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ENCOVER, INC. RAISES $8M IN SERIES C FINANCING TO FUEL
ADDITIONAL GROWTH

Baird Venture Partners Leads Round with Participation from
Existing Investors Sigma Partners and DCM—Doll Capital Management

MOUNTAIN VIEW, Calif., (May 31, 2006) — Encover®, Inc., a leading provider of on-demand software and services to help manufacturers and their channel partners maximize revenues from the sale of service contracts and maintenance agreements, today announced the company has raised $8 million in a Series C round of financing. Chicago-based Baird Venture Partners (BVP) led the financing round with participation from previous investors Sigma Partners and DCM—Doll Capital Management.

Devin Mathews, a principal at BVP, will join the Encover board of directors alongside Peter Solvik, managing director, Sigma Partners; Tom Blaisdell, general partner, DCM; Sridhar Krishnan, Encover's founder and chairman; Sherry Paterra, partner at Paterra and Iguchi; and Chip Overstreet, Encover's president & CEO.

"BVP invests in high-growth, technology-enabled services companies that solve very difficult business problems," said Devin Mathews, principal, BVP. "Service contract sales is a complex business process, particularly in multi-tiered distribution environments, and Encover has proven its ability to drive substantially higher revenues for its manufacturer and channel partner clients. Encover's unique technology is a key differentiator and driver for the business, and we are very excited to be part of the team."

"Encover more than doubled revenues last year, and we brought on some of the top names in the high tech sector," said Chip Overstreet, president and CEO of Encover. "We now have a network of several thousand resellers successfully leveraging our services, and the base is growing rapidly each month. This round of funding will enable us to continue ramping our business, and we're looking forward to working closely with Baird Venture Partners and our other investors as we take Encover through the next phase of growth."

About Encover, Inc.
Encover is a market leader in helping manufacturers and their channel partners manage, market and sell service contracts. The Encover On Demand solution is comprised of dedicated service sales professionals, multi-channel marketing programs, robust multi-channel software, and a suite of best practices that are proven to transform service sales and maximize service contract revenue. The company has top tier clients "including Cisco, Diebold, Kodak and SonicWALL." For more information, please visit www.encover.com.

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Encover Media Contacts:
Michael Londgren
Encover, Inc.
mlondgren@encover.com
650.417.9044