ASSET PURCHASE AGREEMENT



            THIS AGREEMENT, dated as of July 31, 2000, by and among Riverdeep

Group plc, an Irish corporation ("Buyer"), and Edmark Corporation , a Washington

corporation ("Seller"); and IBM for limited purposes as indicated herein.



                              W I T N E S S E T H:



            WHEREAS, Seller wishes to sell certain assets used in the Seller's

educational software product business; and



            WHEREAS, Buyer wishes to purchase from Seller, and Seller wishes to

sell to Buyer, the Transferred Assets for the purchase price and subject to the

terms and conditions hereinafter set forth; and



            WHEREAS, Buyer shall issue and sell to IBM American Depository

Shares ("ADSs"), subject to the terms and conditions hereinafter set forth;



            NOW, THEREFORE, in consideration of the premises set forth above and

the respective covenants, agreements, representations and warranties hereinafter

set forth, Buyer and Seller hereby agree as follows:



                                  Definitions.



            Certain Definitions. As used in this Agreement, the following terms

shall have the meanings specified below:



            "Affiliate" shall mean, as to any Person, any other Person or entity

which is controlling, controlled by or under common control with such Person or

entity;



            "Allocation Statements" shall have the meaning set forth in Section

3.1;



            "Assumed Liabilities" shall have the meaning set forth in Section

1.4;



            "Assumption Agreement" shall mean the Assignment and Assumption

Agreement in the form set out in Exhibit A to be entered into by the Parties on

the Closing Date and by which Buyer assumes the Assumed Liabilities;



            "Bill of Sale" shall mean the Bill of Sale in the form set out in

Exhibit B to be entered into by the Parties on the Closing Date;



            "Burdensome Condition" shall mean any action taken by or before any

Governmental Authority or other Person to challenge the legality of the

transactions contemplated by the Operative Agreements or that would otherwise

deprive a Party of the material benefit of any such transaction, including (i)

the pendency of an investigation by a Governmental Authority (formal or

informal) (ii) the institution of any litigation, or threat thereof or (iii) an

order by a Governmental Authority of competent jurisdiction preventing

consummation of the transactions contemplated by the Operative Agreements or

placing material conditions or limitations upon such consummation.



            "Closing" shall have the meaning set forth in Section 2.1;



            "Closing Date" shall have the meaning set forth in Section 2.1;



            "Code" shall have the meaning set forth in Section 3.1;







            "Confidentiality Agreement" shall mean the Agreement between IBM and

Riverdeep Group plc, dated May 17, 2000;



            "Date of Execution" shall mean the date this Agreement and the other

Operative Agreements identified for signature on that date are signed;



            "Disclosure Schedule" shall have the meaning set forth in the

Seller's Schedule of Disclosure and Exceptions to the Asset Purchase Agreement

and the Buyer's Schedule of Disclosure and Exceptions to the Asset Purchase

Agreement, respectively;



            "Employees" shall have the meaning set forth in Section 4.2;



            "Governmental Actions" shall mean any authorizations, consents,

approvals, waivers, exceptions, variances, franchises, permissions, permits, and

licenses of, and filings and declarations with, Governmental Authorities,

including the expiration or termination of waiting periods imposed under the HSR

Act;



            "Governmental Authority" shall mean any federal, state or local

court, governmental or administrative agency or commission or other governmental

agency, authority, instrumentality or regulatory body, domestic or foreign;



            "Governmental Rule" shall mean any statute, law, treaty, rule, code,

ordinance, regulation or order of any Governmental Authority or any judgment,

decree, injunction, writ, order or like action of any federal, state or local

court, arbitrator or other judicial tribunal of competent jurisdiction, domestic

or foreign;



            "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements

Act of 1976, as amended;



            "IBM" shall mean International Business Machines Corporation, a New

York corporation;



            "Intellectual Property Agreement" shall mean the agreement so

entitled between Buyer, Seller and IBM, entered into on the Date of Execution;



            "Liens" shall mean pledges, claims, liens, charges, encumbrances and

security interests of any kind or nature whatsoever, other than Permitted Liens;



            "Limitation Amount" shall have the meaning set forth in Section

10.2;







            "Operative Agreements" shall mean this Agreement, the Assumption

Agreement (substantially in the form attached as Exhibit A hereto), the Bill of

Sale (substantially in the form attached as Exhibit B hereto), the

Confidentiality Agreement, the Transition Services Agreement, the Real Estate

Assignment and Assumption Agreements, the Registration Rights Agreement (in the

form of Exhibit D hereto) and the Intellectual Property Agreement;



            "Parties" shall mean Buyer and Seller, and, with respect to Article

VII and Sections 4.10, 4.11, 4.12., 10.2 and 10.3 only, IBM;



            "Party" shall mean either Buyer, Seller, or with respect to Article

VII and Sections 4.10, 4.11, 4.12, 10.2 and 10.3 only, IBM;



            "Permitted Liens" shall mean: (i) Liens for Taxes, assessments and

governmental charges due and being contested in good faith by Seller; (ii) Liens

for Taxes either not due and payable or due but for which notice of assessment

has not been given, or which may thereafter be paid without penalty; (iii)

undetermined or inchoate Liens, charges and privileges incidental to current

operations or the ordinary course of business; (iv) any statutory Liens,

charges, adverse claims, security interests or encumbrances of any nature

whatsoever claimed or held by any Governmental Authority that have not at the

time been filed or registered against title to the Transferred Assets or that

relate to obligations that are not due or delinquent; (v) security given in the

ordinary course of business to any public utility, Governmental Authority or to

any statutory or public authority in connection with the Transferred Assets; and

(vi) any Liens described on Schedule 6.6;



            "Person" shall mean any individual, firm, corporation, partnership,

limited liability company, trust, joint venture, Governmental Authority or other

entity, and shall include any successor (by merger or otherwise) of such entity;



            "Plan" shall have the meaning set forth in Section 4.2(e);



            "Pre-Closing Tax Period" shall have the meaning set forth in Section

3.2 ;



            "Public Filings" shall mean public filings disclosed pursuant to the

Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as

amended, including without limitation any filings made pursuant to Form 6-K and

shall also mean public filings in final form made pursuant to the Irish stock

exchange requirements or applicable Irish law;

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