Exhibit 99.2    PRIVATE & CONFIDENTIAL  December 21, 2001  Mr. Stefan Allesch-Taylor Chairman and Chief Executive Officer HTTP Technology, Inc. 46 Berkeley Square London, UK W1X 5DB  Dear Mr. Allesch-Taylor:  Empire Valuation Consultants, Inc. (Empire), an independent
consulting firm specializing in going concern valuations, was retained by HTTP
Technology, Inc. (HTTP) to express an opinion as to the fair market value of
the assets (Assets) of Nightingale Technologies, Ltd. (Nightingale or the
Company), which were acquired by HTTP as of December 29, 2000 (the Valuation
Date).  It is our understanding that
this valuation will be used in meeting financial reporting requirements.  Methodology  Nightingale has been valued on a going concern basis.  Since the Company is closely-held, and thus
without a public market for its ownership interests, this appraisal was
conducted according to guidelines established by the Internal Revenue Service
(IRS), and in conformity with appraisal practices promulgated by the American
Society of Appraisers in the Principles of Appraisal Practice and Code of
Ethics, and the Uniform Standards of Professional Appraisal Practice (USPAP),
together with such standards as were deemed relevant to this engagement.  As noted, this report has been prepared in conformance with USPAP;
Standards 9 and 10 apply directly to the preparation of valuation reports of
business interests.  In general, these
requirements are binding.  However,
flexibility with regard to the extent of certain information contained within
the written appraisal report (Standards Rule 10-2) is permitted.  Therefore, this letter reports contents
have been limited to discussion of those elements deemed critical to the formation
of this opinion.  350 Fifth Avenue   Suite 5513      New York, NY 10118      212-714-0122      Fax 212-714-0124 3255 Brighton Henrietta Town Line Road   Rochester, NY 14623      716-475-9260      Fax 716-475-9380  
   Fair market value as defined here is the price at which ownership
interests would change hands between a willing buyer and a willing seller,
neither being under any compulsion to buy or sell and both having reasonable
knowledge of all relevant facts.  Sources of Information  In valuing the Assets, the following sources of information were
considered which relate specifically to Nightingale:  Interviews,
discussions, and electronic mail correspondence with the following people
regarding Nightingales and HTTPs history, operations, finances, and outlook
as of the Valuation Date:   Dr.
Jamshid Dehmeshki, Chief Technology Officer;  Mr. Paul
Gothard, HTTPs Controller; and  Yourself,
HTTPs Chief Executive Officer;  Audited
financial statements of Nightingale from inception (July 12, 2000) to December
28, 2000;  Copy of
filled out valuation data request for Nightingale prepared by Jason Forsyth;  Five-year
financial statement projections and notes for Nightingale, as of the Valuation
Date;  Memorandum
and Articles of Incorporation of Nightingale, dated July 12, 2000;  HTTP Form
8-K, dated March 7, 2001 containing the Nightingale purchase agreement;  Description
of Nightingales Stochastic Perception Engine (SPE);  SPE Market
Attractiveness Study, dated December 2000 and developed by Z/yen Limited;  Nightingale
patent application for the SPE, dated September 22, 2000;  Assignment
of Patent Application to Nightingale from Nightingale (Nuie) Ltd., dated
October 5, 2000;  2 
   $10 million
unsecured loan note from Nightingale to Nightingale (Nuie) Ltd. for purchase of
SPE in-process patent;  HTTPs World
Wide Web (web) site (www.http-tech.com);  Employment
agreements between Dr. Sabbir Ahmed Rahman and Nightingale; and  Additional
information supplied by HTTP and Nightingale.  Sources of data on the industry
include statistical processing, speech recognition and medical imaging
competitors (Autonomy, Plc., SPSS, Inc., Nuance Communications, Inc., Dues
Technology, Inc. and R2 Technology, Inc.) annual reports, press releases, web
pages and analyst reports.  Economic
data were gathered from Pricewaterhouse
Coopers UK Economic Outlook and HM Treasurys Forecasts for the UK Economy,
among other sources.  Data regarding
expected rates of return came from Ibbotson Associates.  Business
Profile  Nightingale Technology  Nightingale developed software
that utilized its in-process patented SPE algorithm.  As of the Valuation Date, the Company was building a technology
demonstrator, a software package that demonstrates the capabilities of the SPE,
and the SPE was in the process of verification and validation by the Defense
Evaluation and Research Agency (DERA). 
Once the SPE technology demonstrator was completed and the SPE was
validated by DERA, HTTP planned on developing software that would allow the SPE
to be used in four application areas: medical imaging, statistical processing,
speech recognition and defense.  The
Company had no sales and an operating loss of about £751,222 ($1.05 million)
for the period from inception (July 12, 2000) to December 28, 2000.  The Companys headquarters are
located London, UK where most of its staff is employed.  A.  History/Overview  The Company was formed in July
2000 to hold the SPE patent rights developed by Nightingale (Nuie) Ltd. and Dr.
Rahman.  On October 5, 2000, Nightingale
purchase the SPE patent and commercial rights for loan note of $10 million to
Nightingale (Nuie) Ltd.  In addition,
after the purchase of the SPE patent, Nightingale continued development on the
SPE software demonstration package.  On
December 29, 2000, HTTP offered to purchase the stock of Nightingale for 30  3 
   million HTTP shares.  The payment of the shares was contingent
upon two events. First, once Nightingale received DERA validation, 7.5 million
shares (15 million shares post 2:1 HTTP stock split) would be issued and
second, once the SPE is used in a medical imaging prototype to provide scanning
analysis, the 7.5 million (15 million shares post 2:1 HTTP stock split)
additional shares will be provided.  B.Technology
 Stochastic Perception Engine  As of the Valuation Date,
Nightingale had developed the mathematics of the SPE, had an in-process patent
for the SPE and was in the process of developing a technology demonstrator and
having the SPE validated by DERA.  The
SPE is a toolbox of algorithms used to analyze data.  The SPE consists of five
components:  cluster analysis, feature
or variable selection, density estimation, data classification and value
prediction.  Cluster analysis is the
process of identifying structure in data when the structure is unknown.  The SPE uses the single-link method to
perform cluster analysis. The single-link method allows the SPE to perform
cluster analysis in a fast and efficient (lower memory and processing
requirements) manner. Variable estimation is the process of determining the
variable and the weight the variables will have in the classification
process.  The SPE has the feature to
allow the user to define the variables and weights.  Density estimation is the process of estimating a population
distribution from sample data.  The SPE
utilizes the Gaussian, Putty and Morph modeling methods for density
estimation.  Data classification is the
process of identifying data classes and assigning samples to each data
class.  The goal is to minimize the
error is classifying the samples.  The
SPE uses the Gaussian, Putty and Morph methods for sample classification and
selects the method the fewest errors to perform data classification of new
samples and value prediction.  Value
prediction is the process of predicting the class a new sample of data will be
included in.  As of the Valuation Date,
the value prediction component had not been implemented into the SPE.  As of the Valuation Date,
Nightingale had identified the initial application of the SPE to the medical
imaging, statistical analysis, speech recognition and defense fields.  C.Identifiable
Intangible Assets  A major source of potential
revenue for Nightingale is its SPE algorithm (Technology).  As of the Valuation Date, no revenue had
been obtained from the Technology.  The
Company was in the process of developing a technology  4 
   demonstrator that utilized the
Technology and receiving validation of the Technology from DERA.  Additional intangibles acquired
by HTTP include: (1) assembled workforce (Workforce) and (2) covenant not to
compete (CNC).  These intangible
assets provide a supporting role in the development of the software resulting
from the Technology described above.  D.  Customers & Competition  The Companys potential
customers for its Technology include medical imaging firms, any organization
the uses statistical analysis, speech recognition software firms and defense
organizations.  The SPE competes against other
statistical processing algorithms, such as neural networks and portioning
methods, used in products for potential customers described above.  The first market HTTP and
Nightingale want to enter with the SPE is the medical imaging market.  In this market, the SPE would be used to
help radiologists to determine if an area is cancerous.  The SPE would determine likely cancerous
areas the radiologist may have missed and highlight them for further study by
the radiologist.  With the development
of the prototype medical imaging system using the SPE, Nightingale plans on
entering the cancer screening software market. 
Two firms have developed software and systems to perform cancer
screening for breast cancer and lung cancer. 
These firms are as follows:  CADx Medical Systems (CADx) is a breast
cancer screening software and systems developer.  CADx, with software development from Qualia Computing Inc.,
developed a breast cancer screening systems called Second Look.  As of the Valuation Date, Second Look had
completed clinical trails in 11 US locations and had applied for FDA
pre-marketing approval for sales in the US and was available for sale outside the
US.  CADx had two joint development projects
with mammography equipment manufacturers. 
CADx was a private company located in Montreal, Canada.  Deus Technology (Deus) is a lung cancer
screening software and system developer. 
Dues has developed the first lung cancer screening product, RapidScreen
RS-2000.  RapidScreen RS-2000 utilized
neural networks and fuzzy logic to identify likely cancerous locations.  As of the Valuation Date, Dues was in the
process of applying for FDA marketing approval for RapidScreen RS-  5 
   2000.  Deus had no revenue because it not sold any
products as of the Valuation Date.  Deus
is located in Rockville, Maryland.  R2 Technologies (R2) is a breast cancer
screening software and system developer. 
R2 developed the first FDA approved breast cancer screening product,
ImageChecker M1000.  As of the Valuation
Date, 150 ImageChecker systems were installed on a world-wide basis.  R2 was also developing software/systems for
screening of other cancers.  R2 is a
private company and has raised over $60 million in venture financing since
inception in 1993.  R2 is located in Los
Altos, California.  Another market HTTP and
Nightingale want to enter with the SPE is the statistical software market. The applications
of statistical software include analytical software
tools (such as data mining and data analysis) and knowledge management tools,
structuring and searching of unstructured data.  Firms who develop software for these applications include:  Autonomy, Plc
(Autonomy)is UK based knowledge management software
developer.  Autonomys software is a
platform that enables a broad range of operations to be performed on
unstructured data.  Autonomy is located
in Cambridge, UK.  For the year ended
December 2000, Autonomy had an operating income of $12.1 million on sales of
$65.4 million.  SSPS, Inc. (SPSS) is a statistical
analysis software developer located in Chicago, Illinois.  SPSS developed three software products for
use in the CRM, general data mining and data analysis and market research
markets.  For the year ended December
2000, SPSS had an operating profit of $11.5 million on sales of $140.8 million.  Xanalys (Xanlays), a subsidiary of
Global Graphics SA, is a developer of an information management software.  Xanalys two main products, Watson and Power
Case, provide database analysis and visualization capabilities to assist in
investigations.  For the year ended
December 2000, Xanalys had an operating loss of Euro 1.7 million on sales of
Euro 2.3 million.  Other developers include
privately held:  Minitab and Inxight
Software.  The third market HTTP and
Nightingale want to enter with the SPE is the speech recognition software
market.  Firms who develop software for
the speech recognition include:  6 
   Nuance Communications, Inc (Nuance) is US based speech recognition
software developer.  Nuances voice
interface software platform allows the information and services of enterprise
and telecommunications networks and the Internet to be accessible from any
telephone.  Nuance is located in Menlo
Park, California.  For the year ended
December 2000, Nuance had an operating loss of $23.1 million on sales of $51.8
million.  Speechworks International, Inc. (Speechworks) is a speech recognition
software developer.  Speechworks
products provide over the telephone automated speech recognition solutions for
a divers client base including airlines, stock brokers, delivery services and
drug distributors.  Speechworks is located
in Boston, Massachusetts.  Speechworks
had an operating loss of $28.7 million on revenues of $30 million for the year
ended December 2000.  Vocalis, Plc. (Vocalis) is a UK based developer of speech recognition
software.  Vocalis had an operating loss
of £4.1
million on revenues of £2.0
million for the year ended March 31, 2001.  Other developers include: divisions of large corporations, such as IBM,
ITT Industries, Management, Lucent Technologies and Phillips Electronics and
privately held firms, such as Locus Dialogue and Veritel.  Management also wants to enter the defense software market.  The potential uses for the SPE in the
defense software market include cooperative target recognition.  Management believes that Nightingales algorithms are well-positioned
versus its competition, due to the strength of the SPE versus other processing
algorithms on performance characteristics such as speed and memory capacity.  7 
   E.Employees &
Management  Nightingale employed 9 individuals at the Valuation Date, who can be
categorized according to their functions as follows:  Table I Nightingale Employees by Classification  Classification
  
  Number of
  EmployeesExecutive
  
  2Programmer
  
  5Admin
  
  2Total
  
  9
  The Companys management as of the Valuation Date was as follows:  Table II Nightingale Management Team  Name
  
  PositionTony Somers
  
  CEOSabbir Rahman
  
  Chief Scientific Officer
  F.Ownership  As of the Valuation Date, Nightingale was owned by the shareholder of
Nightingale (Niue) Ltd.  The
shareholders of Nightingale (Niue) Ltd; include several wealthy individuals
residing in the United Arab Emirates.  HTTP & the Acquisition of Nightingale  Because this valuation of the Assets is related to HTTPs acquisition
of the Company, it was also necessary to review HTTP as a company together with
the details of its Nightingale acquisition.  8 
   A.  HTTP - Overview  HTTP was a developer of
software.  HTTP provided software
development and programming services to many UK organizations through its HTTP
software unit.  The HTTP Insights unit
was formed to develop software utilizing the SPE.  As of the Valuation Date, HTTP had a market capitalization for
its equity of about $561 million.  As of
March 21, 2001, HTTP had 46 full-time employees.  As of the Valuation Date,
HTTPs corporate goal was to commercialize the SPE.  HTTP Software was to be increasingly focused on the development
of software utilizing the SPE as well as providing on-going support to existing
programming services clients.  HTTP had
generated $514,000 in revenue in 2000.  HTTP faced competition from
other statistical software developers such as R2 Technology, Dues Technology,
CADx Medical Systems, SPSS and Xanalys and other programming services firms
such as Axon Plc., Diagonal Plc., and Microgen Plc.  B.  Acquisition of Nightingale  On the Valuation Date, HTTP
acquired the Assets of Nightingale. 
According to HTTPs management, the acquisition of Nightingale will
provide HTTP with a core technology, the SPE, to further develop applications
of this technology in medical imaging, statistical processing, speech
recognition and defense software. 
Nightingale will receive HTTPs access to funds, strategy expertise and
software development staff.  On December 29, 2000, HTTP (the
Company) offered to acquire all of the issued and outstanding shares of
Nightingale in a stock-for-stock transaction. 
HTTP offered two tranches of 7.5 million shares (15 million shares post
2:1 HTTP stock split) of HTTP stock once specific milestones had been
achieved.  The first 7.5 million shares
would be provided if the Company received a validation by DERA as the technical
and commercial viability of the SPE. 
This condition was satisfied as of February 21, 2001.  As of the Valuation Date, managements
probability of achieving this milestone was very high, close to 100%.  The second 7.5 million shares are payable
upon use of the SPE in a medical imaging product or a DERA validation of the
medical imaging application.  As of this
report date, this milestone has not been achieved.  HTTP acquired all of
Nightingales common stock in exchange for two contingent tranches of HTTP
stock.  Based upon managements
estimated probabilities and HTTPs weighted average stock price as of February
21, 2001 of $12.40, the total  9 
   purchase
price for the Company was estimated to be $93.0 million. HTTP also assumed
about $10.1 million dollars of liabilities, so the total purchase price was
estimated to be $103.1 million. 
Managements projections for the financial performance of Nightingale
are shown in Exhibits A-D.  C.  Classification of Nightingales Identifiable
Assets  The
total purchase price of Nightingale was $103.1 million.  Therefore, on the Valuation Date, the
difference between the book value and fair market value of the Companys net
assets was about $94.0 million.  As such
it was necessary to identify the components that made up that difference.  The value of each of the Assets was
estimated, as described below.  The sum
of these values was then subtracted from Nightingales total purchase price to
arrive at a value for its goodwill.  After
an in-depth review of Nightingale and discussions with HTTPs management, the
following intangible Assets were identified as of the Valuation Date:  Technology (SPE Algorithm) Workforce in Place Covenant Not to Compete Goodwill  The
values for each of the three intangible Assets, exclusive of goodwill, was
estimated utilizing one of the valuation techniques described later in the
report.  This was necessary in order to
ensure a proper and accurate allocation analysis.  Goodwill was estimated as the excess of the purchase price over
the estimated value of the identified tangible and intangible Assets.  Economic,
Industry & Company Outlook  In
the appraisal of any Company, the general economic factors prevailing at the
valuation date, as well as those foreseen then, must be considered.  Assimilation of these facts and forecasts
provides insight into the economic climate in which investors are dealing.  Although individual factors may or may not
have a direct impact upon a particular industry, the overall economy and its
outlook have a strong influence on how investors perceive specific investment
opportunities.  A.  General Economic Outlook  In
its UK Economic Outlook, dated
February 2001, PwC stated that the overall economic growth of the United
Kingdom (UK) economy was slowing in the third  10 
   quarter of 2000.  The primary
driver of growth continued to be household spending as corporate investment
spending rates declined in response to perceptions of inadequate returns on
investment and uncertainty regarding demand. 
Nevertheless, the 2.8% annual rate of gross domestic product (GDP)
growth recorded in the third quarter of 2000 was higher than with the overall
1999 growth rate of 2.2% but in line combined the first and second quarter
annual growth rate of 2.8%.  Independent
forecasts complied by HM Treasury for December 2000 forecast GDP growth to be
3.0% for 2000 and then decline to 2.6% for 2001.  The inflation rate measured by the retail price index was expected to
increase to 3.0% for 2000, based upon independent forecast complied by HM
Treasury, from a 2.3% rate in 1999. 
Based upon these same forecasts, inflation was expected to decline in a
2.4% rate in 2001.  Despite the sharp rise in interest rates that occurred from August 1999
to February 2000, a 1% increase in the short-term lending rate, short-term
rates are expected to fall by 25 to 50 basis point over the next 12
months.  The three-month Treasury bill
rate was forecast to fall to 5.0% from 6.0% currently.  In summary, the consensus complied by HM Treasury was forecasting real,
inflation-adjusted GDP to rise at a rate of 3.0% for all of 2000.  Longer-term projections continued to call
for between 2.5% and 3.0% in real year-over-year GDP growth.  B. 
Industry Outlook  Nightingale plans to compete in four markets: medical imaging,
statistical modeling/analysis, speech recognition and defense software.  The medical imaging market is a nascent
market with a very large growth potential. 
The statistical processing technologies available for automated cancer
screening tools have just recently been developed.  Most of the competitors in this market have developed joint
ventures with medical equipment manufactures to provide the manufacturers with
the capability of computer aided detection of cancer. The use of CAD for breast
cancer detection has proven valuable to date and applications to other types of
cancer detection are now being developed.  The statistical modeling market includes the consumer analysis tools,
data mining tools and statistical modeling packages.  The consumer analysis and data mining market size was estimated
to be a $1.0 billion market by IDC, as of December 1999.  Based upon Z/yen limited, the estimated size
of the statistical software market was estimated to be $400 to $500 million market
in 2000.  These markets  11 
   are expected to grow rapidly due to the increased amount of consumer
data and the business need to analyze the data to assist in marketing
decisions.  The speech recognition market includes software used to develop the
voice interface between people and computers and networks.  Based upon Z/yen limited, the estimated size
of the speech recognition software market was estimated to be $2 to $3 billion
market in 2000.  This market is also
expected to grow rapidly as the popularity and ease of use associated with
voice interface technology increases.  C. 
Company Outlook  The outlook for Nightingale was speculative at the Valuation Date.  As of the Valuation Date, the SPE had potential
application in large and growing markets. 
However, since the technology demonstrator had not been completed, the
DERA validation had been not received and well financed competitors were
present in each of Nightingales target markets, the outlook for Nightingale
was speculative.  Allocation of Nightingales Purchase Price  The purpose of this section is to incorporate the information
considered and/or presented previously into a quantitative representation, thus
assigning a value to the Assets under review. 
The valuation methodology reflects the analysts expectation of how free
and open capital markets would assign value to the Assets.  A. 
General Valuation Approaches  There are a number of generally accepted approaches in use for valuing
intangible assets, none of which is necessarily superior to the others.  It is more a question as to which of the
approaches or combination of approaches is best suited to the business,
industry and economic circumstances of the particular assets being appraised at
the specific valuation date.  The
following discussion summarizes three market approaches as they generally
apply.  Cost Approach:  This approach is based on historic costs
and/or investment costs incurred in the construction and creation of an intangible
or intellectual asset.  However, it is
important to distinguish that cost does not necessarily represent value.  Costs may not be directly related to the
value of intellectual property because the method ignores the income producing
capability of the asset created. 
However, if management incurs costs in developing or purchasing assets,
it normally expects these assets to recover their cost from future cash
flows.  Thus, the cost approach can
sometimes be used to benchmark an assets market value.  12 
   Market Approach:  The first objective of the market approach
is to identify specific, arms length transactions having two key
criteria:  (1) assets which were the
same as or similar to that of the asset under analysis; and (2) public
information which was sufficient to form an opinion of value.  Thereafter, the implied market multiples
from these transactions can be used to form a conclusion of market value.  Income Approach:  Theoretically, the value of an intellectual
asset equates to the present value of its expected future benefits.  Application of this approach requires an
identifiable income stream attributable to the asset, an expected economic
remaining life of that income stream, and a required rate of return (i.e.,
discount rate) commensurate with the risk associated with its realization.  B. 
Selection of Valuation Approaches  The Market Approach was dismissed for all of the intangible Assets
because, while a search was conducted, no public transactions of similar Assets
were identified.  For the Companys assumed tangible assets, the Cost Approach provided
the only basis for their estimated values at the Valuation Date.  First, the value of the Companys net
current assets was assumed to be the minimum value that had been stipulated in
the purchase agreement.  Secondly, per
management, the total market value of the Companys net fixed assets was
estimated to equal its aggregate book value.  To facilitate valuation approach selection, most of the intangible
Assets were then separated into two groups. 
The first group contained the Assets that were revenue generating.  This Asset included:  Technology (SPE Algorithm).  Since this Asset generates the bulk of the
Companys sales, the Income Approach was used to estimate its value.  The second group contained the Asset that
was used in support of the revenue generating Asset.  This Assets included: Workforce. 
Since this Assets supported the generation of Nightingales sales, the
Company had not generated profits, was only one year old, and no comparable
Assets could be identified, the Cost Approach was used to estimate its value.  Finally, for the remaining intangible Asset, i.e., Nightingales CNC,
the Income Approach was used.  C. 
Selection of Discount Rates for the Intangibles  The cash flows attributable to the intangible
Assets represent monies available to the investors in those Assets.  In determining a discount rate for the
intangible Assets,  13 
   many risk factors were considered both at the Company and specific
asset levels, some of which included:  Nightingales
planned medical imaging, statistical processing and speech recognition products
would not gain market acceptance or gain acceptance at a much slower rate than
forecast; That, while
demand for the Companys products is uncertain, the potential interest in
Nightingales software products could be great, given the rapidly growing
medical imaging software industry; That
Nightingales software products will not attain their projected levels of cash
flow or that substitutes for the products will be introduced by competitors in
the future; and That the
expected useful lives for the intangible Assets are comparatively short.  Because the aggregate market value of Nightingale was known from the
purchase price and its total future cash flows streams have been projected, it
was possible to arrive at its weighted average cost of capital (WACC)
discount rate implied through mathematical calculations.  Exhibit E provides the details.  Based on Nightingales projected cash flow
streams and its market value of invested capital (MVIC, or the market value
of Nightingales debt and equity) of $93.0 million, the WACC required to equate
the value of the projected cash flows equal to the purchase price, commonly
referred to as the investments internal rate of return, was 27%.  Assuming an all equity financed firm, which
is the case of most firms of a similar nature, the Companys equity rate of
return would, therefore, be 27%.  The implied WACC, derived above, incorporates the various levels of
risk for all of the Assets identified above. 
The riskiness of the Assets range from the lower levels risk associated
with tangible assets, to the levels applicable to intangibles, then to the
higher levels risk associated with Goodwill. 
Goodwill represents the value associated with yet to-be-developed
products and services.  The risk level
of the Assets vary due to factors such as salability, the length of Assets life,
the Assets ability to be differentiated, the current stage of completeness,
etc.  Since Goodwill is more risky than
the other Assets, Goodwill is generally viewed as requiring a higher rate of
return than a companys implied WACC, assuming its has some developed or
purchased assets in place.  14 
   In order to estimate the
discount rate applicable to each Asset, the required rates of return for
various asset classes were considered. 
These rates start from rates of return on assets like cash, and extend
to bond borrowing rates (including junk bonds), to public equity rates, and to
speculative investments (venture capital rates).  This spectrum provides insights in to relative returns required
for a given risk level.  Table III Asset Class Discount Rate Benchmarks  Asset
  
  Rate of ReturnCash
  
  5.7%AAA Bond
  
  7.2%BBB Bond
  
  8.0%S&P 500
  
  13.3%Small Stocks
  
  18.4%Venture Capital
  
  25-70%
  In addition, Company specific
benchmark rates were developed.  These
rates are shown below and developed in detail in Exhibit F.  (Note: the CAPM method of estimating a
discount rate for Nightingale was considered but since no betas for similar
firms were available, the method was not used.)  Table IV Company Specific Discount Rate Benchmarks  Method
  
  Rate of ReturnBuild-up
  
  25%Size Premium
  
  21%Venture Capital
  
  30-60%Transaction IRR
  
  27%
  Generally, a companys
identifiable intangible assets are less risky in their individual earnings
stream potentials, than the non-identifiable, future products or revenue
streams (i.e. Goodwill).  As a result,
identifiable assets require either the same or a lower rate of return than the
entire company.  Therefore, for the
Companys identifiable intangible assets, it was concluded that the discount
rate should be lower (i.e., 25% - 27%). 
This conclusion was made because goodwill comprises the  15 
   majority of the purchase price
and goodwill should have a higher discount rate than the firm as a whole.  Moreover, 25% - 28% falls with the range of
the WACC and the venture capital discount rates that would be expected on
investments in firms whose development stage was similar to that of Nightingale
at the Valuation Date.  Summary of the
discount rates chosen for each of the Asset is shown in the table below:  Table V Nightingale Intangible Asset Discount Rates  Asset
  
  Discount RateTechnology (SPE Algorithm)
  
  22%Covenant Not to Compete
  
  27%
  The specific discount rates
were chosen based upon a qualitative assessment of the riskiness of each Asset
and the discount rate benchmarks derived above.  Since the Technology was deemed to have a lower risk than the
Goodwill, a lower discount rate of 22% was chosen.  Finally, the discount rate for the Covenant was estimated as the
same as the Company as a whole, 27%.  In valuing assets using the
Income Approach two inputs, a capital charge and an amortization benefit need
to be taken into consideration.  These
two items are discussed below, prior to the analysis of the Assets themselves.  16 
   D.
Selection of Capital Charges  As a part of estimating the
cash flow for the Technology, in which the Income Approach was used, a capital
charge was determined.  This charge
represents a rent (as a % of each Assets sales or flat charge per year) for
other Assets utilized in the development of the specific intangibles projected
revenue stream.  These charges were
determined, based on each assets value at the Valuation Date and its expected
after-tax rate of return or rent factor for the assets that do not wear-out
(working capital).  For assets that do
wear-out (fixed assets, workforce and CNC), the charge is based upon a payment
that includes both a return on and return of the assets original value.  The following are the after-tax rent factors
and capital charges (as a % of sales) determined for the Company.  Table VI Nightingale Capital Charges  Asset
  
  After-tax Rent
  Factor
  
  After-tax
  Capital Charge 
  as a% of
  SalesNet Current Assets
  
  3.7
  %
  2.07
  %Net Fixed Assets
  
  6.1
  %
  0.36
  %Workforce
  
  $
  49,900
  /yrCNC
  
  $
  149,000
  /yr
  Note: the specific charges
utilized in each case is dependent upon which Assets were used in combination with
the asset being valued to generate the resulting revenue stream.  17 
   E.
Amortization Tax Benefit  Since
the values of Nightingales intangible assets are amortizable for federal
income tax purposes, a purchaser of these assets would be willing to pay for
this benefit.  Therefore, an
amortization tax benefit was added to the value of each intangible asset.  This benefit was estimated as the tax
savings associated with purchasing this asset. 
The tax savings (amortization factor) attributable to the amortization
of the fair market value of an asset over its remaining life was calculated
from the following formula:  AF=
  LL-(PVxt)
  where:
  AF
  = Amortization FactorL
  = Tax Life (15 years)V
  = Present Value Annuity Factort
  = Tax Rate = 40%  The
value of the benefit for each asset was estimated as the value the most likely
buyer of the Asset could obtain from purchase of the Asset.  In this case, the most likely buyer of the
Assets was a smaller firm who could utilize the tax benefit (i.e. was
profitable).  This firm would have a
required rate of return lower than Nightingales (27%).  Therefore, a required rate of return of 20%
was used to determine the Amortization Factor for the Assets.  The resulting Amortization Factor for of all
the Assets was 15.9%.  See Exhibit G for
calculation details.  F.
Value of Nightingales Net Current Assets & Net Fixed Assets  To
determine the value of the Companys net current assets and net fixed assets,
the Cost Approach was used, which requires that the assets and liabilities in
question be restated to their market values.  As of
the Valuation Date, the book value of the Companys current assets less its
current liabilities was $527,000, rounded, excluding $10.7 million in debt
assumed by HTTP.  As of the Valuation
Date, the book value of its net fixed assets was $66,000, rounded.  It was concluded, after discussions with
Nightingales management, that the minimum contractual value for the net
current assets and the book values for Nightingales net fixed assets are
reasonable proxies for their market values. 
Therefore, the fair market values of the Companys net current assets
and net fixed assets were concluded to be $527,000, rounded, and $66,000,
rounded respectively, as of the Valuation Date.  Exhibit H is a restated balance  18 
   sheet for Nightingale at the
Valuation Date and provides the fair market value estimates of its tangible and
intangible assets.  G.
Value of Technology (SPE Algorithm)  As described above, one of
Nightingales most valuable intangible Assets is the SPE Algorithm
Technology.  This technology was an
outgrowth of the work of Dr. Rahman had performed on the development of more
efficient processing algorithms.  The
technology, described in more detail above, allows for more efficient data
mining, data analysis and processing of large data sets.  As of the Valuation Date, a set
of algorithms, the SPE, had been developed and a patent application had been
filed for their protection.  Subsequent
to the acquisition, a technology demonstrator, a software package, was
developed to demonstrate the usefulness of the SPE.  As of the Valuation Date, no SPE IPR&D existed because the
SPE had alternative uses in planned applications including medical imaging,
statistical processing and speech recognition. 
In addition, the consideration of HTTP stock was not be paid until
technical feasibility, DERA validation, was achieved.  Since the SPE Technology is the
most important revenue generating Assets for Nightingale, we estimated their
value using the Income Approach.  The
specific valuation steps were as follows:  The SPE
technology will generate revenue for Nightingale in two ways.  First, Nightingale will collect royalty fees
for the use of the SPE in other firms software packages.  Second, Nightingale will receive licensing,
implementation and maintenance revenue from the software it develops using the
SPE algorithms.  Management provided a
forecast of royalty, licensing and maintenance revenues to 2006;  Next, the
revenue applicable factor, which represents the portion of future revenue
applicable to the Technology was estimated. 
This factor was based upon the relative expenditure to develop the
algorithm ($10 million) to the expected future expenditure to implement
applications of the algorithm plus the initial $10 million dollars to develop
the algorithm.  A 10% per year
technology obsolescence factor was applied to the initial $10 million
expenditure to account for the modification of the algorithms.  Operating
expenses include: royalties, sales and marketing, and general and
administrative expenses.  Management
projected these expenses at 33% of  19 
   revenues.  Management estimates 100% of these costs are
attributable to maintaining the Technology. 
The resulting operating margin was 67%.  Taxes then
subtracted from operating income.  Taxes
are based upon a 40% tax rate.  Next, a capital
charge of 2.5% of sales plus $199,100/year are subtracted from the after-tax
income to estimate the after-tax cash flow. 
This capital charge includes charges for other Assets used to generate
the SPE Technology income.  These Assets
include: working capital, fixed assets, Workforce and CNC.  The resulting
after-tax cash flow was discounted by the discount rate estimated for the SPE
Technology of 22%.  Since the
algorithm will be used in products after 2005 a terminal value was estimated as
the 2005 net cash flow times decreased by the LT growth rate based upon
Nightingales 3% LT growth rate less the terminal technology obsolescence
factor of 12.5%, divided by WACC of 22% less -10% LT growth rate.  The resulting
cash flows were added together to arrive at a net present value of $19,837,000,
rounded.  This cash flow includes the
cash flows attributable the SPE Technology.  Finally, the amortization tax
benefit factor, attributable to a buyer being able to write the asset up and
amortize it over 15 years was applied to the net present value resulting in a
value of $22,470,000, rounded for the SPE Technology.  See Exhibit I for detailed calculations.  The expected average life of
the SPE Technology, based upon the time when a majority of the cash flows will
be realized is five years.  H.
Value of Nightingales Workforce  Nightingales Workforce is
composed of 9 individuals.  As mentioned
above, we used the Cost Approach (based on calculating a replacement cost) to
determine the value of the Companys Workforce.  For each class of employee, we estimated the cost to identify,
recruit, hire, and train employees of similar quality.  20 
   Recruitment costs for all
employees and management were concluded to be 25% of annual compensation.  Given that it is not Nightingales
managements policy to pay for relocation costs and that its headquarters are
near a major metropolitan city, relocation costs for a replacement Workforce
were estimated to be zero.  The other
cost looked at was training costs. 
These costs include direct costs to train and indirect costs of
training, such as lost productivity during the training process.  These costs were concluded to equal 1/3 of
total, first year compensation for all employees.  Based on the above assumptions
and the current compensation paid to the Companys employees, the estimated
pre-tax cost for replacing Nightingales work force was $263,000.  Taxes were then subtracted from pre-tax cost
to recreate the Workforce.  Taxes are
based upon a 40% tax rate.  Resulting in
an after-tax cost to re-create the Workforce of $158,000.  Finally, the amortization tax
benefit factor, attributable to a buyer being able to write the asset up and
amortize it over 15 years was applied to the net present value resulting in a
value of $180,000 for the Workforce. 
See Exhibit J for calculation details.  I.
Value of Nightingales Covenant Not to Compete  As described above, one of
Nightingales intangible Assets is its covenant not to compete.  The CNC is an agreement between HTTP and the
employees of Nightingale which precludes Nightingale employees leaving HTTP and
from competing with Nightingale.  The
duration of the CNC is two years from the date of departure from HTTP.  The CNC covers the key employee, Dr. Rahman,
of Nightingale.  In addition to the CNC, the key
employee of Nightingale entered into three-year employment contracts with
HTTP.  The employment contract pays the
employee a $100,000 salary and 10% profit participation in the sale or use of
the SPE.  Since there are no penalties
for leaving HTTP if Dr. Rahman received a better offer from another party, the
period of competition without the non-compete was assumed to be zero years.  We estimated the CNCs value
using the Income Approach.  The estimate
value of the CNC is the sum of the present value of the cash flows that would
be lost if the CNC was not in place. 
Specifically, the value of the CNC is difference between the projected
cash flows if employees start competing as soon as possible, before the CNC
expires, (zero years because of no penalty for leaving other than lost salary
and profit participation) and the projected cash flows if the employees  21 
   start competing after the CNC
expires (two years).  The specific valuation steps
were as follows:  Expected revenue
loss was based on the difference between the revenues where the employee starts
competing with HTTP one year from the Valuation Date (the start-up time for a
new company) and where the employees start competing with HTTP in three years
from the Valuation Date (one year after the non-compete expires).  The lost revenue stream has been reviewed by
Management.  The estimated
lost cash flow was estimated as the lost revenue times the cash flow margins
ranging from 8% of 11%.  The cash flow
margin is derived from the management provided forecast.  The resulting
after-tax cash flow was discounted by the discount rate implied from the
transaction price of 27%.  The resulting
cash flows were added together to arrive at a net present value of $861,000,
rounded.  The net present
value was multiplied times the probability of competition of 50% to arrive at
value of the CNC of $431,000, rounded.  Finally, the amortization tax
benefit factor, attributable to a buyer being able to write the asset up and
amortize it over 15 years was applied to the net present value resulting in a
value of $500,000, rounded, for the CNC. 
See Exhibit K for detailed calculations.  The expected average life of
the CNC, based upon the duration of the CNC, is two years.  J.
Value of Nightingales Goodwill  The Goodwill value associated
with the Nightingale acquisition contains time-to-market benefits, synergies,
and strategic positioning value.  Buy
purchasing Nightingale, HTTP has saved time and resources in the development of
a statistical algorithms on which powerful computer processing software can be
built.  In addition, HTTP has
strengthened its position in the statistical software development
marketplace.  Synergies may also be
realized through use of HTTPs software development workforce in developing
application for the SPE.  Goodwill is  22 
   calculated as the residual value after subtracting the identifiable asset
values from the basis.  The resulting
residual value is $79,981,358.  Managements expected life for Goodwill is five years.  Nightingale is expected to generate revenues
from its existing technology and yet to-be-developed software over the next
five years.  Some of the revenue is
applicable to the existing technology but most of it is applicable to to-be
developed products and services.  The reasonableness of this life was tested by examining the lives
attributed to the goodwill of statistical software developers acquired over the
past two years.  Based upon the
financial filings of firms such as Autonomy, Nuance Communications and SPSS the
lives attribute to goodwill for statistical software development firms ranged
from eighteen months to ten years.  Therefore, the five-year life attributed to Goodwill is not
unreasonable.  See Exhibit L for a summary of all of the projected cash flows and
capital charges, for Nightingale.  The
exhibit also provides a reconciliation of the discount rates.  23 
   Valuation
Conclusion  Given the appraisal procedures and facts outlined above, it is our
opinion that the concluded values, percentages of Company value, weighted
average useful lives and discount rates for Nightingales Assets at the
Valuation Date are as follows:  Table VII Nightingale
Purchase Price Allocation Summary of Value  Asset
  
  Value
  ($000s)
  
  % Nightingale
  Value
  
  Useful Life
  (Yrs)
  
  Discount
  RateCurrent Assets (incl. Debt)
  
  (10,198
  )
  -11.0
  %
  
  
  3.6
  %Net Fixed Assets
  
  66
  
  0.1
  %
  5.0
  
  6.0
  %Technology (SPE Algorithm)
  
  22,470
  
  24.2
  %
  5.0
  
  22.0
  %Workforce
  
  180
  
  0.2
  %
  3.0Covenant Not to Compete
  
  500
  
  0.5
  %
  2.0
  
  27.0
  %Goodwill
  
  79,981
  
  86.0
  %
  5.0
  
  27.1
  %Total
  
  93,000
  
  100.0
  %
  
  
  27.0
  %  Respectfully submitted,  Empire Valuation Consultants, Inc./s/ Keith D. SmithKeith D. Smith, CFASenior Valuation Associate/s/ Scott A. NammacherScott A. Nammacher, ASA, CFAManaging Director  24 
   Addendum
1-1  STATEMENT
OF LIMITING CONDITIONS  Confidentiality/Advertising:  This report and supporting documentation are
confidential.  Neither all nor any part
of the contents of this appraisal shall be copied or disclosed to any party or
conveyed to the public orally or in writing through advertising, public
relations, news, sales, or in any other manner without the prior written
consent and approval of both Empire Valuation Consultants, Inc. and its client.  Litigation Support:  Depositions, expert testimony, attendance in
court, and all preparations/support for same, arising from this appraisal shall
not be required unless arrangements for such services have been previously
made.  Management:  The opinion of value expressed herein
assumes the continuation of prudent management policies over whatever period of
time is deemed reasonable and necessary to maintain the character and integrity
of the appraised business entity as a going concern.  Information and Data:  Information supplied by others that was
considered in this valuation is from sources believed to be reliable, and no
further responsibility is assumed for its accuracy.  Information used was limited to that available on or before the
Valuation Date, or which could be reasonably ascertained as of that date.  We reserve the right to make such
adjustments to the valuation herein reported as may be required by
consideration of additional or more reliable data that may become available
subsequent to the issuance of this report.  Purpose:  All opinions of market value are presented
as Empire Valuation Consultants, Inc.s considered opinion based on the facts
and data obtained during the course of the appraisal investigation.  We assume no responsibility for changes in
market conditions which might require a change in appraised value.  The value conclusion derived in this
appraisal was for the specific purpose and date set forth in this appraisal and
may not be used for any other purpose.  Fee:  The fee established for the formulation and
reporting of these conclusions is not contingent upon the value or other
opinions presented.  Interest:  Neither the appraiser nor any officer or
employee of Empire Valuation Consultants, Inc. has any interest in the property
appraised.  Unexpected Conditions:  We assume that there are no hidden or
unexpected conditions of the assets valued that would adversely affect value.  
   Addendum
1-2  Non Appraisal Expertise:  No opinion is intended for matters which
require legal or specialized expertise, investigation or knowledge, beyond that
customarily employed by appraisers.  Hazardous Substances:  Hazardous substances, if present within the
facilities of a business, can introduce an actual or potential liability that
will adversely affect the marketability and value of the business or its
underlying assets.  In the development
of our opinion of value, no consideration has been given to such liability or
its impact on value unless otherwise indicated in the report.  
   Addendum 2  CERTIFICATION
OF APPRAISERS  We the appraisers certify that, to the best of our knowledge and
belief:  1.Our
analyses, opinions, and conclusions were developed, and this report has been
prepared, in conformity with the Uniform Standards of Professional Appraisal
Practice.  2.All
statements of fact contained in this report are true and correct.  3.The
reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions, and are our personal, unbiased
professional analysis, opinions, and conclusions.  4.The
professional fee paid to Empire for the preparation of this report is not
contingent upon the opinion of value stated herein.  5.Neither
Empire nor any of its employees has, to the best of our knowledge, a present or
intended financial interest in either the entity being valued or in any
affiliates that may exist.  6.No
one provided significant professional assistance to the persons signing this
report, unless specifically stated herein.  The American Society of Appraisers has a mandatory recertification
program for all of its Accredited Senior Appraisers.  The senior member, designated by the ASA, signing below is in
compliance with that program.   /s/ Keith D. SmithKeith D. Smith, CFASenior Valuation Associate/s/ Scott A. NammacherScott A. Nammacher, ASA, CFAManaging DirectorDecember 21, 2001  
   Addendum
3-1  EMPIRE
VALUATION CONSULTANTS, INC.  3255 Brighton Henrietta TownLine Road
  
  350 Fifth Avenue, Suite 5513Rochester, New York 14623
  
  New York, New York 10118Tel:
  (585) 475-9260
  
  Tel:
  (212) 714-0122FAX:
  (585) 475-9380
  
  FAX:
  (212) 714-0124www.empireval.com  Valuation Services  Empire Valuation Consultants, Inc.  provides valuations to business owners,
attorneys, accountants, commercial bankers, investment bankers, trust
departments, insurance agents, and financial planners, among others.  Empiresconsultants
have prepared or managed the preparation of over 7,500 appraisals for the
following reasons:  
  Buy/Sell Agreements
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  Purchase Price Allocation  Other Financial Services  Litigation Support & Expert Testimony  Empirecan assist
you with research and litigation support and its professionals are available to
provide expert testimony in matters involving questions of valuation.  Financial Advisory & Due Diligence Services  Empire also serves
as independent third party financial advisors in mergers & acquisitions,
recapitalizations and ESOPs, solvency opinions, etc.  Empire also offers a unique service, The Insider View, which provides buyers with full analyses
of the businesses they are acquiring.  ESOP Feasibility Studies & Preliminary Valuations  Empire is available
to work with our clients team of financial advisors or participate in
independent feasibility studies and preliminary valuation reviews in connection
with ESOP formation planning.  
   Addendum 3-2  KEITH
D. SMITH, CFA  Academic
Degrees  M.B.A.
  University of California, Los Angeles, Finance, 1997B.S.
  Union College, Electrical Engineering, 1986  Employment  Senior Valuation Associate, Empire Valuation Consultants, Inc.,
Rochester, New York, 2000 - Present  Manager, Valuation Services, PricewaterhouseCoopers LLP, Los Angeles,
California, 1997 - 2000  Senior Technical Analyst, Management, Consulting & Research, Los
Angeles, California, 1992 - 1997  Captain, United States Air Force, Los Angeles Air Force Base, 1986 -
1992  Experience  Mr. Smith is a Chartered
Financial Analyst (CFA) charterholder. 
He has four years of experience in financial consulting and business
valuations.  He has valued the equity,
debt, derivatives, liabilities and NOLs of publicly and privately held
businesses for acquisitions, divestitures, estate and gift tax reporting,
liquidation, financial reporting, and general corporate planning purposes.  In addition, he has valued intangible assets
including technology, in-process research and development, trademark/tradenames,
customer and subscription lists, on-line audiences, covenants not to compete,
inventory, workforce and co-marketing agreements/alliances.  He has a significant amount of experience in
valuing technology, telecommunications, Internet and finance companies and
early stage businesses.  Mr. Smith has
also assisted in developed business plans by developing a financial model of
the business utilizing management provided and publicly available industry
data.  
   Addendum 3-3  SCOTT A. NAMMACHER, ASA, CFA  Academic
Degrees  M.B.A.
  New York University Graduate School of Business, Finance, 1985B.S.
  University of Minnesota, Business, 1977  Employment  Principal and
Managing Director, Empire Valuation Consultants, Inc., New York, New York,
1992-Present  Manager,
Financial Valuations, Arthur Andersen & Co., New York, 1990-1991  V.P., Marigold
Capital Development, Investment Banking Div. of Marigold Enterprises,
Greenwich, Connecticut, 1989-1990  Manager -
Domestic Finance, PepsiCo, Inc. Purchase, New York, 1985-1989  Experience  Mr. Nammacher
is an Accredited Senior Appraiser (ASA) of the American Society of Appraisers
and is a Chartered Financial Analyst (CFA). 
He has over 14 years of experience in financial consulting and business
valuations.  He has valued the equity,
debt, warrants, NOLs, etc. of publicly and privately held businesses for
acquisitions, divestitures, stock repurchases, estate and gift tax reporting,
buy/sell agreements, recapitalizations, and general corporate planning
purposes.  Mr. Nammacher has also
developed business plans and financing packages, and has been involved in
completed transactions totaling almost $1.1 billion.  In addition, he played key roles in the successful launch of a
new business publication.  Mr. Nammacher
has testified as an expert witness in U.S. Tax Court and U.S. Bankruptcy Court,
and other jurisdictions, acted as a valuation consultant to the Superior Court
of New Jersey, and published a book and several articles on junk bonds.  He also received the prestigious Graham
& Dodd Scroll Award from the Financial
Analysts Journal for outstanding financial writing relating to a
cover story he co-authored.  He has also
published an article on the various approaches to determining the tax basis of
real property in the U.S.  
   Addendum 4  VENTURE CAPITAL FIRMS  STAGES
& RATES OF RETURN  Start-ups are generally
financed by venture capitalists (i.e., professionally managed funds whose
full-time activity is the investment of relatively large pools of capital in a
portfolio of primarily early stage enterprises) and by speculative (i.e.,
high-risk-accepting) private investors. 
The thresholds of minimum expected rate of return on start-up candidates
for investment are high.  Stage of
  Start-up
  
  Approximate Range
  of Required ReturnInitial
  Start-up
  
  50% to 75%First Stage
  
  40% to 60%Second Stage
  
  35% to 50%Third Stage
  
  30% to 50%Fourth Stage
  
  30% to 40%
  Standard
Definitions of Start-up Stages  Initial
Startup companies, usually less than a year old, are
involved in early product development and testing.  First stage
companies are performing market studies, testing prototypes, and perhaps
manufacturing limited amounts of product.  Second stage
is usually considered to be when financing for initial expansion is
provided.  A viable product exists and a
market for it has been established. 
Profits, if any, are not yet meaningful.  Third stage
should be experiencing a rapid ramp up in sales.  Profit margins should be acceptable but internally generated cash
is probably insufficient to meet expansion requirements.  Fourth stage
companies should be profitable and growing rapidly.  Although capital may still be needed to fuel growth, much of the
risk associated with early stage companies has been eliminated.  Cash out may be only a year or two away.  
   Nightingale Technologies Exhibit Summary  Exhibit
  Item
  
  Exhibit
  LetterComparative Income Statements
  
  A-1Common Sized
  Income Statements
  
  A-2Income
  Statements - Trend Anaylsis
  
  A-3Comparative
  Balance Sheets
  
  B-1Common Sized
  Balance Sheets
  
  B-2Balance
  Sheet Items as % of Sales
  
  B-3Comparative
  Cash Flow Statements
  
  CComparative
  Financial Ratios
  
  DDiscounted
  Cash Flow Value
  
  ECost of
  Capital Calculations
  
  FAmortization
  Tax Benefit Calculation
  
  GSummary of
  Values
  
  H-1Asset Value
  Summary & Restated Balance Sheet
  
  H-2Value of
  Technology
  
  IValue of
  Workforce in Place
  
  JValue of
  Covanent Not to Compete
  
  KCash Flow
  Summary & Reconciliation of Values
  
  L  
   Exhibit A-1  Nightingale
Technologies Comparative
Income Statements  £/$ 1.453
  
  History
  Dec-00
  
  Projected
  Fiscal Year
  Dec-01
  
  Projected
  Fiscal Year
  Dec-02
  
  Projected
  Fiscal Year
  Dec-03
  
  Projected
  Fiscal Year
  Dec-04
  
  Projected
  Fiscal Year
  Dec-05Revenue
  
  
  
  759,500
  
  37,267,758
  
  146,191,638
  
  283,783,947
  
  431,249,901Cost of Sales
  
  
  
  (225,225
  )
  (6,534,239
  )
  (27,829,743
  )
  (62,936,301
  )
  (120,309,242
  )Gross Profit
  
  
  
  534,275
  
  30,733,518
  
  118,361,896
  
  220,847,646
  
  310,940,659Sales & Marketing
  
  
  
  (455,700
  )
  (8,195,776
  )
  (32,857,057
  )
  (74,209,771
  )
  (100,731,594
  )General & Administration
  
  (609,876
  )
  (6,790,000
  )
  (5,699,750
  )
  (6,237,213
  )
  (7,142,794
  )
  (8,184,214
  )Royalties to Others
  
  
  
  
  
  (1,563,207
  )
  (7,796,977
  )
  (13,538,212
  )
  (19,345,065
  )Amortization & Depreciation
  
  (481,504
  )
  (125,477
  )
  (413,530
  )
  (1,760,234
  )
  (4,811,657
  )
  (9,701,317
  )Total operating expenses
  
  (1,091,380
  )
  (7,371,177
  )
  (15,872,263
  )
  (48,651,481
  )
  (99,702,434
  )
  (137,962,189
  )Operating income (loss)
  
  (1,091,380
  )
  (6,836,902
  )
  14,861,256
  
  69,710,415
  
  121,145,212
  
  172,978,470Interest expense*
  
  (173,123
  )
  
  
  
  
  
  
  
  
  Interest income
  
  
  
  
  
  
  
  
  
  
  
  Other
  
  
  
  
  
  
  
  
  
  
  
  Other income (expenses)
  
  (173,123
  )
  
  
  
  
  
  
  
  
  Pretax income (loss)
  
  (1,264,504
  )
  (6,836,902
  )
  14,861,256
  
  69,710,415
  
  121,145,212
  
  172,978,470Income tax expense (benefit)
  
  
  
  
  
  (3,209,741
  )
  (27,884,166
  )
  (48,458,085
  )
  (69,191,388
  )Net income (loss)
  
  (1,264,504
  )
  (6,836,902
  )
  11,651,514
  
  41,826,249
  
  72,687,127
  
  103,787,082  
 *No projected interest expense, because projections are to determine
cash flows available to debt and equity holders  
   Exhibit A-2  Nightingale Technologies Common Sized Income Statements  History
  Dec-00
  
  Projected
  Fiscal Year
  Dec-01
  
  Projected
  Fiscal Year
  Dec-02
  
  Projected
  Fiscal Year
  Dec-03
  
  Projected
  Fiscal Year
  Dec-04
  
  Projected
  Fiscal Year
  Dec-05Revenue
  
  N/A
  
  100.0
  %
  100.0
  %
  100.0
  %
  100.0
  %
  100.0
  %Cost of Sales
  
  N/A
  
  -29.7
  %
  -17.5
  %
  -19.0
  %
  -22.2
  %
  -27.9
  %Gross Profit
  
  N/A
  
  70.3
  %
  82.5
  %
  81.0
  %
  77.8
  %
  72.1
  %Sales & Marketing
  
  N/A
  
  -60.0
  %
  -22.0
  %
  -22.5
  %
  -26.2
  %
  -23.4
  %General & Administration
  
  N/A
  
  -894.0
  %
  -15.3
  %
  -4.3
  %
  -2.5
  %
  -1.9
  %Royalties to Others
  
  N/A
  
  0.0
  %
  -4.2
  %
  -5.3
  %
  -4.8
  %
  -4.5
  %Amortization & Depreciation
  
  N/A
  
  -16.5
  %
  -1.1
  %
  -1.2
  %
  -1.7
  %
  -2.2
  %Total operating expenses
  
  N/A
  
  -970.5
  %
  -42.6
  %
  -33.3
  %
  -35.1
  %
  -32.0
  %Operating income (loss)
  
  N/A
  
  -900.2
  %
  39.9
  %
  47.7
  %
  42.7
  %
  40.1
  %Interest expense*
  
  N/A
  
  0.0
  %
  0.0
  %
  0.0
  %
  0.0
  %
  0.0
  %Interest income
  
  N/A
  
  0.0
  %
  0.0
  %
  0.0
  %
  0.0
  %
  0.0
  %Other
  
  N/A
  
  0.0
  %
  0.0
  %
  0.0
  %
  0.0
  %
  0.0
  %Other income (expenses)
  
  N/A
  
  0.0
  %
  0.0
  %
  0.0
  %
  0.0
  %
  0.0
  %Pretax income (loss)
  
  N/A
  
  -900.2
  %
  39.9
  %
  47.7
  %
  42.7
  %
  40.1
  %Income tax expense (benefit)
  
  N/A
  
  40.0
  %
  40.0
  %
  40.0
  %
  40.0
  %
  40.0
  %Net income (loss)
  
  N/A
  
  -900.2
  %
  31.3
  %
  28.6
  %
  25.6
  %
  24.1
  %  
 *No projected interest expense, because projections are to determine
cash flows available to debt and equity holders  
   Exhibit A-3  Nightingale
Technologies Income
Statements - Trend Anay  Projected
  Fiscal Year
  Dec-01
  
  Projected
  Fiscal Year
  Dec-02
  
  Projected
  Fiscal Year
  Dec-03
  
  Projected
  Fiscal Year
  Dec-04
  
  Projected
  Fiscal Year
  Dec-05Revenue
  
  N/A
  
  4806.9
  %
  292.3
  %
  94.1
  %
  52.0
  %Cost of Sales
  
  N/A
  
  2801.2
  %
  325.9
  %
  126.1
  %
  91.2
  %Gross Profit
  
  N/A
  
  5652.4
  %
  285.1
  %
  86.6
  %
  40.8
  %Sales & Marketing
  
  N/A
  
  -1698.5
  %
  -300.9
  %
  -125.9
  %
  -35.7
  %General & Administration
  
  -1013.3
  %
  16.1
  %
  -9.4
  %
  -14.5
  %
  -14.6
  %Royalties to Others
  
  N/A
  
  N/A
  
  -398.8
  %
  -73.6
  %
  -42.9
  %Amortization & Depreciation
  
  73.9
  %
  -229.6
  %
  -325.7
  %
  -173.4
  %
  -101.6
  %Total operating expenses
  
  -575.4
  %
  -115.3
  %
  -206.5
  %
  -104.9
  %
  -38.4
  %Operating income (loss)
  
  -526.4
  %
  317.4
  %
  369.1
  %
  73.8
  %
  42.8
  %Interest expense*
  
  100.0
  %
  N/A
  
  N/A
  
  N/A
  
  N/AInterest income
  
  N/A
  
  N/A
  
  N/A
  
  N/A
  
  N/AOther
  
  N/A
  
  N/A
  
  N/A
  
  N/A
  
  N/AOther income (expenses)
  
  100.0
  %
  N/A
  
  N/A
  
  N/A
  
  N/APretax income (loss)
  
  -440.7
  %
  317.4
  %
  369.1
  %
  73.8
  %
  42.8
  %Income tax expense (benefit)
  
  N/A
  
  N/A
  
  -768.7
  %
  -73.8
  %
  -42.8
  %Net income (loss)
  
  -440.7
  %
  270.4
  %
  259.0
  %
  73.8
  %
  42.8
  %  
 *No projected interest expense, because projections are to determine
cash flows available to debt and equity holders  
   Exhibit B-1 Nightingale
Technologies Comparative
Balance Sheets  £/$ 1.453
  
  History
  Dec-00
  
  Projected
  Fiscal Year
  Dec-01
  
  Projected
  Fiscal Year
  Dec-02
  
  Projected
  Fiscal Year
  Dec-03
  
  Projected
  Fiscal Year
  Dec-04
  
  Projected
  Fiscal Year
  Dec-05Cash
  
  709,373
  
  38,529,802
  
  41,596,528
  
  57,517,988
  
  92,966,372
  
  147,833,787Prepayments
  
  86,163
  
  89,500
  
  75,238
  
  86,148
  
  98,695
  
  113,125Accounts Receivable
  
  36,126
  
  253,167
  
  5,754,518
  
  16,977,613
  
  28,626,090
  
  42,294,641Total current assets
  
  831,662
  
  38,872,469
  
  47,426,283
  
  74,581,749
  
  121,691,158
  
  190,241,552Furniture and Office Equipment
  
  32,428
  
  
  
  
  
  
  
  
  
  Motor Vehicles
  
  40,677
  
  
  
  
  
  
  
  
  
  Total
  
  73,105
  
  605,432
  
  877,788
  
  1,150,145
  
  1,313,357
  
  1,540,839Accumulated Depreciation
  
  (6,947
  )
  (123,009
  )
  (307,904
  )
  (554,686
  )
  (722,175
  )
  (991,085
  )Total net fixed assets
  
  66,158
  
  482,423
  
  569,884
  
  595,458
  
  591,182
  
  549,754Other Assets
  
  9,165,165
  
  230,238,512
  
  232,432,282
  
  240,421,286
  
  254,334,304
  
  272,988,756TOTAL ASSETS
  
  10,062,985
  
  269,593,405
  
  280,428,449
  
  315,598,494
  
  376,616,644
  
  463,780,061Accounts Payable
  
  110,986
  
  596,667
  
  501,583
  
  574,321
  
  657,969
  
  754,164Short-term Debt
  
  5,837,295
  
  5,837,295
  
  5,837,295
  
  5,837,295
  
  5,837,295
  
  5,837,295Accrued Expenses
  
  12,924
  
  89,500
  
  75,238
  
  86,148
  
  98,695
  
  113,125Accruals & Deferred Income
  
  180,388
  
  
  
  
  
  
  
  
  
  Total Current Liabilities
  
  6,141,594
  
  6,523,462
  
  6,414,116
  
  6,497,764
  
  6,593,960
  
  6,704,584Long-term Debt
  
  4,887,584
  
  4,887,584
  
  4,887,584
  
  4,887,584
  
  4,887,584
  
  4,887,584Total long-term liabilities
  
  4,887,584
  
  4,887,584
  
  4,887,584
  
  4,887,584
  
  4,887,584
  
  4,887,584Share Capital
  
  2,906
  
  278,840,904
  
  278,840,904
  
  278,840,904
  
  278,840,904
  
  278,840,904Retained Earnings (Accum. Deficit)
  
  (969,099
  )
  (20,658,545
  )
  (9,714,154
  )
  25,372,242
  
  86,294,197
  
  173,346,990Total Shareholders Equity
  
  (966,193
  )
  258,182,359
  
  269,126,750
  
  304,213,146
  
  365,135,100
  
  452,187,894TOTAL LIABILITIES & SHAREHOLDERS EQUITY
  
  10,062,985
  
  269,593,405
  
  280,428,450
  
  315,598,494
  
  376,616,644
  
  463,780,062  
   Exhibit B-2  Nightingale Technologies Common Sized Balance Sheets  History
  Dec-00
  
  Projected
  Fiscal Year
  Dec-01
  
  Projected
  Fiscal Year
  Dec-02
  
  Projected
  Fiscal Year
  Dec-03
  
  Projected
  Fiscal Year
  Dec-04
  
  Projected
  Fiscal Year
  Dec-05Cash
  
  7.05
  %
  14.29
  %
  14.83
  %
  18.23
  %
  24.68
  %
  31.88
  %Prepayments
  
  0.86
  %
  0.03
  %
  0.03
  %
  0.03
  %
  0.03
  %
  0.02
  %Accounts Receivable
  
  0.36
  %
  0.09
  %
  2.05
  %
  5.38
  %
  7.60
  %
  9.12
  %Total current assets
  
  8.26
  %
  14.42
  %
  16.91
  %
  23.63
  %
  32.31
  %
  41.02
  %Furniture and Office Equipment
  
  0.32
  %
  0.00
  %
  0.00
  %
  0.00
  %
  0.00
  %
  0.00
  %Motor Vehicles
  
  0.40
  %
  0.00
  %
  0.00
  %
  0.00
  %
  0.00
  %
  0.00
  %Total
  
  0.73
  %
  0.22
  %
  0.31
  %
  0.36
  %
  0.35
  %
  0.33
  %Accumulated Depreciation
  
  -0.07
  %
  -0.05
  %
  -0.11
  %
  -0.18
  %
  -0.19
  %
  -0.21
  %Total net fixed assets
  
  0.66
  %
  0.18
  %
  0.20
  %
  0.19
  %
  0.16
  %
  0.12
  %Other Assets
  
  91.08
  %
  85.40
  %
  82.88
  %
  76.18
  %
  67.53
  %
  58.86
  %TOTAL ASSETS
  
  100.00
  %
  100.00
  %
  100.00
  %
  100.00
  %
  100.00
  %
  100.00
  %Accounts Payable
  
  1.10
  %
  0.22
  %
  0.18
  %
  0.18
  %
  0.17
  %
  0.16
  %Short-term Debt
  
  58.01
  %
  2.17
  %
  2.08
  %
  1.85
  %
  1.55
  %
  1.26
  %Accrued Expenses
  
  0.13
  %
  0.03
  %
  0.03
  %
  0.03
  %
  0.03
  %
  0.02
  %Accruals & Deferred Income
  
  1.79
  %
  0.00
  %
  0.00
  %
  0.00
  %
  0.00
  %
  0.00
  %Total Current Liabilities
  
  61.03
  %
  2.42
  %
  2.29
  %
  2.06
  %
  1.75
  %
  1.45
  %Long-term Debt
  
  48.57
  %
  1.81
  %
  1.74
  %
  1.55
  %
  1.30
  %
  1.05
  %Total long-term liabilities
  
  48.57
  %
  1.81
  %
  1.74
  %
  1.55
  %
  1.30
  %
  1.05
  %Share Capital
  
  0.03
  %
  103.43
  %
  99.43
  %
  88.35
  %
  74.04
  %
  60.12
  %Retained Earnings (Accum. Deficit)
  
  -9.63
  %
  -7.66
  %
  -3.46
  %
  8.04
  %
  22.91
  %
  37.38
  %Total Shareholders Equity
  
  -9.60
  %
  95.77
  %
  95.97
  %
  96.39
  %
  96.95
  %
  97.50
  %TOTAL LIABILITIES &
  SHAREHOLDERS EQUITY
  
  100.00
  %
  100.00
  %
  100.00
  %
  100.00
  %
  100.00
  %
  100.00
  %  
   Exhibit B-3  Nightingale
Technologies Balance Sheet
Items as % of Sales  History
  Dec-00
  
  Projected
  Fiscal Year
  Dec-01
  
  Projected
  Fiscal Year
  Dec-02
  
  Projected
  Fiscal Year
  Dec-03
  
  Projected
  Fiscal Year
  Dec-04
  
  Projected
  Fiscal Year
  Dec-05Cash
  
  N/A
  
  2.00
  %
  2.00
  %
  2.00
  %
  2.00
  %
  2.00
  %Prepayments
  
  N/A
  
  11.78
  
  0.20
  %
  0.06
  %
  0.03
  %
  0.03
  %Accounts Receivable
  
  N/A
  
  33.33
  %
  15.44
  %
  11.61
  %
  10.09
  %
  9.81
  %Total current assets
  
  N/A
  
  5118.17
  %
  127.26
  %
  51.02
  %
  42.88
  %
  44.11
  %Furniture and Office Equipment
  
  N/A
  
  0.00
  %
  0.00
  %
  0.00
  %
  0.00
  %
  0.00
  %Motor Vehicles
  
  N/A
  
  0.00
  %
  0.00
  %
  0.00
  %
  0.00
  %
  0.00
  %Total
  
  N/A
  
  79.71
  %
  2.36
  %
  0.79
  %
  0.46
  %
  0.36
  %Accumulated Depreciation
  
  N/A
  
  -16.20
  %
  -0.83
  %
  -0.38
  %
  -0.25
  %
  -0.23
  %Total net fixed assets
  
  N/A
  
  63.52
  %
  63.52
  %
  63.52
  %
  63.52
  %
  63.52
  %Other Assets
  
  N/A
  
  30314.48
  %
  623.68
  %
  164.46
  %
  89.62
  %
  63.30
  %TOTAL ASSETS
  
  N/A
  
  35496.17
  %
  752.47
  %
  215.88
  %
  132.71
  %
  107.54
  %Accounts Payable
  
  N/A
  
  78.56
  %
  1.35
  %
  0.39
  %
  0.23
  %
  0.17
  %Short-term Debt
  
  N/A
  
  768.57
  %
  15.66
  %
  3.99
  %
  2.06
  %
  1.35
  %Accrued Expenses
  
  N/A
  
  11.78
  %
  0.20
  %
  0.06
  %
  0.03
  %
  0.03
  %Accruals & Deferred Income
  
  N/A
  
  0.00
  %
  0.00
  %
  0.00
  %
  0.00
  %
  0.00
  %Total Current Liabilities
  
  N/A
  
  858.92
  %
  17.21
  %
  4.44
  %
  2.32
  %
  1.55
  %Long-term Debt
  
  N/A
  
  643.53
  %
  13.11
  %
  3.34
  %
  1.72
  %
  1.13
  %Total long-term
  liabilities
  
  N/A
  
  643.53
  %
  13.11
  %
  3.34
  %
  1.72
  %
  1.13
  %Share Capital
  
  N/A
  
  36713.75
  %
  748.21
  %
  190.74
  %
  98.26
  %
  64.66
  %Retained Earnings (Accum. Deficit)
  
  N/A
  
  -2720.02
  %
  -26.07
  %
  17.36
  %
  30.41
  %
  40.20
  %Total Shareholders Equity
  
  N/A
  
  33993.73
  %
  722.14
  %
  208.09
  %
  128.67
  %
  104.86
  %TOTAL LIABILITIES & SHAREHOLDERS
  EQUITY
  
  N/A
  
  35496.17
  %
  752.47
  %
  215.88
  %
  132.71
  %
  107.54
  %  
   Exhibit C  Nightingale Technologies
Comparative Cash Flow Statements  £/$ 1.453
  
  History
  Dec-00
  
  Projected
  Fiscal Year
  Dec-01
  
  Projected
  Fiscal Year
  Dec-02
  
  Projected
  Fiscal Year
  Dec-03
  
  Projected
  Fiscal Year
  Dec-04
  
  Projected
  Fiscal Year
  Dec-05Net Income (loss)
  
  (1,264,504
  )
  (6,836,902
  )
  11,651,514
  
  41,826,249
  
  72,687,127
  
  103,787,082Adjustments to reconcile net income (loss)
  to net cash provided from operating activitiesDepreciation
  
  481,504
  
  125,477
  
  413,530
  
  1,760,234
  
  4,811,657
  
  9,701,317(Incr.)/decr. in Prepayments
  
  
  
  (3,337
  )
  14,263
  
  (10,911
  )
  (12,547
  )
  (14,429
  )(Incr.)/decr. in Accounts Receivable
  
  (122,274
  )
  (217,041
  )
  (5,501,351
  )
  (11,223,095
  )
  (11,648,477
  )
  (13,668,551
  )(Decr.)/incr. in Accounts Payable
  
  124,784
  
  485,681
  
  (95,083
  )
  72,737
  
  83,648
  
  96,195(Decr.)/incr. in Short-term Debt
  
  
  
  
  
  
  
  
  
  
  
  (Decr.)/incr. in Accrued Expenses
  
  
  
  76,576
  
  (14,263
  )
  10,911
  
  12,547
  
  14,429(Decr.)/incr. in Accruals & Deferred
  Income
  
  
  
  (180,388
  )
  
  
  
  
  
  
  Net Cash Provided By (Used) In Operating
  Activities
  
  (780,491
  )
  (6,549,935
  )
  6,468,609
  
  32,436,126
  
  65,933,956
  
  99,916,043Capital expenditures, net proceeds on
  disposals
  
  (32,428
  )
  (272,356
  )
  (272,356
  )
  (272,356
  )
  (274,442
  )
  (283,097
  )Capitalized R & D Expenses
  
  
  
  (49,368
  )
  (128,993
  )
  (394,548
  )
  (776,732
  )
  (1,122,131
  )Net Cash Provided By (Used) In Investing
  Activities
  
  (32,428
  )
  (321,724
  )
  (401,349
  )
  (666,904
  )
  (1,051,174
  )
  (1,405,228
  )Issuance of Share Capital
  
  
  
  
  
  
  
  
  
  
  
  Long-term Debt
  
  
  
  
  
  
  
  
  
  
  
  Additional Paid-in Capital/(Shareholder
  Distributions)
  
  
  
  6,871,659
  
  (3,000,535
  )
  (15,847,761
  )
  (29,434,397
  )
  (43,643,401
  )Net Cash Provided By (Used) In Financing
  Activities
  
  
  
  6,871,659
  
  (3,000,535
  )
  (15,847,761
  )
  (29,434,397
  )
  (43,643,401
  )NET INCREASE (DECREASE) IN CASH
  
  (812,919
  )
  
  
  3,066,725
  
  15,921,460
  
  35,448,385
  
  54,867,414Beginning Cash
  
  39,342,721
  
  38,529,802
  
  38,529,802
  
  41,596,528
  
  57,517,988
  
  92,966,372Ending Cash
  
  38,529,802
  
  38,529,802
  
  41,596,528
  
  57,517,988
  
  92,966,372
  
  147,833,787  
   Exhibit D  Nightingale Technologies
Comparative Financial Ratios  History
  Dec-00
  
  Projected
  Fiscal Year
  Dec-01
  
  Projected
  Fiscal Year
  Dec-02
  
  Projected
  Fiscal Year
  Dec-03
  
  Projected
  Fiscal Year
  Dec-04
  
  Projected
  Fiscal Year
  Dec-05Liquidity & Efficiency RatiosCurrent Ratio
  
  0.14
  
  5.96
  
  7.39
  
  11.48
  
  18.45
  
  28.37Quick Ratio
  
  0.12
  
  5.95
  
  7.38
  
  11.46
  
  18.44
  
  28.36Days Receivable
  
  N/A
  
  121.67
  
  56.36
  
  42.39
  
  36.82
  
  35.80Days Payable
  
  N/A
  
  966.96
  
  28.02
  
  7.53
  
  3.82
  
  2.29Working Capital
  
  (5,309,932
  )
  32,349,007
  
  41,012,167
  
  68,083,985
  
  115,097,198
  
  183,536,968Sales/Working Capital
  
  N/A
  
  0.02
  
  0.91
  
  2.15
  
  2.47
  
  2.35Working Capital as % Sales
  
  N/A
  
  4259.25
  %
  110.05
  %
  46.57
  %
  40.56
  %
  42.56
  %Coverage RatiosEBIT/Interest
  
  N/A
  
  N/A
  
  N/A
  
  N/A
  
  N/A
  
  N/AEBITA/Current Portion LTD
  
  N/A
  
  N/A
  
  N/A
  
  N/A
  
  N/A
  
  N/ALeverage RatiosNet Fixed Assets/Net Worth
  
  (0.07
  )
  0.00
  
  0.00
  
  0.00
  
  0.00
  
  0.00Total Liabilities (Debt)/Net Worth
  
  (11.42
  )
  0.04
  
  0.04
  
  0.04
  
  0.03
  
  0.03Profitability Ratios% Profit Before Taxes/Total Assets
  
  N/A
  
  -2.5
  %
  5.3
  %
  22.1
  %
  32.2
  %
  37.3
  %% Profit Before Taxes/Tangible Net W
  
  N/A
  
  -2.6
  %
  5.5
  %
  22.9
  %
  33.2
  %
  38.3
  %Other RatiosSales/Net Fixed Assets
  
  N/A
  
  1.57
  
  65.40
  
  245.51
  
  480.03
  
  784.44Sales/Total Assets
  
  N/A
  
  0.00
  
  0.13
  
  0.46
  
  0.75
  
  0.93% Depreciation & Amortization/Sales
  
  N/A
  
  16.5
  %
  1.1
  %
  1.2
  %
  1.7
  %
  2.2
  %  
   Exhibit E  Nightingale Technologies
Discounted Cash Flow Value
As of December 29, 2000  WACC Rate:
  
  27.0
  %LT Growth Rate:
  
  3.0
  %  Fiscal Year
  Dec-01
  
  Fiscal Year
  Dec-02
  
  Fiscal Year
  Dec-03
  
  Fiscal Year
  Dec-04
  
  Fiscal Year
  Dec-05
  
  Horizon (1)Project cash
  flow
  (see Exhibit L for details)
  
  (6,871,659
  )
  3,000,535
  
  15,847,761
  
  29,434,397
  
  43,643,401
  
  187,607,350Times: discount factor
  
  0.894
  
  0.704
  
  0.555
  
  0.437
  
  0.344
  
  0.303Discounted cash flow
  
  (6,142,037
  )
  2,112,414
  
  8,787,750
  
  12,855,660
  
  15,013,685
  
  56,871,831  Sum of
  Discounted Cash Flows:
  
  89,499,303Times: Tax Amortization Benefit
  
  1,159Market Value
  of Invested Capital
  
  103,724,879Less: Net Debt Outstanding
  
  (10,724,879
  )Add: Cash Outstanding
  
  93,000,000Times: Premium for Control
  
  
  
  @ 0.0
  %93,000,000Equity Value of Nightingale Technologies:
  
  93,000,000  
 (1)Gorden Growth Model : V= E*(r-g)/(r-g)  
   Exhibit F  HTTP TECHNOLOGIES
NIGHTINGALE WACC CALCULATION
AS OF DECEMBER 29, 2000
SUMMARY  The weight Average Cost of Capital is calculated as:  WACC = Rd
  (1 - t) D% + ( Re * E% )Where:
  Rd
  =
  Cost of interest bearing
  debt capitalt
  =
  Marginal tax rateD%
  =
  Percentage of debt included
  in capital structureRe
  =
  Cost of equity capitalE%
  =
  Percentage of equity
  included in capital structure   The
cost of equity capital was estimated using the methods described on pages two,
three, and four of this exhibit. The WACC is estimated as a weighted average of
the two methods. The weights are based upon the applicability of each method to
the entity being valued:  Method
  
  Indicated
  WACCSize Premium Approach (see page 2)
  
  20.74
  %Build-up Approach (see page 4)
  
  24.98
  %  1 
   HTTP TECHNOLOGIES NIGHTINGALE WACC CALCULATION AS OF DECEMBER 29, 2000 SIZE PREMIUM APPROACH  The size premium approach is based upon the premium over the risk free
rate portfolios of certain sizes have historically returned.
PricewaterhouseCoopers, in conjunction with the University of Chicagos Center
for Research in Securities Prices, studied the effect of market size on equity
risk premiums within 25 portfolios grouped by size. Recognizing that market
capitalization may be an imperfect measure of the size of a company, eight
alternative measures of size are used in conducting historical rate of return
research.  The unadjusted
(for industry risk) equity risk premium would be as follows:  Equity Risk Premium (unadjusted)
  
  =
  
  15.15
  %  This adjusted equity risk premium is estimated by applying the ratio of
the relative betas of the industry and the size portfolios used to estimate the
equity risk premium  Re
  
  =
  
  Rf
  
  +
  
  ERPWhere:
  
  
  
  Rf
  
  =
  
  5.59
  %Re
  
  =
  
  5.59
  %
  +
  
  15.15
  %Re
  
  =
  
  20.74
  %  Calculation of WARR  WACC
  = (
  D%
  x
  Rd(1-t) + (
  E%
  x
  Re
  )  Where:
  
  D%=
  
  0.0
  %
  See
  Page 2E%=
  
  100.0
  %
  See
  Page 2Rd=
  
  15.00
  %
  See
  Page 2t=
  
  40.00
  %
  See
  Page 2  WACC
  =
  (
  
  0.00%
  x
  9.00%
  ) + (
  100.00%
  x
  20.74%
  )  WACC
  =
  
  20.74%  2 
   HTTP TECHNOLOGIES NIGHTINGALE WACC CALCULATION AS OF DECEMBER 29, 2000 SIZE PREMIUM APPROACH DETAIL  Measures
  of Size
  
  Values
  
  Indicated
  Premium(in $ millions)MV of Equity
  
  
  
  N/ABV of Equity
  
  
  
  N/A5-Year Net Income
  
  
  
  N/AMVIC
  
  
  
  N/ATotal Assets
  
  10
  
  14.6
  %5-Year EBITDA Average
  
  
  
  N/ASales
  
  1
  
  15.7
  %# of Employees
  
  
  
  N/AAverage
  
  
  
  15.2
  %  3 
   HTTP TECHNOLOGIES NIGHTINGALE WACC CALCULATION AS OF DECEMBER 29, 2000 BUILD-UP SUMMARY  Risk-free Rate (20 years)
  
  5.59
  %Equity Risk Premium
  
  7.00
  %Small Stock Premium
  
  5.40
  %
  Mico-cap
  premiumIndustry Premium
  
  4.99
  %
  Ibbotsons
  Industry Premium (2001)Co Specific Risk
  
  2.00
  %Build-up Equity Rate of Return
  
  24.98
  %Debt Rate of Return (After-tax)
  
  9.00
  %Debt/Total Captal
  
  0.0
  %WACC
  
  25.0
  %  4 
   Exhibit G  Nightingale Technologies Amortization Tax Benefit Calculation As of March 15, 2001  Assumptions
  
  WACC
  
  20.0
  %Tax rate
  
  40.0
  %Tax life
  
  15.0  Cash Flow Factor Calculations  Period
  
  Beginning
  Disc. Factor
  
  End
  Disc. Factor
  
  Mid Year
  Disc. Factor0.0000
  
  1.0000
  
  1.0000
  
  1.00001.0000
  
  1.0000
  
  0.8333
  
  0.91672.0000
  
  0.8333
  
  0.6944
  
  0.76393.0000
  
  0.6944
  
  0.5787
  
  0.63664.0000
  
  0.5787
  
  0.4823
  
  0.53055.0000
  
  0.4823
  
  0.4019
  
  0.44216.0000
  
  0.4019
  
  0.3349
  
  0.36847.0000
  
  0.3349
  
  0.2791
  
  0.30708.0000
  
  0.2791
  
  0.2326
  
  0.25589.0000
  
  0.2326
  
  0.1938
  
  0.213210.0000
  
  0.1938
  
  0.1615
  
  0.177711.0000
  
  0.1615
  
  0.1346
  
  0.148012.0000
  
  0.1346
  
  0.1122
  
  0.123413.0000
  
  0.1122
  
  0.0935
  
  0.102814.0000
  
  0.0935
  
  0.0779
  
  0.085715.0000
  
  0.0779
  
  0.0649
  
  0.0714PVAF:
  
  5.1430  Cash Flow Factor:
  
  1.1589  
   Exhibit H-1  Nightingale Technologies Summary of Values As of December 29, 2000  Item
  
  Value
  
  % Company
  Equity Value
  
  Useful
  Life
  
  Discount
  Rate
  
  Rate Rent
  Factor
  
  Valuation
  ApproachCurrent assets, net liabilities
  
  $
  527,363
  
  0.6
  %
  
  
  
  
  3.60
  %
  MarketNet fixed assets
  
  $
  66,158
  
  0.1
  %
  5.0
  
  
  
  6.00
  %
  MarketDebt assumed*
  
  $
  (10,724,879
  )
  -11.5
  %
  
  
  
  
  Net tangible assets
  
  $
  (10,131,358
  )
  -10.9
  %
  
  
  
  
  
  
  Technology
  
  $
  22,470,000
  
  24.2
  %
  5.0
  
  22.0
  %
  
  
  IncomeWorkforce in place
  
  $
  180,000
  
  0.2
  %
  3.0
  
  
  
  12.00
  %
  CostCovenant Not to Compete
  
  $
  500,000
  
  0.5
  %
  2.0
  
  27.0
  %
  
  
  IncomeGoodwill
  
  $
  79,981,358
  
  86.0
  %
  5.0
  
  27.1
  %
  
  
  RemainderCompany equity value
  
  $
  93,000,000
  
  100.0
  %
  
  
  27.0
  %
  
  
  Income  
 *Debt includes both
short-term and long-term debt  
   Exhibit H-2  Nightingale Technologies Asset Value Summary & Restated Balance Sheet As of December 29, 2000  Book Value
  as of 12/29/00
  
  Adjustments to
  Market, as of
  12/29/2000
  
  Market Value
  as of 3/30/01Cash
  
  709,373
  
  
  
  709,373Prepayments
  
  86,163
  
  
  
  86,163Accounts Receivable
  
  36,126
  
  
  
  36,126Total current assets
  
  831,662
  
  
  
  831,662Total net fixed assets
  
  66,158
  
  
  
  66,158Workforce in place
  
  
  
  180,000
  
  180,000Technology
  
  9,165,165
  
  13,304,835
  
  22,470,000Covenant Not to Compete
  
  
  
  500,000
  
  500,000Goodwill
  
  
  
  79,981,358
  
  79,981,358Intangible assets
  
  9,165,165
  
  93,966,193
  
  103,131,358TOTAL ASSETS
  
  10,062,985
  
  93,966,193
  
  104,029,178Accounts Payable
  
  110,986
  
  
  
  110,986Short-term Debt
  
  5,837,295
  
  
  
  5,837,295Accrued Expenses
  
  12,924
  
  
  
  12,924Accruals & Deferred Income
  
  180,388
  
  
  
  180,388Total Current Liabilities
  
  6,141,594
  
  
  
  6,141,594Long-term Debt
  
  4,887,584
  
  
  
  4,887,584Total long-term liabilities
  
  4,887,584
  
  
  
  4,887,584Total Shareholders Equity
  
  (966,193
  )
  93,966,193
  
  93,000,000TOTAL LIABILITIES & SHAREHOLDERS EQUITY
  
  10,062,985
  
  93,966,193
  
  104,029,178  
   Exhibit I  Nightingale Technologies
Value of Technology
As of December 29, 2000  Assumptions
  Year
  
  Pre-2001
  
  2001
  
  2002
  
  2003
  
  2004
  
  2005Investment ($M)
  
  $
  10,000,000
  
  $
  225,225
  
  $
  6,534,239
  
  $
  27,829,743
  
  $
  62,936,301
  
  $
  120,309,242Cum Investment ($M)
  
  $
  10,000,000
  
  $
  10,225,225
  
  $
  16,759,464
  
  $
  44,589,207
  
  $
  107,525,508
  
  $
  227,834,750Remaining Investment ($M)
  
  $
  10,000,000
  
  $
  9,000,000
  
  $
  8,100,000
  
  $
  7,290,000
  
  $
  6,561,000
  
  $
  5,904,900Revenue Applicable Factor
  
  100.0
  %
  88.0
  %
  48.3
  %
  16.3
  %
  6.1
  %
  2.6
  %Operating Costs:
  
  Sales & Marketing
  
  23.0
  %
  
  
  WACC:
  
  22.0
  %Based on 03 costs
  
  General & Admin
  
  5.0
  %
  
  
  Terminal Growth
  
  -10.0
  %Royalties
  
  5.0
  %
  
  
  Investment Obsolesence
  
  10.0
  %Total
  
  33.0
  %  Projected
  Fiscal Year
  Dec-01
  
  Projected
  Fiscal Year
  Dec-02
  
  Projected
  Fiscal Year
  Dec-03
  
  Projected
  Fiscal Year
  Dec-04
  
  Projected
  Fiscal Year
  Dec-05
  
  Horizon (1)Total Revenue
  
  
  
  759,500
  
  37,267,758
  
  146,191,638
  
  283,783,947
  
  431,249,901Times: Revenue Applicable Factor
  
  
  
  88.0
  %
  48.3
  %
  16.3
  %
  6.1
  %
  2.6
  %Net Revenues
  
  
  
  668,494
  
  18,011,843
  
  23,901,233
  
  17,315,951
  
  11,176,906Less: Operating Costs
  
  
  
  (220,603
  )
  (5,943,908
  )
  (7,887,407
  )
  (5,714,264
  )
  (3,688,379
  )@
  33.0
  %EBITA
  
  
  
  447,891
  
  12,067,935
  
  16,013,826
  
  11,601,687
  
  7,488,527Less: Provision for Taxes
  
  
  
  (179,156
  )
  (4,827,174
  )
  (6,405,531
  )
  (4,640,675
  )
  (2,995,411
  )@40.00
  %Net Profit
  
  
  
  268,735
  
  7,240,761
  
  9,608,296
  
  6,961,012
  
  4,493,116Less after tax cost of:Fixed assets, @ 2.1% sales
  
  
  
  (13,824
  )
  (372,466
  )
  (494,253
  )
  (358,076
  )
  (231,127
  )Working capital, @ 0.36% sales
  
  
  
  (2,407
  )
  (64,843
  )
  (86,044
  )
  (62,337
  )
  (40,237
  )Workforce, @ $49,900/year
  
  
  
  (49,934
  )
  (49,934
  )
  (49,934
  )
  (49,934
  )
  (49,934
  )Covenant, @ $149,000/year
  
  
  
  (149,158
  )
  (149,158
  )
  (149,158
  )
  (149,158
  )
  (149,158
  )Net Cash Flow
  
  
  
  53,413
  
  6,604,361
  
  8,828,907
  
  6,341,508
  
  4,022,661
  
  11,313,734Times: Present Value Factor
  
  
  
  0.9098
  
  0.7458
  
  0.6113
  
  0.5011
  
  0.4107
  
  0.370048,597
  
  4,925,316
  
  5,396,975
  
  3,177,431
  
  1,652,104
  
  4,186,073Value of Technology
  
  
  
  
  
  19,386,496Times: Tax Amortization
  Benefit
  
  
  
  
  
  1,15922,467,907Value of
  Technology:
  
  
  
  
  
  $
  22,470,000  
 (1) Gorden Growth Model : V =
E*(r-g)/(r-g)  
  Exhibit J  Nightingale Technologies
Value of Workforce in Place
As of December 29, 2000  Employee
  Category
  
  Annual
  Salary &
  Bonus
  
  
  
  
  
  
  
  
  
  Total
  Replacement
  CostsRecruitment Costs
  
  Training Costs*% Salaries
  
  US $
  
  % Salaries
  
  US $Management
  
  $
  215,000
  
  25.0
  %
  53,750
  
  25.0
  %
  53,750
  
  107,500Information Technology
  
  $
  300,000
  
  20.0
  %
  60,000
  
  25.0
  %
  75,000
  
  135,000Admin
  
  $
  66,758
  
  5.0
  %
  3,338
  
  25.0
  %
  16,690
  
  20,027Totals:
  
  581,758
  
  
  
  117,088
  
  
  
  145,440
  
  262,527  Employee Replacement Costs
  
  262,527Less: Value of Tax Shield
  
  (105,011
  )
  @ 40.0
  %157,516Times: Tax Amortization Benefit
  
  1.1589Workforce Value
  
  182,553Value of Workforce in Place:
  
  $
  180,000  
 * Includes direct costs to
train, as well as indirect costs, due to less than 100% employee productivity
during training period  
   Exhibit K  Nightingale Technologies Value of Covanent Not to Compete As of December 29, 2003  Assumptions:Proabability of Competition
  
  50
  %Discount rate
  
  27
  %  Year 1
  
  Year 2
  
  Year 3
  
  ThereafterImpact of Competition (% of Revs)
  
  2.5
  %
  4.0
  %
  5.0
  %
  5.0
  %Duration of Non-compete
  
  2 years  Projected
  Fiscal Year
  Dec-01
  
  Projected
  Fiscal Year
  Dec-02
  
  Projected
  Fiscal Year
  Dec-03
  
  Projected
  Fiscal Year
  Dec-04
  
  Projected
  Fiscal Year
  Dec-05
  
  Projected
  Fiscal Year
  Jan-06Revenue
  
  $
  759,500
  
  $
  37,267,758
  
  $
  146,191,638
  
  $
  283,783,947
  
  $
  431,249,901
  
  $
  444,187,398Revenues Lost w/o Non-Compete
  
  $
  
  
  $
  931,694
  
  $
  5,847,666
  
  $
  14,189,197
  
  $
  21,562,495
  
  $
  22,209,370Revenues Lost w Non-Compete
  
  $
  
  
  $
  
  
  $
  
  
  $
  7,094,599
  
  $
  17,249,996
  
  $
  22,209,370Net Sales Lost
  
  $
  
  
  $
  931,694
  
  $
  5,847,666
  
  $
  7,094,599
  
  $
  4,312,499
  
  $
  Free Cash Flow Margin
  
  -905
  %
  8
  %
  11
  %
  10
  %
  10
  %
  10
  %Net Free Cash Flow Lost
  
  $
  
  
  $
  74,536
  
  $
  643,243
  
  $
  709,460
  
  $
  431,250
  
  $
  Partial Period
  
  1.0000
  
  1.0000
  
  1.0000
  
  1.0000
  
  1.0000
  
  1.0000Mid-Point of Cash Flow
  
  0.5000
  
  1.5000
  
  2.5000
  
  3.5000
  
  4.5000
  
  5.5000Discount Factor
  
  0.8875
  
  0.6990
  
  0.5506
  
  0.4337
  
  0.3416
  
  0.2690Discounted Cash Flow
  
  $
  0
  
  $
  52,102
  
  $
  354,159
  
  $
  307,667
  
  $
  147,303
  
  $
  0  Sum of Cash Flows
  
  $
  861,232Proabability of Competition
  
  50
  %Value of Non-compete
  
  $
  430,616Times: Tax Authorization Benefit
  
  1,159Value of Non-compete w Tax Benefit
  
  $
  499,061  Value of Covanent Not to Compete:
  
  $
  50,000
  
   Exhibit L  Nightingale
Technologies Cash
Flow Summary & Reconciliation of Values  Fiscal Year
  Dec-01
  
  Fiscal Year
  Dec-02
  
  Fiscal Year
  Dec-03
  
  Fiscal Year
  Dec-04
  
  Fiscal Year
  Dec-05
  
  Horizon
  ValueCFs attributable to company
  
  (6,871,659
  )
  3,000,535
  
  15,847,761
  
  29,434,397
  
  43,643,401
  
  44,952,703Less charges/cash flows for:Current assets, net liabilities
  
  18,985
  
  18,985
  
  18,985
  
  18,985
  
  18,985Net fixed assets
  
  16,457
  
  63,138
  
  104,881
  
  142,397
  
  171,140Workforce in place
  
  49,934
  
  49,934
  
  49,934
  
  49,934
  
  49,934Technology
  
  53,413
  
  6,604,361
  
  8,828,907
  
  6,341,508
  
  4,022,661
  
  3,620,395Covenant Not to Compete
  
  
  
  74,536
  
  643,243
  
  709,460
  
  431,250Residual/goodwill cash flows
  
  (7,010,448
  )
  (3,810,418
  )
  6,201,811
  
  22,172,114
  
  38,949,431
  
  171,640,772GW CFs, Discounted @ 27.08%
  
  (6,431,394
  )
  (2,770,206
  )
  3,431,073
  
  9,652,479
  
  13,342,994
  
  51,787,194  Sum of discounted goodwill cash flows
  
  69,012,139Times: Tax Amortization Benefit
  
  1,15979,981,358Times: Control Premium
  
  
  
  @ 0.0%79,981,358
  Sum of Discounted Goodwill Cash Flows:
  
  $
  79,981,358