice either in writing signed by the person entitled to such notice or such person’s duly authorized attorney, or by telegraph, facsimile transmission or any other available method, whether before, at or after the time stated in such waiver, or the appearance of such person or persons at such meeting in person or by proxy, shall be deemed equivalent to such notice.

6.5    Evidence of Authority.    A certificate by the Secretary, or an Assistant Secretary, or a temporary Secretary, as to any action taken by the stockholders, directors, a committee or any officer or representative of the Corporation shall, as to all persons who rely on the certificate in good faith, be conclusive evidence of such action.

6.6    Facsimile Signatures.    In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Restated By-Laws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board of Directors or a committee thereof.

6.7    Reliance upon Books, Reports and Records.    Each director, each member of any committee designated by the Board of Directors, and each officer of the Corporation shall, in the performance of his or her duties, be fully protected in relying in good faith upon the books of account or other records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers or employees or committees of the Board of Directors so designated, or by any other person as to matters which such director or committee member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

6.8    Time Periods.    In applying any provision of these Restated By-Laws that requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included.

6.9    Certificate of Incorporation.    All references in these Restated By-Laws to the Certificate of Incorporation shall be deemed to refer to the Restated Certificate of Incorporation of the Corporation, as amended and in effect from time to time.

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6.10    Transactions with Interested Parties.    No contract or transaction between the Corporation and one or more of the directors or officers, or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of the directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because such director or officer is present at or participates in the meeting of the Board of Directors or a committee of the Board of Directors which authorizes the contract or transaction or solely because his, her or their votes are counted for such purpose, if:

(1) The material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative vote of a majority of the disinterested directors, even though the disinterested directors be less than a quorum;

(2) The material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or

(3) The contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee of the Board of Directors, or the stockholders.

Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

6.11    Severability.    Any determination that any provision of these Restated By-Laws is for any reason inapplicable, illegal or ineffective shall not affect or invalidate any other provision of these Restated By-Laws.

6.12    Pronouns.    All pronouns used in these Restated By-Laws shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the persons or persons so designated may require.

ARTICLE 7—Amendments

7.1    By the Board of Directors.    Except as is otherwise set forth in these Restated By-Laws, these Restated By-Laws may be altered, amended or repealed, or new by-laws may be adopted, by the affirmative vote of a majority of the directors present at any regular or special meeting of the Board of Directors at which a quorum is present.

7.2    By the Stockholders.    Except as otherwise set forth in these Restated By-Laws, these Restated By-Laws may be altered, amended or repealed or new by-laws may be adopted by the affirmative vote of the holders of seventy-five percent (75%) of the shares of the capital stock of the Corporation issued and outstanding and entitled to vote at any regular meeting of stockholders, or at any special meeting of stockholders, provided notice of such alteration, amendment, repeal or adoption of new by-laws shall have been stated in the notice of such special meeting.

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EX-10.31

Exhibit 10.31

RESTATED CERTIFICATE OF INCORPORATION

OF

CONCERTO SOFTWARE, INC.

Concerto Software, Inc. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:

1.    That the original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on June 15, 1982, and that the name under which the Corporation was originally incorporated was Datavox Communications Corp.

2.    A Certificate of Amendment of the Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on June 25, 1982.

3.    A Certificate of Amendment of the Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on July 6, 1982.

4.    A Certificate of Amendment of the Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on January 18, 1983.

5.    A Certificate of Amendment of the Certificate of Incorporation of the Corporation changing its name from Datavox Communications Corp. to Davox Communications Corp. was filed with the Secretary of State of the State of Delaware on July 25, 1983.

6.    A Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on December 15, 1983.

7.    A Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on May 23, 1984.

8.    A Certificate of Amendment of the Restated Certificate of Incorporation of the Corporation changing its name from Davox Communications Corp. to Davox Corporation was filed with the Secretary of State of the State of Delaware on October 22, 1984.

9.    A Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on March 26, 1985.

10.    A Certificate of Amendment of the Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on December 10, 1985.

11.    A Certificate of Designation, Preference and Rights of Convertible Preferred Stock of the Corporation was filed with the Secretary of State of the State of Delaware on December 30, 1985.

12.    A Certificate of Amendment of the Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on October 24, 1986.

13.    A Certificate of Designation, Preference and Rights of Convertible Preferred Stock of the Corporation was filed with the Secretary of State of the State of Delaware on October 24, 1986.

14.    A Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on April 14, 1987.

15.    A Certificate of Amendment of the Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on April 15, 1987.

16.    A Restated Certificate of the Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on June 17, 1988.

17.    A Certificate of Amendment of the Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on August 6, 1990.

18.    A Certificate of Amendment of the Restated Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on April 24, 1997.

19.    A Certificate of Amendment of the Restated Certificate of Incorporation of the Corporation changing its name from Davox Corporation to Concerto Software, Inc. was filed with the Secretary of State of the State of Delaware on May 2, 2002.

20.    This Restated Certificate of Incorporation (i) restates and integrates and does not amend the Certificate of Incorporation of the Corporation and (ii) was duly adopted in accordance with the provisions of Section 245 of the Delaware General Corporation Law. The text of the Certificate of Incorporation as amended or supplemented heretofore is restated hereby to read as herein set forth in full:

Restated Certificate of Incorporation of Concerto Software, Inc.

FIRST:    The name of the corporation is:

Concerto Software, Inc.

SECOND:    The address of its registered office in the State of Delaware is Corporation Trust Center, 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.

THIRD:    The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporation may be organized under the General Corporation Law of Delaware.

FOURTH:    The total number of shares of stock which the corporation shall have authority to issue is Thirty Million (30,000,000) shares of Common Stock, and the par value of each of such shares is Ten Cents ($.10), amounting in the aggregate to Three Million Dollars ($3,000,000).

FIFTH:    The Board of Directors is authorized to make, alter or repeal the by-laws of the corporation. Election of directors need not be by ballot.

SIXTH:    The corporation eliminates the personal liability of each member of its Board of Directors to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that the foregoing shall not eliminate the liability of a director (i) for any breach of such director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of Title 8 of the Delaware Code of (iv) for any transaction from which such director derived an improper personal benefit.

IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been signed under the seal of the Corporation this 7^th day of May 2003.

CONCERTO SOFTWARE, INC.
By:	/s/    JAMES D. FOY
	Name: James D. Foy Title: President and Chief Executive Officer

EX-10.32

Exhibit 10.32

DAVOX CORPORATION

VICE PRESIDENT, GENERAL COUNSEL & SECRETARY

SEVERANCE AGREEMENT—2000

DAVOX Corporation (“DAVOX”) will provide to you the following terms and condition of salary and benefits continuation:

(1.) DAVOX shall provide a continuation of your base salary and medical benefits at DAVOX’s cost, as may be in effect at the time of a qualifying termination as set forth in subclause 2, commencing upon the date of termination, for a period of six (6) months or until such time as you assume new employment, whichever comes first;

(2.) DAVOX shall provide continuation of salary and benefits as set forth in subclause (1) in the event your employment is terminated for the following reasons: (a) economic layoff; (b) downsizing of the Legal organization which results in the elimination of your position as Vice President, General Counsel & Secretary; or (c) reorganization of the Legal organization which would require you to relocate.

Following the effective date of termination, as set forth in writing and furnished to you by DAVOX, your employment with DAVOX shall cease and you shall not hold yourself as an employee, agent, or representative of DAVOX.

Continuation of salary and benefits shall further be subject to your compliance with any then existing company policies and such other terms as may be in effect between you and DAVOX pertaining to the disclosure of confidential or proprietary information.

DAVOX has final authority to determine all questions of eligibility to receive benefits under this arrangement and to interpret and construe the terms of this arrangement.

Approval:

/s/ Alphonse M. Lucchese	8/1/00
Chairman & Chief Executive Officer	Date
/s/ Paul R. Lucchese	8/1/00
Vice President, General Counsel & Secretary	Date

EX-10.33

Exhibit 10.33

MERGER SUCCESS FEE AGREEMENT

As a condition and in consideration of your efforts to induce and close the merger between CellIt and Davox Corporation, you hereby agree with Davox Corporation as follows:

1. Merger Success Fee:

Upon the consummation and closing of the merger between CellIt and Davox Corporation (the “Merger”), you will be eligible to receive a payment in the amount of Three Hundred Thousand Dollars ($300,000) (the “Merger Success Fee”) provided that you remain continuously employed by Davox Corporation for two full years following the date of the closing of the merger. If your employment is terminated either (i) by Davox Corporation for Cause (as defined below) or (ii) by you for other than a Good Reason, at any time prior to your two year anniversary date, Davox Corporation shall have no obligation or liability to pay you the Merger Success Fee or any portion thereof. However, if your employment is terminated by Davox Corporation for reasons other than Cause, at any time prior to the expiration of said two year anniversary date, Davox Corporation shall pay you the Merger Success Fee.

2. Definitions:

(a) For purposes of this Agreement, a termination for “Cause” shall mean (i) an action or omission by you which constitutes a willful and material breach of the executive’s employment agreement, (ii) fraud, embezzlement, misappropriation of funds or breach of trust in connection with your services hereunder, (iii) conviction of a felony crime or (iv.) a termination of employment due to performance which shall be defined as a failure to meet the essential functions of your position or a failure to deliver value to the company that is commensurate with the duties and responsibilities of your position. Any termination for Cause shall be made in writing to the Executive, which notice shall set forth in detail all acts or omissions upon which the Company is relying for such termination.

(b) For purposes of this Agreement, “Good Reason” shall mean or refer to

For purposes of this Agreement, “Good Reason” shall mean

(i) A constructive dismissal of you by the company. For purposes of this section, a constructive dismissal may include the assignment to you of any duties inconsistent in any respect with your position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by your employment agreement, or any other action by Davox Corporation which results in a diminution in such position, authority, duties, responsibilities or compensation, for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by Davox Corporation promptly after receipt of notice thereof given by you;

(ii) (ii) Davox Corporation requiring you to be based at any office or location other than the greater Boston or Miami Metropolitan area immediately prior to termination, except for travel reasonably required in the performance of your responsibilities.

3. Assignment.    You do not have the right to assign or delegate your rights hereunder to any other person or entity. Davox Corporation has the right to assign this Agreement by operation of law or otherwise, without notice, to any entity which acquires by merger or otherwise a majority voting interest in Company. This Agreement shall inure to the benefit of, and be binding upon, the successors and assigns of Davox Corporation.

4. Employment At-Will:    You agree and acknowledge that, unless otherwise specified in writing between you and Davox Corporation, your employment with Davox Corporation is on an at-will

basis, meaning that either you or Davox Corporation may terminate your employment at any time and for any or no reason with or without notice. The terms above do not create any contractual rights to employment other than at-will and relate only to CellIt’s obligation to pay you the Merger Success Fee upon the termination of your employment.

Very truly yours,

Davox Corporation

By: /s/ James D. Foy

Name: James D. Foy

Title: President & CEO

I REPRESENT THAT I HAVE READ THE FOREGOING AGREEMENT, THAT I FULLY UNDERSTAND THE TERMS AND CONDITIONS OF SUCH AGREEMENT AND THAT I AM KNOWINGLY AND VOLUNTARILY EXECUTING THE SAME. IN ENTERING INTO THIS AGREEMENT, I DO NOT RELY ON ANY REPRESENTATION, PROMISE OR INDUCEMENT MADE BY THE COMPANY OR ITS ATTORNEYS WITH THE EXCEPTION OF THE CONSIDERATION DESCRIBED IN THIS DOCUMENT.

ACCEPTED:

/s/ Alexander Tellez

Alexander Tellez

Date: January 10, 2002

EX-99.1

Exhibit 99.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Concerto Software, Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James D. Foy, Chief Executive Officer of the Company hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002 that to the best of my knowledge:

1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.

/s/ James D. Foy                                                                  May 12, 2003

James D. Foy, Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-99.2

Exhibit 99.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Concerto Software, Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael J. Provenzano, III, Chief Financial Officer of the Company hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002 that to the best of my knowledge:

3) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

4) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.

/s/ Michael J. Provenzano, III                                                      May 12, 2003

Michael J. Provenzano, Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.