S-1

As filed with the Securities and Exchange Commission on April 22, 2004

Registration Number 333-        

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

The Active Network, Inc.

(Exact name of Registrant as specified in its charter)

Delaware	7372	33-0884962
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

1020 Prospect Street, Suite 250

La Jolla, California 92037

(858) 551-9916

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

David Alberga

Chief Executive Officer

The Active Network, Inc.

1020 Prospect Street, Suite 250

La Jolla, California 92037

(858) 551-9916

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Kourosh Vossoughi

General Counsel, Vice President of Corporate Development

The Active Network, Inc.

1020 Prospect Street, Suite 250

La Jolla, California 92037

(858) 551-9916

Additional copies to:

Frederick T. Muto, Esq. Steven M. Przesmicki, Esq. Thomas Owen, Esq. Cooley Godward LLP 4401 Eastgate Mall San Diego, CA 92121 (858) 550-6000 Nora L. Gibson, Esq. Mark Baudler, Esq. Michelle Kley, Esq. Wilson Sonsini Goodrich & Rosati, Professional Corporation One Market, Spear Street Tower San Francisco, CA 94105 (415) 947-2000

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box.  ¨

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box.  ¨

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price(1)		Amount of Registration Fee
Common Stock, $0.001 par value per share	$	46,000,000.00	$	5,828.20

(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o).

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to such Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED         , 2004

         Shares

Common Stock

We are offering          shares of our common stock. This is our initial public offering and no public market currently exists for our shares. We have applied for approval for quotation of our common stock on the Nasdaq National Market under the symbol “ACTN”. We estimate that the initial public offering price will be between $         and $         per share.

Investing in our common stock involves risks.

See “ Risk Factors” beginning on page 7.

	Per Share	Total
Public offering price	$	$
Underwriting discounts and commissions	$	$
Proceeds to us (before expenses)	$	$

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

The underwriters expect to deliver shares of common stock to purchasers on          , 2004. We have granted the underwriters an option to purchase up to an additional          shares of common stock from us solely to cover over-allotments.

Jefferies & Company, Inc.

The date of this prospectus is         , 2004

You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized any other person to provide you with different information. We and the underwriters are offering to sell shares of common stock and seeking offers to buy shares of common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date on the front of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the common stock. In this prospectus, the terms “The Active Network”, “we”, “us”, and “our” refer to The Active Network, Inc., a Delaware corporation.

TABLE OF CONTENTS

	Page
Summary	1
Risk Factors	7
Special Note Regarding Forward-Looking Statements	26
Third Party Sources	26
Use of Proceeds	27
Dividend Policy	27
Capitalization	28
Dilution	29
Selected Consolidated Financial Data	31
Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Business	46
Management	59
Related Party Transactions	74
Principal Stockholders	76
Description of Capital Stock	79
Shares Eligible for Future Sale	83
Underwriting	85
Validity of Common Stock	88
Experts	88
Change in Independent Auditors	88
Where You Can Find More Information	89
Index to Consolidated Financial Statements	F-1

The Active Network, The Active Network logo, eteamz, MessageCast, myteam and RecWare Safari are all registered trademarks of The Active Network, Inc. The Active Technology Suite, active, active.com, Active Marketing Group and Do It Sports are unregistered trademarks of The Active Network, Inc. Other service marks, trademarks and trade names referred to in this prospectus are property of their respective owners.

SUMMARY

The following prospectus summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information, including our consolidated financial statements and notes thereto, appearing elsewhere in this prospectus. This summary does not contain all of the information that you should consider before investing in our common stock. You should read the entire prospectus carefully, including the Risk Factors beginning on page 7.

The Active Network, Inc.

Overview

We are the leading provider of application services that reduce the cost and complexity of managing, organizing and promoting participatory sports and activities, and a leading provider of marketing services to reach active lifestyle consumers.

Our application services, encompassed in the Active Technology Suite^™, are used by event organizers, park and recreation department administrators and amateur sports league administrators to provide online registration transaction processing and data management, enhance marketing and promotion capabilities, and improve the management of facilities and membership. We believe we have the largest customer base in our industry, a customer base that includes organizers of over 7,000 events, 600 park and recreation departments, and 2,500 leagues and camps. Representative customers include the LaSalle Bank Chicago Marathon, the New York City Park and Recreation Department, and Little League organizations around the United States. We also operate eteamz.com, our team and league web-portal, on which approximately 1.5 million teams have been registered since 2000.

Our marketing services group creates integrated online and field marketing campaigns to reach active lifestyle consumers. Our industry access and relationships enable us to target consumers by activity, age, gender and geography as well as other detailed demographics. Our online marketing services include online advertising and targeted e-mail newsletter promotions. Our field marketing services include event promotions, sponsorships and sample placements. Representative marketing services customers include Nestle, Nike, PepsiCo Beverages and Foods, Procter & Gamble, and Unilever.

We generate application services revenues from a combination of online registration convenience fees and license and maintenance fees for our fully-hosted, partially-hosted or client-server applications. For our marketing services, we generate revenues from fees charged for customized marketing campaigns.

From 2000 to 2003, our total revenues have grown at a compound annual growth rate of 131% from $1.2 million to $15.1 million. We believe that we have been able to compete successfully and grow revenues as a result of our ability to deliver comprehensive solutions that produce meaningful results for our customers. Our focus on the participatory sports and activities market has allowed us to create services specifically tailored for this industry. We incurred net losses of $33.9 million, $7.2 million and $1.3 million in 2001, 2002 and 2003, respectively, and expect to continue to incur operating losses through at least the end of 2004. As of December 31, 2003, our accumulated deficit was $76.0 million.

Market Opportunity

Based on an April 2004 study by the Leisure Intelligence Group, which encompassed the 12 months ended March 2004, 62% of American households registered for a community activity requiring a fee. The study reported that Americans paid fees for over 110 million registrations for individual and team-based sports leagues

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and events, over 115 million registrations for park and recreation activities and memberships, over 20 million registrations for camps and over 115 million registrations for continuing education classes. The Leisure Intelligence Group study estimates total registration fees associated with these sports and activities to be over $33 billion. Currently, most of these organized activities use paper-based processing for registration, data collection and data management. The study also estimates that less than 2% of registration fees collected for participatory sports and activities are currently collected through online transaction processing.

We expect participatory sports and activities organizers to increasingly adopt online services due to the cost-efficiency, convenience, improved accuracy and enhanced management flexibility of such services. Further, participants are expecting and demanding that organizers provide online registration. A 2002 National Sports Network Survey reported that 80% of all athletes surveyed would use online registration, if offered.

The market for promotional marketing services, such as event marketing and online advertising, is growing, and marketers are increasingly migrating from traditional media to non-traditional media advertising. According to a 2004 survey published in Promo Magazine, event marketing spending grew 32% from $115 billion in 2001 to $152 billion in 2003. The survey also reported that, from 2001 to 2003, spending on event marketing grew from 25.7% to 32.6% of total annual spending for marketing activities, representing the largest gain in market share of any segment. According to a 2002 Jupiter Research report, online advertising is expected to increase from $5.6 billion in 2002 to $14.0 billion in 2007.

Growth Strategy

We seek to capitalize on and promote the migration towards online management of participatory sports and activities, and strengthen our position as the leading provider of application services to this industry. Further, we intend to capitalize on our industry access and relationships to provide targeted marketing services directed at active lifestyle consumers. To achieve our goal, we intend to:

Expand our Application Services Customer Base

We believe the low penetration of online solutions in our market provides a large potential customer base for our application services. We intend to capitalize on this opportunity to grow our customer base by increasing our sales staff and marketing efforts. We have demonstrated an ability to grow our customer base. As evidence, from 2000 to 2003, our customers under contract grew at a compound annual growth rate of over 30%.

Increase Online Registration by Event and Activity Participants

We seek to increase the percentage of our customers’ participants using online registration to enroll in events and activities. We believe there is significant opportunity for growth within our existing customer base to increase online registration by their participants. In 2003, only approximately 15% of our customers’ participants registered online for events and activities. To increase participant usage of online registration services, we provide our customers with training, relevant content to attract participants to their websites, and an array of tools aimed at promoting online registration. Online registration use by participants in our customers’ events and activities has increased as organizers continue to use our application services over a sustained period of time. On average, 10% of participants use online registration in the first year that an organizer uses our services. By the fourth year, this online registration use typically grows to 30%. Certain events and activities have achieved online registration usage as high as 80% in year four.

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Increase Breadth of Application Services Sold to Our Existing Customer Base

We intend to continue to sell additional revenue generating application services to our existing customers to help enable them to streamline their management processes. These additional services include membership management, activity registration, facility reservation, website publishing tools and communication services. We believe meaningful opportunities exist to sell these additional services to that portion of our customer base that is not currently utilizing the full range of services that we offer. For example, currently less than 10% of the approximately 20,000 leagues on our eteamz.com web-portal use additional services beyond website publishing.

Continue to Enhance our Comprehensive Application Services Offerings

We intend to strengthen our market position by continuing to develop comprehensive, tailored solutions with increased functionality and features for our customers. Over the past three years, we have developed and introduced application services for activity registration, facility reservation, and membership to serve our park and recreation customers. We have also added modules for fundraising, real-time event tracking and merchandising to our application services offerings. In addition, we have created customized desktop roster management, registration and advanced website publishing for league administrators, and have developed multiple applications to automate, streamline and scale back-office operations.

Expand our Marketing Services Business

We intend to continue to leverage our participatory sports and activities industry access and relationships to grow our marketing services business. From 2000 to 2003, our marketing services revenues grew at a compound annual growth rate of 136% from $0.4 million to $5.6 million. We believe we offer consumer brand companies a valuable set of resources to reach active lifestyle consumers. These resources include a registered user base of over four million active lifestyle consumers, a database of 30,000 participatory sports and activities organizers, a searchable participatory sports calendar containing over 50,000 events and activities, and a team and league web-portal with 165 million page views and 7 million unique visitors in the first quarter of 2004. As we grow our customer base of events, park and recreation departments, and amateur sports leagues and the usage of our web-portal, we continue to enhance our ability to offer extensive and targeted online and field marketing campaigns.

Pursue Strategic Acquisitions

We will pursue acquisitions that further strengthen our market position, broaden our customer base and enhance our capabilities. Since 2000, we have completed six acquisitions. We believe we have a successful track record of integrating operations, enhancing revenues and streamlining the cost structure of the businesses we have acquired.

Recent Developments

In April 2004, we purchased substantially all of the assets of Do It Sports, a provider of online registration services and technology for real-time, race-day data services and results, for $0.4 million in cash and the assumption of certain liabilities. Do It Sports has represented that the liabilities assumed, when reduced by cash and receivables, do not exceed $1.9 million. In addition, in July of 2005, we will pay Do It Sports up to $3.3 million, subject to the achievement of certain milestones, in cash or, at our election, shares of common stock. The results of Do It Sports will be included in our consolidated financial statements beginning on April 14, 2004.

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Corporate Information

We were originally incorporated in California in October 1998 as Racegate.com, Inc. and became a Delaware corporation through a stock exchange agreement in July 1999. In May 2001, we changed our name to The Active Network, Inc. Our principal executive offices are located at 1020 Prospect Street, Suite 250, La Jolla, California 92037, and our telephone number is (858) 551-9916. Our corporate website address is theactivenetwork.com. Information contained on our website is not a prospectus and does not constitute part of this prospectus.

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The Offering

Common stock offered by us          shares.

Common stock to be outstanding immediately after this offering          shares.

Use of proceeds We currently plan to use the net proceeds of this offering to fund working capital and for general corporate purposes, including the expansion of our sales staff, to fund development of additional application services functionality and features, and to fund potential acquisitions of complementary services, technologies and companies.

Over-allotment option We have granted the underwriters an option to purchase up to an additional          shares, solely to cover over-allotments.

Proposed Nasdaq symbol ACTN.

The number of shares of common stock to be outstanding immediately after this offering is based on 161,718,471 common shares outstanding as of December 31, 2003.

Except as otherwise indicated, all information in this prospectus assumes:

• The automatic conversion of all shares of our outstanding preferred stock into 154,120,920 shares of common stock upon completion of this offering;

• The exercise, on a cash basis, of warrants to purchase an aggregate of 707,797 shares of common stock at a weighted average exercise price of $0.03 that would otherwise expire upon the effectiveness of this offering; and

• No exercise of the underwriters’ over-allotment option.

The number of outstanding shares of common stock as of December 31, 2003 excludes:

• 44,875,237 shares of our common stock subject to outstanding options at a weighted average exercise price of $0.01;

• 24,781,248 shares of our common stock available for future grant or issuance under our 2002 Stock Option Stock Issuance Plan, our 2004 Equity Incentive Plan and our 2004 Employee Stock Purchase Plan; and

• 1,211,121 shares of our common stock issuable upon exercise of outstanding warrants with a weighted average exercise price of $2.02, including warrants previously exercisable for shares of preferred stock, which will become exercisable for shares of common stock upon the completion of this offering.

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Summary Consolidated Financial Data

The following summary consolidated financial data should be read in conjunction with our consolidated financial statements and notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations and Selected Consolidated Financial Data included elsewhere in this prospectus. Unless otherwise noted, the following information does not give effect to the conversion of our outstanding preferred stock into common stock.

	Year Ended December 31,
	2001			2002			2003
	(In thousands, except share and per share data)
Consolidated Statements of Operations Data:
Revenues:
Application services	$	3,455		$	6,150		$	9,512
Marketing services		943			2,274			5,624
Total revenues		4,398			8,424			15,136
Cost of revenues:
Cost of application services		772			1,262			2,022
Cost of marketing services		56			180			1,130
Total cost of revenues		828			1,442			3,152
Gross profit		3,570			6,982			11,984
Loss from operations		(34,218	)		(7,272	)		(1,371	)
Net loss	$	(33,928	)	$	(7,151	)	$	(1,317	)
Net loss per share:
Basic and diluted	$	(2.00	)	$	(0.41	)	$	(0.17	)
Pro forma(1)							$	(0.01	)
Weighted average number of shares used in per share amounts:
Basic and diluted		16,979,452			17,575,643			7,874,087
Pro forma(1)								162,426,534

	As of December 31, 2003
	Actual		Pro Forma(2)		Pro Forma As Adjusted(3)
	(In thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	5,779	$	5,799	$
Total assets		21,649		21,669
Long-term obligation and promissory note		227		227
Stockholders’ equity	$	14,246	$	14,266	$

⁽¹⁾ Please see Note 1 to our consolidated financial statements for an explanation of the method used to calculate the historical and pro forma net loss per share and the number of shares used in the computation of the per share amounts.

⁽²⁾ The pro forma information contained in the balance sheet gives effect to (i) the automatic conversion of all shares of our outstanding preferred stock into 154,120,920 shares of common stock upon completion of this offering, and (ii) the exercise on a cash basis of outstanding warrants to purchase an aggregate of 707,797 shares of common stock at a weighted average exercise price of $0.03 that would otherwise expire upon the effectiveness of this offering. The pro forma balance sheet data does not give effect to the consummation of our acquisition of substantially all of the assets of Do It Sports. In April 2004, we purchased these assets for $0.4 million in cash and the assumption of certain liabilities. Do It Sports has represented that the liabilities assumed, when reduced by cash and receivables, do not exceed $1.9 million. The pro forma balance sheet data does not give effect to the offering proceeds—see the pro forma as adjusted column.

⁽³⁾ The pro forma as adjusted information above gives effect to our receipt of the estimated net proceeds from the sale of          shares of common stock in this offering by us at the assumed initial public offering price of $         per share after deducting $         million in underwriting discounts and commissions and $         million in estimated offering expenses.

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RISK FACTORS

Before making an investment in our common stock, you should carefully consider the risks described below, as well as the other information set forth in this prospectus, including the information contained in our consolidated financial statements and the related notes. Additional risks and uncertainties not presently known to us, or risks that we currently consider immaterial, may also adversely affect our business, results of operations, financial condition and prospects. If any of the risks or uncertainties described below were to occur, the trading price of our common stock could decline and you could lose all or part of your investment.

Risks Related To Our Business

We have a limited operating history and an unproven business model that makes it difficult to evaluate our business and prospects.

Our limited operating history makes it difficult to evaluate our business and prospects. We were originally incorporated in 1998 and launched our application services in 1999. As a result, we have only limited historical financial data upon which to predict our future operating results. In addition, the business of providing application services to the participatory sports and activities industry is relatively new and unproven. You must consider our business and prospects in light of the risks and uncertainties we will continue to encounter as an early-stage company with an unproven business model. These risks and uncertainties include those risks disclosed throughout this Risk Factors section. Any failure to address these risks and uncertainties successfully would seriously harm our business and prospects.

We have a history of significant operating losses and expect to continue to have significant operating losses in the future. If we do not achieve or sustain profitability, our business, results of operation, financial condition and prospects will suffer.

If we are unable to achieve and sustain annual profitability within a short period of time, or at all, or if we are unable to sustain annual profitability at satisfactory levels, our business, prospects and financial condition will be adversely affected. We expect to continue to incur operating losses on an annual basis through at least the end of 2004. We incurred net losses of $33.9 million, $7.2 million and $1.3 million in 2001, 2002 and 2003, respectively. As of December 31, 2003, our accumulated deficit was $76.0 million. We plan to increase our operating expenses as we continue to grow our sales staff and fund the development of additional application services functionality and features. Our increased operating expenses could also impair our ability to achieve and maintain annual profitability. If our revenues grow more slowly than we anticipate, or if our operating expenses exceed our expectations, we may never be able to achieve profitability on an annual basis. Even if we do achieve profitability, we may not be able to sustain or increase our level of profitability.

Event organizers, park and recreation department administrators, and league administrators may not widely adopt application services such as ours to manage important aspects of their businesses.

If demand for and market acceptance of application services for the participatory sports and activities industry does not grow, our ability to grow our business will be adversely affected. Application services for managing important aspects of participatory sports and activities are relatively new and have not been widely adopted by event organizers, park and recreation department administrators, or league administrators. A market for application services such as ours for the sports and activities industry may not continue to develop and grow. Participatory sports and activities organizers who have already invested substantial resources in other registration methods may be reluctant to adopt a new approach like ours to supplement or replace their existing systems or methods. In addition, concerns about fraud, privacy, security, reliability and other issues may cause participatory sports and activities organizers not to adopt application services for managing important aspects of their business, including participant registrations. If event organizers, park and recreation department administrators, and league administrators do not widely adopt application services such as ours for managing aspects of their businesses, this will materially and adversely affect our business, operating results, financial condition and prospects.

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Participants may be unwilling to conduct commerce on the Internet, which will harm our ability to interest consumers in using our online registration process.

If event and activity participants are unwilling to use the Internet to register for events and purchase products, our business, operating results, financial condition and prospects will be harmed. In 2003, 30% of our total revenues were generated through convenience fees collected through online registration by event and activity participants, and our business and prospects are dependent upon increased online registration by such participants. Online registration and commerce is a relatively new concept, and online registrations may decline or fail to increase as projected. The future of online registration and commerce is highly uncertain. For example, only approximately 15% of the participants involved in our customers’ events and activities currently use our application services to register. Many online registration and commerce companies have ceased operations in recent years, and most existing online commerce companies have only a relatively short operating history. Our long-term prospects depend upon the general public’s willingness to use the Internet as a means to purchase goods and services and for event and activities participants to increase their usage of our online, transaction-based application services. Moreover, our business model is predicated on the willingness of consumers to pay a convenience fee of between 5% and 10% of their registration fee to use our online services.

Our ability to generate increased revenues depends significantly on the efforts of participatory sports and activities organizers to promote the use of our services by event and activity participants. If participatory sports and activities organizers do not successfully promote the use of our services, our business, prospects and results of operations will suffer.

If participatory sports and activities organizers fail to successfully promote the use of our application services by participants to register online for events and activities, our business, results of operations, financial condition and prospects will be impaired. A significant portion of our ability to generate revenues depends on event and activity participants registering online using our application services. One of the principle ways we generate application services revenues is through convenience fees charged at the time a participant registers online for an event or activity. Consequently, our ability to generate increased application services revenues depends in large part upon the ability and willingness of participatory sports and activities organizers who use our application services to increase awareness of our services to their participants. We cannot control the level of effort these organizers expend or the extent to which any of them will be successful in increasing awareness of our services among their participants. We may not be able to prevent these organizers from devoting greater resources to support other registration methods developed by them or other third parties.

Our ability to grow our business will suffer if we are unsuccessful in developing, maintaining and expanding our relationships with participatory sports and activities organizers and participants.

If we fail to maintain and strengthen our existing relationships with participatory sports and activities organizers and participants or develop new relationships, our business, results of operations, financial condition and prospects would be impaired. Our application services business and our marketing services business are each dependent on our ability to develop, maintain and expand our relationships with various event organizers, park and recreation department administrators, league administrators, participants, advertisers and other third parties. Our arrangements with event organizers, park and recreation department administrators, league administrators, advertisers and other third parties are complex and can require substantial personnel and resource commitments. These relationships are critical to our ability to create significant positive referrals and to establish broadly recognized brands in the participatory sports and activities industry.

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Our ability to establish, maintain and strengthen the active.com, RecWare Safari and eteamz brands as leaders for application services in the participatory sports and activities industry is critical to our growth strategy. Our ability to establish and maintain the Active Marketing Group brand as a leader for marketing services targeting active lifestyle consumers is also critical to our growth strategy.

If we are unable to establish and maintain the active.com, RecWare Safari and eteamz brands as leaders for application services in the participatory sports and activities industry, or the Active Marketing Group brand as a leader for marketing services focused on active lifestyle consumers, our business and prospects could be materially and adversely affected. Promoting and maintaining our brands is critical to our efforts to attract and retain application services and marketing services customers. We also believe the importance of brand recognition will increase due to the growing number of Internet sites and relatively low barriers to entry to our markets.

Our ability to grow our marketing service business is substantially dependent on participatory sports and event organizers adopting our application services and sports and activities participants using our services. If our application services business does not grow as we expect, this would adversely affect our ability to grow our marketing services business.

If participatory sports and activities organizers do not adopt our application services or participants do not use our services, our ability to grow our marketing services business will be materially adversely affected. Demand for our marketing services depends significantly on the value of assets we build though our application services business such as our registered user base, our database of participatory sports and activities organizers and professionals, our searchable calendar and our team and league web-portal. Our ability to maintain and strengthen the value of these assets is critical to our ability to grow our marketing services business. In addition, our ability to increase traffic to our websites is important to our ability to generate increased marketing services revenues. Online advertising, which is one component of our marketing business, is driven primarily by the amount of traffic on our websites. Accordingly, any shortfall in website traffic would result in lower impression-based advertising revenues.

We may experience difficulty in developing marketing services that are attractive to advertisers and promoters.

If we fail to develop compelling marketing services for advertisers and promoters, our ability to sustain and grow our marketing services business would be adversely affected. Any such failure could materially and adversely affect our business, results of operations, financial condition and prospects. The market for marketing services such as ours is relatively new. We cannot be certain this market will continue to grow. Our marketing services customers may determine that it is in their best interest to spend their marketing budgets through other forms of promotional or advertising activities.

If we fail to collect accurate and useful data about participatory sports and activities participants, potential consumer brand companies may not utilize our marketing services, which may result in reduced revenues.

We use a wide range of data to expand, refine and target our marketing services on behalf of our customers. We collect most of this data from participants as they register online for participatory sports and activities using our application services. We generally ask organizers and participants to “opt-in” to receive special offers and other direct marketing opportunities from our marketing services customers and us. If privacy or other concerns cause a large portion of participants to decline to share data or if they falsify their data, our marketing services would be less effective since consumer brand companies generally require detailed and accurate demographic data on their target audiences. In addition, laws relating to privacy and use of the Internet to collect personal information, including strict laws relating to collecting information from children, could limit our ability to collect data and utilize our database, or heighten privacy concerns. These laws and regulations

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could limit our ability to collect and utilize data for our marketing services. If we become unable to collect data from a sufficient number of participatory sports and activities organizers and participants, we may lose significant marketing services revenues.

Both our application services and marketing services businesses are dependent on the participatory sports and activities industry and negative factors affecting this industry could have a material adverse effect on our business.

Any factors negatively affecting the participatory sports and activities industry could adversely affect our business, results of operations, financial condition and prospects. Pursuant to contracts we enter into with event organizers, park and recreation department administrators, and league administrators, our application services enable individuals to register online for participatory sports and activities. Consequently, our application services business is directly affected by factors affecting such events and activities, including general economic conditions, consumer trends and work stoppages. In addition, since our marketing services are also directed at the participatory sports and activities industry, any downturn in that market could adversely affect our marketing services business and prospects.

Demand from our current and potential marketing services clients for online advertising may be difficult to forecast accurately.

It may be difficult to forecast our marketing services revenues accurately. A substantial portion of our marketing services revenues is derived from online advertising. Our agreements with marketing services customers who advertise on our website generally have terms of two years or less and, in many cases, the terms are one year or less or may be immediately terminated by the customer. Moreover, the agreements often have payments contingent on usage or impression levels. Our ability to continue to achieve substantial marketing services revenues depends upon a number of factors, including:

• Growth of our application services customer base;

• Broadening our relationships with consumer brand companies;

• Our participant database remaining attractive to consumer brand companies;

• Our ability to generate significant traffic to our websites;

• Our ability to derive accurate and useful information from our customers and their participants;

• Overall economic conditions as well as budgeting patterns of consumer brand companies; and

• Continued acceptance and adoption of online advertising by consumer brand companies.

Our marketing services revenues in any given period may be significantly dependent on one or more customers.

Our results of operation for our marketing services business may be significantly dependent on one or more of our marketing services customers. In the past, a single marketing services customer has represented more than 10% of our marketing services revenues on both a quarterly and annual basis. Our marketing services group creates custom, comprehensive solutions for our customers, often for a particular event or activity. As a result, a significant portion of our marketing services revenues generated from a marketing services customer may not recur and may only be recognized during the particular period an event or activity is held. Furthermore, our marketing services customers are generally under no obligation to renew their relationships with us or to increase their advertising commitments with us. We have only a limited ability to predict what portion of our marketing

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services revenues in consecutive periods will come from sales to any one or small number of our customers. It is possible that if we do not continue to develop significant additional sources of marketing services revenues, the loss of a single marketing services customer could have a material adverse affect on our marketing services revenues and the results of our operations.

If we do not successfully enhance and improve the functionality and features of our application services, this could adversely affect our ability to attract and retain application services customers.

If we do not successfully enhance and improve the functionality and features of our application services, our business and prospects may be materially adversely affected. To grow our business, we must continue to improve the functionality and features of our application services, including developing additional services that generate revenues for our customers. Past examples of added features include fundraising, real-time event tracking and merchandising for events to complement our registration services. We must continue to develop similar services in the future to maintain the attractiveness of our application services to our customers and expand our ability to generate revenues and grow our business. We cannot assure you that we will be able to continue to develop additional functionality or features at a pace necessary to satisfy the demands of our customers. We also cannot assure you the functionality or features we develop will achieve a level of acceptance sufficient for us to generate additional revenues or grow our business.

Our ability to grow our application services and marketing services revenues depends significantly on successfully expanding the percentage of event and activities participants within our existing customer base.

If we fail to generate additional registration revenues from our current customer base of event and activities organizers, through increased online registration by our customers’ participants, our business, results of operations, financial condition and prospects would be harmed. Historically, our event and activity customers have achieved online registration use of 10% in the first year during which they use our registration services and 30% by the fourth year. In addition, we have found that certain of our customers achieve online registration usage as high as 80% for their events or activities. If our existing customers do not continue to use our applications services over a sustained period of time, with annual improvements in online registration by their participants, our applications services revenues may fail to increase. This failure could adversely impact our profitability and our ability to generate positive net cash flows. Because the success of our marketing services business is predicated on our ability to effectively sell registration and application services, any decrease in online participation rates would have a material adverse effect on our marketing services business, our operating results and our prospects.

If we are unable to sell additional application services to our existing customers, our ability to increase our revenues will be limited and this could adversely affect our business and prospects.

If we fail to generate additional business from our current application services customers, our business, results of operations, financial condition and prospects could be harmed. Our business model is highly dependent on the success of our efforts to increase sales to our existing application services customers. Many of our application services customers initially make a purchase of only one or a limited number of our services. Our customers might choose not to expand their use of or make additional purchases of our services. In addition, as we deploy new applications and features for our existing application services or introduce new functionality and features to our application services, our customers may choose not to purchase these new offerings.

If our application services customers do not renew their annual software maintenance agreements or their subscription agreements for our applications services, our operating results will suffer.

If a significant number of our application services customers discontinue their annual maintenance agreements for our application services or their agreements for subscription services, our business and operating results would suffer. Most of our maintenance and subscription agreements have only a one year term.

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Our application services customers are under no obligation to renew these contracts. Even if an application services customer perceives a maintenance or subscription contract to be of value, budgetary pressures can prevent such customer from renewing these contracts.

Any failure to accurately process online registrations and participants’ fees and data could adversely affect our business and prospects.

Any failure to accurately process online registrations and participants’ fees and data could severely diminish the willingness of event and activities organizers and participants to use our services. Any such failures would materially adversely affect our business and prospects. Our ability to accurately process online registration fees and data requires a high level of internal controls. We have a limited operating history in maintaining these internal controls. As our business continues to grow, we must strengthen our internal controls accordingly. Our success requires customer and user confidence in our ability to handle large and growing registration volume.

Our ability to grow our business will be impaired if we do not expand the size and maintain the quality of our customer support organization.

If we do not provide high quality service and support to our application services customers, our ability to grow our business will be impaired. Complaints or negative publicity about our service and support could severely diminish confidence in and use of our services. Our ability to grow our application services revenues depends significantly on our ability to provide a significant and high quality level of service and support to our customers. In addition, new services personnel will require training and education and take time to reach full productivity. We are in a relatively new market and only a limited number of individuals have the skills needed to provide the service and support that our application services customers require. We may not be able to recruit necessary service and support personnel nor retain our current service personnel because competition for qualified service personnel is intense.

Any failure to compete successfully against current or future competitors would materially adversely affect our business and prospects.

If we fail to compete successfully against current or future competitors in either of our application services or marketing services segments, our business, operating results, financial condition and prospects will be materially and adversely affected. The market for our application services and marketing services targeted at the participatory, sports and activities industry is fragmented, competitive and rapidly evolving. As a result, we expect to encounter new and evolving competition as this market becomes aware of the advantages of online application services and marketing services. In addition, there are limited barriers to entry for new competitors to enter these markets.

For our application services, we face competition from many sources, including:

• Traditional processing methods, to which administrators and organizers of participatory sports and activities are accustom, such as paper-based registration submitted by mail or on a walk-in basis;

• Custom-developed solutions for online processing and other solutions created by an event or activity’s technical staff or outside custom service providers;

• Companies that offer generalized functional software designed to address the needs of businesses across a variety of industries, such as content or contact management software programs, e-commerce solutions enterprise resource planning software, and other products having separate software modules, which compete with our application services offering;

• Companies specialized in other vertical markets that enter our market and offer services similar to ours; and

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• Companies that offer integrated software solutions designed to address the needs of participatory sports and activities.

Competition we face may come from larger, better capitalized companies with greater operational, strategic, financial, personnel and other resources than we have. In addition, it may be difficult to displace a competitor once they have established a relationship with an event or activity. Competitors and potential competitors may enter into business combinations or alliances that strengthen their competitive positions. For example, companies that currently are not our significant competitors could acquire one or more of the various companies in our fragmented industry and, over a short period of time, become a significant competitor in the markets we service. If any of these competitors were to aggressively price their competing services in our market, we may be required to reduce our prices, which could adversely affect our operating results and financial condition.

For our marketing services business, we face competition from traditional advertising agencies, promotional marketing companies, sports marketing companies, media companies, internal promotions and sports marketing departments, and other providers of online advertising services. Many of our competitors in the marketing services business are larger and better capitalized than us and have existing relationships with our target customers that may preclude us from doing business with our target customers. In light of the intense competition for the sale of online advertisements and the need to maintain competitive pricing, we may be required to reduce our prices, which could adversely affect our operating results and financial condition.

If we fail to successfully manage our growth, our business and prospects will suffer.

If we are unable to manage our growth successfully, our business, results of operations, financial condition and prospects would be materially and adversely affected. We have rapidly and significantly expanded our operations over the past several years and expect to continue to rapidly expand our operations in the future. Our growth has placed, and is expected to continue to place, a significant strain on our management, operational and financial resources. Many of our officers or senior management personnel have no, or limited prior, senior management experience at public companies. Difficulties with managing growth could disrupt our business, distract our management and employees, and increase our costs.

If we fail to maintain the adequacy of our internal controls, our ability to provide accurate financial statements and comply with the requirements of the Sarbanes-Oxley Act of 2002 could be impaired, which could cause our stock price to decrease substantially.

As a previously private company with no prior public reporting obligations, and as a relatively young company that has grown rapidly over the past few years, we had committed limited personnel and resources to the development of our internal financial and managerial controls. Recently, we have taken measures to improve our financial reporting and management capabilities and we are in the process of instituting changes to our internal controls in order to satisfy our obligations as a public company, including the requirements associated with the Sarbanes-Oxley Act of 2002, when and as such requirements become applicable to us. Prior to taking these measures, we do not believe we had the resources and capabilities to do so. We recently hired a new Chief Financial Officer with prior public company reporting experience and we are also actively recruiting additional financial and accounting personnel to support our continued growth and the requirements of being a public company. We will need to continue to improve our financial and managerial controls, reporting systems and procedures, and documentation thereof, and we will need to continue to expand, train and manage our workforce company-wide. In addition, our anticipated growth in future operations will continue to place a strain on our management systems, controls and resources. If our financial and managerial controls, reporting systems or procedures fail, we may not be able to provide accurate financial statements on a timely basis or comply with the Sarbanes-Oxley Act of 2002. Any failure of our internal controls or our ability to provide accurate financial statements could cause the trading price of our common stock to decrease substantially.

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We might not be able to attract and retain the employees we need to support our planned growth.

Any failure to attract and retain qualified, experienced employees could adversely affect our ability to grow our business. To execute our continuing growth plans, we need to increase the size and maintain the quality of our staff of direct sales and business development representatives and software development staff. To be successful, we must attract and retain highly qualified sales and other personnel with specialized skill sets focused on the participatory sports and activities industry. Competition for qualified and experienced sales and other personnel can be intense, and we might not be successful in attracting and retaining such individuals. The pool of qualified and experienced personnel is limited. We have from time to time experienced, and we expect to continue to experience in the future, difficulty in hiring and retaining highly skilled employees with appropriate qualifications for our business.

Our business and prospects could be harmed if we lose members of our senior management team or if our senior management team does not work well together.

The loss of the services of our executive officers or other key employees for any reason could harm our ability to grow our business. Our performance is substantially dependent on the continued services and on the performance of our senior management and other key personnel, particularly David Alberga, our Chief Executive Officer, Matthew Landa, our President, John Creelman, our Chief Financial Officer, and Jon Belmonte, our Chief Operating Officer. Our performance also depends on our ability to retain and motivate other officers and key employees. We do not have long-term employment agreements with any of our key personnel. In addition, our success depends in large part upon the reputation and influence within the industry of Messrs. Alberga, Landa and Belmonte who have, along with our other senior managers, over their years in the industry, developed long standing and favorable relationships with events organizers, park and recreation department administrators, and league administrators.

Our ability to execute our business plan and to grow our business will be heavily dependent on our management team’s ability to work effectively together and any failure to do so would hurt our business and prospects. Certain members of our senior management team are relatively new to us and have not previously worked with other members of our management team. For example, Mr. Creelman joined us as our Chief Financial Officer in March 2004 and, as a result, has had a limited opportunity to become integrated with our management team. The process of integrating new key executives into our business may detract from the operation of, and have an adverse effect on, our business.

Sales cycles can be long and revenues may not be recognized until completion of the entire sale, which makes it difficult to forecast our operating results.

It is difficult to predict when particular sales will occur or be completed and to forecast our operating results. Any delay or failure to complete sales in a particular period could reduce our revenues in that period, as well as subsequent periods over which revenues for the sale may be recognized as well as associated maintenance revenues. It typically takes us between three and nine months to complete a sale to an application services customer, and at times it can also take us up to one year or longer. In addition, with respect to certain software installation projects, none of the revenues are recognized until the completion of such projects. Any delays in the completion of application installations may cause material fluctuations in our operating results for a particular period. These fluctuations are difficult to accurately forecast since the completion date of such projects can often vary over a period of weeks or months. In addition, a sale to a marketing services customer can also take one year or longer. If our application services or marketing services sales cycle unexpectedly lengthens, for one or more large orders, it would adversely affect the timing of our revenues and our operating results. The period between our initial contact with a potential customer and their purchase of our application services or marketing services is relatively long due to several factors, including:

• Many events and activities that may use our application services occur only annually;

• Our need to educate potential customers about the uses and benefits of our application services;

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• Our need to educate potential marketing services customers about our position in the market and capabilities of our marketing services group;

• Both our application services and marketing services customers have budget cycles which can affect the timing of purchases;

• Park and recreation department administrators often have lengthy internal approval processes before purchasing our application services; and

• Consumer brand companies often have lengthy internal approval processes before purchasing our marketing services.

In addition, both our application services and marketing services customers may demand customization of the services we provide. As a result, these sales opportunities may require us to devote greater resources to individual customers, driving up costs and time required to complete sales and diverting resources to a fewer number of transactions. Moreover, if our sales people, including any sales people we hire in connection with our planned growth, do not develop the necessary skills or reach productivity more slowly than anticipated, our sales cycles could lengthen and adversely affect our operating results.

Our quarterly operating results are volatile, subject to seasonal fluctuations and difficult to predict, all of which may adversely affect our stock price.

Our quarterly operating results have fluctuated in the past and may fluctuate significantly in the future due to a variety of factors, many of which are outside our control. Fluctuations in our quarterly operating results may cause our stock price to decline. Factors that could cause our operating results to fluctuate include those discussed throughout Risk Factors. As a result, we believe that quarterly comparisons of our operating results are not necessarily meaningful and that you should not rely on the results of one quarter as an indication of our future performance. In addition, we experience seasonal fluctuations in our business, with a higher amount of our registration convenience fee revenues being recognized in the second and third quarters when weather is generally more conducive to participation in outdoor sports and activities. Consequently, our operating results may vary significantly from one quarter to the next as part of our normal business cycle.

Future acquisitions could prove difficult to integrate, disrupt our business, dilute stockholder value and strain our resources, which could hurt our business and prospects.

If we fail to achieve the anticipated benefits of any acquisitions we complete, our business, operating results, financial condition and prospects may be impaired. Acquisitions have been an important part of our growth to date as we have completed six acquisitions since 2000. As part of our business strategy, we intend to continue to seek to acquire businesses, services and technologies that we feel could complement or expand our business, augment our market coverage, enhance our technical capabilities, provide us with valuable customer contacts or otherwise offer growth opportunities. Acquisitions and investments involve numerous risks, including:

• Difficulties in integrating operations, technologies, services, accounting and personnel;

• Difficulties in supporting and transitioning customers of our acquired companies to our technology platforms and business processes;

• Diversion of financial and management resources from existing operations;

• Potential loss of key employees;

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• Inability to generate sufficient revenues to offset acquisition or investment costs; and

• Potential write-offs of acquired assets.

Acquisitions also frequently result in recording of goodwill and other intangible assets, which are subject to potential impairments in the future that could harm our operating results. In addition, if we finance acquisitions by issuing convertible debt or equity securities, our existing stockholders may be diluted. Such dilution could adversely affect the market price of our stock. It is also possible that at some point in the future we may decide to enter new markets, thus subjecting ourselves to new risks associated with those markets.

We may not realize the anticipated benefits of our acquisition of Do It Sports.

In April 2004, we acquired substantially all of the assets of Do It Sports, an online events management company. If we fail to successfully integrate Do It Sports’ assets, we may not achieve the intended benefits of this acquisition, including any increase in our revenues and profitability. If we do not successfully integrate Do It Sports’ sales professionals into our organization we may not maintain Do It Sports’ customer contracts, which would adversely impact the intended benefits of this transaction and could result in a future impairment of the goodwill and other intangible assets recorded in conjunction with this purchase. In addition, if one or more of Do It Sports’ key employees were to leave The Active Network, this would likely have a material adverse effect on our ability to realize the benefits from our acquisition of Do It Sports. Further, the integration of Do It Sports’ assets and customers will require substantial attention from management and operations personnel, which could divert their attention from our existing operations. If we become obligated to make an earnout payment to Do It Sports as a result of the achievement of performance milestones, this could adversely affect our cash position if we make such payment in cash or could have a dilutive effect if we make such payment in shares of our common stock.

If the protection of our trademarks and other proprietary rights is inadequate, our brand and reputation could be harmed.

If we are unable to adequately protect our trademarks, including active.com, RecWare Safari, eteamz, Active Marketing Group and the Active Technology Suite, and other proprietary rights, our business and prospects would be impaired. Our ability to grow our application services business and marketing services business is dependent, to a significant extent, on our ability to establish and maintain the active.com, RecWare Safari and eteamz brands as leaders in the participatory sports and activities industry. Our ability to execute our business plan requires that we protect our trademarks, trade dress, service marks and other proprietary information. We regard our trademarks, trade dress, service marks, trade secrets and similar intellectual property as critical to our success and to our ability to strengthen our brand. We rely on trademark and copyright law, trade secret protection and confidentiality agreements with our employees, consultants, partners, suppliers and others to protect our proprietary rights. Nevertheless, the steps we take to protect our proprietary rights may be inadequate.

In addition, the domain names that we maintain are important to our business. The regulation of domain names in the United States and in foreign countries is unclear and subject to change. Governing bodies may establish additional top-level domains, appoint additional domain name registrars or modify the requirements for holding domain names. As a result, we cannot assure you that we will be able to acquire or maintain relevant domain names. Furthermore, the relationship between regulations governing domain names and laws protecting trademarks and similar proprietary rights is also unclear. As a result, we may be unable to prevent third parties from acquiring domain names that are similar to, infringe upon or otherwise decrease the value of our trademarks and other proprietary rights. Any such inability could have a material adverse effect on our business, results of operations, financial condition and prospects.

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Any failure to adequately protect our trademarks and other proprietary rights could also adversely affect our application services business, as well as our marketing services business, as advertisers and promoters may not want to use our services if our brand or reputation has been impaired.

If we fail to upgrade our website, data management and transaction capabilities to accommodate higher volumes of traffic or successfully develop or implement new technologies that enable us to meet evolving industry standards, our business and prospects would be harmed.

If we fail to upgrade our website, data management and transaction capabilities to accommodate higher traffic or fail to successfully develop or implement new technologies that enable us to meet evolving industry standards and remain competitive, our business and prospects would be seriously harmed and our operating results could decline. Additionally, the application services industry is subject to rapid technological change. If competitors introduce new features and website enhancements embodying new technologies, or if new industry standards and practices emerge, our existing websites and systems may become obsolete or unattractive. Developing our websites and data management and transaction systems entails significant technical and business risks. We may use new technologies ineffectively, or we may fail to adapt our websites, data management, transaction systems, and our computer network to meet customer requirements and emerging industry standards.

Our computer and communications hardware and software systems are vulnerable to damage, interruption, failure and security breaches, which could harm our business.

Any significant interruption in the availability or functioning of our websites, or related processing or communications systems for any reason, could seriously harm our business. Our ability to receive and process transactions through our websites is critical to our success and depends upon the efficient and uninterrupted operation of our computer and communications hardware and software systems. Our systems and operations are vulnerable to damage or interruption from power outages, computer equipment failures, software problems, network equipment difficulties and telecommunications failures, computer viruses, security breaches, catastrophic events and errors in usage by our employees and customers. We have experienced temporary system interruptions in the past, which may also occur in the future. Our computing servers are located at the hosting facility of a third party service provider in Burbank, California. The hosting facility is subject to damage from acts of God, terrorism and failures in the physical, power and telecommunications infrastructure in the facility as well as the surrounding geographic area. The continued operation of the hosting facility is also subject to the hosting provider’s business environment and practices. Any event that degrades, interrupts or stops the operations of the hosting facility could have a material adverse impact on our business. We would be forced to find an acceptable hosting facility elsewhere or possibly be required to provide replacement equipment. In the event it becomes necessary to switch hosting facilities, we might not be successful in either finding an alternative service provider on acceptable terms or in hosting the computer servers ourselves.

We may face liability for our privacy practices.

Growing public concern about privacy, and the collection, distribution and use of information about individuals, may subject us to increased regulatory scrutiny and litigation. Any violation of the applicable privacy or data protection laws and regulations, including our own internal privacy policies, may subject us to fines, penalties and damages and may otherwise have a material adverse effect on our business, results of operations and financial condition. We may be subject to the privacy provisions of the Gramm-Leach-Bliley Act and related regulations. In addition, legislation at the state and federal levels may also further restrict our information gathering and disclosure practices. In particular, under state financial privacy laws and regulations, we must provide notice to our customers of our policies on sharing non-public information with third parties, and we must provide advance notice of any changes to our privacy policies. In addition, we must give consumers the right to prevent sharing of their non-public personal information with unaffiliated third parties. The Federal Trade Commission and state agencies have investigated various companies regarding their use of personal information. Existing and potential future privacy laws may limit our ability to develop new products and

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services that make use of data gathered through our services. In addition, if we are accused of violating the stated terms of our privacy policy, we may be forced to expend significant amounts of monetary and human resources to defend against these accusations. We also may be required to make changes to our present and planned products or services.

The Child Online Privacy Protection Act, or COPPA, was enacted in October 1998. COPPA imposes civil and criminal penalties on persons collecting personal information from children under the age of 13. We collect and disclose personal information from such minors, but utilize systems and techniques that are intended to be compliant with the requirements of COPPA. The manner in which COPPA should be interpreted and enforced, however, cannot be fully determined, and future legislation similar to COPPA or any action against us for allegedly violating COPPA could subject us to potential liability and remedial actions, which in turn could materially harm our business. In addition, there are pending “COPPA-like” state laws, such as California’s SB 1633 that prohibits acquisition of identifying information about a minor without the parent’s consent.

Unauthorized disclosure of personal information regarding an activity organizer or participant, whether through breach of our computer systems or otherwise, could adversely affect our business and prospects. We collect and store data about activity organizers and participants, including names, telephone numbers, e-mails and addresses. In addition, we maintain a database of participant information relating to specific transactions, including credit card numbers and cardholder addresses, in order to process transactions and for fraud prevention and other internal processes. The basis of our business is sharing the personal information we collect with event organizers, park and recreation department administrators and league administrators. If there were to be an inadvertent disclosure of personal information by one of our employees, or if one of our customers were to use the personal information we provide to that customer in a manner that was wrongful or otherwise suspect or if a third party gains unauthorized access to the personal information of participants, our operations could be seriously disrupted and our reputation could be harmed. We cannot assure you that we will be able to prevent the unauthorized disclosure of personal information or data regarding an activity organizer or participant.

In addition, if a person penetrates our network security or otherwise misappropriates merchant or cardholder data, we could be subject to liability or business interruption. We do, however, implement commercially reasonable security practices and technology to protect our confidential and sensitive information, including using encryption for the transmission of financial information. There have been a number of instances reported in the press of people penetrating computer systems of payment processors. We cannot guarantee that our systems will not be penetrated in the future. If a breach of our system occurs, we may be subject to liability, including claims for unauthorized purchases with misappropriated credit card information, impersonation or other similar fraud claims. We could also be subject to liability for claims relating to misuse of personal information, such as unauthorized marketing purposes. These claims also could result in protracted and costly litigation.

We may face potential public relations problems as a result of violations of our privacy policies.

Any violation of privacy or data protection laws and regulations may subject us to public criticism. Existing and potential future privacy laws may further aggravate negative public reactions related to any violations of our privacy policies. We could experience an adverse public relations reaction as a result of an unauthorized disclosure of personal information. Because of the increasing sensitivity of consumers to unauthorized disclosures of personal information, companies that experience such a breach often suffer damage to their reputation. In addition, any such unauthorized disclosure of personal information could adversely affect our marketing services business, as well as our application services business, as advertisers and promoters may not want to use our services if our reputation has been impaired.

Existing or future government regulation could harm our business.

We are subject to the same federal, state and local laws as other companies conducting business on the Internet, including consumer protection laws and regulations prohibiting unfair and deceptive trade practices.

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Further, the growth of online commerce could result in more stringent consumer protection laws that impose additional compliance burdens on us. Today there are an increasing number of laws specifically directed at the conduct of business on the Internet. Moreover, due to the increasing use of the Internet, many additional laws and regulations relating to the Internet are being debated at the state and federal levels. These laws and regulations could cover issues such as freedom of expression, pricing, user privacy, fraud, quality of products and services, taxation, advertising, intellectual property rights and information security. Applicability of existing laws to the Internet relating to issues such as property ownership, copyrights and other intellectual property issues, taxation, libel, obscenity and personal privacy could also harm our business. For example, United States and international laws regulate our ability to use customer information and to develop, buy and sell mailing lists. The vast majority of these laws were adopted prior to the advent of the Internet and do not contemplate or address the unique issues raised by the Internet. Those laws that do reference the Internet, such as the CAN-SPAM Act, are only beginning to be interpreted by the courts, and therefore their applicability and reach are uncertain. Similarly, pending state legislation could hinder our ability to acquire customer information (such as California’s SB 1633 that prohibits acquisition of identifying information about a minor without the parent’s consent). The restrictions imposed by, and the costs of complying with, current and possible future laws and regulations related to our business could harm our business, operating results and financial condition.

Tax authorities in a number of states, as well as a Congressional advisory commission, are currently reviewing the appropriate tax treatment of companies engaged in online commerce, and new state tax regulations may subject us to additional state sales and income taxes, which could have an adverse effect on our cash flows and results of operations. Further, there is a possibility that we may be subject to significant fines or other payments for any past failures to comply with these requirements.

In addition, because our website is accessible over the Internet in multiple states and other countries, we may be subject to their laws and regulations or may be required to qualify to do business in those locations. We are qualified to do business only in California at present. Our failure to qualify in a state or country where we are required to do so could subject us to taxes and penalties and we could be subject to legal actions and liability in those jurisdictions. The restrictions or penalties imposed by, and costs of complying with, these laws and regulations could harm our business, operating results and financial condition. Our ability to enforce contracts and other obligations in states and countries in which we are not qualified to do business could be hampered, which could have a material adverse effect on our business.

We may be subject to liability for Internet content that we publish.

As a publisher of online content, we face potential liability for defamation, negligence, intellectual property infringement and other claims based on the information and other content contained on our website. In the past, parties have pursued these types of claims and sometimes successfully litigated them against online services. If we incur legal liability for our online content, our financial condition could be affected adversely and our reputation could suffer.

We may face significant chargeback liability if our customers refuse or cannot reimburse chargebacks resolved in favor of participants who register through our transaction processing systems.

Significant or recurring chargeback amounts could adversely affect our business, operating results and financial condition. We may have potential liability for chargebacks associated with the transactions we process. If a billing dispute between an event or activity organizer and a participant is not ultimately resolved in favor of the organizer, the disputed transaction is charged back to our bank and credited to the credit card account of the participant. If we or our processing banks are unable to collect the chargeback from the organizer’s account, or if the organizer refuses or is financially unable to reimburse us for the chargeback amount, we bear the risk of loss for the amount of the refund paid to the participant’s credit card account. We have in the past experienced chargebacks related to cancelled events.

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We face potential liability for fraudulent activities of participatory sports and activities industry participants and organizers.

We face potential liability for fraudulent activities of participatory sports and activity industry participants and organizers. We have potential liability for losses caused by fraudulent credit card transactions with event or activity participants. Credit card fraud occurs when a participant uses a stolen credit card, or a stolen credit card number in a credit card-not-present transaction, to purchase merchandise or services. In a traditional credit card-present transaction, if the merchant uses the credit card, receives authorization for the transaction from the credit card issuing bank and verifies the signature on the back of the credit card against the paper receipt signed by the individual using the credit card, the credit card issuing bank remains liable for any loss. In a fraudulent credit card-not-present transaction, such as the type of transaction we process for our customers, we are liable to the credit card issuing bank for any loss arising from the transaction, even if we receive authorization for the transaction from the same credit card issuing bank.

We also face potential liability from event and activity organizers. Organizer fraud occurs when an organizer, rather than a participant, knowingly uses a stolen or counterfeit credit card or credit card number to record a false sales transaction, or intentionally fails to deliver the merchandise, events, activities or services sold in an otherwise valid transaction. We have implemented systems and procedures designed to detect and reduce the impact of organizer fraud, but we cannot guarantee that these measures are or will be effective.

It is possible that incidents of fraud could increase in the future, and they may remain undetected for extended periods of time if our systems and procedures are not effective. Significant or recurring credit card fraud could adversely affect our business, financial condition and operating results.

If we are unable to detect and prevent unauthorized use of credit cards and bank account numbers and safeguard confidential user data, our reputation may be harmed and event and activity organizers and participants may be reluctant to use our services.

If we are unable to detect and prevent unauthorized use of credit cards and bank account numbers or protect confidential participant data, our reputation may be harmed and event and activity organizers and participants may be reluctant to use our services. We rely on encryption and authentication technology to provide secure transmission of confidential information, including customer credit card and bank account numbers, and protect confidential participant data. Identity thieves and criminals using stolen credit card or bank account numbers could still potentially circumvent our anti-fraud systems. Advances in computer capabilities, new discoveries in the field of cryptography, or other events or developments may result in a compromise or breach of the technology we use to protect sensitive transaction data. If any such compromise of our security were to occur, it could result in an adverse impact on our reputation. If such an event were to occur, our application services customers may cancel their services with us, event and activity participants may be unwilling to register using our services, and our ability to attract new customers may be harmed. In addition, we may have to spend significant money and time protecting against such security breaches or alleviating problems caused by such breaches. Any such security breaches could adversely affect our marketing services business, as well as our application services business, as consumer brand companies may not want to use our services if our reputation has been impaired.

Any such failure to detect and prevent unauthorized use of credit cards and bank account numbers or protect confidential participant data could adversely affect our marketing services business, as well as our application services business, as consumer brand companies may not want to use our services if our reputation has been impaired.

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If credit card payment processors and service providers fail or no longer agree to provide their services, our merchant relationships could be adversely affected and we could lose business.

Our credit card processors and service providers could terminate their arrangements with us or fail to perform their services efficiently and this could materially and adversely affect our relationships with customers we serve and may cause those customers to discontinue using our application services, which could materially adversely affect our business. We rely on agreements with large payment processing organizations to enable us to provide credit card authorization, data capture, settlement and merchant accounting services, and access to various reporting tools for the customers we serve.

If we fail to adhere to the standards of various credit card associations, our registrations with these associations could be terminated, and we could be required to stop providing transaction processing services.

If we fail to comply with the applicable requirements of the major credit card associations, these associations could suspend or terminate our registration with them. Substantially all of the transactions we process involve major credit card associations. The termination of our registration or any changes in the credit card association rules that would impair our registration could require us to stop providing transaction processing services.

We could suffer from changes in the rates we are charged to process credit cards.

If the rates we currently pay to our credit card processing vendors increase significantly, our business, results of operations and financial condition would be harmed. We pay a transaction fee to credit card companies for each registration we process. We cannot guarantee that our current transaction fees will not increase in the future.

If we were found subject to or in violation of any laws or regulations regarding electronic fund transfers, we could be subject to liability or forced to change our business practices.

The laws relating to the liability of providers of online payment services is currently unsettled. It may ultimately be determined that the transaction processing component of our services is subject to various governmental regulations. The provisions of these laws and related regulations are complicated. Although we have outsourced the processing of our online payments to a third party, who we believe complies with all applicable laws and regulations, we do not have extensive experience with these laws and related regulations. Even technical violations of these laws can result in penalties that are assessed for each non-compliant transaction. Given the high volumes of transactions we process, if we were found to be subject to and in violation of any of these laws or regulations, we would likely have to change our business practices and our business would be adversely affected. In addition, we are aware that governmental agencies have investigated the provision of online payment services and could require changes in the way this business is conducted. Any new laws and regulations could impose significant costs on us and make it more difficult for our customers and events and activities participants to utilize online registrations.

Intellectual property claims against us could be costly and could hurt our business and prospects.

Intellectual property claims against us could be costly and could hurt our business, operating results, financial condition and prospects. Other parties may assert infringement or unfair competition claims against us. In the past, we received a notice from a third party alleging that our Internet fundraising program and related website operations infringe patents published by such third party. In the future, we may receive other notices from, or have lawsuits filed against us by, third parties alleging infringement. We cannot predict whether third parties will assert claims of infringement against us, or whether any past, present or future claims will prevent us from operating our business as planned. If we are forced to defend against third party infringement claims, whether they are with or without merit or are determined in our favor, we could face expensive and time

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consuming litigation, which could distract technical and management personnel. If an infringement claim is determined against us, we may be required to pay monetary damages or ongoing royalties. Further, as a result of infringement claims either against us or against those who license technology to us, we may be required, or deem it advisable, to develop non-infringing intellectual property or enter into costly royalty or licensing agreements. Such royalty or licensing agreements, if required, may be unavailable on terms that are acceptable to us, or at all. If a third party successfully asserts an infringement claim against us and we are required to pay monetary damages or royalties or we are unable to develop suitable non-infringing alternatives or license the infringed or similar intellectual property on reasonable terms on a timely basis, it could significantly harm our business.

If we do not own the intellectual property that we believed we purchased through certain acquisitions, our business and prospects could be harmed.

Since 2000, we have acquired six companies or their operating assets, including intellectual property. We cannot be certain that the companies from whom we purchased such intellectual property owned such intellectual property because, in some cases, there was not adequate documentation to demonstrate chain of title. If we do not own such intellectual property, such lack of ownership could have a material adverse effect on our business, results of operations, financial condition and prospects.

We may not be able to realize the tax benefits associated with the net operating losses we have recorded to date.

As of December 31, 2003, we had federal and California tax net operating loss carryforwards of approximately $27.9 million and $12.8 million, respectively. The federal and California tax loss carryforwards will begin to expire in 2019 and 2009, respectively. If we do not become profitable prior to the expiration of these net operating losses, then we will not be able to use these to our benefit. Additional limitations on the annual use of these net operating losses may also apply due to subsequent issuances of our stock.

Being a public company will increase our administrative costs, which could adversely affect our operating results.

As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act of 2002, as well as new rules subsequently implemented by the Securities and Exchange Commission, or SEC, has required changes in corporate governance practices of public companies. In addition to final rules and rule proposals already made by the SEC, The Nasdaq Stock Market revised its rules for companies that are listed on The Nasdaq Stock Market. We expect these new rules and regulations to increase our legal and financial compliance costs and to make some activities more time consuming or costly. In connection with becoming a public company we created several board committees, must implement disclosure controls and procedures, must augment our internal controls, retain a transfer agent, a bank note company and a financial printer, and will have all of the internal and external costs of preparing and distributing periodic public reports in compliance with our obligations under applicable laws and regulations for public companies. These additional administrative costs could adversely affect our operating results.

Risks Relating To This Offering

Our stock price may be volatile and you may lose all or a part of your investment.

The market price of our common stock may be subject to significant fluctuations after our initial public offering. It is possible that in some future periods our results of operations may be below the expectations of securities analysts and investors. If this occurs, our stock price may decline. Factors that could affect our stock price include the following:

• Changes in securities analysts’ recommendations or estimates of our financial performance;

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• Publication of research reports by analysts;

• Changes in market valuations of similar companies;

• Actual or anticipated fluctuations in our operating results;

• General market conditions or other economic factors unrelated to our performance; and

• Announcements by us or our competitors of significant contracts, acquisitions, commercial relationships, joint ventures or capital commitments.

In addition, The Nasdaq Stock Market in general has experienced significant price and trading volume fluctuations, and the market prices of Internet services and software companies have generally been extremely volatile and have experienced sharp share price and trading volume changes. These broad market fluctuations may adversely affect the trading price of our common stock. You may not receive a positive return on your investment when you sell your shares and may lose the entire amount of your investment.

There has been no prior public market for our common stock, and an active trading market may not develop.

Prior to this offering, there has been no public market for our common stock. The initial public offering price for the shares of our common stock sold in this offering will be determined by negotiation between the representatives of the underwriters and us. This price may not reflect the market price of our common stock following this offering. An active trading market may not develop following completion of this offering or, if it is developed, may not be sustained. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. We cannot assure you that the market price will equal or exceed the initial public offering price of your shares. An inactive market may also impair our ability to raise capital by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration.

Our management has broad discretion as to the use of the net proceeds from this offering.

Our management has broad discretion as to the use of the net proceeds that we will receive from this offering. We cannot assure you that management will apply these funds effectively, nor can we assure you that the net proceeds from this offering will be invested in a manner yielding a favorable return.

New investors in our common stock will experience immediate and substantial dilution of approximately $         per share.

The initial public offering price will be substantially higher than the book value per share of our common stock. Investors purchasing common stock in this offering will, therefore, incur immediate dilution of $         in net tangible book value per share of common stock, based on an assumed initial offering price of $         per share. This dilution figure deducts the estimated $         million in underwriting discounts and commissions and estimated offering expenses payable by us from the public offering proceeds. Investors will incur additional dilution upon the exercise of outstanding stock options and warrants.

Securities analysts may not initiate coverage of our common stock or may issue negative reports, and this may have a negative impact on the market price of our common stock.

We cannot guarantee that securities analysts will cover our common stock after the completion of this offering. If securities analysts do not cover our common stock after the completion of this offering, the lack of

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research coverage may adversely affect our common stock’s market price. The trading market for our common stock will rely in part on the research and reports that industry or financial analysts publish about us or our business. If one or more of the analysts who cover us downgrades our stock, our stock price would likely decline rapidly. If one or more of these analysts ceases coverage of our company, we could become less visible in the financial market, which in turn could cause our stock price to decline. In addition, recently adopted rules mandated by the Sarbanes-Oxley Act of 2002, and a global settlement reached between the SEC, other regulatory analysts and a number of investment banks in April 2003 will lead to a number of fundamental changes in how analysts are reviewed and compensated. In particular, many investment banking firms will now be required to contract with independent financial analysts for their stock research. It may be difficult for companies with smaller market capitalizations, such as our company, to attract independent financial analysts that will cover our common stock, which could have a negative effect on our market price.

Our directors, executive officers and significant stockholders will continue to hold a substantial portion of our stock after this offering, which may lead to conflicts of interest with other stockholders over corporate transactions and other corporate matters.

Following the completion of this offering, our directors, executive officers and current beneficial holders of 5% or more of our outstanding common stock will beneficially own approximately         % of our outstanding common stock, including warrants and stock options exercisable within 60 days after             , 2004. These stockholders, acting together, will be able to influence significantly all matters requiring stockholder approval, including the election of directors and significant corporate transactions such as mergers or other business combinations. This control may delay, deter or prevent a third party from acquiring or merging with us, which could adversely affect the market price of our common stock.

There may be sales of substantial amounts of our common stock after this offering, which could cause our stock price to fall.

Our current stockholders hold a substantial number of shares, which they will be able to sell in the public market in the near future. Upon the closing of this offering,          shares of common stock will be outstanding, assuming conversion of our preferred stock into shares of common stock, exercise on a cash basis of outstanding warrants that otherwise expire upon the effectiveness of this offering, no exercise of the underwriters’ over-allotment option and no exercise of outstanding options or warrants after December 31, 2003. All of the shares sold in this offering will be freely tradable, except for shares purchased by holders subject to lock-up agreements or by any of our existing “affiliates,” as that term is defined in Rule 144 promulgated under the Securities Act, which generally includes officers, directors and 10% or greater stockholders. A significant portion of the shares of our common stock outstanding after this offering will continue to be restricted as a result of securities laws, market stand-off agreements with us or lock-up agreements with Jefferies & Company, Inc. The market stand-off and lock-up agreements restrict holders’ ability to transfer their stock for 180 days after the effective date of the registration statement of which this prospectus forms a part. Of the outstanding shares,          will be available for sale in the public market on the date of this offering, an additional          will be available for sale in the public market 180 days after the date that the registration statement of which this prospectus forms a part is declared effective and the remaining          shares will be available for sale in the public market in         , in each case subject to the requirements of Rule 144. Jefferies & Company, Inc. may, however, waive the lock-up period at any time for any stockholder. In considering any request to release shares subject to a lock-up agreement, Jefferies & Company, Inc. will consider the possible impact of the release of the shares on the trading price of the stock sold in the offering. Jefferies & Company, Inc. does not have any present intention or any understandings, implicit or explicit, to release any of the shares subject to the lock-up agreements prior to the expiration of these lock-up periods. Sales of a substantial number of shares of our common stock within a short period of time after this offering, or after the expiration of applicable lock-up periods, could cause our stock price to fall. In addition, the sale of these shares could impair our ability to raise capital through the sale of additional stock.

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Our future capital needs are uncertain, and we may need to raise additional funds in the future, which may not be available on acceptable terms or at all.

Our capital requirements will depend on many factors, including:

• Acceptance of, and demand for, our application services and marketing services;

• The costs of developing new services or technology;

• The number and timing of acquisitions and other strategic transactions; and

• The costs associated with the growth of our business.

The proceeds from this offering together with our existing sources of cash and cash flows may not be sufficient to fund our activities. As a result, we may need to raise additional funds, and such funds may not be available on favorable terms, or at all. Furthermore, if we issue equity or convertible debt securities to raise additional funds, our existing stockholders may experience dilution, and the new equity or debt securities may have rights, preferences and privileges senior to those or our existing stockholders. If we incur additional debt, it may increase our leverage relative to our earnings or to our equity capitalization. If we cannot raise funds on acceptable terms, we may not be able to develop or enhance our products and services, execute our business plan, take advantage of future opportunities or respond to competitive pressures or unanticipated customer requirements.

Anti-takeover provisions in our organizational documents and Delaware law may discourage or prevent a change in control, even if an acquisition would be beneficial to our stockholders, which could affect our stock price adversely and prevent attempts by our stockholders to replace or remove our current management.

Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may delay or prevent a change in control, discourage bids at a premium over the market price of our common stock and adversely affect the market price of our common stock and the voting and other rights of the holders of our common stock. These provisions include:

• Dividing our Board of Directors into three classes serving staggered three-year terms;

• Prohibiting our stockholders from calling a special meeting of stockholders;

• Permitting the issuance of additional shares of our preferred stock, with any rights, preferences and privileges as they may designate, including the right to approve an acquisition or other changes in control;

• Prohibiting our stockholders from making certain changes to our certificate of incorporation or bylaws except with 66 ²/3% stockholder approval; and

• Requiring advance notice for raising matters of business or making nominations at stockholders’ meetings.

We are also subject to provisions of the Delaware corporation law that, in general, prohibit any business combination with a beneficial owner of 15% or more of our common stock for five years unless the holder’s acquisition of our stock was approved in advance by our Board of Directors. Although we believe these provisions collectively provide for an opportunity to receive higher bids by requiring potential acquirers to negotiate with our Board of Directors, they would apply even if the offer may be considered beneficial by some stockholders. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board of Directors, which is responsible for appointing the members of our management.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

We have made forward-looking statements in this prospectus, including in Management’s Discussion and Analysis of Financial Condition and Results of Operations, that are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include all statements that are not historical facts and often can be identified by the use of forward-looking terminology such as the words “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates” or similar expressions.

Forward-looking statements involve risks, uncertainties and assumptions. You should not put undue reliance on any forward-looking statements. You should understand that many important factors discussed in the Risk Factors section and elsewhere in this prospectus could cause our results to differ materially from those expressed in forward-looking statements. We do not have any obligation or intention, except as provided by law, to update forward-looking statements after the underwriters cease to distribute this prospectus.

THIRD PARTY SOURCES

This prospectus contains statistical data that we obtained from industry publications, reports and other industry sources, including those generated by American Sports Data, Jupiter Research, the Leisure Intelligence Group, the National Sports Network and Promo Magazine. These industry publications generally indicate that they have obtained their information from sources believed to be reliable, but do not guarantee the accuracy and completeness of their information. Although we believe that these publications are reliable, we have not independently verified their data.

We requested the Leisure Intelligence Group conduct a survey of the participatory sports and activities industry and certain other related areas. We did not pay the Leisure Intelligence Group to conduct the study, but we did pay a customary fee to obtain a copy of the report generated as a result of the survey. We also participated in the survey, and responded to requests for information from the Leisure Intelligence Group in connection with its survey.

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USE OF PROCEEDS

We estimate that the net proceeds from the sale of our          shares of common stock in this offering will be approximately $         million, based on an assumed initial public offering price of $         per share, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us, or $         million if the underwriters’ over-allotment option is exercised in full. We currently plan to use the net proceeds of this offering:

• To fund working capital and for general corporate purposes, including the expansion of our sales staff;

• To fund the development of additional application services functionality and features; and

• To fund potential acquisitions of complementary services, technologies and companies.

The amounts we actually expend for working capital and other general corporate purposes will vary significantly depending on a number of factors, including future revenues growth, if any, and the amount of cash that we generate from operations. As a result, we will retain broad discretion over the allocation of the net proceeds of this offering. We have no current agreements or commitments, other than our purchase of the assets of Do It Sports in April 2004, with respect to any acquisitions of products, technologies or companies. Pending the uses listed above, we intend to invest the net proceeds of this offering in short-term, interest-bearing, investment-grade securities. We cannot predict whether the proceeds will yield a favorable return.

DIVIDEND POLICY

We have never declared or paid any cash dividends on shares of our common stock. We currently intend to retain our earnings, if any, and cash to fund working capital and for general corporate purposes and, therefore, do not anticipate paying any cash dividends on our common stock in the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our Board of Directors and will depend upon our financial condition, results of operations and capital requirements.

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CAPITALIZATION

The following table sets forth our capitalization at December 31, 2003, on an actual basis. The following table also sets forth our capitalization on a pro forma basis after giving effect to the automatic conversion of all shares of our outstanding preferred stock into 154,120,920 shares of common stock upon completion of this offering, and the exercise on a cash basis of outstanding warrants to purchase an aggregate of 707,797 shares of common stock at a weighted average exercise price of $0.03 that would otherwise expire upon the effectiveness of this offering. In addition, the following table sets forth our capitalization on a pro forma as adjusted basis to reflect receipt of the estimated net proceeds from the sale of          shares of common stock in this offering by us at the assumed initial public offering price of $         per share after deducting $         million in underwriting discounts and commissions and $         million in estimated offering expenses. The pro forma balance sheet data does not give effect to the consummation of our acquisition of substantially all of the assets of Do It Sports. In April 2004, we purchased these assets for $0.4 million in cash and the assumption of certain liabilities. Do It Sports has represented that the liabilities assumed, when reduced by cash and receivables, do not exceed $1.9 million.

This table should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this prospectus.

	As of December 31, 2003
	Actual			Pro Forma			Pro Forma As Adjusted
	(In thousands, except share data)
Cash and cash equivalents	$	5,779		$	5,799		$
Long-term obligation and promissory note		227			227
Stockholders’ equity:
Convertible preferred stock, $0.001 par value, 147,748,321 shares authorized actual and pro forma,          shares authorized pro forma as adjusted, 146,856,382 shares issued and outstanding actual, no shares issued and outstanding pro forma and pro forma as adjusted		147			–
Common stock, $0.001 par value, 250,000,000 shares authorized actual and pro forma          shares authorized pro forma as adjusted, 6,889,754 shares issued and outstanding actual, 161,718,471 pro forma shares issued and outstanding, and          shares issued and outstanding pro forma as adjusted		7			162
Additional paid-in capital		91,683			91,695
Subscription receivable		(12	)		(12	)
Deferred stock-based compensation		(1,628	)		(1,628	)
Accumulated deficit		(75,951	)		(75,951	)
Total stockholders’ equity		14,246			14,266
Total capitalization	$	14,473		$	14,493		$

Outstanding shares excludes:

• 44,875,237 shares of our common stock subject to outstanding options at a weighted average exercise price of $0.01;

• 24,781,248 shares of our common stock available for future grant or issuance under our 2002 Stock Option Stock Issuance Plan, our 2004 Equity Incentive Plan and our 2004 Employee Stock Purchase Plan; and

• 1,211,121 shares of our common stock issuable upon exercise of outstanding warrants with a weighted average exercise price of $2.02, including warrants previously exercisable for shares of preferred stock, which will become exercisable for shares of common stock upon the completion of this offering.

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DILUTION

If you invest in our common stock in this offering, your ownership interest in us will be diluted to the extent of the difference between the initial public offering price per share and the net tangible book value per share after this offering. Our net tangible book value at December 31, 2003, was approximately $1.6 million, or $0.01 per share of our common stock, after giving effect to the automatic conversion of all shares of our outstanding preferred stock into 154,120,920 shares of common stock upon completion of this offering, and the exercise of outstanding warrants to purchase an aggregate of 707,797 shares of common stock at a weighted average exercise price of $0.03 that would otherwise expire upon the effectiveness of this offering.

After giving effect to the sale of          shares of our common stock in this offering at the assumed initial public offering price of $         per share, the mid-point of the estimated price range set forth on the cover of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value at December 31, 2003, would have been approximately $         per share. This represents an immediate increase in net tangible book value of $         per share to existing stockholders and an immediate dilution of approximately $         per share to new investors purchasing shares of our common stock in this offering.

The following table illustrates the per share dilution to the new investors:

Assumed initial public offering price per share			$
Net tangible book value per share as of December 31, 2003	$	0.01
Increase in net tangible book value per share attributable to this offering
Pro forma as adjusted net tangible book value per share after offering
Dilution per share to new investors in this offering			$

Dilution is determined by subtracting the net tangible book value per share of common stock after this offering from the assumed initial public offering price per share. Net tangible book value per share is equal to our total assets less our total liabilities, divided by the total number of shares of our common stock outstanding (and after giving consideration to the events noted above). If the underwriters exercise their over-allotment option in full, there will be an increase in pro forma as adjusted net tangible book value to $         per share to existing stockholders and an immediate dilution in as adjusted net tangible book value of $         to new investors.

The following table compares the assumed initial public offering price of the shares of common stock to the cost to our existing stockholders of shares of common stock that they acquired within the past five years, or which they have the right to acquire upon conversion of preferred stock or exercise of warrants or outstanding stock options. As the table shows, new investors purchasing shares in this offering will pay an average price per share that is substantially higher than our existing stockholders paid.

	Shares Purchased			Total Consideration				Average Price Per Share
	Number		Percent(1)	Amount		Percent(2)
	(In thousands, except share and per share data)
Existing stockholders	207,804,829	(3)	%	$	94,938		%	$	0.46	(4)
New investors
Total			%	$		%

⁽¹⁾ The number of shares purchased as a percent of the total number of shares of our common stock outstanding, including conversion of preferred stock and exercise of outstanding warrants and stock options, on December 31, 2003.

⁽²⁾ The amount paid for the shares purchased as a percent of total price paid for the shares of our common stock since inception.

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⁽³⁾ Includes all shares of our common stock purchased since inception and assumes the exercise of all stock options and warrants outstanding as of December 31, 2003.

⁽⁴⁾ Based on the average exercise price of all stock options and warrants exercised since inception, as well as all stock options and warrants outstanding as of December 31, 2003.

If the underwriters exercise their over-allotment option in full, our existing stockholders would own         % and our new investors would own         % of the total number of shares of our common stock outstanding after this offering.

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SELECTED CONSOLIDATED FINANCIAL DATA

You should read the following selected consolidated financial data in conjunction with our consolidated financial statements, the notes to the consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included elsewhere in this prospectus.

The table below shows selected consolidated financial data for our last five years. The consolidated statements of operations data for the years ended December 31, 2001, 2002 and 2003 and the consolidated balance sheet data at December 31, 2002 and 2003 are derived from our audited consolidated financial statements included elsewhere in this prospectus. The consolidated statements of operations data for the years ended December 31, 1999 and 2000 and the consolidated balance sheet data at December 31, 1999, 2000 and 2001 are derived from our audited consolidated financial statements not included in this prospectus. Historical results are not necessarily indicative of the results to be expected in future periods.

	Year Ended December 31,
	1999			2000			2001			2002			2003
	(In thousands, except share and per share data)
Consolidated Statements of Operations Data:
Revenues:
Application services:
Registration	$	63		$	645		$	1,730		$	2,834		$	4,535
Software licensing		–			154			1,219			1,893			3,335
Software maintenance		–			–			506			1,423			1,642
Total application services		63			799			3,455			6,150			9,512
Marketing services (1)		11			426			943			2,274			5,624
Total revenues		74			1,225			4,398			8,424			15,136
Total cost of revenues(2)		35			374			828			1,442			3,152
Gross profit		39			851			3,570			6,982			11,984
Operating expenses:
Sales and marketing		1,032			8,003			4,917			4,314			4,869
General and administrative		4,448			21,103			24,732			9,878			8,221
Stock-based compensation(3)		7			299			240			62			265
Goodwill impairment		–			–			7,899			–			–
Total operating expenses		5,487			29,405			37,788			14,254			13,355
Loss from operations		(5,448	)		(28,554	)		(34,218	)		(7,272	)		(1,371	)
Interest income, net		95			550			256			120			47
Other income (expense), net		(24	)		5			34			1			7
Net loss	$	(5,378	)	$	(27,999	)	$	(33,928	)	$	(7,151	)	$	(1,317	)
Net loss per share:
Basic and diluted	$	(1.28	)	$	(1.91	)	$	(2.00	)	$	(0.41	)	$	(0.17	)
Pro forma(4)													$	(0.01	)
Weighted average number of shares used in per share amounts:
Basic and diluted		4,205,358			14,654,879			16,979,452			17,575,643			7,874,087
Pro forma(4)														162,426,534

⁽¹⁾ In 1999 and 2000, marketing services revenues correspond to advertising services and other revenues under classifications used by the predecessor auditors.

⁽²⁾ In 1999 and 2000, the total cost of revenues reflects only the credit card processing fees associated with registration revenues. For subsequent periods, the total cost of revenues includes all direct costs of revenues associated with application services and marketing services.

⁽³⁾ Amounts include stock-based expenses, as follows:

	Year Ended December 31,
	1999		2000		2001		2002		2003
	(In thousands)
Sales and marketing	$	1	$	39	$	31	$	8	$	34
General and administrative		6		260		209		54		231
Total stock-based expenses	$	7	$	299	$	240	$	62	3$	265

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⁽⁴⁾ The pro forma net loss per share is computed using the weighted average number of common shares outstanding, including the pro forma effect of the automatic conversion of all shares of our outstanding preferred stock into 154,120,920 shares of common stock upon completion of this offering, and the exercise of outstanding warrants to purchase an aggregate of 707,797 shares of common stock at a weighted average exercise price of $0.03 that would otherwise expire upon the effectiveness of this offering.

	Year Ended December 31,
	1999		2000		2001		2002		2003
	(In thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents(1)	$	5,877	$	9,303	$	10,408	$	4,467	$	5,779
Total assets		17,296		42,919		28,280		20,697		21,649
Capital lease obligations, long-term		71		57		23		–		–
Long-term obligation and promissory note		–		–		220		331		227
Stockholders’ equity	$	11,030	$	33,411	$	21,342	$	14,767	$	14,246

⁽¹⁾ Certain prior years balances have been reclassified to conform to the current year presentation. Beginning in fiscal 2001, credit card payments in transit have been classified as accounts receivable, whereas they were previously included in cash and cash equivalents.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements and the related notes thereto included elsewhere in this prospectus. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions, as set forth under Special Note Regarding Forward-Looking Statements. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors, including those set forth in the following discussion and under Risk Factors, Business and elsewhere in this prospectus.

Overview

We are the leading provider of application services that reduce the cost and complexity of managing, organizing and promoting participatory sports and activities, and a leading provider of marketing services to reach active lifestyle consumers.

Our application services, encompassed in the Active Technology Suite, enable event organizers, park and recreation department administrators, and league administrators, to eliminate the costs associated with the traditional paper-based registration processing model by using our transaction processing capabilities. We have derived the substantial majority of our historical revenues through the sale of application services to approximately 7,000 events, 600 park and recreation departments, and 2,500 leagues and camps. The market for our application services is highly fragmented, competitive and dependent upon the continued adoption of online registration and related services by both active lifestyle consumers and the organizers and administrators of events, park and recreation departments, and leagues.

Our marketing services group seeks to capitalize on our participatory sports and activities industry access and relationships to create integrated online and field marketing campaigns, which consist of online advertising, targeted e-mail newsletter promotions, event promotions, sponsorships and sample placements. Our marketing services revenues have grown in the last two years, both in terms of absolute amounts and as a percentage of total revenues. The market for our marketing services is relatively new, dominated by larger, more traditional advertising companies and is subject to fluctuations in the marketing budgets of consumer brand companies. We anticipate that our marketing services revenues will continue to increase as a percentage of total revenues as we allocate more sales resources to our marketing services group and continue to capitalize on our access and relationships within the participatory sports and activities industry.

Since our inception, we have increased our revenues by obtaining new customers, growing online registration usage, expanding our software licensing and maintenance business, and acquiring six companies since 2000. While our revenues have increased substantially in recent periods, we have experienced net losses in each year since inception and, as of December 31, 2003, we had an accumulated deficit of $76.0 million. We have managed to develop and grow our application services and marketing services businesses despite the relative infancy of our markets, the economic recession in the United States during 2000 and 2001, the associated budgetary cuts in both private and public sectors during the economic downturn, and the reduction of approximately 50% of our workforce in late 2000 and early 2001. Our success to date is a result of focusing on the active lifestyle population and its activities, expanding our application services customer base, increasing online registration usage by our application services customers’ participants, retaining highly specialized sales and marketing personnel, and developing expertise and domain knowledge to successfully build our marketing services business.

We intend to grow our business by expanding our application services and marketing services customer base, targeting event organizers, park and recreation department administrators, and league administrators who

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use paper-based processing methods, increasing the migration of our customers’ participants to online registration, increasing the breadth of application services sold to our existing customer base, continuing to develop comprehensive, tailored application services, and pursuing strategic acquisitions. We further expect that as our application services customer base grows and, as our customers’ participants increase their use of online registration, our registration revenues will grow more rapidly than our software licensing and maintenance revenues.

We derive a substantial amount of our total revenues in the form of upfront fees, which are deferred and recognized as revenues over the term of the contracts or as the services are delivered. As of December 31, 2002 and 2003, our deferred revenue balance was $2.5 million and $4.3 million, respectively. We expect our sales and marketing expenses to continue to increase as we expand our marketing efforts and sales infrastructure to support future increased revenues. We anticipate that our operating expenses will continue to grow in the future as we add sales personnel and as we incur additional personnel and other costs associated with being a public company. Our revenues may not increase at the same rate as our operating expenses.

Significant Financial Events in 2003

During 2003, we experienced substantial events and changes in our business including:

• The recapitalization of our capital stock in February 2003, which included a reduction in the number of outstanding shares of our common and preferred stock, a reduction in the aggregate liquidation preference of all outstanding shares of preferred stock from $145.7 million to $26.2 million, and the modification of our 2002 Option Plan. For additional information regarding the recapitalization, see Note 5 to our consolidated financial statements included elsewhere in this prospectus.

• A 79.7% increase in total revenues, from $8.4 million in 2002 to $15.1 million in 2003.

• A reduction in our net loss from $7.2 million in 2002 to $1.3 million in 2003.

• An improvement in our cash flow from operations from net cash used of $5.5 million in 2002 to net cash generated of $1.7 million in 2003.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Our critical accounting policies, as set forth below, reflect areas which entail the use of subjective judgment and the use of estimates.

Revenue recognition.    Registration revenues are recognized in accordance with Emerging Issues Task Force, or EITF, consensus on Issue 99-19, Reporting Revenues Gross as a Principal versus Net as an Agent. Under EITF 99-19, registration revenues are recognized net of the portion of the registration fees paid to the event organizers, park and recreation department administrators, and league administrators and net of reserves for chargebacks. We recognize registration revenues when the services are performed.

With respect to software licensing revenues, we follow Statement of Position, or SOP 97-2, Software Revenue Recognition. Consistent with SOP 97-2, software licensing revenues are recognized upon delivery of the software to a customer if a signed contract exists, the fee is fixed or determinable, the collection of resulting receivables is probable and after the software installation and training have been completed.

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Subscription revenues, included in software licensing revenues, are derived from contracts for our hosted application services users. We invoice the customer for the full term of the agreement and the contracts are renewed annually thereafter. We recognize revenues on a straight-line basis over the term of the contract.

Software maintenance revenues are derived from annual maintenance contracts. We invoice the customer for the full term of the contract upon delivery of the software and the maintenance contracts are renewed annually thereafter. We recognize revenues on a straight-line basis over the term of the maintenance contract.

Marketing services revenues consist of online and field marketing campaigns. Online revenues are recognized as online impressions, which are displayed on our website or as electronic content is delivered by e-mail to the intended addressee. Our field marketing services include event promotions, sponsorships and sample placements, which are defined contractually with individual customers. Field marketing revenues are recognized when services are rendered.

Valuation of long-lived and intangible assets and goodwill.    Intangible assets with finite lives are amortized on a straight-line basis over their useful lives and are evaluated for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable under Statement of Financial Accounting Standards, or SFAS, No. 144, Accounting for Impairment or Disposal of Long-Lived Assets. Events or changes in circumstances that indicate that the carrying amount may not be recoverable include, but are not limited to, a significant decrease in the market value of the business or asset acquired, a significant adverse change in the extent or manner in which the business or asset is used or significant adverse change in the business climate. If such events or changes in circumstances are present, we review the carrying value of the asset and apply the undiscounted cash flow method to determine whether the asset is impaired. To the extent that the carrying value of the asset exceeds the undiscounted cash flows over the estimated remaining life of the asset, the impairment is measured using the discounted cash flows. The discount rate utilized would be based on our best estimate of the related risks and return at the time the impairment assessment is made. Prior to 2002, we amortized goodwill over a three-year useful life and evaluated its recoverability in accordance with SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of. Under this standard, if circumstances indicate that recoverability may be in doubt, we are required to state an asset at its fair value if the sum of its undiscounted cash flows is less than its carrying value. Beginning in 2002, we began testing goodwill and intangible assets with indefinite lives for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired in accordance with SFAS No. 142 Goodwill and Other Intangible Assets. The impairment test compares the fair value of the asset with its carrying amount. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, which could materially adversely impact our financial position and results of operations. In 2001, we recorded a charge of $7.9 million for an impairment to the goodwill assigned to several reporting units.

Stock-based compensation.    We issue common stock options to employees under our 2002 Stock Option/Stock Issuance Plan and previously we issued stock options under our 1999 plan. Prior to 2002, we accounted for those stock options granted under those plans under the recognition provisions of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees. Effective on January 1, 2002, we adopted fair value based method of accounting for stock-based employee compensation of SFAS No. 123, Accounting for Stock-Based Compensation. We have also adopted disclosure requirements of SFAS No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure – an Amendment of FASB Statement 123, and have elected to follow the modified prospective method of adoption described in SFAS No. 148. Under this method, compensation expense equal to the fair value of the stock-based award at the date of grant is recognized over the course of its vesting period. Compensation cost recognized in 2002 and 2003 is the same as that which would have been recognized had the minimum value method of SFAS No. 123 been applied from its original effective date. Consistent with the modified prospective method of adoption, results for years prior to 2002 have not been restated. Because there has been no public market for our stock, our Board of Directors determined the

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fair value of our common stock by considering a number of factors including, but not limited to, our operating performance, significant events in our history, trends in the broad market and comparable companies, and the expected valuation we would obtain in an initial public offering.

On January 1, 2002, the Company cancelled 5,309,506 stock options issued under our 1999 Plan and reissued the same number of stock options to employees under our 2002 Plan. In February 2003, in connection with the recapitalization of our capital stock, we modified our 2002 option plan to allow option holders to retain the same percentage of our capital stock on a fully diluted basis before and after the restructuring. This modification resulted in vested options being exercisable for 82% of a pre-restructuring common share, rather than the 25% they were entitled to prior to such modification. In both instances, we determined the difference between fair value of options granted and the fair value of the options received in exchange, as of the date of such exchange, and recorded such amount to deferred compensation. We then amortize this amount to expense over the vesting period of the new or modified options.

Taxes.    Significant management judgment is required in determining the valuation allowance recorded against our net deferred tax assets. We have recorded a full valuation allowance on our net deferred tax assets as of December 31, 2002 and 2003, due to uncertainties associated with our ability to utilize our deferred tax assets. As of December 31, 2003, we had federal and California tax net operating loss carryforwards of approximately $27.9 million and $12.8 million, respectively. The federal and California tax loss carryforwards will begin to expire in 2019 and 2009, respectively. The difference between the retained deficit and net operating losses included in the deferred tax asset is primarily due to the limitations on the usage of the net operating losses pursuant to Section 382 and 383 of the Internal Revenue Code. Section 382 limits the use of the net operating loss in the event of a cumulative change in ownership of more than 50% within a three-year period. We have experienced multiple ownership changes since inception. The net operating losses included in the deferred tax asset are the maximum amount allowed under Section 382. Additional limitations on the annual use of these net operating losses may apply if we subsequently issue stock.

Acquisitions

In November 2001, we purchased myteam.com, a provider of online services for teams and leagues, in a transaction accounted for as a purchase. The acquisition was consummated principally to expand and enhance the software and services offering for the amateur team and league markets. The results of operations of myteam.com have been included in the accompanying consolidated statements of operations since November 29, 2001.

In May 2003, we acquired substantially all of the assets of Onjibe, a provider of online services for teams and leagues. The acquisition was consummated principally to expand our application services business. The results of operations of Onjibe have been included in the accompanying consolidated statements of operations since May 23, 2003.

In April 2004, we purchased substantially all of the assets of Do It Sports, a provider of online registration services and technology for real-time race day data services and results, for $0.4 million in cash and the assumption of certain liabilities, substantially all of which are current liabilities. Do It Sports has represented that the liabilities assumed when reduced by cash and receivables, or Net Liabilities, do not exceed $1.9 million. We have agreed to assume responsibility for Net Liabilities of up to $2.1 million and have placed up to $0.2 million of the aforementioned cash in escrow to be held as security for the indemnification of obligations in the event that Net Liabilities exceed the $1.9 million represented. In addition, in July of 2005, we will pay Do It Sports up to $3.3 million, subject to the achievement of certain milestones, in cash or, at our election, shares of common stock.

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Segment Reporting

We have two reportable operating segments: applications services and marketing services. Our application services are used by event organizers, park and recreation department administrators, and league administrators to provide online registration, and transaction processing and data management, enhance marketing and promotion capabilities and improve the management of all facilities and membership. Our marketing services group capitalizes on our participatory sports and activities industry access and relationships to create targeted online and field marketing campaigns to reach active lifestyle consumers on behalf of consumer brand companies.

Segment reporting expenses include only direct costs such as salaries, payroll taxes, benefits and commissions attributable to each segment. All other operating expenses, depreciation, stock-based compensation and goodwill impairment are captured in the operating expense line item titled “Corporate” in the table below. We do not allocate fixed assets on the basis of reportable operating segments.

The following table sets forth summary financial information for our two operating segments.

	Year Ended December 31,
	2001			2002			2003
	(In thousands)
Revenues:
Application services	$	3,455		$	6,150		$	9,512
Marketing services		943			2,274			5,624
Total revenues		4,398			8,424			15,136
Cost of revenues:
Application services		772			1,262			2,022
Marketing services		56			180			1,130
Total cost of revenues		828			1,442			3,152
Gross profit:
Application services		2,683			4,888			7,490
Marketing services		887			2,094			4,494
Total gross profit		3,570			6,982			11,984
Operating expenses:
Application services		7,855			6,413			7,180
Marketing services		1,168			1,089			1,847
Corporate		28,765			6,752			4,328
Total operating expenses		37,788			14,254			13,355
Segment income (loss):
Application services		(5,172	)		(1,525	)		310
Marketing services		(281	)		1,005			2,647
Corporate		(28,765	)		(6,752	)		(4,328	)
Total loss from operations	$	(34,218	)	$	(7,272	)	$	(1,371	)

Sources of Revenues

We derive our total revenues from our two segments: application services and marketing services.

Application services.    Our application services revenues consist of transaction-based registration revenues, which typically represent 5% to 10% of the total registration fee paid by event and activity participants, software licensing revenues, which consist of license fees for our proprietary software and subscription fees for our hosted software applications, and software maintenance fees for post-warranty software support. Our total

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application services revenues represented 78.6%, 73.0% and 62.8% of our total revenues for 2001, 2002 and 2003, respectively. No single application services customer accounted for more than 10.0% of our total revenues in any year.

Marketing services.    Our marketing services revenues are generated through online and field marketing campaigns offered to our customers seeking to reach active lifestyle consumers. Our online marketing services include online advertising, and targeted e-mail newsletter promotions. Online banner, button, e-mail advertisements and newsletters are impression-based, with revenues based on the number of times the advertisement is displayed on our website or delivered by e-mail during a specified period. Our field marketing campaigns include event promotions, sponsorships and sample placements, and are defined contractually with each customer. Our marketing services revenues accounted for 21.4%, 27.0% and 37.2% of our total revenues for 2001, 2002 and 2003, respectively. No single marketing services customer accounted for more than 10.0% of our total revenues in any year. As we add more personnel and resources to our marketing services segment, we hope to add new customers and generate follow-on contracts with existing customers. Due to lead times associated with selling and performing these services, we may see significant fluctuations in marketing services revenues.

Cost of Revenues

Application services cost of revenues.    Application services cost of revenues consists of credit card processing fees paid by us in conjunction with processing event and activity registration fees on behalf of our customers. Also included in application services cost of revenues are customer program expenses such as fees paid to event and activity organizers for certain marketing benefits.

Marketing services cost of revenues.    Marketing services cost of revenues consist of customer program expenses associated with the execution of online and field marketing services and programs. Customer program expenses include contracted labor, travel, promotion-related materials and shipping costs associated with the performance of our marketing services.

Segment Operating Expenses

Application services and marketing services operating expenses.    We allocate segment operating expenses based on a detailed classification of all of our employees and assign the following personnel-related expenses to the respective segment: salaries, payroll taxes, benefits and commissions.

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Results of Operations

The following table sets forth our consolidated statements of operations data, expressed as a percentage of total revenues for the periods indicated. The following discussion concerning results of operations should be read in conjunction with our Selected Consolidated Financial Data, the consolidated financial statements and accompanying notes and the other consolidated financial data included elsewhere in this prospectus.

	Year Ended December 31,
	2001		2002		2003
Consolidated Statements of Operations Data:
Revenues:
Application services:
Registration	39.3	%	33.6	%	30.0	%
Software licensing	27.7		22.5		22.0
Software maintenance	11.5		16.9		10.8
Total application services	78.6		73.0		62.8
Marketing services	21.4		27.0		37.2
Total revenues	100.0	%	100.0	%	100.0	%
Cost of revenues:
Cost of application services	17.6		15.0		13.4
Cost of marketing services	1.3		2.1		7.5
Total cost of revenues	18.8		17.1		20.8
Gross profit	81.2		82.9		79.2
Operating expenses:
Sales and marketing	111.8		51.2		32.2
General and administrative	562.3		117.3		54.3
Stock-based compensation expense	5.5		0.7		1.8
Goodwill impairment	179.6		0.0		0.0
Total operating expenses	859.2		169.2		88.2
Loss from operations	(778.0	)	(86.3	)	(9.1	)
Interest income, net	5.8		1.4		0.3
Other income, net	0.8		0.0		0.0
Net loss	(771.4	)%	(84.9	)%	(8.7	)%

Comparison of years ended December 31, 2001, 2002 and 2003

Revenues

Total revenues increased from $4.4 million in 2001 to $8.4 million in 2002, an increase of $4.0 million, or 91.5%. Total revenues increased from $8.4 million in 2002 to $15.1 million in 2003, an increase of $6.7 million, or 79.7%. The revenues by segment for these periods are detailed in the table below:

	Year Ended December 31,
Total Revenues:	2001		2002		2003
Application services:	(In thousands)
Registration	$	1,730	$	2,834	$	4,535
Software licensing		1,219		1,893		3,335
Software maintenance		506		1,423		1,642
Total application services		3,455		6,150		9,512
Marketing services		943		2,274		5,624
Total revenues	$	4,398	$	8,424	$	15,136

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Application services revenues.    Application services revenues totaled $3.5 million in 2001 and $6.2 million in 2002, an increase of $2.7 million, or 78.0%. The year-over-year increase was primarily due to an increase in registration revenues of $1.1 million associated with an increase in our customer base, an increase in individual event registration convenience fees of $0.9 million, and an increase of $0.2 million in team and league fees. Applications services revenues grew from $6.2 million in 2002 to $9.5 million in 2003, an increase of $3.3 million, or 54.7%. This increase was due to growth in the number of events under contract, the new release of our client-server software for the park and recreation market and the conversion of customers to our online transaction convenience fee-based model. We expect that, over time, our new and existing customers will continue to move to our online transaction convenience fee-based model to streamline their registration processes. Application services revenues represented 78.6%, 73.0% and 62.8% of total revenues in 2001, 2002 and 2003, respectively.

Marketing services revenues.    Marketing services revenues grew from $0.9 million in 2001 to $2.3 million in 2002, an increase of $1.4 million, or 141.1%. Growth in 2002 revenues was primarily driven by an increase in the absolute number of marketing programs under contract. Marketing services revenues grew from $2.3 million in 2002 to $5.6 million in 2003, an increase of $3.3 million, or 147.3%. The growth in 2003 revenues reflected an increase in resources deployed for marketing services, including an increase in sales personnel, and an increase in the use of field marketing campaigns and special online marketing promotions by our customers. Marketing services revenues represented 21.4%, 27.0% and 37.2% of total revenues in 2001, 2002 and 2003, respectively. The continued growth of our marketing services revenues, both in terms of absolute dollar amounts and as a percentage of total revenues, is dependent upon our retention and additional hiring of specialized sales and marketing personnel.

Cost of Revenues

Application services cost of revenues.    Application services cost of revenues increased from $0.8 million in 2001 to $1.3 million in 2002, an increase of $0.5 million, or 63.5%. This increase was primarily due to the costs associated with credit card processing, which increased by $0.4 million as a result of increased transaction volume. Application services cost of revenues increased from $1.3 million in 2002 to $2.0 million in 2003, an increase of $0.7 million, or 60.2%. This increase was also primarily a result of higher credit card processing costs, which increased by $0.6 million in 2003 as a result of increased transaction volume. In 2001, 2002 and 2003, application services cost of revenues represented 22.3%, 20.5% and 21.3% of total application services revenues, respectively.

Marketing services cost of revenues.    The marketing services cost of revenues increased from $0.1 million in 2001 to $0.2 million in 2002, an increase of $0.1 million, or 221.4%, due to an increase in the number of customers. Marketing services cost of revenues increased from $0.2 million in 2002 to $1.1 million in 2003, an increase of $0.9 million, or 527.8%. The growth was primarily due to an increase in the number of field marketing campaigns we performed and an increase in the breadth of the online and field marketing services we provided. Marketing services cost of revenues represented 5.9%, 7.9% and 20.1% of total marketing services revenues in 2001, 2002 and 2003, respectively. The increase in our marketing services cost of revenues was primarily a result of a shift in the mix of marketing services provided from primarily online to more costly field marketing programs.

Sales and Marketing Expenses

Sales and marketing expenses, which consist primarily of salary, travel, marketing materials and promotional costs, decreased from $4.9 million in 2001 to $4.3 million in 2002, a decrease of $0.6 million, or 12.3%. This decrease was due to a reduction in customer program expenses paid to event organizers to promote our brands. Sales and marketing expenses increased from $4.3 million in 2002 to $4.9 million in 2003, an increase of $0.6 million, or 12.9%. The increase was due to an increase in sales personnel and commission expenses associated with higher revenues offset by a reduction in certain marketing expenses. We plan to further increase the number of direct sales personnel to help accelerate the addition of new customers and sales of

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additional application and marketing services to our existing customer base. Sales and marketing expenses represented 111.8%, 51.2%, and 32.2% of total revenues in 2001, 2002 and 2003, respectively.

General and Administrative Expenses

General and administrative expenses, consisting of salary, outside service, depreciation, amortization and overhead costs, decreased from $24.7 million in 2001 to $9.9 million in 2002, a decrease of $14.8 million, or 60.1%. This decrease was principally due to our adoption of SFAS 142, which changed our treatment of goodwill. In 2001, our depreciation and amortization expense was $13.0 million and in 2002 decreased to $1.5 million. General and administrative expenses decreased from $9.9 million in 2002 to $8.2 million in 2003, a decrease of $1.7 million, or 16.8%. The decrease in general and administrative expenses was primarily attributable to lower depreciation expenses as certain of our fixed assets were fully depreciated by 2003. General and administrative expenses represented 562.3%, 117.3% and 54.3% of total revenues in 2001, 2002 and 2003, respectively. In the future, we expect that our general and administrative expenses will increase in absolute dollars as we add personnel and incur additional professional fees and other costs related to the growth of our business and to our operations as a public company.

Goodwill Impairment

In 2001, we recorded a charge in the amount of $7.9 million for an impairment to the goodwill associated with prior acquisitions.

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Quarterly Results of Operations

The following tables set forth our unaudited quarterly results of operations data for the eight most recent quarters ended December 31, 2003, both in dollars and expressed as a percentage of total revenues. The information in the table below should be read in conjunction with our consolidated financial statements and the notes thereto included elsewhere in this prospectus. We have prepared this information on the same basis as the consolidated financial statements and the information includes all adjustments, consisting only of normal recurring adjustments, that we consider necessary for a fair statement of our financial position and operating results for the quarters presented. Our quarterly operating results have varied substantially in the past and may vary substantially in the future. You should not draw any conclusions about our future results from the results of operations for any particular quarter.

	March 31, 2002			June 30, 2002			Sept. 30, 2002			Dec. 31, 2002			March 31, 2003			June 30, 2003			Sept. 30, 2003		Dec. 31, 2003
	(In thousands, except share and per share data)
Consolidated Statements of Operations Data:
Revenues:
Application services:
Registration revenues	$	588		$	848		$	810		$	588		$	1,017		$	1,292		$	1,247	$	979
Software licensing		252			299			594			748			896			823			1,093		523
Software maintenance		329			349			369			376			380			385			400		477
Total application services		1,169			1,496			1,773			1,712			2,293			2,500			2,740		1,979
Marketing services		641			481			593			559			738			1,171			1,746		1,969
Total revenues		1,810			1,977			2,366			2,271			3,031			3,671			4,486		3,948
Cost of revenues:
Cost of application services		265			364			360			273			458			575			529		460
Cost of marketing services		59			33			70			18			259			230			306		335
Total cost of revenues		324			397			430			291			717			805			835		795
Gross profit		1,486			1,580			1,936			1,980			2,314			2,866			3,651		3,153
Operating expenses:
Sales and marketing		1,086			1,186			1,162			880			1,517			1,123			1,098		1,131
General and administrative		2,951			2,789			2,778			1,360			1,854			2,194			2,065		2,108
Stock-based compensation		44			6			6			6			39			48			56		122
Total operating expenses		4,081			3,981			3,946			2,246			3,410			3,365			3,219		3,361
Income (loss) from operations		(2,595	)		(2,401	)		(2,010	)		(266	)		(1,096	)		(499	)		432		(208	)
Interest income, net		42			33			26			19			12			14			10		11
Other income, net		1			–			–			–			2			2			–		3
Net income (loss)	$	(2,552	)	$	(2,368	)	$	(1,984	)	$	(247	)	$	(1,082	)	$	(483	)	$	442	$	(194	)
Net income (loss) per share:
Basic	$	(0.15	)	$	(0.13	)	$	(0.11	)	$	(0.01	)	$	(0.09	)	$	(0.08	)	$	0.07	$	(0.03	)
Diluted	$	(0.15	)	$	(0.13	)	$	(0.11	)	$	(0.01	)	$	(0.09	)	$	(0.08	)	$	0.00	$	(0.03	)
Weighted average number of shares used in per share Amounts:
Basic		17,235,461			17,649,828			17,677,530			17,733,165			11,902,548			6,391,888			6,505,682		6,767,697
Diluted		17,235,461			17,649,828			17,677,530			17,733,165			11,902,548			6,391,888			192,329,235		6,767,697

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	March 31, 2002		June 30, 2002		Sept. 30, 2002		Dec. 31, 2002		March 31, 2003		June 30, 2003		Sept. 30, 2003		Dec. 31, 2003
Consolidated Statements of Operations Data:
Revenues:
Application services:
Registration revenues	32.5	%	42.9	%	34.2	%	25.9	%	33.6	%	35.2	%	27.8	%	24.8	%
Software licensing	13.9		15.1		25.1		32.9		29.6		22.4		24.4		13.2
Software maintenance	18.2		17.7		15.6		16.6		12.5		10.5		8.9		12.1
Total application services	64.6		75.7		74.9		75.4		75.7		68.1		61.1		50.1
Marketing services	35.4		24.3		25.1		24.6		24.3		31.9		38.9		49.9
Total revenues	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Cost of revenues:
Cost of application services	14.6		18.4		15.2		12.0		15.1		15.7		11.8		11.7
Cost of marketing services	3.3		1.7		3.0		0.8		8.5		6.3		6.8		8.5
Total cost of revenues	17.9		20.1		18.2		12.8		23.7		21.9		18.6		20.1
Gross profit	82.1		79.9		81.8		87.2		76.3		78.1		81.4		79.9
Operating expenses:
Sales and marketing	60.0		60.0		49.1		38.7		50.0		30.6		24.5		28.6
General and administrative	163.0		141.1		117.4		59.9		61.2		59.8		46.0		53.4
Stock-based compensation	2.4		0.3		0.3		0.3		1.3		1.3		1.2		3.1
Total operating expenses	225.5		201.4		166.8		98.9		112.5		91.7		71.8		85.1
Income (loss) from operations	(143.4	)	(121.4	)	(85.0	)	(11.7	)	(36.2	)	(13.6	)	9.6		(5.3	)
Interest income, net	2.3		1.7		1.1		0.8		0.4		0.4		0.2		0.3
Other income, net	0.1		0.0		0.0		0.0		0.1		0.1		0.0		0.1
Net income (loss)	(141.0	)%	(119.8	)%	(83.9	)%	(10.9	)%	(35.7	)%	(13.2	)%	9.9	%	(4.9	)%

In the past, we have experienced seasonal increases in our total revenues in the second and third quarters of each year. This seasonal pattern relates to fluctuations in our application services revenues, specifically registration and software licensing and maintenance revenues, which tend to rise in the second and third quarters of each year due to peak participation periods for the events and leagues managed by our application services customers. To date, we have not experienced any seasonal pattern in our marketing services revenues. In each of the last four quarters, our total revenues have increased as compared to the same period in the prior year. Both application services and marketing services revenues contributed to this year-over-year increase. In particular, the growth in application services revenues, on a year-over-year basis, was due to increases in the number of events, teams and park and recreation departments using our online registration services, the convenience fee generated per registration, the number of software customers and the acquisition of larger customers with the introduction of our new application services. The growth in marketing services revenues, on a year-over-year basis, was due to an increase in the number of sales and marketing professionals, the execution of contracts with new customers, and extension or renewal of contracts with existing customers.

Total operating expenses as a percentage of total revenues have decreased on a sequential basis for the last eight quarters, except for the fourth quarter of 2003. The decrease in operating expenses as a percentage of total revenues for 2002 and the first three quarters of 2003 is a result of consolidation of excess facilities, the elimination of redundant positions and a reduction of general and administrative expenses associated with the acquisition of myteam.com. With respect to the fourth quarter of 2003, operating expenses increased, as a percentage of total revenues, due to an increase in personnel-related sales and marketing, and general and administrative expenses, and the seasonal drop in fourth quarter total revenues.

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Liquidity and Capital Resources

We have historically financed our operations through private sales of approximately $57.8 million of our convertible preferred securities. As of December 31, 2002 and December 31, 2003, we had approximately $4.5 million and $5.8 million, respectively, of cash and cash equivalents.

Net cash flow used by operating activities was $12.3 million in 2001 and $5.5 million in 2002, while we generated $1.7 million in cash flow from operating activities in 2003. In 2001 and 2002, cash used for operating activities was related to our net losses and our working capital requirements. In 2003, net cash flow from operating activities improved due to a decrease in the net loss and an increase in advanced payments associated with software maintenance contracts, application services and marketing services that have been recorded as deferred revenue.

Net cash flow used for investing activities was $0.3 million in each of 2001, 2002 and 2003. Cash used for investing activities related primarily to capital expenditures for property and equipment and for certain acquisition related costs.

Net cash flow provided by financing activities was approximately $13.7 million in 2001, related to the issuance of Series B-6 convertible preferred stock. Net cash flow used in financing activities was $0.1 million in each of 2002 and 2003, and related to payments on promissory notes and capital leases.

In April 2004, we purchased substantially all of the assets of Do It Sports, a provider of online registration services and technology for real-time race day data services and results, for $0.4 million in cash and the assumption of certain liabilities, substantially all of which are current liabilities. Do It Sports has represented that the liabilities assumed when reduced by cash and receivables, or Net Liabilities, do not exceed $1.9 million. We have agreed to assume responsibility for Net Liabilities of up to $2.1 million and have placed up to $0.2 million of the aforementioned cash in escrow to be held as security for the indemnification of obligations in the event that Net Liabilities exceed the $1.9 million represented. In addition, in July of 2005, we will pay Do It Sports up to $3.3 million, subject to the achievement of certain milestones, in cash or, at our election, shares of common stock.

We believe the proceeds generated by the sale of common stock in this offering, and cash on hand, will be sufficient to meet our working capital requirements and contractual commitments for at least the next 12 months.

If we are unable to increase our total revenues or complete this offering, we will need to raise additional funds to finance our future capital needs. We may need additional financing earlier than we anticipate. If we raise additional funds through the sale of equity or convertible debt securities, these transactions may dilute the value of the outstanding common stock. We may also decide to issue securities, including debt securities, which have rights, preferences and privileges senior to our common stock. We cannot assure you that we will be able to raise additional funds on terms favorable to us or at all. If future financing is not available, or is not available on acceptable terms, we may not be able to fund our future needs. This may prevent us from increasing our market share, pursuing new business opportunities or remaining competitive in the participatory sports and activities industry.

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Contractual Obligations

At December 31, 2003, our outstanding commitments included:

	Payments Due by Period
	Total		Less than 1 year		1 to 3 Years		3 to 5 Years		More than 5 years
	(In thousands)
Operating lease obligations(1)	$	615	$	380	$	235	$	–	$	–
Promissory note(2)		100		50		50		–		–
Long-term obligation(3)		240		60		120		60		–
Total	$	955	$	490	$	405	$	60	$	–

⁽¹⁾ We lease our facility located in La Jolla, California under an operating lease that expires in July 2005.

⁽²⁾ Our promissory note obligation relates to our domain name transfer agreement whereby we are obligated to pay $50,000 annually through 2005.

⁽³⁾ Long-term obligation consists of a contract with National Intramural-Recreational Sports Association whereby we are obligated to pay $60,000 per year through 2007.

Quantitative and Qualitative Disclosures about Market Risk

We conduct our business with for-profit organizations, primarily in North America and receive payment for our services primarily in United States dollars. Certain of our registration revenues are derived from events held in Asia, Australia, New Zealand and Canada, and we receive payment for such services in local currencies. Our foreign currency exposure is limited and, as a result, our financial results are unlikely to be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in foreign markets.

All of our cash investments are held in money market, treasury securities or obligations issued by the United States government, certificates of deposit and checking funds. We do not hold derivative financial or commodity instruments.

Recent Accounting Pronouncements

Effective on January 1, 2002, we adopted the fair value based method of accounting for stock-based employee compensation of SFAS No. 123 and the disclosure requirements of SFAS No. 148. Under this method, compensation expense equal to the fair value of the stock based award at grant is recognized over the course of its vesting period. We elected to follow the modified prospective method of adoption described in SFAS No. 148. Compensation cost recognized in 2003 and 2002 is the same as that which would have been recognized had the fair value method of SFAS No. 123 been applied from its original effective date. In accordance with the modified prospective method of adoption, results for years prior to 2002 have not been restated.

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BUSINESS

Overview

We are the leading provider of application services that reduce the cost and complexity of managing, organizing and promoting participatory sports and activities, and a leading provider of marketing services to reach active lifestyle consumers.

Our application services, encompassed in the Active Technology Suite, are used by event organizers, park and recreation department administrators and amateur sports league administrators to provide online registration transaction processing and data management, enhance marketing and promotion capabilities, and improve the management of facilities and membership. We believe we have the largest customer base in our industry, a customer base that includes organizers of over 7,000 events, 600 park and recreation departments, and 2,500 leagues and camps. Representative customers include the LaSalle Bank Chicago Marathon, the New York City Park and Recreation Department, and Little League organizations around the United States. We also operate eteamz.com, our team and league web-portal, on which approximately 1.5 million teams have been registered since 2000.

Our marketing services group creates integrated online and field marketing campaigns to reach active lifestyle consumers. Our industry access and relationships enable us to target consumers by activity, age, gender and geography as well as other detailed demographics. Our online marketing services include online advertising and targeted e-mail newsletter promotions. Our field marketing services include event promotions, sponsorships and sample placements. Representative marketing services customers include Nestle, Nike, PepsiCo Beverages and Foods, Procter & Gamble, and Unilever.

Participatory Sports and Activities Market

Overview

The participatory sports and activities market consists of consumers who actively engage in sports, hobbies, recreational activities and classes. These include three main categories:

• Events: Includes a variety of sports and outdoor activities for individuals, such as marathons, triathlons, mountain biking, cycling and tennis tournaments;

• Parks and recreation activities: Includes activities such as camping, arts and crafts, continuing education courses, driver’s education, and adult and youth sports leagues, which are organized and managed by municipal park and recreation departments, community centers or public school systems;

• Team sports leagues and camps: Includes independently managed amateur and intramural leagues such as Little League Baseball, NFL Youth Football programs and Sport & Social Clubs, and camps hosted by organizations such as Stanford University Basketball, University of Michigan Baseball, Duke University Soccer and Major League Soccer.

Based on an April 2004 study by the Leisure Intelligence Group, which encompassed the 12 months ended March 2004, 62% of American households registered for a community activity requiring a fee. The study reported that Americans paid fees for over 110 million registrations for individual and team-based sports leagues and events, over 115 million registrations for parks and recreation activities and memberships, over 20 million registrations for camps and over 115 million registrations for continuing education classes. The Leisure Intelligence Group study estimates total registration fees associated with these sports and activities to be over $33 billion. Currently, most of these organized activities use paper-based processing for registration, data collection and data management. The study also estimates that less than 2% of registration fees collected for participatory sports and activities are currently collected through online transaction processing.

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Limitations of Paper-Based Processing Model

The walk-up and mail-based paper processing model can be costly, inefficient and prone to errors. For a participant, event registration involves finding and completing a paper registration form and mailing it to the event or activity organizer or traveling to the registration office and completing a registration form in person.

For the event or activities organizer, processing paper-based registration forms is time consuming and costly, and involves the following:

• Receiving and handling of mail-in entry forms;

• Staffing for walk-up registration;

• Ensuring completion and accuracy of registration information and payment amount;

• Processing check and credit card payments;

• Entering participants’ personal data, which can be difficult to read or illegible;

• Maintaining a database of participant information, for example, checking for residency, reporting results, assigning bib numbers and recognizing membership;

• Communicating with participants; and

• Promoting upcoming events to past and potential participants.

Managing an event or activity with a walk-up or mail-based paper processing method can lead to incomplete or lost registration forms requiring follow-up, a lack of secure control of sensitive participant information caused by the mail system or insufficient process controls, and mistakes created by subsequently incorrectly entering participant information into the database. These common errors can add incremental costs for organizers, delay registration for participants and cause the improper reporting of race results.

The alternative to in-house processing is to contract with a third party for handling and data entry services, which we believe typically takes two to five business days to complete and does not provide database, participant communication or promotion capabilities for the organizer.

Emergence of Online Registration

Growing recognition of the benefits associated with online systems is driving organizer and participant demand and increasing the use of online registration.

Specific benefits of online registration for the organizer include:

• Real-time payment and enrollment data;

• Reduced administrative time and expenses incurred to process data;

• Fewer processing errors;

• The ability to provide up-to-date event and activity content to participants;

• The ability to build e-commerce opportunities into the registration process; and

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• Outsourced telephone and e-mail customer support for participants.

Specific benefits of online registration for participants include:

• A more convenient process where there is no need to locate paper registration forms or show up in person to register;

• Real-time registration confirmation;

• The ability to receive up-to-date event and activity content; and

• The ability to have registration questions answered promptly online, by e-mail or by telephone.

The April 2004 Leisure Intelligence Group study estimates that less than 2% of registration fees associated with participatory sports and activities were collected using online services in 2003. The vast majority of registrations are still executed using either walk-up or mail-based paper processing methods. Although the online market is underdeveloped, participatory sports and activities organizers are demonstrating an increasing desire to use Internet-based services to streamline registration and enhance data management. Additionally, increasing participant acceptance and demand is expected to further accelerate this trend. In a 2002 National Sports Network survey, 80% of all athletes surveyed said they would use online registration, if offered, to register for their next sports activity. General acceptance among consumers of online registration has been demonstrated across other verticals. For example, recent growth in online ticket sales for the fan-based sports and entertainment industry worldwide reached approximately 50% in 2003, according to InterActiveCorp.

Attractive Demographic for Advertisers

We believe the active lifestyle population has become a heavily targeted demographic by consumer brand companies because of its size and its attractive characteristics, including income. For example, according to a 2002 study by American Sports Data, 38% of highly active individuals have household income over $75,000 per year compared to approximately 14% of sedentary individuals who have such levels of income.

The market for promotional marketing services, such as event marketing and online advertising, is growing, and marketers are increasingly migrating from traditional media to non-traditional media advertising. According to a 2004 survey published in Promo Magazine, event marketing spending grew 32% from $115 billion in 2001 to $152 billion in 2003. The survey reported that, from 2001 to 2003, spending on event marketing grew 25.7% to 32.6% of total annual spending for marketing activities, representing the largest gain in market share of any segment. The survey also projects that event marketing budgets will grow 15% to 20% in 2004, and it reports that 80% of all respondents said that their event marketing budget will either grow or remain unchanged. According to a 2002 Jupiter Research report, online advertising is expected to increase from $5.6 billion in 2002 to $14.0 billion in 2007, and spending on e-mail marketing is expected to rise from $2.1 billion in 2003 to $6.1 billion in 2008.

The Active Solution

Comprehensive Service Offering

Solutions for Organizers.    Our application services customers include event organizers, park and recreation department administrators, and league administrators. We offer application services that replace the inefficient walk-up and mail-based paper registration and communication processes. Our application services also simplify the administrative tasks associated with the management of participatory sports and activities. We present data in an easy-to-use manner for these organizations, eliminate the majority of required data entry and much of the printing and postage costs associated with attracting and communicating with current and potential participants. Specific functionality includes facility reservation, activity registration, bib number assignment to

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race participants, roster management for leagues, results publishing, financial reporting, tournament bracketing and membership management.

Solutions for Participants.    Our application services provide a user-friendly interface for participants. Our network of websites provides participants with the convenience of a one-stop shop where they can use our calendar to locate an event, activity, class or league, review all pertinent information about that event or activity, register online, receive immediate confirmation of acceptance, check for schedule changes and updates, review event or activity results and take advantage of other helpful features.

Solutions for Consumer Brand Companies.    Our marketing services effort is focused on the creation of promotional marketing campaigns to target active lifestyle consumers. We use our industry access and relationships to categorize consumers by event, activity, income, education, age, gender and geography as well as other detailed segmentation criteria. We provide numerous marketing services to develop and implement a wide range of online and field marketing campaigns so as to make our marketing services customers’ brands a part of each active lifestyle consumer’s experience. Our marketing service employees have experience with established advertising and marketing services companies, major consumer brand companies, public relations firms, professional sports organizations and media companies. In 2002, Promo Magazine listed us as the fifth fastest growing promotional agency in the United States and in 2003 named us as one of the Top 50 Promotional Marketing Companies in the United States, based on total revenues, growth of revenues and other qualitative factors.

Compelling Financial Benefits for Our Application Services Customers

We believe that our application services reduce the cost and complexity of managing, organizing and promoting participatory sports and activities. We believe our customers realize meaningful financial benefits as a result of utilizing our services. These benefits include:

• Elimination of Paper-Based Processing: Our application services help reduce internal staffing requirements or eliminate third party costs associated with data entry and check processing from paper-based registration forms.

• Decrease in Customer Service Costs: We provide e-mail and telephone support for participants. Our customer support group handles most inquiries from online registrants, including basic event related questions which save our customers the costs associated with handling each inquiry.

• Decrease in Marketing Costs: Our application services enable our customers to avoid having to include a registration form within marketing mailers or on advertising circulars, reducing printing and postage costs.

• Increase in Participant Capture Rate: The ease of use and convenience of our application services enable our customers to capture potential participants who may not otherwise register for an event or activity due to the limitations of paper-based processing. Rather than having to locate a paper registration form, complete it and mail it along with payment, our online application service allows participants to visit the event website, click directly through to our online registration form for that event, and input their personal and credit card information. We then process the information and fees, and the registrant receives immediate e-mail confirmation that they are registered for the event or activity.

• Increase in Year-to-Year Retention: Our communication tools, including e-mails and mailings, provide our customers with an effective means of communicating frequently with past participants.

• Increase in Event Promotion: Our searchable event and activity calendar is a tool for participants to find events and activities thereby providing free marketing for our customers. Additionally, we currently send a bi-weekly local events newsletter to approximately 650,000 sports enthusiasts that is customized to highlight upcoming events in the potential participant’s local area.

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• Increase in Merchandise Sales: Our customers have access to ActiveMerchandiser, our integrated e-commerce feature. The ActiveMerchandiser highlights event and activity promotional items available for sale during the participant’s online registration process.

Growth Strategy

We seek to capitalize on and promote the migration towards online management of participatory sports and activities, and strengthen our position as the leading provider of application services to this industry. Further, we intend to capitalize on our industry access and relationships to provide targeted marketing services directed at active lifestyle consumers. To achieve our goal, we intend to:

Expand our Application Services Customer Base

We believe the low penetration of online solutions in our market provides a large potential customer base for our application services. We intend to capitalize on this opportunity to grow our customer base by increasing our sales staff and marketing efforts. We have demonstrated an ability to grow our customer base. As evidence, from 2000 to 2003, our customers under contract grew at a compound annual growth rate of over 30%. To continue to grow this base, we will aggressively target event and activity organizers who currently use the traditional paper-based processing model. Our efforts will primarily consist of direct sales force communication and new marketing initiatives. We plan to increase the number of direct sales professionals we employ and expand our efforts to develop marketing campaigns directed specifically at core segments of the participatory sports and activities market.

Increase Online Registration by Event and Activity Participants

We seek to increase the percentage of our customers’ participants using online registration to enroll in events and activities. We believe there is significant opportunity for growth within our existing customer base to increase online registration by their participants. In 2003, only approximately 15% of our customers’ participants registered online for events and activities. To increase participant usage of online registration services, we provide our customers with training, relevant content to attract participants to their websites, and an array of tools aimed at promoting online registration. Online registration use by participants in our customers’ events and activities has increased as organizers continue to use our application services over a sustained period of time. On average, 10% of participants use online registration in the first year that an organizer uses our services. By the fourth year, this online registration use typically grows to 30%. Certain events and activities have achieved online registration usage as high as 80% in year four.

Increase Breadth of Application Services Sold to Our Existing Customer Base

We intend to continue to sell additional revenue generating application services to our existing customers to help enable them to streamline their management processes. These additional services include membership management, activity registration, facility reservation, website publishing tools and communication services. We believe meaningful opportunities exist to sell these additional services to that portion of our customer base that is not currently utilizing the full range of services that we offer. For example, currently less than 10% of the approximately 20,000 leagues on our eteamz.com web-portal use additional services beyond website publishing. Further, we intend to continue to sell park and recreation department administrators our complete suite of application services that provides multiple functions including online reservation management, scheduling, website management, financial reporting and marketing management.

Continue to Enhance our Comprehensive Application Services Offerings

We intend to strengthen our market position by continuing to develop comprehensive, tailored solutions with increased functionality and features for our customers. Over the past three years, we have developed and

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introduced application services for activity registration, facility reservation, and membership to serve our park and recreation customers. We have also added modules for fundraising, real-time event tracking and merchandising to our application services offerings. In addition, we have created customized desktop roster management, registration and advanced website publishing for league administrators, and have developed multiple applications to automate, streamline and scale back-office operations. By our continuously enhancing the functionality of our application services, we believe our customers will find more applications to help manage their events and activities, and, as a result, purchase additional upgrades to our newer, more fully featured offerings.

Expand our Marketing Services Business

We intend to continue to leverage our participatory sports and activities industry access and relationships to grow our marketing services business. From 2000 to 2003, our marketing services revenues grew at a compound annual growth rate of 136% from $0.4 million to $5.6 million. We believe we offer consumer brand companies a valuable set of resources to reach active lifestyle consumers. These resources include a registered user base of over four million active lifestyle consumers, a database of 30,000 participatory sports and activities organizers, a searchable participatory sports calendar containing over 50,000 events and activities, and a team and league web-portal with 165 million page views and 7 million unique visitors in the first quarter of 2004. As we grow our customer base of events, park and recreation departments, and amateur sports leagues and the usage of our web-portal, we continue to enhance our ability to offer extensive and targeted online and field marketing campaigns.

Pursue Strategic Acquisitions

We will pursue acquisitions that further strengthen our market position, broaden our customer base and enhance our capabilities. Since 2000, we have completed six acquisitions. We believe we have a successful track record of integrating operations, enhancing revenues and streamlining the cost structure of the businesses we have acquired.

Our Revenue Sources

We derive our total revenues from our two segments: application services and marketing services. Our application services revenues consist of transaction-based registration revenues, which typically represent 5% to 10% of the total registration fee paid by event and activity participants, software licensing revenues, which consist of license fees for our proprietary software and subscription fees for our hosted software applications, and software maintenance fees for post-warranty software support. Our total application services revenues represented 78.6%, 73.0% and 62.8% of our total revenues for 2001, 2002 and 2003, respectively. No single application services customer accounted for more than 10.0% of our total revenues in any year. Our marketing services revenues are generated through online and field marketing campaigns offered to our customers seeking to reach active lifestyle consumers. Our online marketing services include online advertising and targeted e-mail newsletter promotions. Online banner, button, e-mail advertisements and newsletters are impression-based, with revenues based on the number of times the advertisement is displayed on our website or delivered by e-mail during a specified period. Our field marketing campaigns include event promotions, sponsorships and sample placements, and are defined contractually with each customer. Our marketing services revenues accounted for 21.4%, 27.0% and 37.2% of our total revenues for 2001, 2002 and 2003, respectively. No single marketing services customer accounted for more than 10.0% of our total revenues in any year.

Our Services

Our service offerings are separated into two segments: application services and marketing services.

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Application Services Offerings

Our application services offerings, encompassed in the Active Technology Suite, help our customers reduce administration and marketing costs and improve operating efficiency. We market our services under three distinct brands: active.com for individual sports, RecWare Safari for park and recreation departments, and eteamz for team sports.

The Active Technology Suite.    Our suite of application services provides organizers the ability to comprehensively manage their events and activities from pre-registration to post-event data usage over our online and offline automated systems. Examples of our functionality include:

Registration

• Event and Activity Registration: Enables participants to review the details of and register for events and activities, and purchase merchandise over the Internet. It is also used by events and park and recreation department employees to input walk-up registrations.

• Facility Reservation: Enables participants to reserve and pay for facilities during time periods defined by the organizer. For example, participants can reserve tennis courts for one hour, picnic grounds for a day, or classrooms for a morning.

• Membership and Recreation Pass Management: Enables organizers to sell or issue membership directly online. For example, individuals can use our services to register online for golf, pool or tennis membership, and organizers can process resident and non-resident membership cards.

• Fundraising: Enables participants to use the Internet for fundraising, including the ability to send e-mail invitations to visit donation websites.

• Day Camp Registration: Enables participants to register for specific classes and pay registration fees for a multi-week day camp or clinic online. For example, a participant can register for two weeks at a camp and then sign up for swimming instruction.

• Touch Screen Point of Sale: Provides a touch screen user interface alternative to our web browser or client server interfaces.

Administration and Data Management

• Financial Reporting: Provides formatted reports on all revenues generated by the event or activity and integrates with the organizer’s accounting software system.

• Participant Management: Enables organizers to input walk-up or mailed registrations directly into our hosted application service, and modify data associated with their event and activity such as assigning bib numbers, publishing results and issuing refunds.

• Roster Management: Enables league administrators to place participants on teams and communicate rosters to coaches over the Internet.

• Tournament Builder: Develops tournament brackets and posts results on the Internet for viewing by participants.

• League Scheduling: Automates league and referee scheduling.

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• League Chartering and Roster Submission: Enables league administrators to submit team rosters and league charter applications directly to their national organizations over the Internet.

Website Management and Communication

• Website Management: Provides custom design, maintenance and hosting of the event, park and recreation department, and league websites.

• Website Self-Publishing Tools: Enables our event, park and recreation department, and league customers to build and manage their own websites and become part of our eteamz.com web-portal.

• MessageCast: Automates one-to-many communication by fax, phone or e-mail from event and activity organizers to their participants.

• E-mail Communication Tools: Enables event and activity organizers to easily organize and segment their participant database to send e-mail.

• Central Marketing: Enables event and activity organizers to download formatted information into third party publishing software for use in the development and printing of catalogs and other marketing materials.

• Organization Online Network: Provides a customized network of websites for national or regional organizations such as the Little League Network and the NFL Youth Football Network.

Marketing Services

Our marketing services group provides our customers with promotional marketing services that target active lifestyle consumers. We sell our marketing services under the Active Marketing Group brand. We specialize in integrated programs that include online and field marketing services. Examples include:

• Online Marketing: We sell online advertising on our websites. We create custom online advertising, including online banners and buttons, and targeted e-mail newsletter promotions designed to reach active lifestyle consumers.

• Market Research: We conduct product and market research for our customers, including online surveys, field research and focus group recruiting.

• Event and Activity Sponsorships: We work with consumer brand companies to create custom opportunities to promote their products through sponsorships of events or activities. We seek to enable consumer brand companies to reach their desired target demographic and help create or strengthen their desired brand image.

• Sample Placement: We coordinate and implement targeted product sampling initiatives for consumer brand companies wishing to reach active lifestyle consumers. Our product sampling initiatives are designed to reach active lifestyle consumers at the most opportune times, such as providing fluid replenishment drinks on-course at a marathon.

• Event Production and Promotion: We create customized events and activities such as soccer clinics, coaching programs and skills tests to introduce our customers’ products to active lifestyle consumers.

• Peer-to-Peer Marketing: We have enlisted over 1,000 locally recognized amateur athletes to catalyze word-of-mouth marketing at specific events and activities. Our sponsored athlete representatives promote our customers’ products to their fellow participants.

• Activation: We provide our customers who seek to leverage their traditional mass market advertising campaigns with specific initiatives to reach active lifestyle consumers.

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Customers

Our customer base is separated into two segments: application services and marketing services.

Application Services Customers

We have contracts with over 7,000 events, 600 park and recreation departments and 2,500 leagues and camps. The table below highlights representative customers who are among our top 50 in revenues between 2001 and 2003 by customer segment.

EVENTS	PARKS	LEAGUES
Accenture Chicago Triathlon	Austin, TX Parks and Recreation	Amherst Youth Basketball
Albertson’s Bay to Breakers, San Francisco, CA	Chesapeake, VA Parks and Recreation	Basking Ridge, NJ Little League
Army Ten Miler, Washington, DC	Clark County Parks and Recreation	Boulder Valley Lacrosse, Boulder, CO
Bike New York	College Station, TX Parks and Recreation	Spring Klein Sports Spring Baseball, Spring, TX
Celestial Seasonings Bolder Boulder, Boulder, CO	Honolulu, HI Parks and Recreation	Greater Memphis Soccer Association
City of Los Angeles Triathlon	Herndon, VA Parks and Recreation	Let it Fly Flag Football, Miami, FL
Country Music Marathon, Nashville, TN	Howard County, MD Parks and Recreation
Harris Direct Seattle Marathon	Maui County Dept. of Parks and Recreation	CAMPS
Hilly Hundred Weekend Festival, Ellettsville, IN	Oakland, CA Parks and Recreation	Duke Women’s Soccer Camp, Durham, NC
Ironman World Championship, Kona, HI	Orange County, FL Parks and Recreation	Kansas State Volleyball Camp
Komen Dallas Race for the Cure	Sarasota, FL County Parks and Recreation	Lute Olson’s Arizona Basketball Camp
Lilac Bloomsday, Spokane, WA	San Diego County, Parks and Recreation	MVP Rutgers Lacrosse Camp, Piscataway, NJ
Motorola Marathon, Austin, TX	Washington, DC Parks and Recreation	Outdoor Adventure Camps, Gresham, OR
Suzuki Rock ‘n Roll Marathon, San Diego, CA	Winston Salem, NC Parks and Recreation	University of Tennessee Football Camp
Tour of the California Alps Death Ride, Markeleeville, CA	Vancouver, BC Parks and Recreation	Vlade Divac Basketball Camp, Sacramento, CA

No single application services customer accounted for more than 10% of our total revenues in any year.

Marketing Services Customers

Our marketing services group has worked with over 80 consumer brand companies to develop and deliver numerous online and field marketing programs. Our customers include some of the leading consumer brand companies. Among our top 50 marketing services customers, determined by revenues between 2001 and 2003 are Coors, Nestle, Nike, PepsiCo Beverage & Foods, Procter & Gamble, Timex and Unilever. No single marketing services customer represented over 10% of our total revenues in any one year.

Sales and Marketing

Our application services sales and marketing efforts are focused on direct contact with event organizers, park and recreation department administrators, and league administrators. To reach these organizers and administrators, we employ a staff of direct sales representatives that is primarily comprised of telephone sales representatives. Our marketing efforts directed at larger events and activities may involve in-person meetings and presentations.

Our marketing services group is primarily comprised of sales and business development representatives who initiate contact with consumer brand companies primarily by the telephone. After this initial contact, our sales efforts directed at larger consumer brand companies may involve in-person meetings and presentations.

Customer Support

Our customer support group handles both event and activity organizers and participants’ inquiries, such as questions relating to registration or entry confirmation. Additionally, our customer support staff trains our customers on effective methods for increasing online registration.

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Technology and Operations

We have built a scalable technology platform to support our application services business model. The software and hardware we use supports numerous forms of data management and transactions as well as content management for our websites and the websites we host for customers.

Access to our application services is provided through the Internet using standard web browsers as well as XML based Internet services for data integration. The access layer is secured with PIX firewalls and SSL technology, providing our customers and their participants with appropriate levels of data security.

Our web servers are hosted at a third party communications data center and are monitored both within and outside of the hosting environment. A Cisco VPN encrypts data between our La Jolla offices and our data center. It is maintained to provide integration with our custom sales tools, customer support team, accounting department and all other communications between our two main facilities.

Transaction Processing

We offer transaction processing capabilities that enable participants to register for events and activities, buy memberships, purchase goods and services, and make donations. Credit card transactions are processed with automatic failover through redundant paths, including redundant T1 lines to separate payment processors. In addition, an Internet gateway is available as an alternate backup mechanism to maintain transaction processing capabilities. We also retain the capability to batch transactions for future processing in the event of backup failure. We believe these layers of redundancy offer high levels of reliability for large scale online registration. We can process all major credit cards, and we accept multiple currencies.

Secure Transaction Environment

Our transaction processing network resides on its own network behind redundant dedicated firewalls. It has been configured to disallow all traffic except for approved transaction processing. All traffic in and out of the network is encrypted using SSL with SSL certificates from Verisign. The credit card payment information is never stored on a durable medium in an unencrypted form. The encryption keys are never stored on a durable storage medium on our transaction servers. When a transaction server is started, it must be primed with the encryption key, which is stored securely and only accessible to approved staff. Transactions are processed through a leased-line directly to our third party payment processing facility.

Competition

Our competition is separated into two segments: application services and marketing services.

The market for our application services and marketing services targeted at the participatory sports and activities industry is fragmented, competitive and rapidly evolving. As a result, we expect to encounter new and evolving competition as this market becomes aware of the advantages of online application services and marketing services. In addition, there are limited barriers to entry for new competitors to enter these markets.

For our application services, we face competition from many sources, including:

• Traditional processing methods, to which administrators and organizers of participatory sports and activities are accustom, such as paper-based registration submitted by mail or on a walk-in basis;

• Custom-developed solutions for online processing and other solutions created by an event or activity’s technical staff or outside custom service providers;

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• Companies that offer generalized functional software designed to address the needs of businesses across a variety of industries, such as content or contact management software programs, e-commerce solutions enterprise resource planning software, and other products having separate software modules, which compete with our application services offering;

• Companies specialized in other vertical markets that enter our market and offer services similar to ours; and

• Companies that offer integrated software solutions designed to address the needs of participatory sports and activities.

Competition we face may come from larger, better capitalized companies with greater operational, strategic, financial, personnel and other resources than we have. In addition, it may be difficult to displace a competitor once they have established a relationship with an event or activity. Competitors and potential competitors may enter into business combinations or alliances that strengthen their competitive positions. For example, companies that currently are not our significant competitors could acquire one or more of the various companies in our fragmented industry and, over a short period of time, become a significant competitor in the markets we service. If any of these competitors were to aggressively price their competing services in our market, we may be required to reduce our prices, which could adversely affect our operating results and financial condition.

We believe that the principal competitive factors in our market include service features, integration, reliability, security, price, ease of installation and use, and software maintenance and upgrades. We believe that we compare favorably with respect to many of these factors.

For our marketing services business, we face competition from traditional advertising agencies, promotional marketing companies, sports marketing companies, media companies, internal promotions and sports marketing departments, and other providers of online advertising services. Many of our competitors in the marketing services business are larger and better capitalized than us and have existing relationships with our target customers that may preclude us from doing business with our target customers. In light of the intense competition for the sale of online advertisements and the need to maintain competitive pricing, we may be required to reduce our prices, which could adversely affect our operating results and financial condition.

We believe that the principal competitive factors in our market for our online and field marketing services include access to consumers, relationships with key organizers within the participatory sports and activities industry, previous experience, creativity of program development and price. We believe that we compete effectively with respect to these factors.

Intellectual Property and Proprietary Rights

Our trademarks and domain names relating to our brands, copyrighted material we develop, trade secrets and other proprietary and intellectual property rights are important to our business. We seek to protect our common-law trademarks through federal registration, but these actions may be inadequate. In order to protect various types of our intellectual property, we currently have five patent applications filed with the United States Patent and Trademark Office. Where consultants develop copyrighted content for us, our general policy is to use written agreements prior to content creation to obtain ownership of that content. In addition, we principally rely upon trademark, copyright and contract law to protect our proprietary rights. We generally enter into confidentiality agreements, work-made-for-hire and proprietary rights contracts and intellectual property licenses with our employees, consultants and corporate partners, respectively, as part of our efforts to control access to and distribution of our technologies, content and other proprietary information.

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Government Regulation

Regulation of Internet Commerce

We are subject to the same federal, state and local laws as other companies conducting business on the Internet, including consumer protection laws and regulations prohibiting unfair and deceptive trade practices. Further, the growth of online commerce could result in more stringent consumer protection laws that impose additional compliance burdens on us. Today, there are an increasing number of laws specifically directed at the conduct of business on the Internet. Moreover, due to the increasing use of the Internet, many additional laws and regulations relating to the Internet are being debated at the state and federal levels. These laws and regulations could cover issues such as freedom of expression, pricing, user privacy, fraud, quality of products and services, taxation, advertising, intellectual property rights and information security. Applicability of existing laws to the Internet relating to issues such as property ownership, copyrights and other intellectual property issues, taxation, libel, obscenity and personal privacy could also harm our business. For example, United States and international laws regulate our ability to use customer information and to develop, buy and sell mailing lists. The vast majority of these laws were adopted prior to the advent of the Internet and do not contemplate or address the unique issues raised by the Internet. Those laws that do reference the Internet, such as the CAN-SPAM Act, are only beginning to be interpreted by the courts, and therefore their applicability and reach are uncertain. Similarly, pending state legislation could hinder our ability to acquire customer information such as California’s SB 1633 that prohibits acquisition of identifying information about a minor without the parent’s consent. The restrictions imposed by, and costs of complying with, current and possible future laws and regulations related to our business could harm our business, operating results and financial condition.

Tax authorities in a number of states, as well as a Congressional advisory commission, are currently reviewing the appropriate tax treatment of companies engaged in online commerce, and new state tax regulations may subject us to additional state sales and income taxes, which could have an adverse effect on our cash flows and results of operations. Further, there is a possibility that we may be subject to significant fines or other payments for any past failures to comply with these requirements.

In addition, because our website is accessible over the Internet in multiple states and other countries, we may be subject to their laws and regulations or may be required to qualify to do business in those locations. We are qualified to do business only in California at present. Our failure to qualify in a state or country where we are required to do so could subject us to taxes and penalties and we could be subject to legal actions and liability in those jurisdictions. The restrictions or penalties imposed by, and costs of complying with, these laws and regulations could harm our business, operating results and financial condition. Our ability to enforce contracts and other obligations in states and countries in which we are not qualified to do business could be hampered, which could have a material adverse effect on our business. In an effort to establish the terms by which we provide our services, we do have “terms of service” for our various websites and “end user agreements” between ourselves and our customers.

Privacy Regulations

We may be subject to the privacy provisions of the Gramm-Leach-Bliley Act and related regulations. In addition, legislation at the state and federal levels may also restrict further our information gathering and disclosure practices. In particular, under federal and state financial privacy laws and regulations, we must provide notice to our customers of our policies on sharing non-public information with third parties, must provide advance notice of any changes to our privacy policies and, with limited exceptions, must give consumers the right to prevent sharing of their non-public personal information with unaffiliated third parties. The Federal Trade Commission and state agencies have investigated various companies regarding their use of personal information. Existing and potential future privacy laws may limit our ability to develop new products and services that make use of data gathered through our services. In addition, if we are accused of violating the stated terms of our privacy policy, we may be forced to expend significant amounts of monetary and human resources to defend against these accusations. We also may be required to make changes to our present and planned products or services. We have established privacy policies in place, which are intended to be compliant with all applicable laws and regulations.

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The Child Online Privacy Protection Act, or COPPA, was enacted in October 1998. COPPA imposes civil and criminal penalties on persons collecting personal information from children under the age of 13. We collect and disclose personal information from such minors, but utilize systems and techniques that are intended to be compliant with the requirements of COPPA. The manner in which COPPA may be interpreted and enforced, however, cannot be fully determined, and future legislation similar to COPPA or any action against us for allegedly violating COPPA could subject us to potential liability and remedial actions, which in turn could materially harm our business. In addition, there are pending “COPPA-like” state laws, such as California’s SB 1633 that prohibits acquisition of identifying information about a minor without the parent’s consent.

Online Payment Services

The laws relating to the liability of providers of online payment services is currently unsettled. It may ultimately be determined that the transaction processing component of our services is subject to various governmental regulations. The provisions of these laws and related regulations are complicated. Although we have outsourced the processing of our online payments to a third party, who we believe complies with all applicable laws and regulations, we do not have extensive experience with these laws and related regulations. Even technical violations of these laws can result in penalties that are assessed for each non-compliant transaction. Given the high volumes of transactions we process, if we were found to be subject to and in violation of any of these laws or regulations, we would likely have to change our business practices and our business would be adversely affected. In addition, we are aware that governmental agencies have investigated the provision of online payment services and could require changes in the way this business is conducted. Any new laws and regulations could impose significant costs on us and make it more difficult for our customers and events and activities participants to utilize online registrations.

Employees

As of December 31, 2003, we had 116 full-time employees. None of our employees is represented by collective bargaining agreements.

Facilities

Our principal executive offices are located at 1020 Prospect Street, Suite 250, La Jolla, California. This leased facility is approximately 11,000 square feet and currently houses the majority of our business activities. The lease for our La Jolla facilities expires on July 31, 2005. We also lease office space in Sacramento, California. The lease for our Sacramento facility expires on August 30, 2004 and automatically renews for one year periods on each anniversary date unless a six month advance notice is given. Our main web-hosting facility is located in Burbank, California. We believe that our facilities are in good operating condition and adequately serve our current business operations. We also anticipate that suitable additional or alternative space, including those under lease options, will be available at commercially reasonable terms for future expansion.

Legal Proceedings

From time to time, we may be involved in litigation relating to claims arising out of our operations or the operations of our acquired businesses. As of the date of this prospectus, we are not a party to any legal proceedings that are expected, individually or in the aggregate, to have a material adverse effect on our business, financial condition or operating results.

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MANAGEMENT

Directors and Executive Officers

The following table sets forth information regarding our executive officers, directors and key employees as of March 31, 2004.

Name	Age	Position(s)
David Alberga	41	Chief Executive Officer and Director
Matthew Landa	39	President
John Creelman	47	Chief Financial Officer
Jon Belmonte	36	Chief Operating Officer
James Woodman, IV	44	Senior Vice President, Business Development and Director
Duane Harlan	48	President, RecWare Division
Kourosh Vossoughi	35	General Counsel, Vice President Corporate Development and Secretary
John Sanders	57	Vice President, Technology
Thomas Clancy	46	Director
Stephen Green	53	Director
Elliot Katzman	47	Director
John Pleasants	38	Director

David Alberga has been a Director and our Chief Executive Officer since December 1999. From December 1999 to February 2002, Mr. Alberga also served as our President. From January 1996 to November 1999, Mr. Alberga served in various positions at TicketMaster Online-CitySearch, a portal and transaction company. Mr. Alberga initially served as General Manager of established markets for CitySearch City Guides and was promoted to Executive Vice President and subsequently to Chief Operating Officer of the company’s City Guides business. Mr. Alberga has also held positions with Linear Technology, an analog semiconductor manufacturer, The Boston Consulting Group and Procter & Gamble. Mr. Alberga holds an M.B.A. and an M.A. from Stanford University, and a B.S. from the United States Military Academy at West Point.

Matthew Landa has been our President since February 2002. From March 2000 to February 2002, Mr. Landa was our Chief Commerce Officer. From June 1999 to March 2000, Mr. Landa was President of ACT Manufacturing, a Nasdaq listed company, providing value-added electronics manufacturing services for original equipment manufacturers in the networking and telecommunications, computer, industrial and medical equipment markets. Mr. Landa resigned from his position as President of ACT Manufacturing in March 2000. In December 2001, ACT Manufacturing filed for bankruptcy. From 1995 to June 1999, Mr. Landa was the President and Chief Executive Officer of CMC Industries, a provider of electronics manufacturing services. ACT Manufacturing acquired CMC Industries in 1999. Mr. Landa holds an M.B.A. from Stanford University and a B.A. from Dartmouth College.

John Creelman has been our Chief Financial Officer since March 2004. From September 2003 to March 2004, Mr. Creelman served as an independent consultant to a variety of technology companies. From August 2001 to September 2003, Mr. Creelman was the Chief Financial Officer of VSK Photonics, an optical networking company. From March 1998 to March 2001, Mr. Creelman served as Chief Financial Officer of Copper Mountain Networks, a manufacturer of DSL equipment. Mr. Creelman has also held positions with ESI Software, Inc., a provider of Internet authoring software and services, Western Digital Corporation, a manufacturer of hard disk drives, and MTI Technology Corporation, a manufacturer of high-end storage systems. Mr. Creelman holds an M.B.A. and a B.A. from the University of California at Irvine.

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Jon Belmonte has been our Chief Operating Officer since April 2000. From April 1999 until we acquired LeagueLink in April 2000, Mr. Belmonte was a co-founder and Vice President of Strategy and Business Development of LeagueLink. Prior to LeagueLink, Mr. Belmonte worked as a Strategy Consultant for Boston Consulting Group. Mr. Belmonte holds an M.B.A. from the Kellogg School of Management, Northwestern University and a B.S.E. from the Wharton School, University of Pennsylvania.

James Woodman, IV has been a Director and our Senior Vice President of Business Development since January 2000. From July 1998 until we merged with ActiveUSA in December 1999, Mr. Woodman was the founder and Chief Executive Officer of ActiveUSA. Previously, Mr. Woodman founded Florida Sports Magazine and directed participation triathlons. Mr. Woodman holds a B.A. from the University of Arizona.

Duane Harlan has been the President of our RecWare division since November 2000. From 1991 until we acquired Sierra Digital in November 2000, Mr. Harlan founded and served as Chief Executive Officer of Sierra Digital. Mr. Harlan holds a B.A. from California State University, Sacramento.

Kourosh Vossoughi has been our General Counsel and Vice President of Corporate Development since March 2000 and our Secretary since May 2001. From March 1998 to March 2000 Mr. Vossoughi was an Associate at Brobeck, Phleger and Harrison. Prior to that, Mr. Vossoughi was an Associate at Luce, Forward, Hamilton & Scripps. Mr. Vossoughi holds a J.D. from the University of San Diego School of Law and a B.A. from the University of California, Berkeley.

John Sanders has served as our Vice President of Technology since January 2001. From October 1999 until we acquired eteamz.com in December 2000, Mr. Sanders served as Chief Technology Officer of eteamz.com. From October 1997 to September 1999, Mr. Sanders was employed as a technology consultant to a variety of businesses. Previously, Mr. Sanders served as Senior Vice President-MIS for Spelling Entertainment Group, an entertainment firm, Senior Vice President-MIS for MGM/UA Communications, an entertainment firm, and as a Senior Manager in the consulting practice of Arthur Andersen & Co. He holds an M.B.A. from the Anderson School, University of California, Los Angeles and a B.A. from the University of California, Los Angeles.

Thomas Clancy has been a Director since November 2002. Mr. Clancy has been a Managing Director at Enterprise Partners Venture Capital since October 1999. Previously, Mr. Clancy was a Partner at Technical Resource Connection, now Perot Systems, a provider of information technology services, and at Expersoft, a developer of portfolio management software applications. Mr. Clancy serves on the board of a number of private companies. Mr. Clancy holds a B.S. from Rensselaer Polytechnic Institute.

Stephen Green has been a Director since November 2001. Mr. Green has been a General Partner at Canaan Partners since November 1991. Mr. Green serves as a Director of Dean Foods Company and holds a B.A. from Amherst College.

Elliot Katzman has been a Director since November 2001. Mr. Katzman has been a General Partner at Kodiak Ventures since May 2002. From March 1999 until we acquired myteam.com in November 2001, Mr. Katzman was the founder and served as Chief Executive Officer of myteam.com. Previously, Mr. Katzman held key executive management roles in several technology start-ups, including SolidWorks, Atria Software and Epoch Systems. Mr. Katzman serves on the board of a number of private companies and holds a B.S. and B.A. from Salem State College.

John Pleasants has been a Director since February 2002. Mr. Pleasants has been President and Chief Executive Officer of TicketMaster, a wholly owned subsidiary of InterActiveCorp, a diversified media and transaction company since June 2003. From December 2002 to June 2003, Mr. Pleasants served as President of USA Interactive’s newly formed Information & Services group. From December 2001 to December 2002, Mr. Pleasants served as the Chief Executive Officer of TicketMaster, a leading transaction company. From

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January 2000 to December 2001, Mr. Pleasants served as Chief Executive Officer of TicketMaster Online-CitySearch, a web-portal and transaction company. From 1996 until January 2000, Mr. Pleasants held various positions with TicketMaster Online-CitySearch. Mr. Pleasants holds an M.B.A. from Harvard University and a B.A. from Yale University.

Board Composition

Effective upon the completion of this offering, our Board of Directors will be authorized to have six members. There are no family relationships among any of our directors and executive officers.

We will divide our Board of Directors into three classes, as follows:

• Class I, which will consist of Tom Clancy and Stephen Green, and whose term will expire at the annual meeting of stockholders to be held in 2005;

• Class II, which will consist of Elliot Katzman and James Woodman, IV, and whose term will expire at the annual meeting of stockholders to be held in 2006; and

• Class III, which will consist of David Alberga and John Pleasants, and whose term will expire at the annual meeting of stockholders to be held in 2007.

At each annual meeting of stockholders to be held after the initial classification, the successors to directors whose terms then expire will serve until the third annual meeting following their election and until their successors are duly elected and qualified. The authorized number of directors may be changed only by resolution of our Board of Directors. Any additional directorships resulting from an increase in the number of directors will be distributed between the three classes so that, as nearly as possible, each class will consist of one-third of the directors. Our directors will hold office until their successors have been elected and qualified or until their earlier death, resignation, disqualification or removal for cause by the affirmative vote of the holders of a majority of the outstanding stock entitled to vote on election of directors.

Board Committees

Our Board of Directors has an audit committee, a compensation committee and a corporate governance and nominating committee.

Audit Committee.    Our audit committee oversees our corporate accounting and financial reporting process. The audit committee consists of Tom Clancy, Stephen Green and Elliot Katzman, each of whom is independent under applicable SEC rules and has been determined by our Board of Directors to be independent under the applicable Nasdaq rules. Our Board of Directors has determined that Mr. Green and Mr. Katzman qualify as audit committee financial experts under applicable SEC rules. The responsibilities of this committee include, among other things:

• Engaging our independent auditors to perform audit services and any permissible non-audit services;

• Monitoring the objectivity and independence of our independent auditors on our engagement team as required by law;

• Reviewing our annual and quarterly consolidated financial statements and reports and discussing the statements and reports with our independent auditors and management;

• Reviewing significant issues with our independent auditors and management that arise regarding accounting principles and financial statement presentation, and matters concerning the scope, adequacy and effectiveness of our internal controls;

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• Establishing procedures for the receipt, retention and treatment of complaints received by us regarding internal controls, accounting or auditing matters;

• Establishing procedures for the confidential, anonymous submissions by employees regarding accounting, internal controls or accounting matters; and

• Reviewing and, if appropriate, approving proposed related party transactions.

Both our independent auditors and management periodically meet privately with our audit committee.

Compensation Committee.    Our compensation committee consists of Tom Clancy, Stephen Green and Elliot Katzman, each of whom has been determined by our Board of Directors to be independent under applicable Nasdaq rules. The responsibilities of this committee include, among other things:

• Determining the compensation and other terms of employment of our executive officers, including our Chief Executive Officer, and reviewing and approving corporate performance goals and objectives relevant to such compensation;

• Recommending to our Board of Directors the type and amount of compensation to be paid or awarded to board members;

• Evaluating and recommending to our Board of Directors the equity incentive plans, compensation plans and similar programs advisable for us, as well as modification or termination of existing plans and programs;

• Administering the issuance of stock options and other equity incentive arrangements under our equity incentive plans;

• Establishing policies with respect to equity compensation arrangements; and

• Reviewing and approving the terms of any employment agreements, severance arrangements, change-in-control protections and any other compensatory arrangements for our executive officers.

Nominating and Corporate Governance Committee.    Our nominating and corporate governance committee consists of Elliot Katzman and John Pleasants, each of whom has been determined by our Board of Directors to be independent under applicable Nasdaq rules. The responsibilities of this committee include, among other things:

• Developing and maintaining a current list of the functional needs and qualifications of members of our Board of Directors;

• Evaluating director performance on the board and applicable committees of the board and determining whether continued service on our board is appropriate;

• Interviewing, evaluating, nominating and recommending individuals for membership on our Board of Directors;

• Evaluating stockholder nominations of candidates for election to our board;

• Developing, reviewing and amending a set of corporate governance policies and principles, including a code of ethics;

• Considering questions of possible conflicts of interest of directors as such questions arise; and

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• Recommending to our Board of Directors the establishment of such special committees as may be desirable or necessary from time to time in order to address ethical, legal, business or other matters that may arise.

Compensation Committee Interlocks and Insider Participation

No member of our compensation committee has ever been an officer or employee of ours. None of our executive officers currently serves, or has served during the last completed year, on the compensation committee or Board of Directors or any other entity that has one or more executive officers serving as a member of our Board of Directors or compensation committee.

Director Compensation

Directors are reimbursed for reasonable out-of-pocket expenses in connection with attending meetings of our Board of Directors and committees of our Board of Directors.

Effective upon completion of this offering, we will compensate directors who serve on our audit committee with $1,000 per each meeting attended. In addition, upon the effectiveness of this offering, we will grant each member of our audit committee an option to purchase 157,500 shares of our common stock with an exercise price equal to the initial public offering price. These shares will vest over a four year period.

All of our directors are eligible to participate in our 2004 Equity Incentive Plan, and following the completion of this offering, our employee directors will be eligible to participate in our 2004 Employee Stock Purchase Plan. For a more detailed description of these plans, see Employee Benefit Plans.

Executive Compensation

The following table summarizes information concerning the compensation awarded to, earned by, or paid for services rendered in all capacities during the year ended December 31, 2003, by our Chief Executive Officer and our four other most highly compensated executive officers. We refer to these executives as our named executive officers elsewhere in this prospectus. The compensation described in this table does not include medical, group life insurance or other benefits which are available generally to all of our salaried employees.

Summary Compensation Table

	2003 Annual Compensation				Long Term Compensation
Name and Principal Position	Salary		Bonus(1)		Securities Underlying 2003 Option Awards (#)	All Other Compensation(2)
Current executive officers:
David Alberga Chief Executive Officer	$	180,000	$	98,039	1,200,000	$	26,235
Matthew Landa President		170,000		77,459	700,000		24,778
John Creelman(3) Chief Financial Officer		–		–	–		–
Jon Belmonte Chief Operating Officer		150,000		81,699	500,000		22,084
James Woodman, IV Senior Vice President, Business Development		150,000		62,092	210,316		–
Former executive officer:
Natalya Smith(4) Former Chief Financial Officer		150,000		17,472	–		9,583

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⁽¹⁾ These amounts represent a special year-end bonus earned and awarded in 2003 and paid in 2004. Management elected to apply the entire amount toward the exercise of stock options and payment of related taxes.

⁽²⁾ These amounts represent deferred salary earned in 2001 and 2002 and paid in 2003.

⁽³⁾ Mr. Creelman joined us in March 2004. His annual salary is $160,000. Upon commencement of his employment, Mr. Creelman was granted an option to purchase 2,734,470 shares of common stock. See Employment Contracts and Change-in-Control Arrangements for a description of his employment arrangements.

⁽⁴⁾ Ms. Smith was our Chief Financial Officer until March 2004. See Related Party Transactions for a description of our severance payment obligations to Ms. Smith.

Stock Option Grants in Last Fiscal Year

The following table sets forth information regarding grants of stock options to each of the named executive officers during 2003. No stock appreciation rights were granted to the named executive officers during 2003. These options are immediately exercisable and vest in equal monthly installments over 4 years.

During the year ended December 31, 2003, we granted stock options to purchase 7,242,938 shares of our common stock under our 2002 Stock Option/Stock Issuance Plan, including grants to executive officers. Generally, 25% of the shares subject to options vest one year from the date of hire and the remainder of the shares vest in equal monthly installments over the 36 months thereafter. Options granted one year from the date of hire start vesting immediately in equal monthly installments over 48 months. Options expire ten years from the date of grant.

Potential realizable value is based upon the assumed initial public offering price of our common stock of $        , which is the midpoint of the range listed on the cover of this prospectus. Potential realizable values are net of exercise price, but before taxes associated with exercise. Amounts per share representing hypothetical gains are those amounts that could be achieved if options are exercised at the end of the option term. The assumed 5% and 10% rates of stock price appreciation are provided in accordance with rules of the SEC based on the assumed initial public offering price of $         per share and do not represent our estimate or projection of the future stock price.

Option Grants in Last Year

Name	Number of Securities Underlying Options Granted	Percent of Total Options Granted to Employees		Exercise Price Per Share		Expiration Date	Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Options Terms
							5%	10%
Current executive officers:
David Alberga	1,200,000	16.6	%	$	0.01	12/31/2013
Matthew Landa	700,000	9.7	%	$	0.01	12/31/2013
John Creelman	–	–			–	–
Jon Belmonte	500,000	6.9	%	$	0.01	12/31/2013
James Woodman, IV	210,316	2.9	%	$	0.01	12/31/2013
Former executive officer:
Natalya Smith	–	–			–	–

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Aggregated Option Exercises in 2003 and Year-End Option Values

The following table sets forth certain information regarding exercised stock options during the year ended December 31, 2003 and unexercised options held as of December 31, 2003, by each of the named executive officers. There was no public trading market for our common stock as of December 31, 2003. Accordingly, these values have been calculated on the basis of the mid-point of the estimated price range set forth on the cover of this prospectus, which is $         , less the applicable exercise price per share, multiplied by the number of shares issued or issuable, as the case may be, on the exercise of the option. This mid-point does not necessarily represent the actual value of our common stock at December 31, 2003. These options are immediately exercisable and, when and if exercised, will be subject to a repurchase right held by us, which right lapses in accordance with the respective vesting schedules for the option grants.

	Number of Shares Acquired on Exercise		Number of Securities Underlying Unexercised Options at December 31, 2003		Value of Unexercised In-the-Money Options at December 31, 2003
Name	Exercised	Value Realized	Exercisable	Unexercisable	Exercisable	Unexercisable
Current executive officers:
David Alberga	–	–	7,249,253	–
Matthew Landa	–	–	5,741,044	–
John Creelman	–	–	–	–
Jon Belmonte	–	–	5,541,044	–
James Woodman, IV	–	–	4,041,509	–
Former executive officer:
Natalya Smith	–	–	2,099,400	–

Employment Contracts and Change-in-Control Arrangements

We have entered into employment agreements with Messrs. Alberga, Landa, Creelman, Belmonte and Woodman setting forth their base salaries, bonus eligibility and other employment benefits. Each named executive officer’s employment is on an “at-will” basis and can be terminated by us or the officer at any time, for any reason, or for no reason, and with or without notice, subject, where applicable, to the stock restriction agreements and severance arrangements described below.

We have entered into an employment agreement with a severance arrangement with Mr. Alberga. This agreement provides that he will receive severance payments equal to twelve months of his then current base salary, paid ratably over a twelve month period, one year acceleration of the vesting of his unvested option shares and twelve months of continued health coverage in the event his employment is constructively terminated or terminated other than for cause. Six months after a change of control, if Mr. Alberga’s employment is not terminated for cause, all of his then unvested options shall immediately vest. If within six months after a change of control, Mr. Alberga’s employment is terminated other than for cause, all of his then unvested option shares shall immediately vest.

We have entered into an employment agreement with a severance arrangement with Mr. Landa. This agreement provides that, in the event his employment is terminated other than for cause, he will receive severance payments equal to six months of his then current base salary, paid ratably over a six month period. If within six months after a change of control, Mr. Landa’s employment is terminated other than for cause, he will receive severance payments equal to six months of his then current base salary, paid ratably over a six month period, and 63% of his yet unvested shares will immediately vest. Six months after a change of control, if Mr. Landa’s employment is not terminated for cause, 50% of his then unvested options shall immediately vest.

We have entered into an employment agreement with a severance arrangement with Mr. Creelman. This agreement provides that in the event his employment is constructively terminated or terminated other than for cause, he will receive severance payments equal to six months of his then current base salary, paid ratably over a

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six month period and six months of continued healthcare coverage. In addition, his unvested options will accelerate by twelve months. In the event of a change of control, 50% of Mr. Creelman’s then outstanding options will accelerate and vest on the date six months after the date of the change of control, provided that he continues to be employed by us. In the event his employment is terminated other than for cause or he resigns for good reason within six months following a change of control, 50% of his then outstanding unvested options will accelerate and vest and he will be entitled to receive his base pay, paid as though he was still employed by us, for a period of six months following the date of such termination in installments in accordance with normal payroll practices.

We have entered into an employment agreement with a severance arrangement with Mr. Belmonte. This agreement provides that he will receive severance payments equal to six months of his then current base salary, paid ratably over a six month period, in the event his employment is terminated other than for cause.

We have entered into an employment agreement with a severance arrangement with Mr. Woodman. This agreement provides that in the event his employment is constructively terminated or terminated other than for cause, he will receive severance payments equal to three months of his then current base salary, paid ratably over a three month period, and 50% of his then unvested options will accelerate. Six months after a change of control, if Mr. Woodman’s employment is not terminated for cause, 50% of his then unvested options shall immediately vest. If at any time after a change of control, Mr. Woodman’s employment is terminated other than for cause, he will receive severance payments equal to three months of his then current base salary, paid ratably over a three month period, and 50% of his then unvested options will accelerate.

Each named executive officer has also entered into a standard form agreement with respect to proprietary information and inventions. Among other things, this agreement obligates the officer to refrain from disclosing any of our confidential information received during the course of employment and to assign to us any inventions conceived or developed during the course of employment.

Employee Benefit Plans

2004 Equity Incentive Plan

In March 2004, we adopted the 2004 Equity Incentive Plan, or the 2004 Plan, to become effective upon the effective date of this offering. The 2004 Plan will terminate in March 2014 unless our Board of Directors terminates it earlier. The 2004 Plan provides for the grant of the following:

• Incentive stock options, as defined under the Internal Revenue Code, which may be granted solely to our employees, including officers; and

• Non-statutory stock options, stock purchase awards, stock bonus awards, stock appreciation rights, stock unit awards and other stock awards, which may be granted to our directors, consultants and employees, including officers.

Share Reserve.    An aggregate of 13,671,000 shares of our common stock are reserved for issuance under the 2004 Plan. This amount will be increased annually on the first date of our fiscal year, from 2005 through 2013, by the least of (i) 4% of the total number of shares of common stock outstanding on the day preceding the first day of such fiscal year, (ii) 11,025,000 shares of common stock, or (iii) such number of shares as determined by our Board of Directors. In addition, the share reserve under the 2004 Plan will be increased from time to time by any shares of common stock that, but for the termination of the 2002 Plan as of the effective date of this offering, would have reverted to the share reserve under the 2002 Plan pursuant to the terms thereof.

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Shares subject to options and stock awards that expire, terminate, are repurchased, or are forfeited under the 2004 Plan will again become available for the grant of awards under the 2004 Plan. Shares issued under the 2004 Plan may be previously unissued shares or reacquired shares bought on the market or otherwise. If any shares subject to a stock award are not delivered to a participant because such shares are withheld for the payment of taxes or the stock award is exercised through a “net exercise”, the number of shares that are not delivered to the participant shall remain available for the grant of awards under the 2004 Plan. If the exercise of any stock award is satisfied by tendering shares of common stock held by the participant, the number of shares tendered shall again become available for the grant of awards under the 2004 Plan. The maximum number of shares that may be issued under the 2004 Plan subject to incentive stock options is 31,500,000.

Administration.    The 2004 Plan will be administered by our Board of Directors, who may in turn delegate authority to administer the 2004 Plan to a committee. Subject to the terms of the 2004 Plan, our Board of Directors or its authorized committee determines recipients, the numbers and types of stock awards to be granted and the terms and conditions of the stock awards, including the period of their exercisability and vesting. Subject to the limitations set forth below, our Board of Directors or its authorized committee will also determine the exercise price of options granted under the 2004 Plan and, with the consent of any adversely affected option holder, may reprice such options, which includes reducing the exercise price of any outstanding option, canceling an option in exchange for cash or another equity award, or any other action that is treated as a repricing under generally accepted accounting principals. Subject to the terms of the 2004 Plan, our Board of Directors may delegate to one or more of our officers the authority to grant stock awards to our other officers and employees. Such officer would be able to grant only the number of stock awards specified by our Board of Directors, and such officer would not be allowed to grant a stock award to him or herself.

Stock Options.    Stock options are granted pursuant to stock option agreements. Generally, the exercise price for an incentive stock option cannot be less than 100% of the fair market value of the common stock on the date of grant. The exercise price for a nonstatutory stock option shall be determined by our Board of Directors or its authorized committee. Options granted under the 2004 Plan vest at the rate specified in the option agreement.

In general, the term of stock options granted under the 2004 Plan may not exceed ten years. Unless the terms of an optionee’s stock option agreement provide for earlier or later termination, if an optionee’s service relationship with us, or any affiliate of ours, ceases due to disability or death, the optionee, or his or her beneficiary, may exercise any vested options up to 12 months, or 18 months in the event of death, after the date such service relationship ends. If an optionee’s service relationship with us, or any affiliate of ours, ceases without cause for any reason other than disability or death, the optionee may exercise any vested options up to three months from cessation of service, unless the terms of the stock option agreement provide for earlier or later termination. If an optionee’s relationship with us, or any affiliate of ours, ceases with cause, the option will terminate at the time the optionee’s relationship with us ceases. In no event may an option be exercised after its expiration date.

Acceptable consideration for the purchase of common stock issued under the 2004 Plan will be determined by our Board of Directors and may include cash, common stock previously owned by the optionee, a deferred payment arrangement, the net exercise of the option, consideration received in a “cashless” broker-assisted sale and other legal consideration approved by our Board of Directors.

Generally, an optionee may not transfer a stock option other than by will or the laws of descent and distribution unless the optionee holds a nonstatutory stock option that provides otherwise. However, an optionee may designate a beneficiary who may exercise the option following the optionee’s death.

Limitations.    Incentive stock options may be granted only to our employees. The aggregate fair market value, determined at the time of grant, of shares of our common stock with respect to incentive stock options that are exercisable for the first time by an optionee during any calendar year under all of our stock plans may not exceed $100,000. The options or portions of options that exceed this limit are treated as nonstatutory stock

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options. No incentive stock option may be granted to any person who, at the time of the grant, owns or is deemed to own stock possessing more than 10% of our total combined voting power, or any parent or subsidiary of ours unless the following conditions are satisfied:

• The option exercise price must be at least 110% of the fair market value of the stock subject to the option on the date of grant; and

• The term of any incentive stock option award must not exceed five years from the date of grant.

In addition, when we become subject to the requirements of Section 162(m) of the Internal Revenue Code, which denies a deduction to publicly held corporations for certain compensation paid to specified employees in a taxable year to the extent that the compensation exceeds $1 million, no person may be granted options or stock appreciation rights under the 2004 Plan covering more than 15,750,000 shares of common stock in any calendar year.

Stock Purchase or Bonus Awards.    Stock purchase or bonus awards are granted through a purchase or bonus award agreement. Stock bonus awards may be granted in consideration for the recipient’s past services for us. Subject to certain limitations, the purchase price for stock purchase or bonus awards must be at least the par value of our common stock. The purchase price for a stock purchase award may be payable in cash, or any other form of legal consideration approved by our Board of Directors. Common stock under a stock purchase or bonus award agreement may be subject to a share repurchase option or forfeiture right in our favor, each in accordance with a vesting schedule. If a recipient’s service relationship with us terminates, we may reacquire (at a purchase price equal to the lesser of the then fair market value or the recipient’s original purchase price) or receive via forfeiture all of the shares of our common stock issued to the recipient pursuant to a stock purchase or bonus award which have not vested as of the date of termination. Rights to acquire shares under a stock purchase or bonus award may be transferred to the extent provided in the award agreement so long as the common stock awarded pursuant to the grant remains subject to the terms of the original award agreement.

Stock Appreciation Rights.    Stock appreciation rights are granted through a stock appreciation right agreement. Each stock appreciation right is denominated in share equivalents. The strike price of each stock appreciation right is determined by our Board of Directors or its authorized committee at the time of grant of the stock appreciation right. Our Board of Directors or its authorized committee may also impose any restrictions or conditions upon the vesting of stock appreciation rights that it deems appropriate. Stock appreciation rights may be paid in our common stock, in cash, in any combination of the two or in any other form of legal consideration approved by our Board of Directors. If a stock appreciation right recipient’s relationship with us, or any affiliate of ours, ceases for any reason, the recipient may exercise any vested stock appreciation right up to 3 months from cessation of service, unless the terms of the stock appreciation right agreement provide for earlier or later termination.

Stock Unit Awards.    Stock unit awards are purchased through a stock unit award agreement. Subject to certain limitations, the consideration, if any, for stock unit awards must be at least the par value of our common stock. The consideration for a stock unit award may be payable in any form acceptable to our Board of Directors and permitted under applicable law. Our Board of Directors may impose any restrictions or conditions upon the vesting of stock unit awards, or that delay the delivery of the consideration after the vesting of stock unit awards, that it deems appropriate. Stock unit awards may be settled in our common stock, in cash, in any combination of the two or in any other form of legal consideration approved by our Board of Directors. Dividend equivalents may be credited in respect of shares covered by a stock unit award, as determined by our Board of Directors. At the discretion of our Board of Directors, such dividend equivalents may be converted into additional shares covered by the stock unit award. If a stock unit award recipient’s service relationship with us terminates, any unvested portion of the stock unit award is forfeited upon the recipient’s termination of service.

Other Stock Awards.    Other forms of stock awards based on our common stock may be granted either alone or in addition to other stock awards under the 2004 Plan. Our Board of Directors has sole and complete authority to determine the persons to whom and the time or times at which such other stock awards will be granted, the number of shares of our common stock to be granted and all other conditions of such other stock awards.

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Corporate Transactions.    In the event of certain corporate transactions, all outstanding stock awards under the 2004 Plan may be assumed, continued or substituted for by any surviving entity. If the surviving entity elects not to assume, continue or substitute for such awards, the vesting provisions of such stock awards will be accelerated and such stock awards will be terminated if not exercised prior to the effective date of the corporate transaction. A stock award may be subject to acceleration of vesting in the event of a change in control as may be provided in the applicable stock award agreement or other written agreement between the award recipient and us. Our standard forms of option agreement provide that if upon specified change in control transactions an optionee’s continuous service has not yet terminated, the shares of common stock subject to such option will become accelerated to the lesser of 25% of the shares subject to the option or all of the remaining unvested shares subject to the option.

Plan Amendments.    Our Board of Directors will have authority to amend or terminate the 2004 Plan. No amendment or termination of the 2004 Plan shall adversely affect any rights under awards already granted to a participant unless agreed to by the affected participant. To the extent necessary to comply with applicable provisions of federal securities laws, state corporate and securities laws, the Internal Revenue Code, the rules of any applicable stock exchange or national market system, and the rules of any non-U.S. jurisdiction applicable to awards granted to residents therein, we shall obtain stockholder approval of any such amendment to the 2004 Plan in such a manner and to such a degree as may be required.

2002 Stock Option/Stock Issuance Plan

Our Board of Directors initially adopted, and our stockholders approved, our 2002 Stock Option/Stock Issuance Plan, or 2002 Plan, in January 2002. The 2002 Plan was amended once in February 2003.

The 2002 Plan will terminate by its terms in January 2012 unless our Board of Directors terminates it earlier. The 2002 Plan provides for the grant of the following:

• Incentive stock options, as defined under the Code, which may be granted solely to our employees, including officers; and

• Nonstatutory stock options, stock purchase awards and stock issuance awards, which may be granted to our directors, consultants and employees, including officers.

Share Reserve.    As of March 15, 2004, an aggregate of 3,557,434 shares of our common stock were reserved for issuance under the 2002 Plan and options to purchase an aggregate of 20,554,852 shares of our common stock were outstanding under the 2002 Plan. Shares subject to awards that expire, terminate or are repurchased (at a price no greater than the original price paid for the shares) under the 2002 Plan become available again for the grant of awards under the 2002 Plan. Shares issued under the 2002 Plan may be previously unissued shares or reacquired shares bought in the market or otherwise.

Administration.    Upon completion of this offering, we intend to grant all future stock awards under our 2004 Plan and to cease granting options under our 2002 Plan. The 2002 Plan will continue to be administered by our Board of Directors or to a committee, which has been delegated authority by the Board of Directors to administer the 2002 Plan. Subject to the terms of the 2002 Plan, our Board of Directors or its authorized committee has broad authority to administer the 2002 Plan.

Stock Options.    Stock options are granted pursuant to stock option agreements. Generally, the exercise price for an incentive stock option cannot be less than 100% of the fair market value of the common stock on the date of grant. The exercise price for a nonstatutory stock option generally cannot be less than 85% of the fair market value of the common stock on the date of grant. Options granted under the 2002 Plan vest at the rate specified in the option agreement.

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In general, the term of stock options granted under the 2002 Plan may not exceed ten years. Unless the terms of an optionee’s stock option agreement provide for later termination, if an optionee’s service relationship with us ceases due to disability or death, the optionee, or his or her beneficiary, may exercise any vested options for up to twelve months after the date such service relationship ends. If we terminate an optionee for misconduct, such optionee’s stock options terminate immediately upon the termination of the optionee and may not be exercised by the optionee after such termination. If an optionee’s relationship with us, or any affiliate of ours, ceases for any reason other than disability, death or a termination for misconduct, the optionee may exercise any vested options for three months from cessation of service. In no event may an option be exercised after its expiration date.

Generally, an optionee may not transfer an incentive stock option other than by will or the laws of descent and distribution. An optionee may transfer nonstatutory stock options by will, the laws of descent and distribution, pursuant to a domestic relations order, or in limited estate planning circumstances. In addition, an optionee may designate a beneficiary who may exercise the option following the optionee’s death.

Limitations.    Incentive stock options may be granted only to our employees. The aggregate fair market value, determined at the time of grant, of shares of our common stock with respect to incentive stock options that are exercisable for the first time by an optionee during any calendar year under all of our stock plans may not exceed $100,000. The options or portions of options that exceed this limit are treated as nonstatutory stock options. No incentive stock option may be granted to any person who, at the time of the grant, owns or is deemed to own stock possessing more than 10% of our total combined voting power, or any parent or subsidiary of ours, unless the following conditions are satisfied:

• The option exercise price must be at least 110% of the fair market value of the stock subject to the option on the date of grant; and

• The term of any incentive stock option award must not exceed five years from the date of grant.

In addition, no nonstatutory stock option may be granted to any person who, at the time of the grant, owns or is deemed to own stock possessing more than 10% of our total combined voting power, or any affiliate, unless the option exercise price is at least 110% of the fair market value of the stock subject to the option on the date of grant.

Stock Issuance Awards.    A stock issuance award may be awarded in consideration for the recipient’s past services performed for us. If a stock issuance recipient’s service relationship with us terminates, we may reacquire all of the shares of our common stock issued to the recipient pursuant to a stock issuance award which have not vested as of the date of termination. Rights to acquire shares under a stock issuance award are generally not transferable.

Stock Purchase Awards.    Stock purchase awards are purchased through a stock purchase agreement. Subject to certain limitations, the purchase price for stock purchase awards must be at least 85% of the fair market value of the common stock on the date of grant or at the time the purchase is consummated, or 100% of the fair market value if the recipient of the stock purchase award possesses more than 10% of our total combined voting power, or any parent or subsidiary of ours. The purchase price for a stock purchase award may be payable in cash, a deferred payment arrangement, past services rendered for us or a deferred payment method.

Right of Repurchase.    We may specify in any stock award granted under the 2002 Plan that such stock award is subject to a right of repurchase on our behalf. Our right of repurchase permits us to repurchase an unvested stock award for an amount designated in the stock award agreement, which is the lower of the fair market value of the stock award at the time of repurchase or the original purchase price paid by the recipient of such stock award.

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Change in Control.    In the event of certain corporate transactions, all outstanding equity awards under the 2002 Plan may be assumed, continued or substituted for by any surviving entity. If the surviving entity elects not to assume, continue or substitute for such awards, the vesting provisions of such stock awards will be accelerated and such stock awards will be terminated if not exercised prior to the effective date of the corporate transaction. Other forms of equity awards such as restricted stock awards may have their repurchase or forfeiture rights assigned to the surviving or acquiring entity. If such repurchase or forfeiture rights are not assigned, then such equity awards will become fully vested. A stock award may provide for acceleration of vesting in the event of a change in control, or upon the optionee’s involuntary termination following a specified event, as may be provided in the applicable stock award agreement or other written agreement between the award recipient and us. Our standard forms of award agreements provide that following specified change in control transactions, the equity awards granted under the 2002 Plan will become accelerated to the lesser of (a) 25% of the shares subject to the award at the time of grant (or, if the award was replaced with a cash incentive program, 25% of the total cash payments that were placed in escrow and to be paid to the participant in connection with the change in control) or (b) all of the remaining unvested shares subject to the award (or, if the award was replaced with a cash incentive program, the participant’s cash payments that remain in escrow at the time of his or her termination).

Plan Amendments.    Our Board of Directors has authority to amend or terminate the 2002 Plan. No amendment or termination of the 2002 Plan shall adversely affect any rights under awards already granted to a participant unless agreed to by the affected participant. To the extent necessary to comply with applicable provisions of federal securities laws, state corporate and securities laws, the Internal Revenue Code, the rules of any applicable stock exchange or national market system, and the rules of any non-U.S. jurisdiction applicable to awards granted to residents therein, we shall obtain stockholder approval of any such amendment to the 2002 Plan in such a manner and to such a degree as may be required.

1999 Stock Option/Stock Issuance Plan

We terminated our 1999 Stock Option/Stock Issuance Plan in November 2001. As of December 31, 2003, options to purchase 6,845,770 shares of our common stock remained outstanding under this plan. The terms and conditions of the 1999 Stock Option/Stock Issuance Plan are substantially similar to the 2002 Plan.

2004 Employee Stock Purchase Plan

We adopted in March 2004 and our stockholders approved in March 2004 our 2004 Employee Stock Purchase Plan, the 2004 Purchase Plan, to become effective upon the closing of this offering. The 2004 Purchase Plan will terminate at the time that all of the shares of our common stock reserved for issuance under 2004 Purchase Plan have been issued, unless our Board of Directors terminates it earlier. The 2004 Purchase Plan provides a means by which employees may purchase our common stock through payroll deductions, and is intended to qualify as an employee stock purchase plan within the meaning of Section 423 of the Internal Revenue Code.

Share Reserve.    An aggregate of 8,190,000 shares of our common stock are reserved for issuance under the 2004 Purchase Plan. This amount will be increased annually on the first day of our fiscal year, from 2005 through 2013, by the least of (i) 1% of the fully-diluted shares of common stock outstanding on the day preceding the first day of such fiscal year, (ii) 2,756,250 shares of common stock, or (iii) such number of shares as determined by our Board of Directors.

Administration.    The 2004 Purchase Plan will be administered by our Board of Directors, who may in turn delegate authority to administer the 2004 Purchase Plan to a committee.

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Offering.    The 2004 Purchase Plan is implemented by offerings of rights to eligible employees. Under the 2004 Purchase Plan, we may specify offerings with a duration of not more than 27 months, and may specify shorter purchase periods within each offering. The first offering will begin on the effective date of this offering and be approximately 24 months in duration with purchases occurring every six months.

Unless otherwise determined by the Board of Directors or its authorized committee, common stock is purchased for accounts of employees participating in the plan at a price per share equal to the lesser of (i) 85% of the fair market value of a share of our common stock on the date of commencement of the offering or (ii) 85% of the fair market value of a share of our common stock on the date of purchase. In the event the fair market value of a share of our common stock on the date of purchase is lower than the fair market value of a share of our common stock on the date of commencement of participation in the offering, the offering period automatically restarts on the day following such purchase. Generally, all regular employees, including executive officers, who work more than 20 hours per week and are customarily employed by us for more than 5 months per calendar year may participate in the purchase plan and may authorize payroll deductions of up to 20% of their earnings for the purchase of common stock under the purchase plan.

Limitations.    Eligible employees may be granted rights only if the rights, together with any other rights granted under employee stock purchase plans, do not permit the employee’s rights to purchase our stock to accrue at a rate which exceeds $25,000 of the fair market value of the stock for each calendar year in which such rights are outstanding. In addition, no employee will be eligible for the grant of any rights under the 2004 Purchase Plan if immediately after such rights are granted, such employee owns and/or holds outstanding options to purchase stock possessing 5% or more of our outstanding capital stock.

Corporate Transactions.    In the event of certain corporate transactions, all outstanding purchase rights under the 2004 Purchase Plan may be assumed or substituted for by any surviving entity. If the surviving entity elects not to assume or substitute for such purchase rights, the purchase rights will be exercised prior to the corporate transaction and the purchase rights will terminate immediately following such exercise.

Plan Amendments.    Our Board of Directors will have authority to amend or terminate the 2004 Purchase Plan. If the board determines that the termination of an offering is in the best interests of us and our stockholders, the board may terminate any offering on any purchase date, establish a new purchase date with respect to any offering then in progress or terminate any offering and refund any money contributed back to the participants. To the extent necessary to comply with applicable provisions of federal securities laws, state corporate and securities laws, the Internal Revenue Code, the rules of any applicable stock exchange or national market system, and the rules of any non-U.S. jurisdiction applicable to awards granted to residents therein, we shall obtain stockholder approval of any such amendment to the 2004 Purchase Plan in such a manner and to such a degree as may be required.

401(k) Plan

Effective January 2001, we adopted our 401(k) plan for our employees. The 401(k) plan is intended to qualify under Section 401(k) of the Internal Revenue Code of 1986, as amended, so that contributions to the 401(k) plan by employees or by us, and the investment earnings thereon, are not taxable to employees until withdrawn from the 401(k) plan, and so that contributions by us, if any, will be deductible by us when made. Under the 401(k) plan, employees may elect to reduce their current compensation by up to the statutorily prescribed annual limit and to have the amount of such reduction contributed to the 401(k) plan. The 401(k) plan permits, but does not require, matching contributions to the 401(k) plan by us on behalf of all participants in the 401(k) plan. We have not to date made any matching contributions to the 401(k) plan.

Limitation of Liability and Indemnification

Our amended and restated certificate of incorporation, which will become effective upon the completion of this offering, limits the liability of directors to the fullest extent permitted by Delaware law. Delaware law

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provides that directors of a corporation will not be personally liable for monetary damages for breach of their fiduciary duties as directors, except liability for any of the following acts:

• Any breach of their duty of loyalty to the corporation or its stockholders;

• Acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

• Unlawful payments of dividends or unlawful stock repurchases or redemptions; or

• Any transaction from which the director derived an improper personal benefit.

These limitations of liability do not apply to liabilities arising under federal securities laws and do not affect the availability of equitable remedies such as injunctive relief or rescission.

Our amended and restated bylaws, which will become effective prior to the completion of this offering, also provide that we will indemnify our directors, officers, employees and other agents to the fullest extent permitted by law. Our amended and restated bylaws also permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in connection with their services to us, regardless of whether our amended and restated bylaws permit such indemnification. We have obtained an insurance policy that insures our directors and officers against certain liabilities, including liabilities arising under the Securities Act or otherwise.

We have entered, and intend to continue to enter, into separate indemnification agreements with our directors and executive officers, in addition to the indemnification provided for in our amended and restated bylaws. These agreements, among other things, provide that we will indemnify our directors and executive officers for certain expenses, including attorneys’ fees, judgments, fines and settlement amounts incurred by a director or executive officer in any action or proceeding arising out of their services as one of our directors or executive officers, or any of our subsidiaries or any other company or enterprise to which the person provides services at our request.

At present, there is no pending litigation or proceeding involving any of our directors or executive officers as to which indemnification is required or permitted, and we are not aware of any threatened litigation or proceeding that may result in a claim for indemnification.

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RELATED PARTY TRANSACTIONS

Since January 2001, there has not been any transaction or series of similar transactions to which we were or are a party in which the amount involved exceeded or exceeds $60,000 and in which any of our directors or executive officers, any holder of more than 5% of any class of our voting securities or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than the compensation arrangements and indemnification agreements described in Management and the transactions set forth below. We believe that we have executed all of the transactions set forth below on terms no less favorable to us than we could have obtained from unaffiliated third parties.

Private Placement Financing

Beginning in November 2001, we issued 84,378,637 shares of Series B6 preferred stock in a private placement transaction at a price per share of $0.1333. Each share of Series B6 preferred stock outstanding immediately prior to the offering is convertible into one share of common stock. The following table summarizes the shares of Series B6 preferred stock purchased by executive officers, directors and five-percent or greater stockholders and their affiliated entities.

Investors(1)	Series B-6 Preferred Stock
Canaan Equity(2)	22,500,971
ABS Ventures(3)	15,000,647
Charles River Partnership	9,375,404
North Bridge Venture Partners	9,375,404
Austin Ventures	7,500,322
TicketMaster(4)	5,625,243

⁽¹⁾ Unless otherwise noted, shares held by affiliated persons and entities have been added together for purposes of this chart. See Principal Stockholders for a chart of beneficial owners.

⁽²⁾ Stephen Green, who is a member of our Board of Directors, is affiliated with Canaan Equity, a holder of more than 5% of our common stock.

⁽³⁾ ABS Ventures is affiliated with Bruns Grayson, a holder of more than 5% of our common stock.

⁽⁴⁾ John Pleasants, who is a member of our Board of Directors, is the President and Chief Executive Officer of TicketMaster.

Restructuring of Our Capital Stock

We consummated a restructuring of our capital stock effective February 14, 2003 pursuant to which: (i) each share of Series A-1 preferred stock converted into one share of Series A-1 preferred stock, (ii) each share of Series A-2 preferred stock converted into one share of Series A-2 preferred stock, (iii) each share of Series A-3 preferred stock converted into one share of Series A-3 preferred stock, (iv) each share of Series B preferred stock converted into one share of Series B-1 preferred stock, (v) each share of Series C preferred stock converted into (A) one share of Series B-2 preferred stock, plus (B) in the case of Kettle Partners 0.9224564 share of common stock, plus (C) in the case of Austin Ventures 0.1036756 share of common stock, (vi) each share of Series D-1 preferred stock converted into one share of Series B-3 preferred stock, (vii) each share of Series D-2 preferred stock converted into one share of Series A-4 preferred stock, (viii) each share of Series E preferred stock converted into one share of Series A-5 preferred stock, (ix) each share of Series F preferred stock converted into one share of Series B-4 preferred stock, (x) each share of Series G preferred stock converted into one share of Series B-5 preferred stock, (xi) each share of Series H preferred stock converted into one share of Series A-6 preferred stock, (xii) each share of Series I preferred stock converted into 0.8265357 share of Series B-6 preferred stock, (xiii) each share of Series J preferred stock converted into 0.8265357 share of Series B-7 preferred stock, (xiv) each share of common stock converted into 0.25 share of common stock, (xv) each warrant to purchase Series F preferred converted into a warrant to purchase the same number of shares of Series B-4 preferred stock. The aggregate liquidation preference of all outstanding shares of preferred stock was reduced from approximately $145.7 million to $26.2 million. A number of our directors hold shares of stock or are affiliated with entities who hold shares of stock that were impacted by this restructuring.

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Transactions with TicketMaster

As part of the consideration for the sale of our Series B-3 preferred stock and Series A-4 preferred stock to TicketMaster Online-CitySearch in December 1999, we were granted a $3.0 million credit toward the purchase of advertising and other promotional services. In 2003, we were obligated to utilize a minimum of $ 0.5 million of the credit each year. We used $1.3 million, $0.5 million, and $0.5 million of the credit in 2001, 2002 and 2003, respectively. The remaining credit expired in November 2003.

Real Property Lease with Duane Harlan

In 1995, we entered into a Lease Agreement, which continues as amended, with Duane Harlan, the President of our RecWare division. The lease is for our facility located in Sacramento, California, for which we pay Mr. Harlan $6,000 per month. The lease expires on August 30, 2004.

Option Grant to Elliot Katzman

As part of our acquisition of myteam.com, Elliot Katzman received a vested option to purchase 4,316,529 shares of our common stock.

Agreements with Management

We have entered into employment agreements with certain of our executive officers, which contain vesting acceleration or severance benefits upon termination of employment or a change of control. See Management—Employment Agreements for a description of these letter agreements. Please see Management—Aggregate Option Exercises and Option Values and Principal Stockholders for a description of the option and stock holdings of our directors and executive officers. Please see Management—Limitations on Directors’ Liability and Indemnification Agreements for a description of our indemnification agreements with our directors and executive officers.

We entered into a separation agreement with Ms. Smith, our former Chief Financial Officer, in April 2004. This separation agreement provides that we will pay to Ms. Smith severance equal to three months of base salary for a total of $37,500 and approximately $3,500 in additional compensation, and accelerate the vesting on 590,456 unvested option shares held by her.

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PRINCIPAL STOCKHOLDERS

The following table sets forth information regarding the beneficial ownership of our common stock as of March 15, 2004, and as adjusted to reflect the sale of              shares of common stock in this offering, of:

• Each person or entity who is known by us to own beneficially more than 5% of our outstanding common stock;

• Each of our named executive officers;

• Each of our directors; and

• All current directors and executive officers as a group.

The table below reflects that as of March 15, 2004, there were 185,471,670 shares of common stock outstanding, assuming the automatic conversion of all outstanding preferred stock and the exercise, on a cash basis, of outstanding warrants that would otherwise expire upon the effectiveness of this offering.

The table below is based upon information supplied by officers, directors and principal stockholders. Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options or warrants held by that person that are currently exercisable or will become exercisable within 60 days after March 15, 2004 are deemed outstanding, while such shares shall not be deemed outstanding for purposes of computing percentage ownership of any other person.

Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock held by them. Except as otherwise noted, the address for each holder of more than 5% of our common stock is c/o The Active Network, Inc., 1020 Prospect Street, Suite 250, La Jolla, California 92037.

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	Number of Shares Beneficially Owned			Percentage of Outstanding Shares
Beneficial Owner	Outstanding Shares	Shares Underlying Options	Shares Underlying Warrants	Before Offering		After Offering
Five percent stockholders:
Entities Affiliated with Canaan Equity(1) 105 Rowayton Avenue Rowayton, CT 06853	22,500,971	—	—	12.1	%
Entities Affiliated with Bruns Grayson(2) 1 South Street, Ste. 2150 Baltimore, MD 21202	20,714,933	—	—	11.1
TicketMaster(3) 8800 Sunset Blvd. Los Angeles, CA 90069	13,910,269	—	3,125	7.5
Entities Affiliated with Austin Ventures(4) 300 West 6th Street, Ste. 2300 Austin, TX 78101	10,788,635	—	80,930	5.8
Entities Affiliated with Charles River Partnership(5) 1000 Winter Street, Ste. 3300 Waltham, MA 02451	9,375,404	—	—	5.0
Entities Affiliated with North Bridge Venture Partners III, L.P.(6) 950 Winter Street, Ste. 4600 Waltham, MA 02451	9,375,404	—	—	5.0
Current named executive officers and directors:
Stephen Green(1)	22,500,971	—	—	12.1
John Pleasants(3)	13,910,269	—	3,125	7.5
Tom Clancy(7)	8,333,334	—	19,687	4.5
David Alberga	4,662,966	2,586,287	—	3.8
Matthew Landa	5,342,025	399,019	—	3.1
Jon Belmonte	3,885,805	1,655,239	—	2.9
James Woodman, IV	5,087,405	210,316	—	2.8
Elliot Katzman	—	4,316,529	—	2.3
John Creelman(8)	—	—	—	—
All current directors and executive officers as a group (12 persons)	68,379,077	10,519,109	22,812	40.0
Former executive officer:
Natalya Smith	831,013	677,931	—	*

 * Less than 1% of total.

⁽¹⁾ Consists of 14,738,136 shares owned by Canaan Equity II L.P., 6,592,785 shares owned by Canaan Equity II L.P. (QP), and 1,170,050 shares owned by Canaan Equity II Entrepreneurs L.L.C. Stephen Green, one of our board members, is a general partner of Canaan Partners.

⁽²⁾ Consists of 20,493,669 shares owned by ABS Ventures VI, L.P. and 221,264 shares owned by ABS Investors L.L.C. Mr. Grayson is the managing member of ABS Investors L.L.C. and the managing member of Calvert Capital IV, which is the general partner of ABS Ventures VI, L.P.

⁽³⁾ Includes 13,910,269 shares and 3,125 shares of common stock issuable upon exercise of a warrant expiring on September 29, 2005 held by TicketMaster Online-CitySearch, Inc. John Pleasants, a member of our board, is the President and Chief Executive Officer of TicketMaster.

⁽⁴⁾ Represents 10,574,301 shares held by Austin Ventures VI, L.P. and 295,264 shares held by Austin Ventures VI Affiliates Fund, L.P. Includes 2,431 shares of common stock issuable upon exercise of warrants expiring

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on September 29, 2005, 2,431 shares of common stock issuable upon exercise of a warrant expiring on October 27, 2005, and 75,932 shares of common stock issuable upon exercise of a warrant expiring on August 4, 2009 held by Austin Ventures VI, L.P. Includes 68 shares of common stock issuable upon exercise of a warrant expiring on September 29, 2005 and 68 shares of common stock issuable upon exercise of a warrant expiring on October 27, 2005 held by Austin Ventures VI Affiliates Fund, L.P.

⁽⁵⁾ Consists of 8,685,243 shares held by Charles River Partnership IX, 266,074 shares held by Charles River Partnership IX-A, 237,929 shares held by Charles River IX-B LLC and 186,158 shares held by Charles River IX-C LLC. Charles River Partnership IX, Charles River Partnership IX-A, Charles River IX-B LLC and Charles River IX-C LLC are venture funds affiliated with Charles River IX GP Limited Partnership.

⁽⁶⁾ Represents 6,288,965 shares held by North Bridge Venture Partners V-A, L.P. and 3,086,439 shares held by North Bridge Venture Partners V-B, L.P.

⁽⁷⁾ Includes 7,666,667 shares and 18,112 shares of common stock issuable upon exercise of a warrant expiring on September 29, 2005 held by Enterprise Partners IV, L.P. and 666,667 shares and 1,575 shares of common stock issuable upon exercise of a warrant expiring on September 29, 2005 held by Enterprise Partners IV Associates, L.P. Tom Clancy, one of our board members, is a general partner of Enterprise Partners Venture Capital.

⁽⁸⁾ John Creelman joined us as Chief Financial Officer in March 2004.

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DESCRIPTION OF CAPITAL STOCK

General

The following descriptions of our capital stock give effect to the following events:

• The amendment and restatement of our bylaws, each of which will occur prior to the completion of this offering;

• The amendment and restatement of our certificate of incorporation upon the completion of this offering; and

• The conversion of our preferred stock into 154,120,920 shares of common stock upon the completion of this offering.

Upon completion of this offering, our authorized capital stock will consist of         shares of common stock, par value $0.001 per share and          shares of undesignated preferred stock, par value $0.001 per share.

The following is a summary of the rights of our common stock and preferred stock. This summary is not complete. For more detailed information, please see our amended and restated certificate of incorporation and bylaws, which will become effective upon the completion of this offering and are filed as exhibits to the registration statement of which this prospectus is a part.

Common Stock

Outstanding Shares

Based on 6,889,754 shares of common stock outstanding as of December 31, 2003, the issuance of          shares of common stock in this offering, and assumed exercise, on a cash basis, immediately prior to the completion of this offering, of outstanding warrants to purchase an aggregate of 707,797 shares of common stock and no additional exercise of options or warrants, there will be          shares of common stock outstanding upon completion of this offering. As of December 31, 2003, there were outstanding options to purchase 44,875,237 shares of common stock, and outstanding warrants to purchase 1,918,918 shares of preferred stock and common stock. As of March 15, 2004, we had approximately 168 holders of our common stock. All of our outstanding shares of common stock are, and the shares of common stock to be issued in this offering will be, fully paid and nonassessable.

Voting

Each holder of common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders, including the election of directors. Our amended and restated certificate of incorporation and bylaws do not provide for cumulative voting rights. Because of this absence of cumulative voting, the holders of a majority of the shares of common stock entitled to vote in any election of directors can elect all of the directors standing for election, if they should so choose.

Dividends

Subject to preferences that may be applicable to any then outstanding preferred stock, holders of common stock are entitled to receive ratably those dividends, if any, as may be declared from time to time by our Board of Directors out of legally available funds.

Liquidation

In the event of our liquidation, dissolution or winding up, holders of common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities and the satisfaction of any liquidation preferences that may be granted to the holders of any then outstanding shares of preferred stock.

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Rights and Preferences

Holders of common stock have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions applicable to the common stock. The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock, which we may designate and issue in the future.

Preferred Stock

Upon the closing of this offering, our Board of Directors will have the authority, without further action by the stockholders, to issue up to          shares of preferred stock in one or more series:

• To establish from time to time the number of shares to be included in each such series;

• To fix the rights, preferences and privileges of the shares of each wholly unissued series and any qualifications, limitations or restrictions thereon; and

• To increase or decrease the number of shares of any such series (but not below the number of shares of such series then outstanding).

Our Board of Directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of our common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, delay, defer or prevent our change in control and may adversely affect the market price of the common stock and the voting and other rights of the holders of common stock. We have no current plans to issue any shares of preferred stock.

Warrants

As of December 31, 2003, there were warrants outstanding to purchase an aggregate of 1,918,918 shares of preferred stock and common stock at a weighted average exercise price of $1.28 per share. Of these:

• Warrants covering an aggregate of 707,797 shares of common stock will automatically expire immediately prior to the completion of this offering;

• Warrants covering an aggregate of 126,861 shares of common stock will automatically expire 90 days after the completion of this offering;

• Warrants to purchase 891,931 shares of preferred stock will terminate in November 2004;

• Warrants covering an aggregate of 27,810 shares of common stock will terminate in September and October 2005; and

• Warrants covering an aggregate of 164,519 shares of common stock will terminate in August 2009.

Some of these warrants have a net exercise provision under which its holder may, in lieu of payment of the exercise price in cash, surrender the warrant and receive a net amount of shares based on the fair market value of our common stock at the time of exercise of the warrant after deduction of the aggregate exercise price. Each of these warrants also contains provisions for the adjustment of the exercise price and the aggregate number of shares issuable upon the exercise of the warrant in the event of stock dividends, stock splits, reorganizations, reclassifications and consolidations.

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Certain holders of our warrants are entitled to registration rights under our Fifth Amended and Restated Investors’ Rights Agreement, as described in Registration Rights below. These warrants terminate in November 2004.

Registration Rights

The holders of 153,346,226 shares of common stock or their transferees will be entitled to certain rights with respect to the registration of such shares under the Securities Act. These rights are provided under the terms of an agreement between us and the holders of these securities. Subject to limitations in the agreement, including our ability to delay registration in certain circumstances, the holders of at least 51% of these securities then outstanding may require, on two occasions beginning April 30, 2004, that we use our best efforts to register these securities for public resale. If we register any of our common stock either for our own account or for the account of other security holders, the holders of these securities are entitled to include their shares of common stock in that registration, subject to the ability of the underwriters to limit the number of shares included in the offering. After completion of this offering, the holders of at least 15% of these securities then outstanding may also require us, but not more than three times in any twelve-month period, to register all or a portion of these securities on Form S-3 when the use of that form becomes available to us, provided, among other limitations, that the proposed aggregate selling price is at least $1.0 million. We will be responsible for paying all registration expenses, including the reasonable fees of legal counsel for the selling holders, and the holders selling their shares will be responsible for paying all selling expenses.

Delaware Anti-Takeover Law and Provisions of our Amended and Restated Certificate of Incorporation and Bylaws

Delaware Anti-Takeover Law

We are subject to Section 203 of the Delaware General Corporation Law. Section 203 generally prohibits a public Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless:

• Prior to the date of the transaction, the Board of Directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

• The interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding (i) shares owned by persons who are directors and also officers and (ii) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

• On or subsequent to the date of the transaction, the business combination is approved by the board and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 ²/3% of the outstanding voting stock which is not owned by the interested stockholder.

Section 203 defines a business combination to include:

• Any merger or consolidation involving the corporation and the interested stockholder;

• Any sale, transfer, pledge or other disposition involving the interested stockholder of 10% or more of the assets of the corporation;

• Subject to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; or

• The receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

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In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with, or controlling, or controlled by, the entity or person.

Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws

Provisions of our amended and restated certificate of incorporation and amended and restated bylaws may delay or discourage transactions involving an actual or potential change in our control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests. Therefore, these provisions could adversely affect the price of our common stock. Among other things, our amended and restated certificate of incorporation and bylaws:

• Permit our Board of Directors to issue up to          shares of preferred stock, with any rights, preferences and privileges as they may designate, including the right to approve an acquisition or other change in control;

• Provide that the authorized number of directors may be changed only by resolution of the Board of Directors;

• Provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;

• Divide our Board of Directors into three classes;

• Require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and may not be taken by written consent;

• Provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide timely notice in writing, and also must comply with specified requirements as to the form and content of a stockholder’s notice;

• Do not provide for cumulative voting rights (therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose); and

• Provide that special meetings of our stockholders may be called only by the Chairman of the board, our Chief Executive Officer, or by the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors.

The amendment of any of these provisions would require approval by the holders of at least two-thirds of our then outstanding common stock.

Nasdaq National Market Listing

We have applied to have our common stock included for quotation on the Nasdaq National Market under the symbol “ACTN”.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company.

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for our common stock. We cannot predict the effect, if any, that market sales of shares of our common stock or the availability of shares of our common stock for sale will have on the market price of our common stock prevailing from time to time. Nevertheless, sales of substantial amounts of our common stock in the public market could adversely affect the market price of our common stock and could impair our future ability to raise capital through the sale of our equity securities.

Upon the completion of this offering, we will have          shares of our common stock outstanding, assuming conversion of our preferred stock into shares of common stock, exercise on a cash basis of outstanding warrants that otherwise expire upon the effectiveness of this offering, no exercise of the underwriters’ over-allotment option and no exercise of outstanding options or warrants after December 31, 2003. Of these outstanding shares, the          shares sold in this offering will be freely tradable, except that any shares held by our “affiliates” as that term is defined in Rule 144 promulgated under the Securities Act, may only be sold in compliance with the limitations described below. The remaining          shares of our common stock will continue to be deemed “restricted securities” as defined under Rule 144. Restricted shares may be sold in the public market only if registered or if they qualify for an exemption from registration under Rule 144 or Rule 701 promulgated under the Securities Act, which are summarized below. In addition, each of our officers, directors, one percent or greater stockholders and certain other stockholders have entered into market stand-off agreements with us and/or lock-up agreements with Jefferies & Company, Inc. whereby they have agreed not to sell any of their stock for 180 days following the date of this prospectus. Subject to the provisions of Rule 144 and Rule 701, additional shares will be available for sale in the public market as follows:

• Beginning on the effective date of the registration statement, the          shares sold in this offering will be immediately available for sale in the public market;

• After 180 days following the effective date of the registration statement,          additional shares will become eligible for sale in the public market, subject to compliance with Rule 144 and Rule 701 as described below; and

• The remaining          shares will be eligible for sale in          2004, subject to compliance with Rule 144.

Lock-Up Agreements

Each of our officers, directors, one percent or greater stockholders and certain other stockholders have agreed, subject to specified exceptions, that, without prior written consent of Jefferies & Company, Inc., they will not offer, sell, contract to sell, pledge, grant any option to sell, or otherwise dispose of, directly or indirectly, any shares of our common stock or securities convertible into or exercisable for shares of our common stock, or warrants or other rights to purchase our common stock during the 180-day period following the effective date of the registration statement. Jefferies & Company, Inc., may, in its sole discretion, permit early release of shares subject to the lock-up agreements. In considering any request to release shares subject to a lock-up agreement, Jefferies & Company, Inc. will consider the possible impact of the release of the shares on the trading price of the stock sold in the offering. Jefferies & Company, Inc. does not have any present intention or any understandings, implicit or explicit, to release any of the shares subject to the lock-up agreements prior to the expiration of these lock-up periods.

Rule 144

In general, under Rule 144 as currently in effect, a person, or group of persons whose shares are required to be aggregated, including an affiliate of The Active Network, who has beneficially owned shares for at least one year, is entitled to sell within any three-month period, a number of shares that does not exceed the greater of one percent of the then outstanding shares of our common stock, or the average weekly trading volume in our common stock during the four calendar weeks preceding the date on which notice of the sale is filed. In

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addition, a person who is not deemed to have been an affiliate at any time during the 90 days preceding a sale and who has beneficially owned the shares proposed to be sold for at least two years would be entitled to sell those shares under Rule 144(k) without regard to the requirements described above. When a person acquires shares from one of our affiliates, that person’s holding period for the purpose of effecting a sale under Rule 144 would commence on the date of transfer from the affiliate.

Rule 701

In general, under Rule 701 of the Securities Act, an employee, officer, director, consultant or advisor who purchased shares from us in connection with a compensatory stock or option plan or other written agreement in compliance with Rule 701 is eligible to resell those shares in reliance on Rule 144, but without compliance with certain restrictions, including the holding period contained in Rule 144. However, the shares issued pursuant to Rule 701 are subject to the lock-up agreements described above and under Plan of Distribution and will only become eligible for sale upon the expiration of those agreements.

Registration of Shares Issued Pursuant to Benefits Plans

We intend to file registration statements under the Securities Act as promptly as possible after the effective date of this offering to register shares to be issued pursuant to our employee benefit plans. As a result, any options or rights exercised under our 1999 Plan, 2002 Plan, 2004 Plan, 2004 Purchase Plan or any other benefit plan after the effectiveness of the registration statements will also be freely tradable in the public market, subject to the market stand-off and lock-up agreements discussed above. However, such shares held by affiliates will still be subject to the volume limitation, manner of sale, notice and public information requirements of Rule 144. As of December 31, 2003, there were outstanding options to purchase an aggregate of 44,875,237 shares of common stock, with an average exercise price of $0.01, each of which options were exercisable and subject to a standard repurchase option to the extent such shares were not vested, in accordance with the terms of the grant.

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UNDERWRITING

Subject to the terms and conditions stated in the underwriting agreement between us and the underwriters, each of the underwriters named below has severally agreed to purchase, and we have agreed to sell to each named underwriter, the number of shares set forth opposite the name of each underwriter.

Underwriter	Number of Shares
Jefferies & Company, Inc.
WR Hambrecht + Co, LLC
Total

The underwriting agreement provides that the obligations of the several underwriters to purchase the shares offered by us are subject to some conditions. The underwriters are obligated to purchase all of the shares offered by us, other than those covered by the over-allotment option described below, if any of the shares are purchased. The underwriting agreement also provides that, in the event of a default by an underwriter, in some circumstances the purchase commitments of non-defaulting underwriters may be increased or the underwriting agreement may be terminated.

Prior to this offering, there has been no public market for the common stock. The initial offering price will be negotiated among us and the representatives for the underwriters. Among the factors to be considered in determining the initial public offering price of the common stock shares, in addition to prevailing market conditions, will be our historical performance, estimates of our business potential and earnings prospects, an assessment of our management and consideration of the above factors in relation to market valuations of companies in related businesses. There can be no assurance, however, that the prices at which the common stock shares will sell in the public market after this offering will not be lower than the price at which they are sold by the underwriters or that an active trading market in the shares will develop and continue after this offering.

The underwriters propose to offer the shares to the public initially at the public offering price set forth on the cover of this prospectus, and to some dealers at that price less a concession not in excess of $         per share. The underwriters may allow, and those dealers may reallow, a discount not in excess of $         per share to other dealers. After this offering, the public offering price, the concession to selected dealers and the reallowance to other dealers may be changed by the underwriters.

We have granted to the underwriters an option, exercisable not later than 30 days after the date of this prospectus, to purchase, in whole or in part, up to          additional shares at the public offering price less the underwriting discount set forth on the cover of this prospectus.

The underwriters may exercise that option only to cover over-allotments, if any, made in connection with the sale of the shares of common stock offered by us. To the extent that option is exercised, each underwriter will be obligated, subject to some conditions, to purchase a number of additional shares approximately proportionate to that underwriter’s initial purchase commitment as indicated in the table above.

The following table shows the per share and total underwriting discounts and commissions to be paid to the underwriters by us. Such amounts are shown assuming both no exercise and full exercise of the underwriters’ option to purchase          additional shares.

	Without Exercise of Over-allotment	With Exercise of Over-allotment
Per Share	$	$
Total	$	$

We estimate that the total expenses of this offering, excluding the underwriting discounts and commissions, will be approximately $         million, which will be paid by us.

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This offering of the shares is made for delivery when, as and if accepted by the underwriters and subject to prior sale and to withdrawal, cancellation or modification of this offering without notice. The underwriters reserve the right to reject an order for the purchase of shares in whole or in part.

We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, and to contribute to payments the underwriters may be required to make in respect of these liabilities.

We are applying to have the common stock approved for qualification on The Nasdaq National Market under the symbol “ACTN”.

A prospectus in electronic format may be made available on the websites maintained by one or more of the underwriters. The underwriters may agree to allocate a number of shares to underwriters for sale to their online brokerage account holders. Internet distributions will be allocated by the representatives to underwriters that may make Internet distributions on the same basis as other allocations. In addition, shares may be sold by the underwriters to securities dealers who resell shares to online brokerage account holders.

Each of our officers, directors, one percent or greater stockholders and certain other stockholders have agreed not to offer, sell, contract to sell, grant any option to purchase, announce any intention to sell, transfer the economic risk of ownership in, make any short sale, pledge or otherwise dispose of, directly or indirectly, or file a registration statement under the Securities Act relating to, any shares of our common stock or securities or other rights convertible into or exchangeable or exercisable for any shares of our common stock or securities either owned as of the date of this prospectus or thereafter acquired without the prior written consent of the underwriters for a period of 180 days after the date of this prospectus, other than certain permitted transfers, such as transfers to family members, trusts established for the benefit of a transferring stockholder and its family members or transfers by stockholders that are partnerships or corporations to the partners or stockholders of such stockholders, but in each case subject to the prior execution by the transferee(s) of a lock-up agreement which is satisfactory to Jefferies & Company, Inc.

Upon the expiration of this 180-day lock-up period, substantially all of these shares will become eligible for sale, subject to the restrictions of Rule 144. These restrictions will not affect our ability to issue shares of our common stock or other securities pursuant to the exercise of stock options currently outstanding.

We have been advised by the representatives that, in accordance with Regulation M under the Securities Act, some persons participating in this offering may engage in transactions, including syndicate covering transactions, stabilizing bids or the imposition of penalty bids, that may have the effect of stabilizing or maintaining the market price of the shares at a level above that which might otherwise prevail in the open market.

A “syndicate covering transaction” is a bid for or the purchase of shares on behalf of the underwriters to reduce a syndicate short position incurred by the underwriters in connection with this offering. The underwriters may create a syndicate short position by making short sales of our shares and may purchase our shares in the open market to cover syndicate short positions created by short sales. Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in this offering. Short sales can be either “covered” or “naked.” “Covered” short sales are sales made in an amount not greater than the underwriters’ over-allotment option to purchase additional shares from us in this offering. “Naked” short sales are sales in excess of the over-allotment option.

A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in this offering. If the underwriters create a syndicate short position, they may choose to reduce or “cover” this position by either exercising all or part of the over- allotment option to purchase additional shares from us or by engaging in “syndicate covering transactions.” The underwriters may close out any covered

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short position by either exercising their over-allotment option or purchasing shares in the open market. The underwriters must close out any naked short position by purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option.

A “stabilizing bid” is a bid for or the purchase of shares on behalf of the underwriters for the purpose of fixing or maintaining the price of our common stock. A “penalty bid” is an arrangement that permits the representatives to reclaim the selling concession from an underwriter or a syndicate member when shares sold by such underwriter or syndicate members are purchased by the representatives in a syndicate covering transaction and, therefore, have not been effectively placed by the underwriter or syndicate member.

We have been advised by the representatives that these transactions may be effected on The Nasdaq National Market or otherwise and, if commenced, may be discontinued at any time. Similar to other purchase activities, these activities may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of our common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in the open market.

On November 3, 2000, Hambrecht Eu Capital, an affiliate of WR Hambrecht + Co, LLC, one of the underwriters, purchased 2,380,952 shares of Series B-5 preferred stock at a price of $1.05 per share, for an aggregate purchase price of $2.5 million. Upon completion of this offering, the shares of preferred stock held by Hambrecht Eu Capital will be converted into 2,380,952 shares of common stock.

On January 4, 2001, Jefferies Investors XI LLC, an affiliate of Jefferies & Company, Inc., one of the underwriters, purchased 261,905 shares of Series B-5 preferred stock at a price of $1.05 per share, for an aggregate purchase price of $0.3 million. Upon completion of this offering, the shares of preferred stock held by Jefferies Investors XI LLC will be converted into 261,905 shares of common stock.

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VALIDITY OF COMMON STOCK

The validity of the shares of common stock offered by us in this offering will be passed upon for us by Cooley Godward, LLP, San Diego, California. Certain legal matters relating to this offering will be passed upon for the underwriters by Wilson Sonsini Goodrich & Rosati, Professional Corporation, San Francisco, California. As of the date of this prospectus, Wilson Sonsini holds 10,000 shares of our common stock. Wilson Sonsini purchased this stock pursuant to the exercise of a warrant that we issued in connection with our acquisition of Onjibe in May 2003. Wilson Sonsini was a security holder of Onjibe at the time of the acquisition. Wilson Sonsini was issued the warrant in connection with the payment of legal services provided to Onjibe. Wilson Sonsini has entered into 180-day lock-up agreements with both us and Jefferies & Company, Inc. restricting its ability to sell, or otherwise dispose of, any shares of our common stock during the 180-day period following the effective date of this offering.

EXPERTS

The consolidated financial statements as of December 31, 2002 and December 31, 2003 and for each of the two years in the period ended December 31, 2003 included in this prospectus have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report appearing herein (which report expresses an unqualified opinion and includes an explanatory paragraph related to the Company’s change in its method of accounting for goodwill and intangible assets to conform with Statement of Financial Accounting Standards SFAS No. 142 and its change in its method for accounting for stock-based employee compensation to conform with the minimum value based method under SFAS No. 123 by adopting the modified prospective method as described in SFAS No. 148) and have been so included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

Ernst & Young LLP, independent auditors, have audited our consolidated financial statements for the year ended December 31, 2001, as set forth in their report. We have included our consolidated financial statements for the year ended December 31, 2001 in the prospectus and elsewhere in the registration statement in reliance upon Ernst & Young LLP’s report, given on their authority as experts in accounting and auditing.

CHANGE IN INDEPENDENT AUDITORS

On July 31, 2003, our Board of Directors dismissed Ernst & Young LLP as our independent auditor, and on October 1, 2003, engaged Deloitte & Touche LLP as our independent auditor for the years ending December 31, 2002 and 2003.

During the two years ended December 31, 2001 and 2002, and in the subsequent period through July 31, 2003, there were no disagreements between us and Ernst & Young LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreement, if not resolved to Ernst & Young LLP’s satisfaction, would have caused Ernst & Young LLP to make reference to the subject of the disagreement in connection with their reports on our financial statements for such years; and for the same periods there were no reportable events as described in Item 304(a)(1)(v) of Regulation S-K. Ernst & Young LLP did not report on our financial statements for the years ended December 31, 2002 and 2003.

We provided Ernst & Young LLP with a copy of the foregoing disclosures and requested that Ernst & Young LLP furnish us with a letter addressed to the SEC stating whether or not it agrees with the above statements. Ernst & Young LLP’s letter, dated April 15, 2004, is filed as an exhibit to the Registration Statement of which this prospectus is a part.

Prior to their appointment on October 1, 2003, we did not consult with Deloitte & Touche LLP regarding the application of accounting principles to a specified transaction, the type of audit opinion that might be rendered on our financial statements or any other matters or reportable events as set forth in Items 304(a)(2)(i) and (ii) of Regulation S-K.

88

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of common stock being offered by this prospectus. This prospectus does not contain all of the information in the registration statement and its exhibits. For further information with respect to us and the common stock offered by this prospectus, we refer you to the registration statement and its exhibits. Statements contained in this prospectus as to the contents of any contract or any other document referred to are not necessarily complete, and in each instance, we refer you to the copy of the contract or other document filed as an exhibit to the registration statement. Each of these statements is qualified in all respects by this reference.

You can read our SEC filings, including the registration statement of which this prospectus is a part, over the Internet at the SEC’s website at www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facilities at 450 Fifth Street, N.W., Washington, D.C. 20549. You may also obtain copies of the document at prescribed rates by writing to the Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities.

Upon completion of this offering, we will be subject to the information reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and we will file reports, proxy statements and other information with the SEC. We also intend to furnish our stockholders with annual reports containing our consolidated financial statements audited by an independent public accounting firm and quarterly reports containing our unaudited consolidated financial information. We maintain a website at theactivenetwork.com. The reference to our web address does not constitute incorporation by reference of the information contained at this site. Upon completion of this offering, you may access our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act with the SEC free of charge at our website as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC.

89

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Independent Auditors’ Report	F-2
Consolidated Balance Sheets	F-4
Consolidated Statements of Operations	F-5
Consolidated Statements of Stockholders’ Equity	F-6
Consolidated Statements of Cash Flows	F-7
Notes to Consolidated Financial Statements	F-8

F-1

INDEPENDENT AUDITORS’ REPORT

Board of Directors and Stockholders

The Active Network, Inc.

We have audited the accompanying consolidated balance sheets of The Active Network, Inc., as of December 31, 2002 and 2003 and the related consolidated statements of operations, stockholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of The Active Network, Inc. at December 31, 2002 and 2003 and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 1 to the consolidated financial statements, effective January 1, 2002, the Company changed its method of accounting for goodwill and other intangible assets to conform to Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets. Effective January 1, 2002, the Company adopted the fair value based method of accounting for stock-based employee compensation in accordance with SFAS No 123, Accounting for Stock-Based Compensation, and has adopted the modified prospective method as described in SFAS No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure.

/s/    DELOITTE & TOUCHE LLP

San Diego, California

March 31, 2004 (except for Note 11, as to which the date is April 14, 2004)

F-2

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

The Board of Directors and Stockholders

The Active Network, Inc.

We have audited the accompanying consolidated statements of operations, stockholders’ equity and cash flows of The Active Network, Inc. for the year ended December 31, 2001. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, The Active Network, Inc. consolidated results of operations, stockholders’ equity and cash flows for the year ended December 31, 2001, in conformity with accounting principles generally accepted in the United States.

/s/    ERNST & YOUNG LLP

San Diego, California

July 12, 2002

F-3

THE ACTIVE NETWORK, INC.

Consolidated Balance Sheets

(In thousands, except share data)

	December 31,
	2002			2003
ASSETS
Current assets:
Cash and cash equivalents	$	4,467		$	5,779
Restricted cash		305			–
Accounts receivable, net		1,757			2,295
Prepaid expenses and other current assets		139			101
Total current assets		6,668			8,175
Property and equipment, net		1,139			516
Goodwill		12,714			12,714
Other assets		176			244
Total assets	$	20,697		$	21,649
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	969		$	746
Accrued expenses		1,996			2,030
Deferred revenue, current portion		2,543			4,255
Current portion of long-term liabilities		78			44
Total current liabilities		5,586			7,075
Deferred rent		13			33
Deferred revenue, long-term		–			68
Promissory note		91			47
Long-term obligation		240			180
Commitments and contingencies (Notes 6 and 9)
Stockholders’ equity:
Convertible preferred stock, $0.001 par value; 182,661,642 and 147,748,321 shares authorized, 166,887,686 and 146,856,382 shares issued and outstanding at December 31, 2002 and 2003 (aggregate liquidation preference of $145,746 and $26,248 at December 31, 2002 and 2003, respectively) (Note 5)		167			147
Common stock, $0.001 par value; 300,000,000 and 250,000,000 shares authorized, 17,778,756 and 6,889,754 shares issued and outstanding at December 31, 2002 and 2003, respectively		18			7
Additional paid-in capital		89,810			91,683
Prepaid services (Note 5)		(511	)		–
Subscription receivable		–			(12	)
Deferred stock-based compensation		(83	)		(1,628	)
Accumulated deficit		(74,634	)		(75,951	)
Total stockholders’ equity		14,767			14,246
Total liabilities and stockholders’ equity	$	20,697		$	21,649

See accompanying notes to consolidated financial statements

F-4

THE ACTIVE NETWORK, INC.

Consolidated Statements of Operations

(In thousands, except share and per share data)

	Year Ended December 31,
	2001			2002			2003
Revenues:
Registration	$	1,730		$	2,834		$	4,535
Software licensing		1,219			1,893			3,335
Software maintenance		506			1,423			1,642
Marketing services		943			2,274			5,624
Total revenues		4,398			8,424			15,136
Cost of revenues:
Cost of application services		772			1,262			2,022
Cost of marketing services		56			180			1,130
Total cost of revenues		828			1,442			3,152
Gross profit		3,570			6,982			11,984
Operating expenses:
Sales and marketing		4,917			4,314			4,869
General and administrative		24,732			9,878			8,221
Stock-based compensation(1)		240			62			265
Goodwill impairment		7,899			–			–
Total operating expenses		37,788			14,254			13,355
Loss from operations		(34,218	)		(7,272	)		(1,371	)
Interest income, net		256			120			47
Other income, net		34			1			7
Net loss	$	(33,928	)	$	(7,151	)	$	(1,317	)
Net loss per share:
Basic and diluted	$	(2.00	)	$	(0.41	)	$	(0.17	)
Pro forma (unaudited) (Note 1)								(0.01	)
Weighted average number of shares used in per share amounts:
Basic and diluted		16,979,452			17,575,643			7,874,087
Pro forma (unaudited) (Note 1)								162,426,534

⁽¹⁾ Amounts include stock-based expenses, as follows:

	Year Ended December 31,
	2001		2002		2003
Sales and marketing	$	31	$	8	$	34
General and administrative		209		54		231
Total stock-based expenses	$	240	$	62	$	265

See accompanying notes to consolidated financial statements

F-5

THE ACTIVE NETWORK, INC.

Consolidated Statements of Stockholders’ Equity

Year Ended December 31, 2001, 2002 and 2003

(In thousands, except share and per share data)

	Convertible Preferred Stock					Common Stock					Additional Paid-In Capital			Deferred Compensation			Prepaid Services			Subscriptions Receivable			Accumulated Deficit			Total Stockholders’ Equity
	Shares		Amount			Shares		Amount
Balance, January 1, 2001	46,303,504		$	46		16,865,449		$	17		$	72,003		$	(279	)	$	(2,321	)	$	(2,500	)	$	(33,555	)	$	33,411
Exercise of stock options						317,604			–			29															29
Amortization of prepaid services																		560									560
Amortization related to deferred compensation															240												240
Amortization of prepaid services for purchase of license																		750									750
Issuance of Series B-6 preferred stock for cash—net of offering cost of $17,000	102,087,115			102								11,131															11,233
Issuance of Series B-7 preferred stock in purchase transaction (Note 3)	13,447,067			14								1,468															1,482
Payments on subscription receivable																					2,500						2,500
Repurchase of unvested common stock						(204,881	)		–			(4	)														(4	)
Extinguishment of put right on common stock for promissory note						50,000			–			1															1
Extinguishment of put right on preferred stock	5,050,000			5								4,981															4,986
Compensation related to the issuance of stock options in purchase transaction												82															82
Net loss																								(33,928	)		(33,928	)
Balance, December 31, 2001	166,887,686			167		17,028,172			17			89,691			(39	)		(1,011	)		–			(67,483	)		21,342
Exercise of stock options						150,584						3															3
Amortization related to deferred compensation															65												65
Amortization of prepaid services																		500									500
Deferred compensation related to stock option issuances												109			(109	)											–
Issuance of warrants and common stock for services						600,000			1			7															8
Net loss																								(7,151	)		(7,151	)
Balance, December 31, 2002	166,887,686			167		17,778,756			18			89,810			(83	)		(511	)		–			(74,634	)		14,767
Exercise of stock options						452,134			–			8															8
Deferred compensation related to stock option issuances												1,185			(1,185	)											–
Deferred compensation related to stock option cancellation and re-grant												623			(623	)											–
Amortization of deferred compensation															263												263
Amortization of prepaid services																		511									511
Issuance of warrants for services												4															4
Recapitalization (Note 5)	(20,031,304	)		(20	)	(11,781,432	)		(11	)		31															–
Issuance of warrants in conjunction with Onjibe acquisition (Note 3)												10															10
Exercise of warrants						440,296			–			12									(12	)					–
Net loss																								(1,317	)		(1,317	)
Balance, December 31, 2003	146,856,382		$	147		6,889,754		$	7		$	91,683		$	(1,628	)	$	–		$	(12	)	$	(75,951	)	$	14,246

See accompanying notes to consolidated financial statements

F-6

THE ACTIVE NETWORK, INC.

Consolidated Statements of Cash Flows

(In thousands)

	Year Ended December 31,
	2001			2002			2003
Cash flows from operating activities:
Net loss	$	(33,928	)	$	(7,151	)	$	(1,317	)
Adjustments to reconcile net loss to net cash provided by (used for) operating activities:
Depreciation and amortization		13,216			2,276			893
Goodwill impairment		7,899			–			–
Bad debt expense (recovery)		381			(388	)		141
Amortization of prepaid services		561			500			511
Amortization of deferred compensation		241			65			263
Issuance of warrants and common stock for services		–			8			4
Changes in operating assets and liabilities—net of effect of acquisitions:
Restricted cash		12			465			305
Accounts receivable		(437	)		(821	)		(679	)
Prepaid expenses		(255	)		435			38
Other assets		278			29			–
Accounts payable		(819	)		(1,116	)		(223	)
Accrued expenses		(224	)		(1,261	)		34
Deferred revenue		780			1,539			1,780
Deferred rent		(11	)		(2	)		20
Long-term obligation		–			(60	)		(60	)
Net cash provided by (used for) operating activities		(12,306	)		(5,482	)		1,710
Cash flows from investing activities:
Purchase of property and equipment		(403	)		(341	)		(237	)
Payment for acquisitions—net of cash acquired		92			–			(82	)
Net cash used for investing activities		(311	)		(341	)		(319	)
Cash flows from financing activities:
Exercise of stock options		29			3			8
Payments on capital lease obligations		(36	)		(21	)		(37	)
Payments on promissory note		–			(100	)		(50	)
Payments for repurchase of common stock		(4	)		–			–
Net proceeds from issuance of preferred stock		11,233			–			–
Proceeds from the payment received on Series B-5 preferred stock		2,500			–			–
Net cash provided by (used for) financing activities		13,722			(118	)		(79	)
Net increase (decrease) in cash and cash equivalents		1,105			(5,941	)		1,312
Cash and cash equivalents—beginning of year		9,303			10,408			4,467
Cash and cash equivalents—end of year	$	10,408		$	4,467		$	5,779
Supplemental disclosures of cash flow activity:
Cash paid during the year for interest	$	11		$	14		$	8
Non-cash activities:
Extinguishment of redemption right related to Series B preferred stock		4,981			–			–
Common stock issued and value of stock options assumed in conjunction with acquisition		1,564			–			–
Extinguishment of put right on common stock		250			–			–
Warrants for common stock issued in acquisition		–			–			10

See accompanying notes to consolidated financial statements

F-7

THE ACTIVE NETWORK, INC.

Notes to Consolidated Financial Statements

1.    ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Business—The Active Network, Inc. (the “Company”) was incorporated under the laws of the State of California on October 7, 1998 under the name Racegate.com. The Company became a Delaware corporation through a stock exchange agreement on July 6, 1999. In May 2001, the Company’s Certificate of Incorporation was amended to change the Company’s name to The Active Network, Inc.

The Company’s application services are used by event organizers, park and recreation department administrators and sports league administrators to provide online registration, transaction processing and data management, enhance their marketing and promotion capabilities, and improve the management of facilities and membership. The Company’s marketing services group capitalizes on its industry access and relationships to create targeted online and field marketing campaigns to reach active lifestyle consumers.

Principles of Consolidation and Basis of Presentation—The consolidated financial statements include the accounts of The Active Network, Inc., and its wholly-owned subsidiary, RecWare by The Active Network, Inc. All intercompany balances have been eliminated in consolidation. Certain prior year balances have been reclassified to conform to the current year presentation.

Use of Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting periods. Significant estimates in the financial statements include the estimate of fair value for the Company’s common stock in determining stock compensation, allowance for doubtful accounts, lives of tangible and intangible assets and impairment of goodwill and long-lived assets. Actual results could differ from those estimates.

Cash and Cash Equivalents—Cash and cash equivalents consist of cash and money market funds. The Company considers all highly liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents.

Restricted Cash—Restricted cash represents cash designated to satisfy contractual obligations resulting from the myteam.com acquisition. At December 31, 2003, the obligations had been satisfied and the Company no longer has restricted cash.

Fair Value of Financial Instruments—The carrying value of cash, cash equivalents, accounts receivable, accounts payable, accrued liabilities, obligations under capital leases, long-term liabilities and promissory note approximates fair value.

Concentration of Credit Risk—Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and accounts receivable, which are generally not collateralized. Cash and equivalents are held primarily with one financial institution and consist primarily of cash in bank accounts and highly liquid debt instruments. The Company maintains an allowance for potential credit losses on accounts receivable.

Property and Equipment—Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets (three to five years), except leasehold improvements which are amortized over the lesser of the estimated life of the asset or the remaining lease term.

F-8

THE ACTIVE NETWORK, INC.

Notes to Consolidated Financial Statements—(Continued)

The Company assesses potential impairments to its long-lived assets when events or changes in circumstances indicate that the asset’s carrying value may not be recoverable and the carrying amount of the asset exceeds the estimated future undiscounted cash flows. When the carrying amount of the asset exceeds the estimated future undiscounted cash flows, an impairment loss is recognized to reduce the asset’s carrying amount to its estimated fair value based on the present value of the estimated future cash flows.

Goodwill and Intangible Assets—Goodwill represents the excess of the cost of an acquired entity over the net of the amounts assigned to assets acquired and liabilities assumed. Prior to 2002, the Company amortized goodwill over a three-year useful life and evaluated its recoverability in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 121, Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of. Under this standard, if circumstances indicate that recoverability may be in doubt, the Company is required to state an asset at its fair value if the sum of its undiscounted cash flows is less than its carrying value. Effective January 1, 2002, the Company adopted SFAS No. 142, Goodwill and Other Intangible Assets. Under this standard, goodwill and intangible assets that do not have finite lives are no longer amortized. Instead, goodwill and intangible assets that do not have finite lives are assessed periodically for impairment. Upon adoption, the Company determined that it did not have a transitional goodwill impairment charge as of January 1, 2002. As a result of the Company’s annual assessment as of December 31, 2002 and 2003, no impairment was indicated. Intangible assets with finite lives are amortized on a straight-line basis over their useful lives and are evaluated for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable under SFAS No. 144, Accounting for Impairment or Disposal of Long-Lived Assets.

Deferred Rent—Rent expense is recorded on a straight-line basis over the term of the lease. The difference between rent expense and amounts paid under the lease agreements is recorded as deferred rent in the accompanying consolidated balance sheets.

Revenue Recognition—Revenues consist of fees received for registration services, software licensing, software maintenance and marketing services.

Registration revenues are the convenience fees received for the processing of transactions for any of the Company’s application services products and are recognized in accordance with Emerging Issues Task Force (“EITF”) consensus on Issue 99-19, Reporting Revenues Gross as a Principal versus Net as an Agent. Under EITF 99-19, registration revenues are recognized net of the portion of the registration fees paid to the event organizers, park and recreation department administrators, or league administrators, and net of reserves for chargebacks. The Company recognizes registration revenues when services are performed.

The Company has adopted Statement of Position (“SOP”) 97-2, Software Revenue Recognition, as amended, which sets forth the accounting for software products and maintenance revenues. Under SOP 97-2, software licensing revenues are recognized when delivery of the product to the customer has occurred, a signed contract exists, the fee is fixed or determinable, and collection of the resulting receivables is probable. In accordance with SOP 97-2, the Company recognizes software licensing revenues after installation and training has been completed.

Subscription revenues, included in software licensing revenues, are derived from annual contracts for the Company’s hosted amateur sports league and park and recreation customers. The Company invoices the customer for the full term of the agreement and the contracts are renewed annually thereafter. The Company recognizes revenues on a straight-line basis over the term of the contract.

F-9

THE ACTIVE NETWORK, INC.

Notes to Consolidated Financial Statements—(Continued)

Software maintenance revenues consists of annual maintenance contracts. The Company invoices customers for the full term of the agreement upon delivery of software, and the maintenance contracts are renewed annually thereafter. The Company recognizes revenues on a straight-line basis over the term of the maintenance contract.

Marketing services revenues consists of online and field marketing campaigns. The Company’s online marketing services include online advertising, e-mail marketing and targeting newsletter promotions. Banner, button and e-mail advertisements are impression-based, with the revenues based on the number of times the advertisement is displayed or delivered over the contract period. Impression-based contract revenues are recognized as the impression is displayed on the Company’s website or delivered by e-mail to the intended addressee. The Company’s field marketing services include event promotions, sponsorships and sample placements, and are defined contractually with individual customers. Field advertising revenues is recognized at the time the service is rendered. The price is fixed by the contract for each sale and is refundable only if the Company is not able to fulfill the contractual obligations.

The Company records amounts billed to customers in excess of recognizable revenues as deferred revenue in the accompanying consolidated balance sheets.

Advertising Costs—Costs of advertising are expensed when incurred. Advertising costs for the years ended December 31, 2001, 2002 and 2003 were approximately $81,000, $64,000 and $55,000, respectively, and are included in sales and marketing in the consolidated statements of operations.

Income Taxes—The Company accounts for income taxes in accordance with SFAS No. 109, Accounting for Income Taxes, which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities. SFAS No. 109 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized.

The Company evaluates the realizability of its deferred tax assets by assessing its valuation allowance and by adjusting the amount of such allowance, if necessary. The factors used to assess the likelihood of realization of the Company’s forecast of future taxable income and available tax planning strategies to realize or renew net deferred tax assets in order to avoid the potential loss of future tax benefits.

F-10

THE ACTIVE NETWORK, INC.

Notes to Consolidated Financial Statements—(Continued)

Stock-Based Compensation—The Company issues common stock options to employees under the 2002 Stock Option/Stock Issuance Plan and previously under the 1999 plan. Prior to 2002, the Company accounted for stock options granted under those plans under the recognition provisions of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees. Effective on January 1, 2002, the Company adopted the fair value based method of accounting for stock-based employee compensation of SFAS No. 123, Accounting for Stock-Based Compensation and the disclosure requirements of SFAS No. 148, Accounting for Stock-Based Compensation—Transition and Disclosure—an Amendment of FASB Statement 123. Under this method, compensation expense equal to the fair value of the stock-based award at the date of grant is recognized over the course of its vesting period. The Company elected to follow the modified prospective method of adoption described in SFAS No. 148. Compensation cost recognized in 2002 and 2003 is the same as that which would have been recognized had the fair value method of SFAS No. 123 been applied from its original effective date. In accordance with the modified prospective method of adoption, results for years prior to 2002 have not been restated. The following table illustrates the effect on net loss and net loss per share if compensation cost for all outstanding stock option awards had been determined based on their fair values at the grant date for the year ended December 31, 2001 (In thousands, except per share data):

Net loss as reported	$	(33,928	)
Add: Stock-based employee compensation included in net loss		240
Deduct: Total stock-based compensation expense determined under fair value based method for all awards		(403	)
Net loss, pro forma under SFAS No. 123	$	(34,091	)
Net loss per share, basic and diluted
As reported	$	(2.00	)
Pro forma	$	(2.01	)

Net Loss Per Share—Basic net loss per share is computed by dividing net loss by weighted-average number of common shares outstanding for the fiscal period.

The following were excluded from the computation of diluted earnings per share as they had an anti-dilutive impact:

	Year Ended December 31,
	2001	2002	2003
Convertible preferred stock	168,721,075	168,721,075	154,120,920
Options	13,234,940	46,748,546	44,875,237
Warrants	2,168,721	2,168,721	1,918,918
Total	182,291,347	215,804,953	200,915,075

Pro Forma Net Loss Per Share (unaudited)—Pro forma net loss per share is computed using the weighted average number of common shares outstanding, including the pro forma effects of the automatic conversion of all shares of our outstanding preferred stock into 154,120,920 shares of common stock upon completion of this offering and the exercise of outstanding warrants to purchase an aggregate of 707,797 shares of common stock at a weighted average exercise price of $0.03 that would otherwise expire upon the effectiveness of an initial public offering.

Comprehensive Loss—The Company reports all components of comprehensive loss in the financial statements in the period in which they are recognized. Comprehensive loss is defined as the change in equity

F-11

THE ACTIVE NETWORK, INC.

Notes to Consolidated Financial Statements—(Continued)

during a period from transactions and other events and circumstances from non-owner sources. For the years ended December 31, 2001, 2002 and 2003 there was no difference between comprehensive loss and net loss.

2.    BALANCE SHEET INFORMATION

Accounts receivable consist of the following:

	December 31,
	2002			2003
	(In thousands)
Accounts receivable	$	1,762		$	2,400
Less allowance		(5	)		(105	)
Receivables, net	$	1,757		$	2,295

During the years ended December 31, 2001, 2002 and 2003, the Company increased (decreased) its allowance for doubtful accounts by $381,000, $(388,000) and $141,000, respectively, and wrote off receivables (net of recoveries) totaling $85,000, $154,000 and $41,000, respectively.

Property and equipment, including assets recorded under capital leases, consist of the following:

	December 31,
	2002			2003
	(In thousands)
Computers and software	$	3,817		$	2,771
Furniture and fixtures		303			303
Office equipment		446			449
Leasehold improvements		62			64
		4,628			3,587
Accumulated depreciation		(3,489	)		(3,071	)
Total property and equipment, net	$	1,139		$	516

Other assets consist of the following:

	December 31,
	2002		2003
	(In thousands)
Domain license	$	151	$	151
Customer contracts		–		95
Lease deposits		25		25
		176		271
Accumulated amortization		–		(27	)
Total other assets	$	176	$	244

F-12

THE ACTIVE NETWORK, INC.

Notes to Consolidated Financial Statements—(Continued)

Accrued expenses consist of the following:

	December 31,
	2002		2003
	(In thousands)
Accrued compensation	$	560	$	949
Sales taxes		378		575
Accrued sponsorship		385		60
Professional services		311		151
Other accrued expenses		362		295
Total accrued expenses	$	1,996	$	2,030

3.    ACQUISITIONS

In November 2001, the Company purchased myteam.com, Inc. (“myteam.com”) a provider of online services for teams and leagues, in a transaction accounted for as a purchase. The Company issued 13,447,067 shares of Series B-7 preferred stock with a fair value of $1,482,000 to certain debt holders of myteam.com and options to purchase 8,213,457 shares of common stock at an exercise price of $0.01 in exchange for all outstanding capital stock of myteam.com. The acquisition was consummated principally to expand the Company’s application services business. The results of operations of myteam.com have been included in the accompanying consolidated statements of operations since November 29, 2001.

In May 2003, the Company acquired substantially all of the assets of Onjibe, Inc. (“Onjibe”), a provider of online services for teams and leagues in exchange for cash consideration of $90,000 and warrants to purchase 200,000 shares of the Company’s common stock at $0.01 per share with a fair value of $10,000. This transaction was accounted for as a purchase. The acquisition was consummated principally to expand the Company’s application services business. The results of operations of Onjibe have been included in the accompanying consolidated statements of operations since May 23, 2003. The following assumptions were used to value the warrants: no dividend yield, volatility of 80%, risk free interest rate of 3.69% and a life of ten years.

For the acquisitions described above, the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values at the dates of acquisition, as follows:

	Onjibe		myteam.com
	(In thousands)
Assets:
Cash and restricted cash	$	5	$	726
Prepaids and other assets		–		573
Fixed assets		–		178
Goodwill		–		4,222
Intangible assets		95		–
Total assets		100		5,699
Liabilities:
Accounts payable		–		928
Accrued expenses		–		205
Accrued compensation		–		822
Deferred revenue		–		54
Total liabilities		–		2,009
Net assets	$	100	$	3,690

F-13

THE ACTIVE NETWORK, INC.

Notes to Consolidated Financial Statements—(Continued)

Unaudited Pro Forma Results of Operations

The following unaudited pro forma results of operations present the impact on the Company’s results of operations for the year ended December 31, 2001, as if the acquisition of myteam.com had occurred on January 1, 2001. The acquisition of Onjibe did not have a significant effect on the financial results of the Company.

	2001
	Historical			Pro forma combined
Revenues	$	4,398,000		$	5,428,000
Net loss	$	(33,928,000	)	$	(52,300,000	)
Basic and diluted net loss per share	$	(2.00	)	$	(3.08	)

Goodwill and Intangible Assets

Goodwill totaling $12,714,000 is classified entirely as part of the application services segment. In 2001, the Company determined that the goodwill assigned to several reporting units had become impaired. Accordingly, the Company recorded goodwill impairment charges totaling $7,899,000.

Intangible assets consist of the following:

	December 31, 2002						December 31, 2003
	Gross carrying value		Accumulated amortization		Net		Gross carrying value		Accumulated amortization			Net
	(In thousands)
Domain license	$	151	$	–	$	151	$	151	$	–		$	151
Customer contracts		–		–		–		95		(27	)		68
	$	151	$	–	$	151	$	246	$	(27	)	$	219

The domain name is recorded at cost and is not currently amortized as it meets the indefinite life criteria of SFAS No. 142. The Company compared the fair value of this asset with its carrying value and determined that no impairment loss should be recorded. The customer contracts were acquired as part of the Onjibe acquisition and are being amortized over the life of the customer relationships of two years.

Amortization expense related to amortizable intangible assets was $0, $0 and $27,000 for 2001, 2002 and 2003, respectively.

Estimated future intangible asset amortization expense associated with intangible assets existing at December 31, 2003 is as follows (In thousands):

Year
2004	$	50
2005		18
Total	$	68

Actual amortization expense to be reported in future periods could differ from these estimates as a result of acquisitions, divestitures, impairments and other factors.

F-14

THE ACTIVE NETWORK, INC.

Notes to Consolidated Financial Statements—(Continued)

4.    INCOME TAXES

The following is a reconciliation from the expected statutory federal income tax expense to the Company’s actual income tax expense:

	2001			2002			2003
	(In thousands)
Tax benefit at U.S. statutory rate	$	(11,536	)	$	(2,431	)	$	(448	)
State tax rate net of federal benefit		(2,035	)		(426	)		(84	)
Stock-based compensation		96			15			31
Goodwill and other		2,124			4,094			(317	)
Net change in valuation allowance		11,351			(1,252	)		818
	$	–		$	–		$	–

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2002 and 2003 are shown below:

	December 31,
	2002			2003
	(In thousands)
Deferred tax assets:
Net operating loss carryforwards	$	9,904		$	10,254
Deferred revenue		965			2,113
Depreciation and amortization		2,264			1,787
Other—net		793			616
Total deferred tax assets		13,926			14,770
Valuation allowance		(13,926	)		(14,770	)
Net deferred tax assets	$	–		$	–

A valuation allowance of $13,926,000 and $14,770,000 has been recorded at December 31, 2002 and 2003, respectively, to offset the net deferred tax assets as realization is uncertain due to the uncertainty of recoverability of such assets given the Company’s operating losses.

The Company had federal and California tax net operating loss carryforwards at December 31, 2003 of approximately $27,900,000 and $12,800,000, respectively. The federal and California tax loss carryforwards will begin to expire in 2019 and 2009, respectively, unless previously utilized.

The difference between the retained deficit and the net operating losses included in the deferred tax asset is primarily due to the limitations on the usage of the net operating losses pursuant to Section 382 and 383 of the Internal Revenue Code. Section 382 limits the use of the net operating loss in the event of a cumulative change in ownership of more than 50% within a three-year period. The Company has had multiple ownership changes since inception. The net operating losses included in the deferred tax asset are the maximum amount allowed under Section 382. Additional limitations on the annual use of these net operating losses may also apply.

In addition, the Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. These audits can involve complex issues, which may require an extended period of time to resolve. In management’s opinion, adequate provisions for income taxes have been made for all years.

F-15

THE ACTIVE NETWORK, INC.

Notes to Consolidated Financial Statements—(Continued)

5.    STOCKHOLDERS’ EQUITY

Recapitalization—On February 14, 2003, the Company effectuated a recapitalization of its capital stock whereby the Company’s various stockholders agreed to adjustments of their ownership percentage and certain ownership rights pursuant to terms negotiated in connection with the issuance of Series B-6 and B-7 convertible preferred stock in November 2001. The recapitalization consisted of the following changes: (i) each share of common stock issued and outstanding immediately prior to the recapitalization (and any warrants exercisable for common stock) underwent a 1 for 4 reverse stock split; (ii) each share of Series B-6 preferred stock, Series B-7 preferred stock and each common stock option issued and outstanding (and any share of common stock issued pursuant to the exercise of such options) immediately prior to such recapitalization underwent a 0.8265357 for 1 reverse stock split in order to retain their fully diluted ownership percentage after the recapitalization; (iii) the aggregate liquidation preference of all outstanding shares of preferred stock was reduced from $145,746,000 to $26,248,000; and (iv) Series A-1, Series A-2, Series A-3, Series B, Series C, Series D-1, Series D-2, Series E, Series F, Series G, Series H, Series I and Series J preferred stock were redesignated as Series A-1, Series A-2, Series A-3, Series B-1, Series B-2, Series B-3, Series A-4, Series A-5, Series B-4, Series B-5, Series A-6, Series B-6 and Series B-7, respectively.

The Company accounted for the recapitalization of the capital stock as a redistribution among stockholders. On the date of the recapitalization the Company recorded an adjustment to Series B-6 and Series B-7 preferred stock, common stock and additional paid-in capital for the change in shares outstanding at their respective par values per share. The share quantities prior to the recapitalization were not retroactively restated for the change as the stockholders do not maintain equal ownership rights before and after the change.

Pursuant to a modification to the 2002 option plan dated February 7, 2003, the then-outstanding options were modified to allow such option holders to retain the same ownership percentage of the Company on a fully diluted basis at the time of the recapitalization, resulting in a 0.8265357 for 1 reverse split, instead of being subject to the 1 for 4 reverse split imposed on the common stock. Accordingly, in accordance with SFAS 123, Accounting for Stock-based Compensation, the Company determined the compensation expense associated with the modification in terms of the options and recorded deferred compensation expense to be amortized over the remaining vesting period of the modified options. The additional option value of $623,000 as a result of the modification represents the difference between the fair value of the options immediately after and before the modification of the options.

F-16

THE ACTIVE NETWORK, INC.

Notes to Consolidated Financial Statements—(Continued)

Convertible Preferred Stock—All series of preferred stock are convertible, at the option of the holder, at any time into a number of fully paid and non-assessable shares of common stock that results from dividing the original issue price by the conversion price at the time in effect for such series, subject to certain anti-dilution adjustments. At December 31, 2003, shares of Series A-1, A-2, A-5, B-1, B-2, B-4, B-5, B-6, and B-7 preferred stock are convertible into an equal number of shares of common stock. At December 31, 2003, Series A-3, A-4, A-6 and B-3 preferred stock are convertible into shares of common stock at rates of 1.10, 1.22, 1.64 and 1.22, respectively. The authorized, issued and outstanding shares of convertible preferred stock by series at December 31, 2003 on a pre- and post-recapitalization basis are as follows:

		Pre-Recapitalization				Post-Recapitalization
Series Designation	Issue Date	Authorized	Issued and Outstanding Shares	Liquidation Preference		Authorized	Issued and Outstanding Shares	Liquidation Preference		Dividend and Liquidation Priority	Shares as If Converted
Series A-1	Apr-1999	641,500	641,500	$	597,000	641,500	641,500	$	16,000	5	641,500
Series A-2	Jun-1999	750,000	750,000		697,000	750,000	750,000		38,000	5	750,000
Series A-3	Jun-1999	405,882	405,882		377,000	405,882	405,882		30,000	5	444,642
Series B-1	Jul-1999	5,050,000	5,050,000		5,050,000	5,050,000	5,050,000		1,111,000	3	5,050,000
Series B-3	Dec-1999	6,582,814	5,838,813		15,004,000	5,838,813	5,838,813		3,301,000	3	7,098,827
Series B-2	Dec-1999	2,729,012	2,729,012		3,247,000	2,729,012	2,729,012		714,000	3	2,729,012
Series A-4	Dec-1999	1,167,315	1,167,315		3,000,000	1,167,315	1,167,315		150,000	5	1,419,221
Series A-5	Apr-2000	1,082,150	1,082,150		400,000	1,082,150	1,082,150		20,000	5	1,082,150
Series B-4	Apr-2000	2,973,115	2,973,115		2,637,000	3,865,046	2,973,115		582,000	3	2,973,115
Series A-6	Dec-2000	12,000,000	8,854,492		9,283,000	8,864,254	8,864,254		650,000	4	14,578,112
Series B-5	Dec-2000	26,939,787	21,861,225		22,954,000	21,861,225	21,861,225		6,888,000	2	21,861,225
Series B-6	Nov-2001	108,893,000	102,087,115		81,000,000	84,378,644	84,378,637		11,248,000	1	84,378,637
Series B-7	Nov-2001	13,447,067	13,447,067		1,500,000	11,114,480	11,114,479		1,500,000	6	11,114,479
		182,661,642	166,887,686	$	145,746,000	147,748,321	146,856,382	$	26,248,000		154,120,920

Dividends—The holders of shares of convertible preferred stock are entitled to receive dividends, out of any assets legally available, prior and in preference to any declaration or payment of any dividend on common stock. Dividends are payable whenever funds are legally available, when and if declared by the Board of Directors. No dividends have been declared. Priority of dividend payment for each series of preferred stock is noted in the above table. Dividend payments to the holders of each series have priority and are made in preference to all other series with a lower priority.

Each share of preferred stock is automatically converted into common stock upon the effective date of an underwritten public offering of the Company’s common stock in which the market capitalization of the Company, based on the initial offering price per share, excluding shares sold by the Company, is at least $125 million and the gross proceeds to the Company are at least $25 million.

Liquidation Preferences—In the event of a liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the holders of convertible preferred stock are entitled to receive designated amounts per share plus an amount equal to all declared and unpaid dividends on such stock. The above table notes the order of liquidation preference and amount for each series of convertible preferred stock. Liquidation payments to the holders of each series have priority and are made in preference to all other series with a lower priority. Upon completion of the distributions to the holders of convertible preferred stock, the remaining assets shall be distributed among the holders of convertible preferred stock and common stock pro rata based on the number of shares of common stock held by each, assuming conversion of all preferred stock into common stock.

Voting Rights—Each share of convertible preferred stock is entitled to one vote for each share of common stock into which such share of preferred stock is convertible.

F-17

THE ACTIVE NETWORK, INC.

Notes to Consolidated Financial Statements—(Continued)

Prepaid Service Agreement—As part of an investment by TicketMaster Online-CitySearch, Inc. (“TMCS”) in December 1999, the Company was entitled to receive as consideration $10,000,000 in cash plus a $3,000,000 credit toward the purchase of advertising and other promotional services from TMCS. The Company was obligated to utilize a minimum of $500,000 of the credit each year. If the Company failed to utilize the annual minimum, the credit would be reduced as if the minimum amount had been utilized. The Company recorded the $3,000,000 credit as prepaid services and reduced the prepaid amount as the services have been used or as the credit expired. The credit was fully utilized at December 31, 2003. In 2003, TMCS was acquired by USA Interactive, a current stockholder of the Company, now known as InterActiveCorp.

Redeemable Common Stock—In conjunction with the execution of a domain name transfer agreement in February 2000, the Company paid $500,000 and issued 50,000 shares of common stock subject to a $500,000 put right (“Put Right”) exercisable within thirty days after February 22, 2003. In December 2001, the Company executed an amendment to the agreement to extinguish the Put Right. In consideration of the cancellation of the Put Right, the Company entered into a non-interest bearing promissory note for $250,000. The note is payable in five equal installments of $50,000 commencing on June 21, 2002 and continuing on December 30, 2002 and annually on December 30 thereafter. The Company has recorded a discount related to the note based on an interest rate of 6%. At December 31, 2003, the principal balance of the note is $100,000 and the balance of the unamortized discount is $9,000.

1999 Stock Option/Stock Issuance Plan—In March 1999, the Company established the 1999 Stock Option Plan (the “1999 Plan”) for eligible employees, officers and directors. The 1999 Plan provided for the issuance of up to 65,000,000 shares of common stock under incentive and non-qualified stock options. The Board of Directors determined terms of the stock option agreements, including vesting requirements, subject to the provisions of the 1999 Plan. Options granted by the Company generally vest over three to four years and are exercisable from the date of grant for a period of ten years. Unvested shares of stock are subject to repurchase upon termination of employment. The exercise price of the incentive stock options must equal at least the fair value of the stock on the date of grant, or 110% of the fair value in the case of any person possessing 10% combined voting power for all classes of the stock of the Company. The exercise price of nonstatutory stock options may be less than 100% of the fair value of the stock on the date of grant. The 1999 Plan was terminated in November 2001.

2002 Stock Option Stock Issuance Plan—In January 2002, the Company established the 2002 Stock Option/Stock Issuance Plan (the “2002 Plan”), which replaced the 1999 Plan and assumed certain options issued under the 1999 Plan. The 2002 Plan provides for the issuance of up to 48,352,338 shares of common stock on a post restructuring basis under incentive and non-qualified stock options. The Board of Directors determines terms of the stock option agreements, including vesting requirements, subject to the provisions of the 2002 Plan. Options granted by the Company generally vest over three to four years and are exercisable from the date of grant for a period of ten years. The exercise price of the incentive stock options must equal at least the fair value of the stock on the date of grant, or 110% of the fair value in the case of any person possessing 10% combined voting power for all classes of the stock of the Company. The exercise price of nonstatutory stock options may be less than 100% of the fair value of the stock on the date of grant.

F-18

THE ACTIVE NETWORK, INC.

Notes to Consolidated Financial Statements—(Continued)

A summary of the Company’s stock option activity, including options granted under the 1999 Plan, the 2002 Plan and other equity incentive arrangements, and related information is as follows for the three years ended December 31, 2003:

	Options		Weighted- Average Exercise Price
Outstanding, January 1, 2001	5,451,450		$	0.37
Granted	10,258,341			0.11
Exercised	(317,604	)		0.09
Cancelled	(2,157,247	)		0.46
Outstanding, December 31, 2001	13,234,940			0.16
Granted	39,937,396			0.01
Exercised	(150,584	)		0.01
Cancelled	(6,273,206	)		0.36
Outstanding, December 31, 2002	46,748,546			0.01
Granted	2,036,352			0.01
Exercised	(113,776	)		0.01
Cancelled	(367,659	)		0.01
Recapitalization adjustment	(7,977,680	)
Granted	5,559,850			0.01
Exercised	(338,358	)		0.01
Cancelled	(672,038	)		0.02
Outstanding, December 31, 2003	44,875,237		$	0.01

The following summarizes information regarding options outstanding at December 31, 2003:

	Options Outstanding				Options Exercisable
Range of Exercise Price	Number Outstanding	Weighted- Average Remaining Contractual Life (Years)	Weighted- Average Exercise Price		Number Exercisable	Weighted- Average Exercise Price
$0.01	44,872,737	8.32	$	0.01	29,596,376	$	0.01
$2.00	2,500	7.15		2.00	2,500		2.00
	44,875,237	8.32	$	0.01	29,598,876	$	0.01

The following table sets forth information about the fair value the of each option grant on the date of grant using the Black-Scholes option pricing model and the weighted-average assumptions used for such grants:

	2001	2002	2003
Dividend yield	0.00%	0.00%	0.00%
Volatility factor	0%	0%	0%
Risk free interest rate	6.25%	2.68 – 5.02%	2.48 – 3.23%
Expected life of option	5 years	5 years	5 years

F-19

THE ACTIVE NETWORK, INC.

Notes to Consolidated Financial Statements—(Continued)

The weighted-average fair value on the date of grant and weighted-average exercise prices of options granted were as follows during 2001, 2002 and 2003:

	2001					2002					2003
	Shares	Fair Value		Exercise Price		Shares	Fair Value		Exercise Price		Shares	Fair Value		Exercise Price
Exercise price equals fair value of the related stock	10,258,341	$	0.11	$	0.11	39,937,396	$	0.01	$	0.01	–	$	–	$	–
Exercise price is less than the fair value of the related stock	–	$	–	$	–	–	$	–	$	–	7,596,202	$	0.16	$	0.01
Exercise price is greater than the fair value of the related stock	–	$	–	$	–	–	$	–	$	–	–	$	–	$	–

Stock Option Cancellation and Reissue—On January 1, 2002, the Company cancelled 5,309,506 stock options issued under the 1999 Plan and reissued the same number of stock options to employees under the 2002 Plan. The weighted average exercise price of the cancelled options was $0.42 per share and the exercise price of the new options was $0.01 per share. The Company measured the difference in fair value of the cancelled options and the newly issued options on January 2002 using the Black-Scholes option pricing model. The difference in fair value of $12,000 was recorded as deferred compensation expense and is being amortized to expense over the vesting period of the new options.

Warrants—The fully vested warrants assumed or newly issued warrants for the purchase of the Company’s stock have been issued to third parties in connection with acquisitions, common or preferred stock financing and to service providers. The Company has valued the warrants using the Black-Scholes option pricing model and determined a fair value for each warrant as of the issue date. The assumptions utilized in the determination of the fair value of warrants issued during the year ended December 31, 2003 are as follows:

Dividend yield	0.00%
Volatility factor	80%
Risk free interest rate	1.15 – 3.92%
Expected life of warrant	1 – 10 years

Effect of Recapitalization on Warrants—Unexercised common stock warrants outstanding at the date of recapitalization were reduced by 75% as a result of the restructuring, which represents the same reduction rate applied to the outstanding common shares. The exercise prices of the outstanding warrants were adjusted accordingly. The warrant amounts reflected in the following table are based on original issue quantities through February 14, 2003 and then reduced by 2,541,873 warrants as of that date as a result of the recapitalization.

F-20

THE ACTIVE NETWORK, INC.

Notes to Consolidated Financial Statements—(Continued)

A summary of the Company’s warrants at December 31, 2003 is presented below:

		Fair Value at Date of Issuance		Expiration date	Pre-Recapitalization			Post-Recapitalization
Date Issued	Type of Stock				Warrant Shares	Exercise price		Warrant Shares	Exercise price
August 1999	Common	$	23,000	August 2009	658,081	$	1.65	164,519	$	6.58
December 1999	Common		17,000	December 2009	507,459		1.01	126,861		4.04
April 2000	Series B-4 Preferred		473,000	November 2004	891,931		0.89	891,931		0.89
September 2000	Common		9,000	September 2005 - October 2005	111,250		0.50	27,810		2.00
January 2003	Common		1,000	January 2008 - January 2013	190,000		0.01	47,500		0.05
February 2003	Common		1,000	March 2004 - March 2005	961,186		0.01	240,297		0.05
May - November 2003	Common		57,000	August 2008	420,000		0.01	420,000		0.01
		$	581,000		3,739,907			1,918,918

Warrants issued in 2003 included 360,445 issued to a customer, 240,296 of which have been exercised for common stock. The common shares have been issued and a subscription receivable was recorded for the amount due on exercise. Stock-based expense of $3,000 related to the issuance of the warrant was recorded as an offset to revenues.

Shares Reserved for Future Issuance—The following table presents shares reserved for future issuance at December 31, 2003:

Conversion of preferred stock	154,120,920
Stock options issued and outstanding	44,875,237
Warrants issued and outstanding	1,918,918
Authorized for future option grants	2,920,248
	203,835,323

6.    COMMITMENTS

The Company leases its facilities under operating leases that expire in 2005. Rent expense was $ 892,000 $431,000 and $432,000 for the years ended December 31, 2001, 2002 and 2003, respectively. Annual minimum future payments under operating leases are as follows at December 31, 2003 (In thousands):

2004	$	380
2005		235
Total future lease payments	$	615

The Company amended a strategic alliance agreement with a sports association in 2001. In connection with the amendment and settlement the Company agreed to pay a total of $700,000, payable in amounts of $200,000 each in 2001 and 2002, and $60,000 annually in years 2003 through 2007. The Company recorded the full value of the payment obligation and has reflected the long-term portion of the obligation as a long-term liability.

F-21

THE ACTIVE NETWORK, INC.

Notes to Consolidated Financial Statements—(Continued)

In September 2003, the Company obtained a standby letter of credit of $55,000 as security for performance under a software license and services contract with a customer. The contract allows for draws against the letter of credit if specified software deliverables do not occur and customer acceptance is not achieved. The letter of credit expires September 2004. No draws have occurred against the letter of credit.

The Company obtained a letter of credit in the amount of $200,000 in conjunction with a lease agreement. The letter of credit expired February 2001 and was extended for an additional one-year period. In April 2001 the Company had satisfied all payment obligations under the lease agreement and the letter of credit was released.

7.    EMPLOYEE BENEFIT PLAN

The Company established a defined contribution employee retirement plan (the “401(k) Plan”) effective January 1, 2001, conforming to Section 401(k) of the Internal Revenue Code (“IRC”). All full-time employees (as defined in the 401(k) Plan) may elect to have a portion of their salary deducted and contributed to the 401(k) Plan up to the maximum allowable limitations of the IRC, which may be matched by the Company in an amount determined by the Board of Directors. No such Company contributions have been approved or made since the inception of the 401(k) Plan.

8.    RELATED PARTIES

The Company entered into a lease agreement with an officer for its Sacramento, California facility. The lease agreement, which continues as amended, provides for monthly rent of $6,000. The lease expires August 2004.

9.    SEGMENT INFORMATION

SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s CODM is its Chief Executive Officer. While the Chief Executive Officer evaluates results in a number of different ways, the Company has determined that its reportable segments are based upon internal financial reports that disaggregate certain operating information into two reportable segments called application services and marketing services. Application services provide online registration and transaction processing, enhance marketing and promotion capabilities and improve the management of facilities and memberships. Marketing services create targeted online and field marketing campaigns to reach active lifestyle consumers.

The classification of segment operating expenses and segment income (loss) from operations differs from the financial statements in that the segment operating expenses include only the direct costs such as salaries, payroll taxes, benefits, and commissions attributable to each segment. All other operating expenses, depreciation stock-based compensation and goodwill impairment are captured in the line items titled “Corporate” in the tables below. The Company does not allocate nor analyze fixed assets on the basis of reportable operating segments.

F-22

THE ACTIVE NETWORK, INC.

Notes to Consolidated Financial Statements—(Continued)

The following table presents a summary of operating segments:

	Year Ended December 31,
	2001			2002			2003
	(In thousands)
Revenues:
Application services:
Registration	$	1,730		$	2,834		$	4,535
Software licensing		1,219			1,893			3,335
Software maintenance		506			1,423			1,642
Total application services		3,455			6,150			9,512
Marketing services		943			2,274			5,624
Total revenues		4,398			8,424			15,136
Cost of revenues:
Application services		772			1,262			2,022
Marketing services		56			180			1,130
Total cost of revenues		828			1,442			3,152
Gross profit		3,570			6,982			11,984
Operating expenses:
Application services		7,855			6,413			7,180
Marketing services		1,168			1,089			1,847
Corporate expenses		28,765			6,752			4,328
Loss from operations	$	(34,218	)	$	(7,272	)	$	(1,371	)
Segment income (loss):
Application services	$	(5,172	)	$	(1,525	)	$	310
Marketing services		(281	)		1,005			2,647
Corporate		(28,765	)		(6,752	)		(4,328	)
Loss from operations	$	(34,218	)	$	(7,272	)	$	(1,371	)

No single application services or marketing services customer accounted for more than 10% of the Company’s total revenues in any year.

10.    LITIGATION

The Company is subject to certain legal claims arising in the ordinary course of business, some of which involve claims for monetary damages. The ultimate outcome of such claims cannot be predicted at this time. It is management’s opinion, after consultation with its legal counsel, that any such liability resulting from the ultimate resolution of such claims would not have a material adverse effect on the Company’s financial position or the Company’s future results of operations or cash flows.

11.    SUBSEQUENT EVENTS

In April 2004, the Company purchased substantially all of the assets of Do It Sports, a provider of online registration services and technology for real-time race day data services and results, for $350,000 in cash and the assumption of certain liabilities, substantially all of which are current liabilities. Do It Sports has represented that the liabilities assumed when reduced by cash and receivables, or Net Liabilities, do not exceed $1,900,000. The Company has agreed to assume responsibility for Net Liabilities of up to $2,125,000 and have placed up to

F-23

THE ACTIVE NETWORK, INC.

Notes to Consolidated Financial Statements—(Continued)

$225,000 of the aforementioned cash in escrow to be held as security for the indemnification of obligations in the event that Net Liabilities exceed the $1,900,000 represented. In addition, in July of 2005, the Company will pay Do It Sports up to $3,250,000, subject to the achievement of certain milestones, in cash or, at its election, shares of common stock.

In March 2004, the Company’s Board of Directors approved the 2004 Equity Incentive Plan with a reserve of 13,671,000 shares of common stock and the 2004 Employee Stock Purchase Plan with a reserve of 8,190,000 shares of common stock.

F-24

Through and including                 , 2004, the 25th day after the date of this prospectus, all dealers effecting transactions in our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following table sets forth all costs and expenses, other than underwriting discounts and commissions, payable by us in connection with the sale and distribution of the common stock being registered. All amounts shown are estimates except for the SEC registration fee, the NASD filing fee and the Nasdaq National Market filing fee.

SEC registration fee	$	5,828.20
NASD filing fee		5,100.00
Nasdaq National Market filing fee		*
Blue sky qualification fees and expenses		*
Printing and engraving expenses		*
Legal fees and expenses		*
Accounting fees and expenses		*
Transfer agent and registrar fees and expenses		*
Directors and officers’ liability insurance premium (1933 Act)		*
Miscellaneous expenses		*
Total	$	*

* To be provided by amendment.

Item 14. Indemnification of Directors and Officers.

We are incorporated under the laws of the State of Delaware. Section 145 of the Delaware General Corporation Law provides that a Delaware corporation may indemnify any persons who are, or are threatened to be made, parties to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person was an officer, director, employee or agent of such corporation, or is or was serving at the request of such person as an officer, director, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided that such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation’s best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was illegal. A Delaware corporation may indemnify any persons who are, or are threatened to be made, a party to any threatened, pending or completed action or suit by or in the right of the corporation by reason of the fact that such person was a director, officer, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit provided such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation’s best interests except that no indemnification is permitted without judicial approval if the officer or director is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him or her against the expenses, which such officer or director has actually and reasonably incurred. Our amended and restated bylaws, which will become effective upon the completion of this offering, provide for the indemnification of our directors and officers to the fullest extent permitted under the Delaware General Corporation Law.

II-1

Section 102 of the Delaware General Corporation Law permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duties as a director, except for liability:

• For any transaction from which the director derives an improper personal benefit;

• For acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;

• For acts related to unlawful stock repurchases, redemptions or other distributions or payment of dividends; or

• For any breach of a director’s duty of loyalty to the corporation or its stockholders.

Our amended and restated certificate of incorporation and amended and restated bylaws include such a provision. Expenses incurred by any officer or director in defending any such action, suit or proceeding in advance of its final disposition shall be paid by us upon delivery to us of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified by us.

Section 174 of the Delaware General Corporation Law provides, among other things, that a director, who willfully or negligently approves of an unlawful payment of dividends or an unlawful stock purchase or redemption, may be held liable for such actions. A director who was either absent when the unlawful actions were approved, or dissented at the time, may avoid liability by causing his or her dissent to such actions to be entered in the books containing minutes of the meetings of the Board of Directors at the time such action occurred or immediately after such absent director receives notice of the unlawful acts.

As permitted by the Delaware General Corporation Law, we have entered into indemnity agreements with each of our directors and executive officers, that require us to indemnify such persons against any and all expenses (including attorneys’ fees), witness fees, damages, judgments, fines, settlements and other amounts incurred (including expenses of a derivative action) in connection with any action, suit or proceeding, whether actual or threatened, to which any such person may be made a party by reason of the fact that such person is or was a director, an officer or an employee of Active or any of its affiliated enterprises, provided that such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to our best interests and, with respect to any criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful. The indemnification agreements also set forth certain procedures that will apply in the event of a claim for indemnification thereunder.

At present, there is no pending litigation or proceeding involving any of our directors or executive officers as to which indemnification is required or permitted, and we are not aware of any threatened litigation or proceeding that may result in a claim for indemnification.

We have an insurance policy covering our officers and directors with respect to certain liabilities, including liabilities arising under the Securities Act or otherwise.

We have entered into an underwriting agreement, which provides that the underwriters are obligated, under some circumstances, to indemnify our directors, officers and controlling persons against specified liabilities, including liabilities under the Securities Act.

II-2

Reference is made to the following documents filed as exhibits to this registration statement regarding relevant indemnification provisions described above and elsewhere herein:

Exhibit Document	Number
Form of Underwriting Agreement	1.1
Form of Amended and Restated Certificate of Incorporation to be effective upon the closing of this offering	3.1
Form of Amended and Restated Bylaws to be effective upon the closing of this offering	3.2
Fifth Amended and Restated Investors’ Rights Agreement dated as of November 29, 2001 by and among the Registrant and Stockholders named therein.	4.2
Form of Indemnification Agreement by and among the Registrant and each of its directors and officers	10.10

Item 15. Recent Sales of Unregistered Securities.

The following list sets forth information regarding all securities sold by us since 2001.

(1) From January 1, 2001 through December 31, 2001, we granted options to purchase 10,308,361 shares of our common stock to employees, directors and consultants under our 1999 Stock Option/Stock Issuance Plan at an exercise price of $0.50 per share. No consideration was paid to us by any recipient of any of the foregoing options for the grant of such options. On various dates from January 1, 2000 through December 31, 2001, options were exercised for an aggregate of 701 shares of our common stock. We have received aggregate consideration of approximately $350 in connection with the exercise of these options.

(2) On February 11, 2001, we granted options to purchase 510,000 shares of our common stock to certain employees at an exercise price of $0.50 per share. No consideration was paid to us by any recipient of any of the foregoing options for the grant of such options. None of these options were exercised and have subsequently been cancelled.

(3) In February 2001, we issued 2,380,952 shares of Series B-5 preferred stock to Hambrecht/Eu Capital as consideration for an Accord, Settlement and Release Agreement dated February 21, 2001.

(4) In May 2001, we issued 5,000 shares of Series A-6 preferred stock to Empirix, Inc. as consideration for an Accord and Release Agreement dated May 23, 2001.

(5) In November 2001, we issued and sold an aggregate of 102,087,115 shares of Series B-6 preferred stock to institutional and accredited investors for aggregate consideration of $11,250,000. Upon completion of this offering, these shares will convert into 102,087,115 shares of common stock.

(6) In November 2001, pursuant to our acquisition of myteam.com, Inc., we issued an aggregate of 13,447,067 shares of Series B-7 preferred stock to Comdisco, Inc., Wand Affiliates Fund L.P., and Wand Equity Portfolio II, L.P. Upon completion of this offering, these shares will convert into 13,447,067 shares of common stock.

(7) From January 1, 2002 through February 13, 2003, we granted options to purchase 43,148,898 shares of our common stock to employees, directors and consultants under our 2002 Stock Option/Stock Issuance Plan at an exercise price of approximately $0.01 per share. No consideration was paid to us by any recipient of any of the foregoing options for the grant of such options. On various dates from January 1, 2002 through February 13, 2003, options were exercised for an aggregate of 264,350 shares of our common stock. We have received aggregate consideration of approximately $3,168 in connection with the exercise of these options.

II-3

(8) In January 2003, we issued a warrant to purchase up to 90,000 shares of our common stock at an exercise price of $0.01 per share to Mike Smith. This warrant had a fair value that was not significant.

(9) In January 2003, we issued a warrant to purchase up to 10,000 shares of our common stock at an exercise price of $0.01 per share to Tim Murphy. This warrant had a fair value that was not significant.

(10) In January 2003, we issued a warrant to purchase up to 40,000 shares of our common stock at an exercise price of $0.01 per share to Amateur Athletic Union. This warrant had a fair value that was not significant.

(11) In January 2003, we issued a warrant to purchase up to 50,000 shares of our common stock at an exercise price of $0.01 per share to D&P Software. This warrant had a fair value that was not significant.

(12) In February 2003, we issued a warrant to purchase up to 1,922,372 shares of our common stock at an exercise price of $0.01 per share to NFL Properties LLC. This warrant had a fair value that was not significant.

(13) We consummated a restructuring of our capital stock effective February 14, 2003 pursuant to which: (i) each share of Series A-1 preferred stock converted into one share of Series A-1 preferred stock, (ii) each share of Series A-2 preferred stock converted into one share of Series A-2 preferred stock, (iii) each share of Series A-3 preferred stock converted into one share of Series A-3 preferred stock, (iv) each share of Series B preferred stock converted into one share of Series B-1 preferred stock, (v) each share of Series C preferred stock converted into (A) one share of Series B-2 preferred stock, plus (B) in the case of Kettle Partners, 0.9224564 share of common stock, plus (C) in the case of Austin Ventures, 0.1036756 share of common stock, (vi) each share of Series D-1 preferred stock converted into one share of Series B-3 preferred stock, (vii) each share of Series D-2 preferred stock converted into one share of Series A-4 preferred stock, (viii) each share of Series E preferred stock converted into one share of Series A-5 preferred stock, (ix) each share of Series F preferred stock converted into one share of Series B-4 preferred stock, (x) each share of Series G preferred stock converted into one share of Series B-5 preferred stock, (xi) each share of Series H preferred stock converted into one share of Series A-6 preferred stock, (xii) each share of Series I preferred stock converted into 0.8265357 share of Series B-6 preferred stock, (xiii) each share of Series J preferred stock converted into 0.8265357 share of Series B-7 preferred stock, (xiv) each share of common stock converted into 0.25 share of common stock, (xv) each warrant to purchase Series F preferred converted into a warrant to purchase the same number of shares of Series B-4 preferred stock.

(14) From February 14, 2003 through March 15, 2004, we granted options to purchase 5,594,600 shares of our common stock to employees, directors and consultants under our 2002 Stock Option/Stock Issuance Plan at an exercise price of approximately $0.01 per share. No consideration was paid to us by any recipient of any of the foregoing options for the grant of such options. On various dates from February 14, 2003 through March 15, 2004, options were exercised for an aggregate of 24,095,595 shares of our common stock. We have received aggregate consideration of approximately $349,386 in connection with the exercise of these options.

(15) In May 2003, pursuant to our Asset Purchase Agreement with Onjibe, we issued a warrant to purchase up to 190,000 shares of our common stock at an exercise price of $0.01 per share to Freddy Nolan. This warrant had a fair value that was not significant.

(16) In May 2003, pursuant to our Asset Purchase Agreement with Onjibe, we issued a warrant to purchase up to 10,000 shares of our common stock at an exercise price of $0.01 per share to Wilson Sonsini Goodrich & Rosati, Professional Corporation. This warrant had a fair value that was not significant.

(17) In August 2003, we issued a warrant to purchase up to 200,000 shares of our common stock at an exercise price of $0.01 per share to John Fullmer. This warrant had a fair value that was not significant.

II-4

(18) In August 2003, we issued a warrant to purchase up to 100,000 shares of our common stock at an exercise price of $0.01 per share to Matthew Burke. This warrant had a fair value that was not significant.

(19) In August 2003, we issued a warrant to purchase up to 100,000 shares of our common stock at an exercise price of $0.01 per share to Sam Zales. This warrant had a fair value that was not significant.

(20) In November 2003, we issued a warrant to purchase up to 20,000 shares of our common stock at an exercise price of $0.01 per share to Logical Solutions, Inc. in connection with a Strategic Partnership and License Agreement. This warrant had a fair value that was not significant.

The offers, sales and issuances of the securities described in paragraphs 2 through 4, 8 through 13, and 15 through 20 were deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act in that the issuance of securities to the recipients did not involve a public offering. The recipients of securities in each such transaction represented their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were affixed to the share certificates and warrants issued in such transactions. Each of the recipients of securities in the transactions described in paragraphs 1 and 2 and 5 through 15 were accredited or sophisticated persons and had adequate access, through employment, business or other relationships, to information about us.

The offers, sales and issuances of the preferred stock described in paragraphs 5 and 6 were deemed to be exempt from registration under the Securities Act in reliance on Rule 506 of Regulation D in that the issuance of securities to the accredited investors did not involve a public offering. The purchasers of securities in each such transaction represented their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were affixed to the share certificates issued in such transactions. Each of the recipients of securities in the transactions described in paragraphs 3 and 4 were accredited investors under Rule 501 of Regulation D.

The offers, sales and issuances of the options and common stock described in paragraphs 1, 7 and 14, were deemed to be exempt from registration under the Securities Act in reliance on Rule 701 in that the transactions were under compensatory benefit plans and contracts relating to compensation as provided under such rule. The recipients of such options and common stock were our employees, directors or bona fide consultants and received the securities under our 2002 Equity Incentive Plan. Appropriate legends were affixed to the securities issued in these transactions. Each of the recipients of securities in these transactions had adequate access, through employment, business or other relationships, to information about us.

There were no underwriters employed in connection with any of the transactions set forth in this Item 15.

Item 16. Exhibits and Financial Statement Schedules.

(a) Exhibits.

Exhibit Number	Exhibit Description
1.1	Form of Underwriting Agreement
2.1	Asset Purchase Agreement dated as of April 9, 2004 by and among the Registrant, Do It Sports, Inc. and its shareholders
3.1	Form of Amended and Restated Certificate of Incorporation of the Registrant to be in effect upon closing of this offering
3.2	Form of Amended and Restated Bylaws of the Registrant to be in effect upon closing of this offering
4.1†	Specimen Common Stock Certificate
4.2	Fifth Amended and Restated Investors’ Rights Agreement dated as of November 29, 2001 by and among the Registrant and Stockholders named therein

II-5

Exhibit Number	Exhibit Description
5.1†	Opinion of Cooley Godward LLP
10.1	Standard Office Lease—Net dated September 20, 1995, by and between Sierra Digital, Inc. and Duane A. Harlan
10.1(a)	Addendum to Lease Agreement dated September 20, 1995, by and between Sierra Digital, Inc. and Duane A. Harlan
10.1(b)	Addendum to Lease Agreement dated April 28, 2003, by and between the Registrant and Safari Holdings, LLC (and/or Duane Harlan)
10.2	Office Lease dated June 2, 1999, by and between the Registrant and Prospect Center Corporation
10.2(a)	Amendment to Original Lease dated November 17, 1999, by and between the Registrant and Prospect Center Corporation
10.2(b)	Second Agreement to Amend Lease dated March 14, 2000, by and between the Registrant and Prospect Center Corporation
10.2(c)	Third Lease Amendment dated March 11, 2002, by and between the Registrant and 1020 Prospect Street LP
10.2(d)	Third Amendment to Office Lease dated July 15, 2003, by and between the Registrant and 1020 Prospect Street LP
10.3#	2002 Stock Option/Stock Issuance Plan
10.3(a)#	Amendment to 2002 Stock Option/Stock Issuance Plan
10.4#	Form of Stock Option Agreement under 2002 Stock Option/Stock Issuance Plan
10.5#	Form of Restricted Stock Purchase Agreement
10.6#†	2004 Equity Incentive Plan
10.7#†	Form of Stock Option Agreement under 2004 Equity Incentive Plan
10.8#†	2004 Employee Stock Purchase Plan
10.9#†	Form of Offering Document under the 2004 Employee Stock Purchase Plan
10.10#	Form of Indemnification Agreement by and between the Registrant and each of its directors and officers
10.11#	Employment Agreement dated November 22, 1999, by and between the Registrant and David Alberga
10.12#	Employment Agreement dated February 14, 2000, by and between the Registrant and Matthew Landa
10.12(a)#	Addendum to Employment Agreement dated December 20, 2000, by and between the Registrant and Matthew Landa
10.13#	Employment Agreement dated April 28, 2000, by and between the Registrant and Jon Belmonte
10.13(a)#	Addendum to Employment Agreement dated December 20, 2000, by and between the Registrant and Jon Belmonte
10.14#	Employment Agreement dated March 15, 2004 by and between the Registrant and John Creelman
10.15#	Severance Agreement, dated April 9, 2004, by and between the Registrant and Natalya Smith
16.1	Letter from Ernst & Young, LLP to the Securities and Exchange Commission, dated April 15, 2004
23.1†	Consent of Cooley Godward LLP (included in Exhibit 5.1)
23.2	Consent of Deloitte & Touche LLP
23.3	Consent of Ernst & Young LLP, Independent Auditors
24.1	Powers of Attorney (Included on Signature Page)

† To be filed by amendment.

# Indicates management contract or compensatory plan.

II-6

(b) Financial Statement Schedules.

No financial statement schedules are provided because the information called for is not required or is shown either in the financial statements or the notes thereto.

Item 17. Undertakings.

The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the Underwriting Agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective; and

(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-7

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, State of California, on the 21st day of April, 2004.

THE ACTIVE NETWORK, INC.
By:	/s/    DAVID ALBERGA
	David Alberga Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints David Alberga and John Creelman, and each of them acting individually, as his or her true and lawful attorneys-in-fact and agents, each with the full power of substitution, for him or her and in his or her name, place or stead, in any and all capacities, to sign any and all amendments to this Registration Statement (including post-effective amendments), and to sign any registration statement for the same offering covered by this Registration Statement that is to be effective upon filing pursuant to Rule 462(b) promulgated under the Securities Act, and all post-effective amendments thereto, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/    DAVID ALBERGA         David Alberga	Chief Executive Officer and Director (Principal Executive Officer)	April 21, 2004
/s/    JOHN CREELMAN         John Creelman	(Principal Financial and Accounting Officer)	April 21, 2004
/s/    THOMAS CLANCY         Thomas Clancy	Director	April 21, 2004
/s/    STEPHEN GREEN         Stephen Green	Director	April 21, 2004
/s/    JOHN PLEASANTS         John Pleasants	Director	April 21, 2004
/s/    ELLIOT KATZMAN         Elliot Katzman	Director	April 21, 2004
/s/    JAMES WOODMAN, IV         James Woodman, IV	Director	April 21, 2004

II-8

EXHIBIT INDEX

Exhibit Number	Exhibit Description
1.1	Form of Underwriting Agreement
2.1	Asset Purchase Agreement dated as of April 9, 2004 by and among the Registrant, Do It Sports, Inc. and its shareholders
3.1	Form of Amended and Restated Certificate of Incorporation of the Registrant to be in effect upon closing of this offering
3.2	Form of Amended and Restated Bylaws of the Registrant to be in effect upon closing of this offering
4.1†	Specimen Common Stock Certificate
4.2	Fifth Amended and Restated Investors’ Rights Agreement dated as of November 29, 2001 by and among the Registrant and Stockholders named therein
5.1†	Opinion of Cooley Godward LLP
10.1	Standard Office Lease—Net dated September 20, 1995, by and between Sierra Digital, Inc. and Duane A. Harlan
10.1(a)	Addendum to Lease Agreement dated September 20, 1995, by and between Sierra Digital, Inc. and Duane A. Harlan
10.1(b)	Addendum to Lease Agreement dated April 28, 2003, by and between the Registrant and Safari Holdings, LLC (and/or Duane Harlan)
10.2	Office Lease dated June 2, 1999, by and between the Registrant and Prospect Center Corporation
10.2(a)	Amendment to Original Lease dated November 17, 1999, by and between the Registrant and Prospect Center Corporation
10.2(b)	Second Agreement to Amend Lease dated March 14, 2000, by and between the Registrant and Prospect Center Corporation
10.2(c)	Third Lease Amendment dated March 11, 2002, by and between the Registrant and 1020 Prospect Street LP
10.2(d)	Third Amendment to Office Lease dated July 15, 2003, by and between the Registrant and 1020 Prospect Street LP
10.3#	2002 Stock Option/Stock Issuance Plan
10.3(a)#	Amendment to 2002 Stock Option/Stock Issuance Plan
10.4#	Form of Stock Option Agreement under 2002 Stock Option/Stock Issuance Plan
10.5#	Form of Restricted Stock Purchase Agreement
10.6#†	2004 Equity Incentive Plan
10.7#†	Form of Stock Option Agreement under 2004 Equity Incentive Plan
10.8#†	2004 Employee Stock Purchase Plan
10.9#†	Form of Offering Document under the 2004 Employee Stock Purchase Plan
10.10#	Form of Indemnification Agreement by and between the Registrant and each of its directors and officers
10.11#	Employment Agreement dated November 22, 1999, by and between the Registrant and David Alberga
10.12#	Employment Agreement dated February 14, 2000, by and between the Registrant and Matthew Landa

Exhibit Number	Exhibit Description
10.12(a)#	Addendum to Employment Agreement dated December 20, 2000, by and between the Registrant and Matthew Landa
10.13#	Employment Agreement dated April 28, 2000, by and between the Registrant and Jon Belmonte
10.13(a)#	Addendum to Employment Agreement dated December 20, 2000, by and between the Registrant and Jon Belmonte
10.14#	Employment Agreement dated March 15, 2004, by and between the Registrant and John Creelman
10.15#	Severance Agreement, dated April 9, 2004, by and between the Registrant and Natalya Smith
16.1	Letter from Ernst & Young, LLP to the Securities and Exchange Commission, dated April 15, 2004
23.1†	Consent of Cooley Godward LLP (included in Exhibit 5.1)
23.2	Consent of Deloitte & Touche LLP
23.3	Consent of Ernst & Young LLP, Independent Auditors
24.1	Powers of Attorney (Included on Signature Page)

† To be filed by amendment.

# Indicates management contract or compensatory plan.

EX-1.1

Exhibit 1.1

[            ] Shares

The Active Network, Inc.

Common Stock

UNDERWRITING AGREEMENT

                 , 2004

JEFFERIES & COMPANY, INC.

WR HAMBRECHT + CO, LLC

As Representatives of the several Underwriters

c/o JEFFERIES & COMPANY, INC.

520 Madison Avenue, 12^th Floor

New York, New York 10022

Ladies and Gentlemen:

Introductory. The Active Network, Inc., a Delaware corporation (the “Company”), proposes to issue and sell to the several underwriters named in Schedule A (the “Underwriters”) an aggregate of [            ] shares (the “Firm Shares”) of its Common Stock, par value $0.001 per share (the “Shares”). In addition, the Company has granted to the Underwriters an option to purchase up to an additional [            ] Shares (the “Optional Shares”), as provided in Section 2. The Firm Shares and, if and to the extent such option is exercised, the Optional Shares, are collectively called the “Offered Shares.” Jefferies & Company, Inc. (“Jefferies”) and WR Hambrecht + Co, LLC have agreed to act as representatives of the several Underwriters (in such capacity, the “Representatives”) in connection with the offering and sale of the Offered Shares.

The Company has prepared and filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-1 (File No. 333-[            ]), which contains a form of prospectus to be used in connection with the public offering and sale of the Offered Shares. Such registration statement, as amended, including the financial statements, exhibits and schedules thereto, in the form in which it was declared effective by the Commission under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (collectively, the “Securities Act”), including any information deemed to be a part thereof at the time of effectiveness pursuant to Rule 430A under the Securities Act, is called the “Registration Statement.” Any registration statement filed by the Company pursuant to Rule 462(b) under the Securities Act is called the “Rule 462(b) Registration Statement,” and from and after the date and time of filing of the Rule 462(b) Registration Statement the term “Registration Statement” shall include the Rule 462(b) Registration Statement. Such prospectus, in the form first used by the Underwriters to confirm sales of the Offered Shares, is called the “Prospectus.” All references in this Agreement to the Registration Statement, the Rule 462(b) Registration Statement, a preliminary prospectus or the Prospectus, or any amendments or supplements to any of the foregoing, shall include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”).

The Company hereby confirms its agreements with the Underwriters as follows:

Section 1. Representations and Warranties of the Company. The Company hereby represents, warrants and covenants to each Underwriter as follows:

(a) Compliance with Registration Requirements. The Registration Statement and any Rule 462(b) Registration Statement have been declared effective by the Commission under the Securities Act. The Company has complied to the Commission’s satisfaction with all requests of the Commission for additional or supplemental information. No stop order suspending the effectiveness of the Registration Statement or any Rule 462(b) Registration Statement is in effect and no proceedings for such purpose have been instituted or are pending or, to the best knowledge of the Company, are contemplated or threatened by the Commission.

Each preliminary prospectus and the Prospectus when filed complied in all material respects with the Securities Act and, if filed by electronic transmission pursuant to EDGAR (except as may be permitted by Regulation S-T under the Securities Act), was identical to the copy thereof delivered to the Underwriters for use in connection with the offer and sale of the Offered Shares. Each of the Registration Statement, any Rule 462(b) Registration Statement and any post-effective amendment thereto, at the time it became effective and at all subsequent times through the closing of the sale of the Optional Shares (or the expiration of the Underwriters’ option to purchase of the Optional Shares as set forth in Section 2(c) below), complied and will comply in all material respects with the Securities Act and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus, as amended or supplemented, as of its date and at all subsequent times through the closing of the sale of the Optional Shares (or the expiration of the Underwriters’ option to purchase of the Optional Shares as set forth in Section 2(c) below), did not and will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The representations and warranties set forth in the two immediately preceding sentences do not apply to statements in or omissions from the Registration Statement, any Rule 462(b) Registration Statement, or any post-effective amendment thereto, or the Prospectus, or any amendments or supplements thereto, made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by the Representatives expressly for use therein, it being understood and agreed that the only such information furnished by the Representatives to the Company consists of the information described in Section 8(b) below. There are no contracts or other documents required to be described in the Prospectus or to be filed as exhibits to the Registration Statement which have not been described or filed as required.

(b) Offering Materials Furnished to Underwriters. The Company has delivered to the Representatives one complete manually signed copy of the Registration Statement and of each consent filed as a part thereof, and conformed copies of the Registration Statement (without exhibits) and preliminary prospectuses and the Prospectus, as amended or supplemented, in such quantities and at such places as the Representatives have reasonably requested for each of the Underwriters.

(c) Distribution of Offering Material By the Company. The Company has not distributed and will not distribute, prior to the later of (i) the expiration or termination of the option granted to the several Underwriters in Section 2 and (ii) the completion of the Underwriters’ distribution of the Offered Shares, any offering material in connection with the offering and sale of the Offered Shares other than a preliminary prospectus, the Prospectus or the Registration Statement.

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(d) The Underwriting Agreement. This Agreement has been duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company, enforceable against the Company in accordance with its terms.

(e) Authorization of the Offered Shares. The Offered Shares to be purchased by the Underwriters from the Company have been duly authorized for issuance and sale pursuant to this Agreement and, when issued and delivered by the Company pursuant to this Agreement, will be validly issued, fully paid and nonassessable.

(f) No Applicable Registration or Other Similar Rights. There are no persons with registration or other similar rights to have any equity or debt securities registered for sale under the Registration Statement or included in the offering contemplated by this Agreement, except for such rights as have been duly waived.

(g) No Material Adverse Change. Except as otherwise disclosed in the Prospectus, subsequent to the respective dates as of which information is given in the Prospectus: (i) there has been no material adverse change, or any development that could reasonably be expected to result in a material adverse change, in the condition, financial or otherwise, or in the earnings, business, operations or prospects, whether or not arising from transactions in the ordinary course of business, of the Company and its subsidiaries, considered as one entity (any such change is called a “Material Adverse Change”); (ii) the Company and its subsidiaries, considered as one entity, have not incurred any material liability or obligation, indirect, direct or contingent, not in the ordinary course of business nor entered into any material transaction or agreement not in the ordinary course of business; and (iii) there has been no dividend or distribution of any kind declared, paid or made by the Company or, except for dividends paid to the Company or other subsidiaries, any of its subsidiaries on any class of capital stock or repurchase or redemption by the Company or any of its subsidiaries of any class of capital stock.

(h) Independent Accountants. Deloitte & Touche LLP and Ernst & Young LLP, who have expressed their opinion with respect to the financial statements (which term as used in this Agreement includes the related notes thereto), as filed with the Commission as a part of the Registration Statement and included in the Prospectus, are (i) independent public or certified public accountants as required by the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (ii) in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X and (iii) a registered public accounting firm as defined by the Public Company Accounting Oversight Board (the “PCAOB”) whose registration has not been suspended or revoked and who has not requested such registration to be withdrawn.

(i) Preparation of the Financial Statements. The financial statements filed with the Commission as a part of the Registration Statement and included in the Prospectus present fairly the consolidated financial position of the Company and its subsidiaries as of and at the dates indicated and the results of their operations and cash flows for the periods specified. Such financial statements have been prepared in conformity with generally accepted accounting principles as applied in the United States applied on a consistent basis throughout the periods involved, except as may be expressly stated in the related notes thereto. No other financial statements or supporting schedules are required to be included in the Registration Statement. The financial data set forth in the Prospectus under the captions “Prospectus Summary—Summary Consolidated Financial Data,” “Selected Consolidated Financial Data” and “Capitalization” fairly present the information set forth therein on a basis consistent with that of the audited financial statements contained in the Registration Statement. To the best of the Company’s knowledge, no person who has been suspended or barred from being associated with a registered public accounting firm, or who has failed to comply with any sanction pursuant to Rule 5300 promulgated by the PCAOB, has participated in or otherwise aided the

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preparation of, or audited, the financial statements, supporting schedules or other financial data filed with the Commission as a part of the Registration Statement and included in the Prospectus.

(j) Company’s Accounting System. The Company makes and keeps accurate books and records and maintains a system of accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles as applied in the United States and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

(k) Incorporation and Good Standing of the Company and its Subsidiaries. Each of the Company and its subsidiaries has been duly incorporated and is validly existing as a corporation, partnership or limited liability company, as applicable, in good standing under the laws of the jurisdiction of its incorporation or organization and has the corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and, in the case of the Company, to enter into and perform its obligations under this Agreement. Each of the Company and each subsidiary is duly qualified as a foreign corporation, partnership or limited liability company, as applicable, to transact business and is in good standing in the State of Delaware and each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where such failure to be so qualified and in good standing could not, singly or in the aggregate, result in a Material Adverse Change. All of the issued and outstanding capital stock or other equity or ownership interest of each subsidiary has been duly authorized and validly issued, is fully paid and nonassessable and is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance or adverse claim. The Company does not own or control, directly or indirectly, any corporation, association or other entity other than the subsidiaries listed under the heading “Principles of Consolidation and Basis of Presentation” in note 1 to the financial statements filed with the Commission as part of the Registration Statement. None of such subsidiaries meets the definition of a “significant subsidiary” set forth in Rule 1-02(w) of Regulation S-X.

(l) Capitalization and Other Capital Stock Matters. The authorized, issued and outstanding capital stock of the Company is as set forth in the Prospectus under the caption “Capitalization” (other than for subsequent issuances, if any, pursuant to employee benefit plans described in the Prospectus or upon exercise of outstanding options or warrants described in the Prospectus). The Shares (including the Offered Shares) conform in all material respects to the description thereof contained in the Prospectus. All of the issued and outstanding Shares have been duly authorized and validly issued, are fully paid and nonassessable and have been issued in compliance with federal and state securities laws. None of the outstanding Shares were issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company. There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company or any of its subsidiaries other than those described in the Prospectus. The description of the Company’s stock option, stock bonus and other stock plans or arrangements, and the options or other rights granted thereunder, set forth in the Prospectus accurately and fairly presents the information required to be shown with respect to such plans, arrangements, options and rights.

(m) Stock Exchange Listing. The Offered Shares have been approved for inclusion on the Nasdaq National Market, subject only to official notice of issuance.

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(n) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required. Neither the Company nor any of its subsidiaries is in violation of its charter or by-laws or is in default (or, with the giving of notice or lapse of time, would be in default) (“Default”) under any indenture, mortgage, loan or credit agreement, note, contract, franchise, lease or other instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any of its subsidiaries is subject (each, an “Existing Instrument”), except for such Defaults as would not, individually or in the aggregate, result in a Material Adverse Change. The Company’s execution, delivery and performance of this Agreement, consummation of the transactions contemplated hereby and the issuance and sale of the Offered Securities (i) have been duly authorized by all necessary corporate action and will not result in any violation of the provisions of the charter or by-laws of the Company or any subsidiary, (ii) will not conflict with or constitute a breach of, or Default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, or require the consent of any other party to, any Existing Instrument and (iii) will not result in any violation of any law, administrative regulation or administrative or court decree applicable to the Company or any subsidiary. No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental or regulatory authority or agency, is required for the Company’s execution, delivery and performance of this Agreement and consummation of the transactions contemplated hereby, except such as have been obtained or made by the Company and are in full force and effect under the Securities Act, applicable state securities or blue sky laws and from the NASD.

(o) No Material Actions or Proceedings. There are no legal or governmental actions, suits or proceedings pending or, to the best of the Company’s knowledge, threatened (i) against or affecting the Company or any of its subsidiaries, (ii) which has as the subject thereof any officer or director of, or property owned or leased by, the Company or any of its subsidiaries or (iii) relating to environmental or discrimination matters, where in any such case (A) there is a reasonable possibility that such action, suit or proceeding might be determined adversely to the Company, such subsidiary or such officer or director, and if so determined adversely would reasonably be expected to result in a Material Adverse Change or adversely affect the consummation of the transactions contemplated by this Agreement or (B) any such action, suit or proceeding is or would be material in the context of the sale of Offered Shares. No material labor dispute with the employees of the Company or any of its subsidiaries exists or, to the best of the Company’s knowledge, is threatened or imminent.

(p) Intellectual Property Rights. The Company and its subsidiaries own or possess sufficient trademarks, trade names, patent rights, copyrights, domain names, licenses, approvals, trade secrets and other similar rights (collectively, “Intellectual Property Rights”) reasonably necessary to conduct their businesses as now conducted; and the expected expiration of any of such Intellectual Property Rights would not result in a Material Adverse Change. Except as disclosed in the Prospectus under the caption “Risk Factors—Intellectual property claims against us could be costly and could hurt our business and prospects”, neither the Company nor any of its subsidiaries has received, or has any reason to believe that it will receive, any notice of infringement or conflict with asserted Intellectual Property Rights of others. The Company is not a party to or bound by any options, licenses or agreements with respect to the Intellectual Property Rights of any other person or entity that are required to be set forth in the Prospectus and are not described therein. None of the technology employed by the Company has been obtained or is being used by the Company in violation of any contractual obligation binding on the Company or, to the Company’s knowledge, any of its officers, directors or employees or otherwise in violation of the rights of any persons.

(q) All Necessary Permits, etc. The Company and each subsidiary possess such valid and current certificates, authorizations or permits issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to conduct their respective businesses, and neither the Company nor any subsidiary has received, or has any reason to believe that it will receive, any notice of proceedings

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relating to the revocation or modification of, or non-compliance with, any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, could result in a Material Adverse Change.

(r) Title to Properties. The Company and each of its subsidiaries has good and marketable title to all of the real and personal property and other assets reflected as owned by them in the financial statements referred to in Section 1(i) above (or elsewhere in the Prospectus), in each case free and clear of any security interests, mortgages, liens, encumbrances, equities, adverse claims and other defects, except such as do not materially and adversely affect the value of such property and do not materially interfere with the use made or proposed to be made of such property by the Company or such subsidiary. The real property, improvements, equipment and personal property held under lease by the Company or any subsidiary are held under valid and enforceable leases, with such exceptions as are not material and do not materially interfere with the use made or proposed to be made of such real property, improvements, equipment or personal property by the Company or such subsidiary.

(s) Tax Law Compliance. The Company and its subsidiaries have filed all necessary federal, state and foreign income and franchise tax returns or have properly requested extensions thereof and have paid all taxes required to be paid by any of them and, if due and payable, any related or similar assessment, fine or penalty levied against any of them except as may be being contested in good faith and by appropriate proceedings. The Company has made adequate charges, accruals and reserves in the applicable financial statements referred to in Section 1(i) above in respect of all federal, state and foreign income and franchise taxes for all periods as to which the tax liability of the Company or any of its consolidated subsidiaries has not been finally determined.

(t) Company Not an “Investment Company”. The Company has been advised of the rules and requirements under the Investment Company Act of 1940, as amended (the “Investment Company Act”). The Company is not, and after receipt of payment for the Offered Shares will not be, an “investment company” within the meaning of Investment Company Act and will conduct its business in a manner so that it will not become subject to the Investment Company Act.

(u) Insurance. Each of the Company and its subsidiaries are insured by recognized, financially sound and reputable institutions with policies in such amounts and with such deductibles and covering such risks as are generally deemed adequate and customary for their businesses including, but not limited to, policies covering real and personal property owned or leased by the Company and its subsidiaries against theft, damage, destruction, acts of vandalism and earthquakes. The Company has no reason to believe that it or any subsidiary will not be able (i) to renew its existing insurance coverage as and when such policies expire or (ii) to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not result in a Material Adverse Change. Neither of the Company nor any subsidiary has been denied any insurance coverage which it has sought or for which it has applied.

(v) No Price Stabilization or Manipulation; Compliance with Regulation M. The Company has not taken, directly or indirectly, any action designed to or that might be reasonably expected to cause or result in stabilization or manipulation of the price of the Shares or any other “reference security” (as defined in Rule 100 of Regulation M under the 1934 Act (“Regulation M”)) whether to facilitate the sale or resale of the Offered Shares or otherwise, and has taken no action which would directly or indirectly violate Regulation M. The Company acknowledges that the Underwriters may engage in passive market making transactions in the Offered Shares on the Nasdaq National Market in accordance with Regulation M.

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(w) Related Party Transactions. There are no business relationships or related-party transactions involving the Company or any subsidiary or any other person required to be described in the Prospectus which have not been described as required.

(x) No Unlawful Contributions or Other Payments. Neither the Company nor any of its subsidiaries nor, to the best of the Company’s knowledge, any employee or agent of the Company or any subsidiary, has made any contribution or other payment to any official of, or candidate for, any federal, state or foreign office in violation of any law or of the character required to be disclosed in the Prospectus.

(y) Disclosure Controls and Procedures; Deficiencies in or Changes to Internal Control Over Financial Reporting. The Company has established and maintains disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), which (i) are designed to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the Company’s principal executive officer and its principal financial officer by others within those entities; (ii) have been evaluated for effectiveness as of a date within 90 days prior to the date of the Prospectus; and (iii) are effective in all material respects to perform the functions for which they were established. Based on the most recent evaluation of its disclosure controls and procedures, the Company is not aware of (i) any significant deficiencies or material weaknesses in the design or operation of its internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information or (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. The Audit Committee of the Company’s Board of Directors have been advised of all significant deficiencies in the internal controls that have been identified by the Company’s auditors and any corrective actions that have been taken with respect to such significant deficiencies and material weaknesses. The Company is not aware of any change in its internal control over financial reporting that has occurred during its most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

(z) Compliance with Environmental Laws. Except as would not, singly or in the aggregate, result in a Material Adverse Change, (i) neither the Company nor any of its subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, “Hazardous Materials”) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”), (ii) the Company and its subsidiaries have all permits, authorizations and approvals required under any applicable Environmental Laws and are each in compliance with their requirements, (iii) there are no pending or, to the best of the Company’s knowledge, threatened administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Law against the Company or any of its subsidiaries and (iv) to the best of the Company’s knowledge, there are no events or circumstances that might reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company or any of its subsidiaries relating to Hazardous Materials or any Environmental Laws.

(aa) ERISA Compliance. The Company and its subsidiaries and any “employee benefit plan” (as defined under the Employee Retirement Income Security Act of 1974, as amended, and the

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regulations and published interpretations thereunder (collectively, “ERISA”)) established or maintained by the Company, its subsidiaries or their “ERISA Affiliates” (as defined below) are in compliance in all material respects with ERISA. “ERISA Affiliate” means, with respect to the Company or a subsidiary, any member of any group of organizations described in Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended, and the regulations and published interpretations thereunder (the “Code”) of which the Company or such subsidiary is a member. No “reportable event” (as defined under ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates. No “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates, if such “employee benefit plan” were terminated, would have any “amount of unfunded benefit liabilities” (as defined under ERISA). Neither the Company, its subsidiaries nor any of their ERISA Affiliates has incurred or reasonably expects to incur any liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates that is intended to be qualified under Section 401(a) of the Code is so qualified and nothing has occurred, whether by action or failure to act, which would cause the loss of such qualification.

(bb) Brokers. Except as contemplated by this Agreement, there is no broker, finder or other party that is entitled to receive from the Company any brokerage or finder’s fee or other fee or commission as a result of any transactions contemplated by this Agreement.

(cc) No Outstanding Loans or Other Extensions of Credit. Neither the Company nor any of its subsidiaries has extended or maintained credit, arranged for the extension of credit, or renewed any extension of credit, in the form of a personal loan, to or for any director or executive officer (or equivalent thereof) of the Company and/or such subsidiary except for such extensions of credit as are (i) expressly permitted by Section 13(k) of the Exchange Act or (ii) fully repaid, discharged, forgiven or otherwise no longer outstanding or owing in any way on the date of this Agreement.

(dd) Compliance with Laws. The Company has not been advised, and has no reason to believe, that it and each of its subsidiaries are not conducting business in compliance with all applicable laws, rules and regulations of the jurisdictions in which it is conducting business, except where failure to be so in compliance would not result in a Material Adverse Change.

(ee) Compliance with Sarbanes-Oxley Act. The Company is in compliance with all applicable provisions of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) that are effective and applicable to it as an “issuer” as defined under the Sarbanes-Oxley Act.

(ff) Board of Directors and Audit Committee Matters. A majority of the Company’s Board of Directors are independent as defined in Rule 4200 of the Rules of the NASD (the “NASD Rules”). The Company’s Board of Directors has validly appointed an audit committee that satisfies the requirements of Rule 4350(d)(2) of the NASD Rules (without respect to any exemptions from the independence requirements contemplated by the NASD Rules or Rule 10A-3 of the Exchange Act) and the Audit Committee has adopted a charter that (i) satisfies the requirements of Rule 4350(d)(1) of the NASD rules and (ii) specifies that the Audit Committee has the responsibilities set forth in Sections (b)(2) – (5) of Rule 10A-3 of the Exchange Act. The Company’s Board of Directors has determined that at least one of the members of the Audit Committee is a financial expert as defined under Section (h)(2) of Item 401 or Regulation S-K promulgated under the Securities Act.

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(gg) No Planned Acquisitions. Neither the Company nor any of the Subsidiaries is currently planning any acquisitions for which disclosure of pro forma financial information would be required under the Securities Act or the regulations promulgated thereunder.

(hh) Officer Certifications. Any certificate signed by any officer of the Company delivered to the Underwriters or to counsel for the Underwriters pursuant to the terms of this Agreement shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.

The Company acknowledges that the Underwriters and, for purposes of the opinions to be delivered pursuant to Section 5 hereof, counsel to the Company and counsel to the Underwriters, will rely upon the accuracy and truthfulness of the foregoing representations and hereby consents to such reliance.

Section 2. Purchase, Sale and Delivery of the Offered Shares.

(a) The Firm Shares. The Company agrees to issue and sell to the several Underwriters the Firm Shares upon the terms herein set forth. On the basis of the representations, warranties and agreements herein contained, and upon the terms but subject to the conditions herein set forth, the Underwriters agree, severally and not jointly, to purchase from the Company the respective number of Firm Shares set forth opposite their names on Schedule A. The purchase price per Firm Share to be paid by the several Underwriters to the Company shall be $[            ] per share.

(b) The First Closing Date. Delivery of certificates for the Firm Shares to be purchased by the Underwriters and payment therefor shall be made at the offices of Jefferies, 520 Madison Avenue, New York, New York (or such other place as may be agreed to by the Company and the Representatives) at 9:00 a.m. New York time, on [            ], or such other time and date not later than 1:30 p.m. New York time, on [            ]as the Representatives shall designate by notice to the Company (the time and date of such closing are called the “First Closing Date”).

(c) The Optional Shares; Option Closing Date. In addition, on the basis of the representations, warranties and agreements herein contained, and upon the terms but subject to the conditions herein set forth, the Company hereby grants an option to the several Underwriters to purchase, severally and not jointly, up to an aggregate of [            ] Optional Shares from the Company at the purchase price per share to be paid by the Underwriters for the Firm Shares. The option granted hereunder is for use by the Underwriters solely in covering any over-allotments in connection with the sale and distribution of the Firm Shares. The option granted hereunder may be exercised at any time and from time to time in whole or in part upon notice by the Representatives to the Company, which notice may be given at any time within 30 days from the date of this Agreement. Such notice shall set forth (i) the aggregate number of Optional Shares as to which the Underwriters are exercising the option, (ii) the names and denominations in which the certificates for the Optional Shares are to be registered and (iii) the time, date and place at which such certificates will be delivered (which time and date may be simultaneous with, but not earlier than, the First Closing Date, provided that such notice is delivered to the Company not less than two business days prior to the First Closing Date; and in such case the term “First Closing Date” shall refer to the time and date of delivery of certificates for the Firm Shares and such Optional Shares). Such time and date of delivery, if subsequent to the First Closing Date, is called an “Option Closing Date” and shall be determined by the Representatives and shall not be earlier than three nor later than five full business days after delivery of such notice of exercise. If any Optional Shares are to be purchased, (A) each Underwriter agrees, severally and not jointly, to purchase the number of Optional Shares (subject to such adjustments to eliminate fractional shares as the Representatives may determine) that bears the same proportion to the total number of Optional Shares to be purchased as the number of Firm Shares set forth on Schedule A opposite the name of such Underwriter bears

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to the total number of Firm Shares and (B) the Company agrees to sell the number of Optional Shares to be sold by the Company as set forth in the paragraph “Introductory” of this Agreement. The Representatives may cancel the option at any time prior to its expiration by giving written notice of such cancellation to the Company.

(d) Public Offering of the Offered Shares. The Representatives hereby advise the Company that the Underwriters intend to offer for sale to the public, on the terms set forth in the Prospectus, their respective portions of the Offered Shares as soon after this Agreement has been executed and the Registration Statement has been declared effective as the Representatives, in their sole judgment, has determined is advisable and practicable.

(e) Payment for the Offered Shares. Payment for the Offered Shares shall be made at the First Closing Date (and, if applicable, at each Option Closing Date) by wire transfer of immediately available funds to the order of the Company.

It is understood that the Representatives have been authorized, for its own account and the accounts of the several Underwriters, to accept delivery of and receipt for, and make payment of the purchase price for, the Firm Shares and any Optional Shares the Underwriters have agreed to purchase. Jefferies, individually and not as a Representative of the Underwriters, may (but shall not be obligated to) make payment for any Offered Shares to be purchased by any Underwriter whose funds shall not have been received by the Representatives by the First Closing Date or an Option Closing Date, as the case may be, for the account of such Underwriter, but any such payment shall not relieve such Underwriter from any of its obligations under this Agreement.

(f) Delivery of the Offered Shares. The Company shall deliver, or cause to be delivered, to the Representatives for the accounts of the several Underwriters certificates for the Firm Shares at the First Closing Date, against the irrevocable release of a wire transfer of immediately available funds to the order of the Company for the amount of the purchase price therefor. The Company shall also deliver, or cause to be delivered, to the Representatives for the accounts of the several Underwriters, certificates for the Optional Shares the Underwriters have agreed to purchase at the First Closing Date or an Option Closing Date, as the case may be, against the irrevocable release of a wire transfer of immediately available funds to the order of the Company for the amount of the purchase price therefor. The certificates for the Offered Shares shall be in definitive form and registered in such names and denominations as the Representatives shall have requested at least two full business days prior to the First Closing Date (or the applicable Option Closing Date, as the case may be) and shall be made available for inspection on the business day preceding the First Closing Date (or the applicable Option Closing Date, as the case may be) at a location in New York City as the Representatives may designate. Time shall be of the essence, and delivery at the time and place specified in this Agreement is a further condition to the obligations of the Underwriters.

(g) Delivery of Prospectus to the Underwriters. Not later than 12:00 p.m. on the second business day following the date the Offered Shares are first released by the Underwriters for sale to the public, the Company shall deliver or cause to be delivered, copies of the Prospectus in such quantities and at such places as the Representatives shall request.

Section 3. Additional Covenants of the Company. The Company further covenants and agrees with each Underwriter as follows:

(a) Representatives’ Review of Proposed Amendments and Supplements. During the period beginning on the date hereof and ending on the later of the First Closing Date or such date, as in the opinion of counsel for the Underwriters, the Prospectus is no longer required by law to be delivered in

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connection with sales by an Underwriter or dealer (the “Prospectus Delivery Period”), prior to amending or supplementing the Registration Statement (including any registration statement filed under Rule 462(b) under the Securities Act) or the Prospectus, the Company shall furnish to the Representatives for review a copy of each such proposed amendment or supplement, and the Company shall not file any such proposed amendment or supplement to which the Representatives reasonably object.

(b) Securities Act Compliance. After the date of this Agreement, the Company shall promptly advise the Representatives in writing (i) of the receipt of any comments of, or requests for additional or supplemental information from, the Commission relating to the Registration Statement or the offering contemplated hereby, (ii) of the time and date of any filing of any post-effective amendment to the Registration Statement or any amendment or supplement to any preliminary prospectus or the Prospectus, (iii) of the time and date that any post-effective amendment to the Registration Statement becomes effective and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto or of any order preventing or suspending the use of any preliminary prospectus or the Prospectus, or of any proceedings to remove, suspend or terminate from listing or quotation the Shares from any securities exchange upon which it is listed for trading or included or designated for quotation, or of the threatening or initiation of any proceedings for any of such purposes. If the Commission shall enter any such stop order at any time, the Company will use its best efforts to obtain the lifting of such order at the earliest possible moment. Additionally, the Company agrees that it shall comply with the provisions of Rules 424(b) and 430A, as applicable, under the Securities Act and will use its reasonable efforts to confirm that any filings made by the Company under such Rule 424(b) were received in a timely manner by the Commission.

(c) Amendments and Supplements to the Prospectus and Other Securities Act Matters. If, during the Prospectus Delivery Period, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if in the reasonable opinion of the Representatives or counsel for the Underwriters it is otherwise necessary to amend or supplement the Prospectus to comply with law, the Company agrees to promptly prepare (subject to Section 3(a) hereof), file with the Commission and furnish at its own expense to the Underwriters, amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with law. Neither the Representatives’ consent to, nor delivery of, any such amendment or supplement shall constitute a waiver of any of the Company’s obligations under this Section 3(c).

(d) Copies of any Amendments and Supplements to the Prospectus. The Company agrees to furnish the Representatives, without charge, during the Prospectus Delivery Period, as many copies of the Prospectus and any amendments and supplements thereto as the Representatives may reasonably request.

(e) Blue Sky Compliance. The Company shall cooperate with the Representatives and counsel for the Underwriters to qualify or register the Offered Shares for sale under (or obtain exemptions from the application of) the state securities or blue sky laws or Canadian provincial securities laws of those jurisdictions designated by the Representatives, shall comply with such laws and shall continue such qualifications, registrations and exemptions in effect so long as required for the distribution of the Offered Shares; provided, however the Company shall not be required to qualify as a foreign corporation or to take any action that would subject it to general service of process in any such jurisdiction where it is not presently qualified. The Company will advise the Representatives promptly of the suspension of the qualification or registration of (or any such exemption relating to) the Offered Shares for offering, sale or

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trading in any such jurisdiction or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification, registration or exemption, the Company shall use reasonable efforts to obtain the withdrawal thereof at the earliest possible moment.

(f) Use of Proceeds. The Company shall apply the net proceeds from the sale of the Offered Shares sold by it in the manner described under the caption “Use of Proceeds” in the Prospectus.

(g) Transfer Agent. The Company shall engage and maintain, at its expense, a registrar and transfer agent for the Shares.

(h) Earnings Statement. As soon as practicable, the Company will make generally available to its security holders and to the Representatives an earnings statement (which need not be audited) that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder covering a period of at least twelve months beginning with the first fiscal quarter of the Company after the “effective date” (as defined in Rule 158) of the Registration Statement.

(i) Periodic Reporting Obligations. During the Prospectus Delivery Period the Company shall file, on a timely basis, with the Commission and the Nasdaq National Market all reports and documents required to be filed under the Exchange Act. Additionally, the Company shall report the use of proceeds from the issuance of the Offered Shares as may be required under Rule 463 under the Securities Act.

(j) Listing. The Company will use its best efforts to effect and maintain the inclusion and quotation of the Offered Shares on the Nasdaq National Market and to maintain the inclusion and quotation of the Shares on the Nasdaq National Market.

(k) Company to Provide Copy of the Prospectus in Form That May be Downloaded from the Internet. The Company shall cause to be prepared and delivered, at its expense, within one business day from the effective date of this Agreement, to the Representatives an “electronic Prospectus” to be used by the Underwriters in connection with the offering and sale of the Offered Shares. As used herein, the term “electronic Prospectus” means a form of Prospectus, and any amendment or supplement thereto, that meets each of the following conditions: (i) it shall be encoded in an electronic format, satisfactory to the Representatives, that may be transmitted electronically by the Representatives to offerees and purchasers of the Offered Shares for at least the Prospectus Delivery Period; (ii) it shall disclose the same information as the paper Prospectus and Prospectus filed pursuant to EDGAR, except to the extent that graphic and image material cannot be disseminated electronically, in which case such graphic and image material shall be replaced in the electronic Prospectus with a fair and accurate narrative description or tabular representation of such material, as appropriate; and (iii) it shall be in or convertible into a paper format or an electronic format, satisfactory to the Representatives, that will allow investors to store and have continuously ready access to the Prospectus at any future time, without charge to investors (other than any fee charged for subscription to the Internet as a whole and for on-line time).

(l) Agreement Not to Offer or Sell Additional Shares. During the period commencing on the date hereof and ending on the 180th day following the date of the Prospectus (the “Lock-up Period”), the Company will not, without the prior written consent of Jefferies (which consent may be withheld at the sole discretion of Jefferies), directly or indirectly, sell, offer, contract or grant any option to sell, pledge, transfer or establish an open “put equivalent position” within the meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or transfer, or announce the offering of, or file any registration statement under the Securities Act in respect of, any Shares, options or warrants to acquire Shares or securities exchangeable or exercisable for or convertible into Shares (other than as contemplated by this Agreement with respect to the Offered Shares); provided, however, that (i) the Company may issue Shares or options to purchase its Shares, or Shares upon exercise of options, pursuant to any stock option, stock bonus or other stock plan or arrangement described in the Prospectus, but only if the holders of such shares, options, or shares issued upon exercise of such options, agree in writing not to sell, offer, dispose of or otherwise transfer any such shares or options during such Lock-up Period without the prior written consent of Jefferies (which consent may be withheld at the sole discretion of the Jefferies); (ii) the Company may file a registration statement on Form S-8 with the Commission with respect to Shares issuable pursuant to any stock option, stock bonus or other stock plan or arrangement described in the Prospectus; (iii) the Company may issue Shares upon exercise of warrants pursuant to any warrant arrangement described in the Prospectus, but only if the holders of such Shares issued upon exercise of such warrants agree in writing not to sell, offer, dispose of or otherwise transfer any such shares or warrants during such Lock-up Period without the prior written consent of Jefferies (which consent may be withheld at the sole discretion of the Jefferies); and (iv) the Company may issue up to              Shares pursuant to agreements entered into in connection with business combination transactions in the Company’s industry as described in the Prospectus (including mergers, asset purchases, share purchases, strategic transactions, joint ventures and licensing arrangements) (and the Company may issue or assume options, warrants or other securities in connection with such transactions that become convertible into or exerciseable for Shares, provided that any Shares issuable pursuant to such options, warrants or other securities shall count toward the share limit specified above) but only if the holders of such Shares, options, warrants or other securities or shares issued upon exercise of such options, warrants or other securities agree in writing not to sell, offer, dispose of or otherwise transfer any such Shares or options during such Lock-up Period without the prior written consent of Jefferies (which consent may be withheld at the sole discretion of the Jefferies).

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(m) Future Reports to the Representatives. During the period of five years hereafter the Company will furnish to the Representatives at 520 Madison Avenue, New York, New York Attention: General Counsel: (i) as soon as practicable after the end of each fiscal year, copies of the Annual Report of the Company containing the balance sheet of the Company as of the close of such fiscal year and statements of income, stockholders’ equity and cash flows for the year then ended and the opinion thereon of the Company’s independent public or certified public accountants; (ii) as soon as practicable after the filing thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other report filed by the Company with the Commission, the NASD or any securities exchange; and (iii) as soon as available, copies of any report or communication of the Company mailed generally to holders of its capital stock.

(n) Investment Limitation. The Company shall not invest, or otherwise use the proceeds received by the Company from its sale of the Offered Shares in such a manner as would require the Company or any of its subsidiaries to register as an investment company under the Investment Company Act.

(o) No Stabilization or Manipulation; Compliance with Regulation M. The Company will not take, directly or indirectly, any action designed to or that might be reasonably expected to cause or result in the stabilization or manipulation of the price of the Shares or any other reference security, whether to facilitate the sale or resale of the Offered Shares or otherwise, and the Company will, and shall cause each of its executive officers and directors to, comply with all applicable provisions of Regulation M. If the limitations of Rule 102 of Regulation M (“Rule 102”) do not apply with respect to the Offered Shares or any other reference security pursuant to any exception set forth in Section (d) of Rule 102, then promptly upon notice from the Representatives (or, if later, at the time stated in the notice), the Company will, and shall cause each of its affiliates to, comply with Rule 102 as though such exception were not available but the other provisions of Rule 102 (as interpreted by the Commission) did apply.

(p) Existing Lock-Up Agreement. The Company will enforce all existing agreements between the Company and any of its security holders that prohibit the sale, transfer, assignment, pledge or hypothecation of any of the Company’s securities in connection with the Company’s initial public offering. In addition, the Company will direct the transfer agent to place stop transfer restrictions upon any such securities of the Company that are bound by such existing “lock-up” agreements for the duration of the periods contemplated in such agreements.

Jefferies, on behalf of the several Underwriters, may, in its sole discretion, waive in writing the performance by the Company of any one or more of the foregoing covenants or extend the time for their performance.

Section 4. Payment of Expenses. The Company agrees to pay all costs, fees and expenses incurred in connection with the performance of its obligations hereunder and the transactions contemplated hereby, including without limitation (i) all expenses incident to the issuance and delivery of the Offered Shares (including all printing and engraving costs), (ii) all fees and expenses of the registrar and transfer agent of the Shares, (iii) all necessary issue, transfer and other stamp taxes in connection with the issuance and sale of the Offered Shares to the Underwriters, (iv) all fees and expenses of the Company’s counsel, independent public or certified public accountants and other advisors, (v) all costs and expenses incurred in connection with the

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preparation, printing, filing, shipping and distribution of the Registration Statement (including financial statements, exhibits, schedules, consents and certificates of experts), each preliminary prospectus and the Prospectus, and all amendments and supplements thereto, and this Agreement, (vi) all filing fees, attorneys’ fees and expenses incurred by the Company or the Underwriters in connection with qualifying or registering (or obtaining exemptions from the qualification or registration of) all or any part of the Offered Shares for offer and sale under the state securities or blue sky laws or the provincial securities laws of Canada, and, if requested by the Representatives, preparing and printing a “Blue Sky Survey” or memorandum, and any supplements thereto, advising the Underwriters of such qualifications, registrations and exemptions, (vii) the filing fees incident to, and the reasonable fees and expenses of counsel for the Underwriters in connection with, the NASD’s review and approval of the Underwriters’ participation in the offering and distribution of the Offered Shares, (viii) the fees and expenses associated with including the Shares on the Nasdaq National Market, (ix) all other fees, costs and expenses referred to in Item 13 of Part II of the Registration Statement, and (ix) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the offering of the Shares, including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the officers of the Company, and the cost of any aircraft chartered in connection with the road show presentations. Except as provided in this Section 4, Section 6, Section 8 and Section 9 hereof, the Underwriters shall pay their own expenses, including the fees and disbursements of their counsel.

Section 5. Conditions of the Obligations of the Underwriters. The obligations of the several Underwriters to purchase and pay for the Offered Shares as provided herein on the First Closing Date and, with respect to the Optional Shares, each Option Closing Date, shall be subject to the accuracy of the representations and warranties on the part of the Company set forth in Section 1 hereof as of the date hereof and as of the First Closing Date as though then made and, with respect to the Optional Shares, as of each Option Closing Date as though then made, to the timely performance by the Company of its covenants and other obligations hereunder, and to each of the following additional conditions:

(a) Accountants’ Comfort Letter. On the date hereof, the Representatives shall have received from Deloitte & Touche LLP and Ernst & Young LLP, independent public or certified public accountants for the Company, (i) letters dated the date hereof addressed to the Underwriters, in form and substance satisfactory to the Representatives, containing statements and information of the type ordinarily included in accountant’s “comfort letters” to underwriters, delivered according to Statement of Auditing Standards No. 72 (or any successor bulletin), with respect to the audited and unaudited financial statements and certain financial information contained in the Registration Statement and the Prospectus (and the Representatives shall have received an additional [            ] conformed copies of such accountants’ letter for each of the several Underwriters), and (ii) confirming that they are (A) independent public or certified public accountants as required by the Securities Act and (B) in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X.

(b) Compliance with Registration Requirements; No Stop Order; No Objection from NASD. For the period from and after effectiveness of this Agreement and prior to the First Closing Date and, with respect to the Optional Shares, each Option Closing Date:

(i) the Company shall have filed the Prospectus with the Commission (including the information required by Rule 430A under the Securities Act) in the manner and within the time period required by Rule 424(b) under the Securities Act; or the Company shall have filed a post-effective amendment to the Registration Statement containing the information required by such Rule 430A, and such post-effective amendment shall have become effective;

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(ii) no stop order suspending the effectiveness of the Registration Statement, any Rule 462(b) Registration Statement, or any post-effective amendment to the Registration Statement, shall be in effect and no proceedings for such purpose shall have been instituted or threatened by the Commission; and

(iii) the NASD shall have raised no objection to the fairness and reasonableness of the underwriting terms and arrangements applicable to the Offered Shares.

(c) No Material Adverse Change. For the period from and after the date of this Agreement and prior to the First Closing Date and, with respect to the Optional Shares, each Option Closing Date there shall not have occurred any event that, in the judgment of the Representatives, is material and adverse and makes it impracticable to proceed with the sale or delivery of the Offered Shares or to enforce contracts for the sale of securities.

(d) Opinions of Counsel for the Company. On each of the First Closing Date and each Option Closing Date the Representatives shall have received the opinion of Cooley Godward LLP, counsel for the Company, dated as of such Closing Date, the form of which is attached as Exhibit A (and the Representatives shall have received an additional [            ] conformed copies of such counsel’s legal opinion for each of the several Underwriters).

(e) Opinion of Counsel for the Underwriters. On each of the First Closing Date and each Option Closing Date the Representatives shall have received the opinion of Wilson Sonsini Goodrich & Rosati, P.C., counsel for the Underwriters, in form and substance satisfactory to the Underwriters, dated as of such Closing Date.

(f) Officers’ Certificate. On each of the First Closing Date and each Option Closing Date the Representatives shall have received a written certificate executed by the Chairman of the Board, Chief Executive Officer or President of the Company and the Chief Financial Officer or Chief Accounting Officer of the Company, dated as of such Closing Date, to the effect set forth in subsection (b)(ii) of this Section 5, and further to the effect that:

(i) for the period from and after the date of this Agreement and prior to such Closing Date, there has not occurred any Material Adverse Change;

(ii) the representations, warranties and covenants of the Company set forth in Section 1 of this Agreement are true and correct with the same force and effect as though expressly made on and as of such Closing Date; and

(iii) the Company has complied with all the agreements hereunder and satisfied all the conditions on its part to be performed or satisfied hereunder at or prior to such Closing Date.

(g) Bring-down Comfort Letter. On each of the First Closing Date and each Option Closing Date the Representatives shall have received from each of Deloitte & Touche LLP and Ernst & Young LLP, independent public or certified public accountants for the Company, a letter dated such date, in form and substance satisfactory to the Representatives, to the effect that they reaffirm the statements made in the letter furnished by them pursuant to subsection (a) of this Section 5, except that the specified date referred to therein for the carrying out of procedures shall be no more than three business days prior to the First Closing Date or the applicable Option Closing Date, as the case may be (and the Representatives shall have received an additional [            ] conformed copies of such accountants’ letters for each of the several Underwriters).

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(h) Lock-Up Agreement from Certain Securityholders of the Company. On or prior to the date hereof, the Company shall have furnished to the Representatives an agreement in the form of Exhibit B hereto from each director, officer and beneficial owner (as defined and determined according to Rule 13d-3 under the Exchange Act) of one percent or more of the outstanding issued share capital of the Company, and such agreement shall be in full force and effect on each of the First Closing Date and each Option Closing Date.

(i) Additional Documents. On or before each of the First Closing Date and each Option Closing Date, the Representatives and counsel for the Underwriters shall have received such information, documents and opinions as they may reasonably require for the purposes of enabling them to pass upon the issuance and sale of the Offered Shares as contemplated herein, or in order to evidence the accuracy of any of the representations and warranties, or the satisfaction of any of the conditions or agreements, herein contained.

If any condition specified in this Section 5 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Representatives by notice to the Company at any time on or prior to the First Closing Date and, with respect to the Optional Shares, at any time prior to the applicable Option Closing Date, which termination shall be without liability on the part of any party to any other party, except that Section 4, Section 6, Section 8 and Section 9 shall at all times be effective and shall survive such termination.

Section 6. Reimbursement of Underwriters’ Expenses. If this Agreement is terminated by the Representatives pursuant to Section 5, Section 7, Section 10 or Section 11, or if the sale to the Underwriters of the Offered Shares on the First Closing Date is not consummated because of any refusal, inability or failure on the part of the Company to perform any agreement herein or to comply with any provision hereof, the Company agrees to reimburse the Representatives and the other Underwriters (or such Underwriters as have terminated this Agreement with respect to themselves), severally, upon demand for all out-of-pocket expenses that shall have been reasonably incurred by the Representatives and the Underwriters in connection with the proposed purchase and the offering and sale of the Offered Shares, including but not limited to fees and disbursements of counsel, printing expenses, travel expenses, postage, facsimile and telephone charges.

Section 7. Effectiveness of this Agreement. This Agreement shall not become effective until the later of (i) the execution of this Agreement by the parties hereto and (ii) notification by the Commission to the Company of the effectiveness of the Registration Statement under the Securities Act. Prior to such effectiveness, this Agreement may be terminated by any party by notice to each of the other parties hereto, and any such termination shall be without liability on the part of (a) the Company to any Underwriter, except that the Company shall be obligated to reimburse the expenses of the Representatives and the Underwriters pursuant to Sections 4 and 6 hereof, (b) of any Underwriter to the Company, or (c) of any party hereto to any other party except that the provisions of Section 8 and Section 9 shall at all times be effective and shall survive such termination.

Section 8. Indemnification.

(a) Indemnification of the Underwriters. The Company agrees to indemnify and hold harmless each Underwriter, its officers and employees, and each person, if any, who controls any Underwriter within the meaning of the Securities Act and the Exchange Act against any loss, claim, damage, liability or expense, as incurred, to which such Underwriter or any officers, employees or controlling persons of such Underwriter may become subject, under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation as contemplated by subsection (d) below), insofar as such loss, claim, damage, liability or expense (or actions in

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respect thereof as contemplated below) arises out of or is based (i) upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, or any amendment thereto, including any information deemed to be a part thereof pursuant to Rule 430A under the Securities Act, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading; or (ii) upon any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; or (iii) any act or failure to act or any alleged act or failure to act by any Underwriter in connection with, or relating in any manner to, the Shares or the offering contemplated hereby, and which is included as part of or referred to in any loss, claim, damage, liability or action arising out of or based upon any matter covered by clause (i) or (ii) above, provided that the Company shall not be liable under this clause (iii) to the extent that a court of competent jurisdiction shall have determined by a final judgment that such loss, claim, damage, liability or action resulted primarily from any such acts or failures to act undertaken or omitted to be taken by such Underwriter through its gross negligence or willful misconduct; and to reimburse each Underwriter and any officers, employers or controlling persons of such Underwriter for any and all expenses (including the fees and disbursements of counsel chosen by Jefferies) reasonably incurred by such Underwriter or any officers, employees or controlling persons of such Underwriter in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that the foregoing indemnity agreement shall not apply to any loss, claim, damage, liability or expense to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Company by the Representatives expressly for use in the Registration Statement, any preliminary prospectus or the Prospectus (or any amendment or supplement thereto), it being understood and agreed that the only such information furnished by the Representatives to the Company consists of the information described in subsection (b) below; provided further, however, that the foregoing indemnification agreement with respect to the preliminary prospectus shall not inure to the benefit of any Underwriter from which the person asserting any such loss, claim, damage or liability purchased Shares, or any officers, employees or controlling persons of such Underwriter, if (i) a copy of the Prospectus (as then amended or supplemented) was required by law to be delivered to such person at or prior to the written confirmation of the sale of Shares to such person, (ii) a copy of the Prospectus (as then amended or supplemented) was delivered by the Company to such Underwriter in accordance with Section 2(g) above, (iii) a copy of the Prospectus (as then amended or supplemented) was not sent or given to such person by or on behalf of such Underwriter, and (iv) the Prospectus (as so amended or supplemented) would have cured the defect and removed the basis for the related cause of action giving rise to such loss, claim, damage or liability. The indemnity agreement set forth in this Section 8(a) shall be in addition to any liabilities that the Company may otherwise have.

(b) Indemnification of the Company, its Directors and Officers. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, each of its directors, each of its officers who signed the Registration Statement and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act, against any loss, claim, damage, liability or expense, as incurred, to which the Company, or any such director, officer or controlling person may become subject, under the Securities Act, the Exchange Act, or other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of such Underwriter), insofar as such loss, claim, damage, liability or expense (or actions in respect thereof as contemplated below) arises out of or is based upon any untrue or alleged untrue statement of a material fact contained in the Registration Statement, any preliminary prospectus or the Prospectus (or any amendment or supplement thereto), or arises out of or is based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue

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statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, any preliminary prospectus or the Prospectus (or any amendment or supplement thereto), in reliance upon and in conformity with written information furnished to the Company by the Representatives expressly for use therein; and to reimburse the Company, or any such director, officer or controlling person for any and all expenses reasonably incurred by the Company, or any such director, officer or controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action. The Company and the Underwriters hereby agree that the only information that the Underwriters have furnished to the Company expressly for use in the Registration Statement, any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) is the information appearing in the fourth, twelfth, and sixteenth through nineteenth paragraphs under the caption “Underwriting” in the Prospectus. The indemnity agreement set forth in this Section 8(b) shall be in addition to any liabilities that each Underwriter may otherwise have.

(c) Notifications and Other Indemnification Procedures. Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof, but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party for contribution or otherwise to the extent it is not prejudiced as a result of such failure. In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in, and, to the extent that it shall elect, jointly with all other indemnifying parties similarly notified, by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that a conflict may arise between the positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of such indemnifying party’s election so to assume the defense of such action and approval by the indemnified party of counsel (which approval shall not be unreasonably withheld), the indemnifying party will not be liable to such indemnified party under this Section 8 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel (together with local counsel), approved by the indemnifying party, representing all of the indemnified parties who are parties to such action) or (ii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action, in each of which cases the fees and expenses of counsel for the indemnified party shall be at the expense of the indemnifying party.

(d) Settlements. The indemnifying party under this Section 8 shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party against any loss, claim, damage, liability or expense by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by Section 8(c) hereof, the indemnifying party agrees that it shall be liable for any settlement of any proceeding

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effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement; provided however, any request by the indemnified party for reimbursement under this sentence shall be conditioned on a good faith belief by the indemnified party that such indemnified party is entitled to indemnification under this Section 8; and provided further that if the indemnified party is ultimately determined not to be entitled to indemnification under this Section 8 and such determination is final, the indemnified party shall promptly return to the indemnifying party any amount previously received from the indemnifying party under this sentence. No indemnifying party shall, without the prior written consent of the indemnified party (which consent shall not be unreasonably withheld or delayed), effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity was or could have been sought hereunder by such indemnified party, unless such settlement, compromise or consent includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding.

Section 9. Contribution. If the indemnification provided for in Section 8 is for any reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as a result of any losses, claims, damages, liabilities or expenses referred to therein (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the Underwriters, on the other hand, from the offering of the Offered Shares pursuant to this Agreement or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and the Underwriters, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company, on the one hand, and the Underwriters, on the other hand, in connection with the offering of the Offered Shares pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Offered Shares pursuant to this Agreement (before deducting expenses) received by the Company, and the total underwriting discount received by the Underwriters, in each case as set forth on the front cover page of the Prospectus bear to the aggregate initial public offering price of the Offered Shares as set forth on such cover. The relative fault of the Company, on the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company, on the one hand, or the Underwriters, on the other hand, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 8(c), any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The provisions set forth in Section 8(c) with respect to notice of commencement of any action shall apply if a claim for contribution is to be made under this Section 9; provided, however, that no additional notice shall be required with respect to any action for which notice has been given under Section 8(c) for purposes of indemnification.

The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 9.

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Notwithstanding the provisions of this Section 9, no Underwriter shall be required to contribute any amount in excess of the underwriting commissions received by such Underwriter in connection with the Offered Shares underwritten by it and distributed to the public. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to this Section 9 are several, and not joint, in proportion to their respective underwriting commitments as set forth opposite their names in Schedule A. For purposes of this Section 9, each officer and employee of an Underwriter and each person, if any, who controls an Underwriter within the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company with the meaning of the Securities Act and the Exchange Act shall have the same rights to contribution as the Company.

Section 10. Default of One or More of the Several Underwriters. If, on the First Closing Date or the applicable Option Closing Date, as the case may be, any one or more of the several Underwriters shall fail or refuse to purchase Offered Shares that it or they have agreed to purchase hereunder on such date, and the aggregate number of Offered Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase does not exceed 10% of the aggregate number of the Offered Shares to be purchased on such date, the Representatives may make arrangements satisfactory to the Company for the purchase of such Offered Shares by other persons, including any of the Underwriters, but if no such arrangements are made by such Closing Date, the other Underwriters shall be obligated, severally, in the proportions that the number of Firm Shares set forth opposite their respective names on Schedule A bears to the aggregate number of Firm Shares set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as may be specified by the Representatives with the consent of the non-defaulting Underwriters, to purchase the Offered Shares which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date. If, on the First Closing Date or the applicable Option Closing Date, as the case may be, any one or more of the Underwriters shall fail or refuse to purchase Offered Shares and the aggregate number of Offered Shares with respect to which such default occurs exceeds 10% of the aggregate number of Offered Shares to be purchased on such date, and arrangements satisfactory to the Representatives and the Company for the purchase of such Offered Shares are not made within 48 hours after such default, this Agreement shall terminate without liability of any party to any other party except that the provisions of Section 4, Section 6, Section 8 and Section 9 shall at all times be effective and shall survive such termination. In any such case either the Representatives or the Company shall have the right to postpone the First Closing Date or the applicable Option Closing Date, as the case may be, but in no event for longer than seven days in order that the required changes, if any, to the Registration Statement and the Prospectus or any other documents or arrangements may be effected.

As used in this Agreement, the term “Underwriter” shall be deemed to include any person substituted for a defaulting Underwriter under this Section 10. Any action taken under this Section 10 shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.

Section 11. Termination of this Agreement. Prior to the First Closing Date this Agreement may be terminated by the Representatives by notice given to the Company if at any time (i) trading or quotation in any of the Company’s securities shall have been suspended or limited by the Commission or by the Nasdaq National Market, or trading in securities generally on either the Nasdaq Stock Market or the New York Stock Exchange shall have been suspended or limited, or minimum or maximum prices shall have been generally established on any of such stock exchanges by the Commission or the NASD; (ii) a general banking moratorium shall have been declared by any of federal, New York, Delaware or California authorities; (iii) there shall have occurred any outbreak or escalation of national or international hostilities or any crisis or

20

calamity, or any change in the United States or international financial markets, or any substantial change or development involving a prospective substantial change in United States’ or international political, financial or economic conditions, in each case as in the judgment of the Representatives is material and adverse and makes it impracticable to market the Offered Shares in the manner and on the terms described in the Prospectus or to enforce contracts for the sale of securities; (iv) in the judgment of the Representatives there shall have occurred any Material Adverse Change; or (v) the Company shall have sustained a loss by strike, fire, flood, earthquake, accident or other calamity of such character as in the judgment of the Representatives may interfere materially with the conduct of the business and operations of the Company regardless of whether or not such loss shall have been insured. Any termination pursuant to this Section 11 shall be without liability on the part of (a) the Company to any Underwriter, except that the Company shall be obligated to reimburse the expenses of the Representatives and the Underwriters pursuant to Sections 4 and 6 hereof, (b) any Underwriter to the Company, or (c) of any party hereto to any other party except that the provisions of Section 8 and Section 9 shall at all times be effective and shall survive such termination.

Section 12. Representations and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties and other statements of the Company, of its officers and of the several Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or the Company or any of its or their partners, officers or directors or any controlling person, as the case may be, and will survive delivery of and payment for the Offered Shares sold hereunder and any termination of this Agreement.

Section 13. Notices. All communications hereunder shall be in writing and shall be mailed, hand delivered or telecopied and confirmed to the parties hereto as follows:

If to the Representatives:

Jefferies & Company, Inc.

520 Madison Avenue, 8^th Floor

New York, New York 10022

Facsimile: (212) 284-2280

Attn: General Counsel

with a copy to:

Wilson Sonsini Goodrich & Rosati, P.C.

One Market, Spear Street Tower

San Francisco, California 94105

Facsimile: (415) 947-2000

Attn: Nora L. Gibson, Esq.

If to the Company:

The Active Network, Inc.

1020 Prospect Street, Suite 250

La Jolla, California 92037

Facsimile: (858) 551-7619

Attn: Chief Executive Officer

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with a copy to:

Cooley Godward LLP

4401 Eastgate Mall

San Diego, California 92121

Facsimile: (858) 550-6420

Attn: Steven M. Przesmicki, Esq.

Any party hereto may change the address for receipt of communications by giving written notice to the others.

Section 14. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto, including any substitute Underwriters pursuant to Section 10 hereof, and to the benefit of the employees, officers and directors and controlling persons referred to in Section 8 and Section 9, and in each case their respective successors, and no other person will have any right or obligation hereunder. The term “successors” shall not include any purchaser of the Offered Shares as such from any of the Underwriters merely by reason of such purchase.

Section 15. Partial Unenforceability. The invalidity or unenforceability of any Section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other Section, paragraph or provision hereof. If any Section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.

Section 16. Governing Law Provisions. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to agreements made and to be performed in such state. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby (“Related Proceedings”) may be instituted in the federal courts of the United States of America located in the Borough of Manhattan in the City of New York or the courts of the State of New York in each case located in the Borough of Manhattan in the City of New York (collectively, the “Specified Courts”), and each party irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment of any such court (a “Related Judgment”), as to which such jurisdiction is non-exclusive) of such courts in any such suit, action or proceeding. Service of any process, summons, notice or document by mail to such party’s address set forth above shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit, action or other proceeding brought in any such court has been brought in an inconvenient forum.

Section 17. General Provisions. This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof. This Agreement may be executed in two or more counterparts, each one of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement may not be amended or modified unless in writing by all of the parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition is meant to benefit. The Table of Contents and the Section headings herein are for the convenience of the parties only and shall not affect the construction or interpretation of this Agreement.

Each of the parties hereto acknowledges that it is a sophisticated business person who was adequately represented by counsel during negotiations regarding the provisions hereof, including, without limitation, the indemnification provisions of Section 8 and the contribution provisions of Section 9, and is fully informed

22

regarding said provisions. Each of the parties hereto further acknowledges that the provisions of Sections 8 and 9 hereto fairly allocate the risks in light of the ability of the parties to investigate the Company, its affairs and its business in order to assure that adequate disclosure has been made in the Registration Statement, any preliminary prospectus and the Prospectus (and any amendments and supplements thereto), as required by the Securities Act.

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If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to the Company the enclosed copies hereof, whereupon this instrument, along with all counterparts hereof, shall become a binding agreement in accordance with its terms.

Very truly yours,
THE ACTIVE NETWORK, INC.
By:
	[Name] [Title]

The foregoing Underwriting Agreement is hereby confirmed and accepted by the Representatives in New York, New York as of the date first above written.

JEFFERIES & COMPANY, INC.

WR HAMBRECHT + CO, LLC

Acting as Representatives of the

several Underwriters named in

the attached Schedule A.

By JEFFERIES & COMPANY, INC.
By:
	[Name] [Title]

SCHEDULE A

Underwriters	Number of Firm Shares to be Purchased
Jefferies & Company, Inc.	[        ]
WR Hambrecht + Co., LLC	[        ]
[    ]	[        ]
[    ]	[        ]
[    ]	[        ]
Total	[        ]

EXHIBIT A

Opinion of counsel for the Company to be delivered pursuant to Section 5(d)(i) of the Underwriting Agreement.

(i) The Company is a corporation duly incorporated under the laws of the State of Delaware, with corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and to enter into and issue and sell the Shares under the Underwriting Agreement.

(ii) The Company is validly existing as a corporation and in good standing under the laws of the State of Delaware and is qualified to do business as a foreign corporation in the State of California.

(iii) The authorized, issued and outstanding capital stock of the Company (including the Shares) conforms in all material respects to the descriptions thereof set forth in the Prospectus. All of the outstanding Shares have been duly authorized and validly issued, and are fully paid and nonassessable. The form of certificate used to evidence the Offered Shares is in due and proper form and complies with all applicable requirements of the charter and by-laws of the Company and the General Corporation Law of the State of Delaware.

(iv) No stockholder of the Company or any other person has any preemptive right, right of first refusal or other similar right to subscribe for or purchase securities of the Company arising (i) by operation of the charter or by-laws of the Company or the General Corporation Law of the State of Delaware or (ii) any agreement or other instrument filed as an exhibit to the Registration Statement.

(v) The Underwriting Agreement has been duly authorized by all necessary corporate action on the part of the Company and has been executed and delivered by the Company.

(vi) The Offered Shares to be purchased by the Underwriters from the Company have been duly authorized and, when issued and delivered by the Company pursuant to the Underwriting Agreement against payment of the consideration set forth therein, will be validly issued, fully paid and nonassessable.

(vii) The Registration Statement and the Rule 462(b) Registration Statement, if any, has been declared effective by the Commission under the Securities Act. To the best knowledge of such counsel, no stop order suspending the effectiveness of either of the Registration Statement or the Rule 462(b) Registration Statement, if any, has been issued under the Securities Act and no proceedings for such purpose have been instituted or are pending or overtly threatened by the Commission. Any required filing of the Prospectus and any supplement thereto pursuant to Rule 424(b) under the Securities Act has been made in the manner and within the time period required by such Rule 424(b).

(viii) The Registration Statement, including any Rule 462(b) Registration Statement, as of its effective date, and the Prospectus, as of its date, (other than the financial statements and the related notes and supporting schedules included therein and the financial and statistical data derived therefrom, as to which no opinion need be rendered) complied as to form in all material respects with the applicable requirements of the Securities Act.

(ix) The statements (i) in the Prospectus under the captions “Description of Capital Stock,” “Business—Government Regulation—Regulation of Internet Commerce,” and “Shares Eligible for Future

A-1

Sale”, insofar as such statements purport to describe certain provisions of the statutes referred to therein, fairly present, in all material respects, such provisions of the statutes.

(x) To the best knowledge of such counsel, there are no legal or governmental actions, suits or proceedings by or before any court or governmental agency pending to which the Company is a party of a character required to be disclosed in the Registration Statement, other than those disclosed therein.

(xi) To the best knowledge of such counsel, there are no Existing Instruments of a character required to be described in the Registration Statement or to be filed as exhibits thereto other than those described therein or filed or incorporated by reference as exhibits thereto.

(xii) The execution and delivery of the Underwriting Agreement by the Company, the performance by the Company of its obligations thereunder (other than performance by the Company of its obligations under the indemnification section of the Underwriting Agreement, as to which no opinion need be rendered) (and assuming performance as of the date hereof) and the issuance and sale of the Offered Shares (i) will not result in any violation of the provisions of the charter or by-laws of the Company; (ii) will not constitute a breach of, or Default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to any agreement or instrument filed as an exhibit to the Registration Statement pursuant to Item 601(b)(10) of Regulation S-K to which the Company is a party or by which the Company is bound; (iii) will not result in any violation of any federal or state law or, to the best knowledge of such counsel any administrative regulation or administrative or court decree, applicable to the Company; or (iv) will not require any consents, approvals or authorizations to be obtained by the Company, or any registrations, declarations or filings to be made by the Company, in each case, under any federal or California or Delaware statute, rule or regulation applicable to the Company that have not been obtained or made, except such as have been obtained and made under the Securities Act and the Exchange Act and except any consents, approvals, authorizations, registrations, declarations or filings with any state securities regulatory authority for which no opinion is required.

(xiii) The Company is not, and after receipt of payment for the Offered Shares and the application of the net proceeds thereof as described in the Prospectus, will not be, an “investment company” within the meaning of Investment Company Act.

A-2

In the course of the preparation of the Registration Statement and Prospectus, such counsel has participated in conferences with officers and other representatives of the Company, representatives of the independent public accountants of the Company and representatives of the Underwriters and their legal counsel at which the contents of the Registration Statement and the Prospectus were discussed and, although such counsel has not independently verified and are not passing upon and do not assume responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement or the Prospectus (except as and to the extent stated in paragraph (ix) above), on the basis of the foregoing nothing has come to such counsel’s attention that causes such counsel to believe that (A) the Registration Statement (except for the financial statements and schedules and other financial and statistical data included therein, as to which such counsel shall not be required to express a belief), at the time the Registration Statement became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or (B) the Prospectus (except for the financial statements and related notes and supporting schedules included therein and the financial and statistical data derived therefrom, as to which such counsel shall not be required to express an opinion), as of the date of the Prospectus, or as of the date hereof, as the case may be, contained or contains an untrue statement of a material fact or omitted or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of any jurisdiction other than the General Corporation Law of the State of Delaware, the General Corporation Law of the State of California or the federal law of the United States, to the extent they deem proper and specified in such opinion, upon the opinion (which shall be dated the First Closing Date or the applicable Option Closing Date, as the case may be, shall be satisfactory in form and substance to the Underwriters, shall expressly state that the Underwriters may rely on such opinion as if it were addressed to them and shall be furnished to the Representatives) of other counsel of good standing whom they believe to be reliable and who are satisfactory to counsel for the Underwriters; provided, however, that such counsel shall further state that they believe that they and the Underwriters are justified in relying upon such opinion of other counsel, and (B) as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Company and public officials.

A-3

EXHIBIT B

The undersigned is an owner of record or beneficially of certain shares of the common stock of the Company (“Shares”) or securities convertible into or exchangeable or exercisable for Shares. The Company proposes to carry out a public offering of Shares of the Company (the “Offering”) for which you will act as the representatives of the underwriters. The undersigned recognizes that the Offering will be of benefit to the undersigned and will benefit the Company by, among other things, raising additional capital for its operations. The undersigned acknowledges that you and the other underwriters are relying on the representations and agreements of the undersigned contained in this letter in carrying out the Offering and in entering into underwriting arrangements with the Company with respect to the Offering.

In consideration of the foregoing, the undersigned hereby agrees that the undersigned will not, without the prior written consent of Jefferies & Company, Inc. (which consent may be withheld in its sole discretion), directly or indirectly, sell, offer, contract or grant any option to sell (including without limitation any short sale), pledge, transfer, establish an open “put equivalent position” within the meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, or otherwise dispose of any Shares or options or warrants to acquire Shares, or securities exchangeable or exercisable for or convertible into Shares currently or hereafter owned either of record or beneficially (as defined in Rule 13d-3 under the Exchange Act) by the undersigned, or publicly announce an intention to do any of the foregoing, for a period commencing on the date hereof and continuing through the close of trading on the date 180 days after the date of the final prospectus used in connection with the Offering (the “Lockup Period”). Notwithstanding the foregoing, this letter agreement and the Lockup Period will terminate, and there shall be no obligations hereunder, if (i) the Company notifies you that it does not intend to proceed with the Offering, (ii) if the underwriting agreement by and among the Company and the underwriters related to the Offering (the “Underwriting Agreement”) is not executed by the Company and you prior to September 1, 2004, or (iii) if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the shares of common stock.

Notwithstanding the restrictions set forth above, the undersigned may transfer (i) shares of common stock that are acquired in open market transactions by the undersigned, including without limitation shares acquired in a directed share program, (ii) Shares as a bona fide gift or gifts, (iii) Shares to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, (iv) if the undersigned is a corporation, Shares held by the undersigned to any wholly-owned subsidiary or affiliate of such corporation, (v) if the undersigned is a limited liability company, Shares held by the undersigned to a member or affiliated limited liability company or (vi) if the undersigned is a partnership, Shares held by the undersigned to a partner or affiliated partnership; provided that in the case of each of the transactions described in clauses (ii) through (vi) above, (A) it shall be a condition to the transfer that the donee or transferee execute an agreement stating that the donee or transferee is receiving and holding such capital stock subject to the provisions of this letter agreement and there shall be no further transfer of such capital stock except in accordance with this letter agreement, (B) any such transfer shall not involve a disposition for value, (C) each party (donor, donee, transferor or transferee) shall not be required by law (other than as required to comply with the disclosure requirements of the Securities Act of 1933, as amended (the “Securities Act”), and the Exchange Act) to make, and shall agree to not voluntarily make, any public announcement of the transfer or disposition and (D) no filing by any party (donor, donee, transferor or transferee) under the Exchange Act shall be required or shall be voluntarily made in connection with such transfer (other than a filing on a Form 5, Schedule 13D or Schedule 13G made after the expiration of the 180-day period referred to

B-1

above). In addition, notwithstanding the lockup restrictions described in this agreement, the undersigned may at any time enter into a written plan meeting the requirements of Rule 10b5-1 under the Exchange Act relating to the sale of shares of common stock, if then permitted by the Company, provided that the shares subject to such plan may not be sold until after completion of the Lockup Period. For purposes of this letter agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin.

The undersigned agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of Shares or securities convertible into or exchangeable or exercisable for Shares held by the undersigned except in compliance with the foregoing restrictions.

With respect to the Offering only, the undersigned waives any registration rights relating to registration under the Securities Act of any Shares owned either of record or beneficially by the undersigned, including any rights to receive notice of the Offering.

This agreement is irrevocable and will be binding on the undersigned and the respective successors, heirs, personal representatives, and assigns of the undersigned.

Printed Name of Holder
By:
	Signature
Printed Name of Person Signing

(and indicate capacity of person signing if

signing as custodian, trustee, or on behalf

of an entity)

B-2

EX-2.1

Exhibit 2.1

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT is entered into as of April 9, 2004, by and among Do It Sports, Inc., a Michigan corporation (“Seller”), the shareholders of Seller listed as signatories hereto (each a “Shareholder” and collectively, the “Shareholders”, which such definition explicitly excludes Harvey Appelle and Surface Combustion, Inc.) and The Active Network, Inc., a Delaware corporation (“Buyer”).

WHEREAS, Seller provides products and services to the participatory sports industry including, but not limited to, online registration and related services (the “Business”); and

WHEREAS, Buyer desires to acquire from Seller, and Seller desires to sell to Buyer, the properties, assets and rights of Seller upon the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing (incorporated herein by this reference) and the mutual promises, representations, warranties, agreements and covenants set forth herein, the parties agree as follows:

ARTICLE I: CERTAIN DEFINITIONS

The following terms, as used in this Agreement, have the following meanings:

“Accounts Receivable” means (a) all trade accounts receivable and other rights to payment from customers of Seller and the full benefit of all security for such accounts or rights to payment, including all trade accounts receivable representing amounts receivable in respect of goods shipped or products sold or services rendered to customers of Seller, (b) all other accounts or notes receivable of Seller and the full benefit of all security for such accounts or notes, and (c) any claim, remedy or other right related to any of the foregoing.

“Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by, or under common control with such other Person.

“Ancillary Agreements” shall mean all agreements attached or to be attached as Exhibits to this Agreement.

“Assignment and Assumption Agreement” means that certain Assignment and Assumption Agreement to be entered into as of the Closing by and between Seller and Buyer regarding the assignment of the Assets and the assumption of the Assumed Liabilities, in substantially the form attached hereto as Exhibit A.

“Bill of Sale” means that certain bill of sale for the Assets to be executed and delivered by Seller as of the Closing, in substantially the form to be attached hereto as Exhibit B.

“Disclosure Schedule” collectively refers to all Schedules attached hereto in response to the representations, warranties and disclosures made by Seller in Articles II, III, IV, V, VI, VII and VIII, which Schedules shall designate the specific numbered and lettered sections and subsections of this Agreement to which they correspond. The final Disclosure Schedule shall be attached upon execution of this Agreement.

“Employment Agreement” means that certain employment agreement to be entered into as of the Closing by and between Buyer and each of Thomas J. Silinski and Brad Chick, in substantially the form attached hereto as Exhibit C.

“Exhibit” means any writing identified in this Agreement as an exhibit or attached to this Agreement as an exhibit.

“Facilities” means the facilities leased by Seller and located at 615 South Mansfield Road, Ypsilanti, Michigan.

“Lien” means any charge, claim, community or other marital property interest, condition, equitable interest, lien, option, pledge, security interest, mortgage, right of way, easement, encroachment, servitude, right of first refusal or similar restriction, right of first option, encumbrance or restriction of any nature whatsoever.

“Material Adverse Effect” means a material adverse effect on the condition (financial or otherwise), business, assets, results of operations or prospects of Seller or the Business.

“Non-Competition Agreement” shall mean that certain non-competition agreement to be entered into as of the Closing by and between Buyer and each of Thomas J. Silinski and Brad Chick, in substantially the form attached hereto as Exhibit D.

The term “or” is used in this Agreement in the inclusive sense of “and/or.”

“Permits” means any franchises, licenses, permits, consents, authorizations, certificates and approvals of any federal, state, or local regulatory, administrative, or other governmental agency or body issued to or held by Seller.

“Permitted Encumbrances” means those Liens specifically listed on Schedule 1.1.

“Person” means an individual, a corporation, a limited liability company, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

The term “record” or “records” refers to information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

“Schedule” means a schedule attached to this Agreement as an exception to or disclosure regarding a representation, warranty, covenant, agreement or other provision set forth in this Agreement.

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ARTICLE II: PURCHASE AND SALE OF ASSETS

Section 2.1 Description of Assets to be Acquired. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, but effective as of the Closing Date, Seller shall sell, convey, assign, transfer and deliver to Buyer, and Buyer shall purchase and acquire from Seller, free and clear of any Liens other than Permitted Encumbrances, all of Seller’s right, title and interest in and to all of Seller’s property and assets, real, personal or mixed, tangible and intangible, of every kind and description, wherever located, including the following (but excluding the Excluded Assets):

(a) All furniture, fixtures, furnishings, equipment (including, without limitation, all computer hardware and software, computer files, supplies, billing and office support equipment, telecommunications equipment and records used in or necessary to operate, staff, prepare and collect bills and maintain the Business or any portion thereof) appliances and all other tangible personal property of every kind, manner and description owned by Seller, whether or not reflected as capital assets on the accounting records of Seller, including without limitation the material tangible items of personal property listed on Schedule 2.1(a) hereto;

(b) All improvements to real property and buildings leased by Seller pursuant to the real property leases for the Facilities;

(c) All of Seller’s claims and rights under all agreements, contracts, contract rights, leases, licenses, purchase and sale orders, quotations, and other executory agreements (collectively, the “Contracts”), as listed on Schedule 2.1(c) hereto, and all outstanding offers or solicitations made by or to Seller to enter into any Contract;

(d) All current assets of Seller, including without limitation all (i) Accounts Receivable, (ii) inventory, and (iii) cash, bank accounts, cash equivalents, accounts receivable (net of reserves on the books) and unbilled customer receivables;

(e) All Permits of Seller or with respect to the Assets, and pending applications therefore or renewals thereof, in each case to the extent such can be transferred, conveyed, assigned or sold to Buyer under applicable law, including without limitation those listed on Schedule 2.1(e) hereto;

(f) All of Seller’s right, title and interest in and to copyright rights, trade secret rights, trademark and service mark rights, trade names, logos, patents, patent applications, patent rights, and all other intellectual property and proprietary rights worldwide together with all of Seller’s right, title and interest in and to any underlying inventions, improvements, processes, technical information, know-how, standards, processes, procedures, computer software, algorithms, designs, formulas, data, ideas, techniques, confidential and proprietary information, customer lists, supplier lists, Internet domain names, Internet web sites and other information related in any manner to the Business or in which Seller has any proprietary interest, together with all of the goodwill associated therewith (collectively, the “Proprietary Rights”), including without limitation those listed on Schedule 2.1(f) hereto;

(g) All data and records related to the Assets or the operation of Seller, including without limitation client and customer lists and records, supplier lists and records, referral sources, research and development reports and records, standards, templates, processes and procedures, personnel and payroll records, service and warranty records, equipment logs, operating guides and manuals, financial and accounting records, creative materials, advertising materials, promotional materials, studies, reports, plans, correspondence and other similar documents;

(h) All insurance benefits, including without limitation rights and proceeds, arising from or relating to the Assets or the Assumed Liabilities;

(i) All of Seller’s rights, if any, under express or implied warranties from suppliers and vendors of Seller;

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(j) All of Seller’s causes of action, judgments, and claims or demands of whatever kind or description relating to the Assets, whether choate or inchoate, known or unknown, contingent or noncontingent, including all such claims listed in Schedule 2.1(j) hereto;

(k) All rights of Seller relating to deposits and prepaid expenses, claims for refunds and rights to offset in respect thereof;

(l) All goodwill associated with Seller (the “Goodwill”);

(m) All tangible or intangible assets (including all trademarks, patents and intellectual property and proprietary rights) owned by Shareholders that in any way relate to the Business or are necessary to the operation of the Business;

(n) The name “Do It Sports” and any other derivations thereof used by Seller in conducting business and any other names or logos used by Seller in the normal course of business; and

(o) All of Seller’s other intangible and tangible property, including without limitation all assets not heretofore mentioned.

The assets, properties, and rights to be conveyed, sold, transferred, assigned, and delivered to Buyer pursuant to this Section 2.1 are sometimes hereinafter collectively referred to as the “Assets.” Notwithstanding the foregoing or anything to the contrary in this Agreement, the transfer of the Assets pursuant to this Agreement shall not include the assumption of any liability or obligation related to the Assets, Seller or the Business unless Buyer specifically and expressly assumes such liability or obligation pursuant to Section 3.1.

Section 2.2 Excluded Assets. Notwithstanding anything to the contrary in this Section 2.2 or elsewhere in this Agreement, the term Assets does not refer to any of the assets related to the Business that are specifically described on Schedule 2.2 hereto (the “Excluded Assets”). The Excluded Assets are not part of the sale and purchase of the Assets contemplated hereunder and shall remain the property of Seller after the Closing.

Section 2.3 Closing. The consummation of the transactions contemplated by this Agreement, including without limitation the sale and purchase of the Assets, the payment of the Purchase Price, and the assumption of the Assumed Liabilities (the “Closing”), shall take place after the close of business on the first business day on which the last of the conditions contained in Article XII hereof is fulfilled or waived by the applicable party (the “Closing Date”). Notwithstanding anything to the contrary herein contained, in no event shall the Closing Date occur after the date which is five (5) days following the date hereof, unless Buyer and Seller otherwise agree in writing to extend such five (5) day period. The Closing shall take place at the office of Buyer at 1020 Prospect Street, Suite 250, La Jolla, CA 92037.

ARTICLE III: LIABILITIES

Section 3.1 Assumed Liabilities. Subject to Section 3.2 hereof, Buyer hereby agrees on the Closing Date to assume, satisfy and perform (i) all liabilities and obligations of Seller incurred on and after the Closing under the contracts listed on Schedule 2.1(c) but only to the extent such liabilities and obligations (A) arise after the Closing Date in the normal course of business, (B) do not arise from or relate to any breach by Seller of any provision of any of such Contracts, or (C) do not arise from or relate to any event, circumstance or condition occurring or existing on or prior to the Closing Date that, with notice or lapse

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of time, would constitute or result in a breach of any of such Contracts, and (ii) Net Current Liabilities (as defined in Section 5.7 hereof) of up to $2,125,000.00, including all liabilities of Seller listed on Schedule 3.1 and including all liabilities and obligations of Seller excepted pursuant to Sections 3.1(i)(A), 3.1(i)(B) and 3.1(i)(C) above (collectively, the “Assumed Liabilities”).

Section 3.2 Liabilities Not Assumed. Other than as set forth in Section 3.1, Buyer shall not assume, nor shall Buyer or any Affiliate of Buyer be deemed to have assumed or guaranteed, any liability or obligation of any nature of Seller, or claims of such liability or obligation, whether accrued, matured or unmatured, liquidated or unliquidated, fixed or contingent, known or unknown arising out of (a) acts or occurrences, or related to any of the Assets, prior to the Closing Date or (b) any other liability or obligation of Seller (collectively, the “Unassumed Liabilities”). Without limiting the generality of the foregoing, certain of the Unassumed Liabilities are set forth in Schedule 3.2.

Section 3.3 Satisfaction of Assumed Liabilities. Buyer shall satisfy and perform within one hundred eighty days of the Closing the Assumed Liabilities owed to customers or such later date on which such liabilities are due, except for those liabilities being disputed in good faith by Buyer and except for those customer obligations specifically identified by Seller on Schedule 3.1 which listed customer obligations shall be paid by Buyer within the time limits set forth in Schedule 3.1. All other Assumed Liabilities shall be paid when due.

ARTICLE IV: PURCHASE PRICE

Section 4.1 Consideration. Upon the terms and subject to the conditions contained in this Agreement, in consideration for the Assets and the other forms of consideration to be given by Seller and in full payment therefor, Buyer will pay, or cause to be paid, the purchase price set forth in Section 4.2 hereof to Seller, subject to the provisions set forth in Section 4.3, and Buyer will assume all of the Assumed Liabilities.

Section 4.2 Payment of Purchase Price. Subject to Section 4.3, the purchase price (“Purchase Price”) to be paid or payable by Buyer to Seller for the Assets and the other forms of consideration to be given by Seller (including the Non-Competition Agreement) shall be Three Hundred and Fifty Thousand Dollars $350,000. The Purchase Price less the amount deposited in escrow pursuant to Section 4.3 shall be payable by cashier’s check or wire transfer to Seller at the Closing.

Section 4.3 Escrow. On the Closing Date, Buyer will deposit in escrow (the “Escrow Deposit”) $225,000 of the Purchase Price which shall be held as security for the indemnification obligations of Seller and each Shareholder, pursuant to the provisions of the Escrow Agreement, to be entered into at the Closing (the “Escrow Agreement”) which shall be substantially in the form of Exhibit E attached hereto.

Section 4.4 Allocation of Purchase Price. The Purchase Price shall be allocated among the Assets and the non-competition provisions of the Employment Agreements in the manner as determined by Buyer within 90 days from the Closing Date and, at such time as its determined, provided for in Schedule 4.4 hereto, which the parties acknowledge was prepared using the allocation methods and principles required by the Internal Revenue Code of 1986, as amended (the “Code”), and the U.S. Department of Treasury regulations promulgated thereunder. Neither Buyer nor Seller shall take any

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position inconsistent with such allocation, and any and all filings with and reports made to any taxing authority will be consistent with that allocation.

Section 4.5 Earnout Payment. As soon as practicable following June 30, 2005, Buyer shall make a payment (the “Earnout Payment”) to Seller. The Earnout Payment shall be equal to X minus Y where X is equal to 4.5 multiplied by Seller’s Operating Income (as defined in Exhibit F) generated during the 12 month period from July 1, 2004 to June 30, 2005, and Y is equal to (i) the Assumed Liabilities to the extent actually paid to unaffiliated third parties by Buyer prior to June 30, 2005 plus (ii) the Purchase Price plus (iii) any cost or expense incurred by Buyer as a result of Seller’s or the Shareholders’ failure to satisfy their indemnification obligations hereunder. Buyer shall pay the Earnout Payment in cash. If, however, Buyer’s common stock is listed on NASDAQ National Market, Buyer may in lieu of the cash payment pay the Earnout Payment in common stock of Buyer (the fair market value of such common stock to be equal to the weighted average intraday trading price of Buyer’s common stock for the 10 trading days immediately preceding June 30, 2005 as reported by Bloomberg). The Earnout Payment shall not exceed Three Million Two Hundred and Fifty Thousand Dollars ($3,250,000). If either Shareholder is terminated without “Cause” (as such term is defined in the Employment Agreement) prior to June 30, 2005, then the Buyer shall be required to pay the maximum Earnout Payment to Seller.

Section 4.6 Compliance with Securities Laws. Any equity issued under this Agreement shall be issued in reliance upon and shall be qualified under Section 3(a)(10) of the Securities Act of 1933.

Section 4.7 Additional Payment. If by the first anniversary of the Closing the payments that Buyer has made to third parties, who are not Buyer’s Affiliates, as a consequence of the assumption by Buyer of the Net Current Liabilities net of the cash, bank accounts, cash equivalents, accounts receivable (net of reserves on the books) and unbilled customer receivables constituting Net Current Liabilities are less than $1.9 million, then Buyer on that first anniversary shall make a payment to Seller in an amount equal to (i) 100 percent of such difference up to $100,000, (ii) 0 percent of such difference in excess of $100,000 and less than $200,000, and (ii) 50 percent of such difference in excess of $200,000 (the “Additional Payment”). In no event shall the Additional Payment exceed $350,000.

Section 4.8 Accounting. Whether or not the Additional Payment is due, Buyer shall provide on the first anniversary of the Closing to Seller a list of all payments made by Buyer to third parties, who are not Affiliates of Buyer, as a consequence of the assumption by Buyer of the Assumed Liabilities. As soon as practical following June 30, 2005, and in any event no later than July 31, 2005, Buyer shall provide to Seller and “Seller’s Representative” (as such term is defined in the Escrow Agreement) a detailed accounting showing the calculation of the Earnout Payment, whether or not Buyer determines it is payable. With respect to the Additional Payment and Earnout Payment calculations of Buyer, Buyer shall provide appropriate supporting documentation, and Seller or Seller’s Representative shall be permitted to review Buyer’s relevant books and records. Seller’s Representative may dispute Buyer’s determinations with respect to the Additional Payment and the Earnout Payment if within three (3) months from the respective date each such determination is communicated to Seller, Seller’s Representative sends a written notice to Buyer setting forth the specific items in dispute. Buyer and Seller’s Representative shall seek to reconcile any disputed amounts and any such resolution by them shall be final, binding and conclusive. If Buyer and Seller’s Representative are unable to reach a resolution within twenty days after Buyer’s receipt of the notice from the Seller’s Representative, the dispute shall be submitted to an independent public accounting firm, which within thirty days after submission will determine and report to the parties on the remaining disputed amounts. The report of the independent public accounting firm shall be final, binding and conclusive. The fees and disbursements of the independent accounting firm shall be allocated between the Seller’s Representative and the Buyer so that the Seller’s Representative’s share of such fees and disbursements shall be in the same proportion

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that the aggregate amount of such remaining disputed amounts so submitted by Seller’s Representative to the independent accounting firm that is unsuccessfully disputed by the Seller’s Representative (as finally determined by the independent accounting firm) bears to the total amount of such remaining disputed amounts so submitted by Seller’s Representative and the remainder of such fees and disbursements shall be paid by Buyer.

ARTICLE V: REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDERS

Except as set forth on Schedule 5 hereto (which Schedule specifically identifies the exceptions to the relevant sections of this Section 5), Seller and each of the Shareholders represent, warrant and covenant to Buyer, as of the date hereof and as of the Closing Date, that:

Section 5.1 Organization and Good Standing. Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Michigan, and has all requisite power and authority to own and operate its business in the places where such business is now conducted and to directly own, lease, and operate the Assets. Seller is duly qualified or licensed to do business, and is in good standing, in each of the jurisdictions in which either the ownership or use of the properties owned or used by it, or the nature of the activities conducted by it, requires such qualification or licensing.

Section 5.2 Capitalization. The authorized capital stock of Seller consists of sixty thousand (60,000) shares of common stock, no par value, of which twenty-three thousand one hundred twenty-eight (23,128) shares are issued and outstanding and five thousand (5,000) shares of preferred stock, no par value, of which one thousand nine hundred forty-eight (1,948) are issued and outstanding, (the “Issued Shares”). To the Company’s knowledge, the Issued Shares are held of record and beneficially by the persons and in the amounts set forth on Schedule 5.2. The Issued Shares have been duly and validly issued by Seller and are fully paid and nonassessable. Except as set forth on Schedule 5.2, there are no outstanding options, warrants or other rights to subscribe for, purchase or acquire, or any plans, contracts or commitments providing for the issuance of, any capital stock of Seller or any securities convertible into or exchangeable for any capital stock of Seller.

Section 5.3 Authorization. Seller and the Shareholders have full power and authority to enter into this Agreement and each of the Ancillary Agreements, to perform their respective obligations hereunder and thereunder, and to consummate the transactions contemplated hereby and thereby, including, without limitation, the execution and delivery of each Closing Document. As used in this Agreement, the “Closing Documents” are this Agreement, the Ancillary Agreements, bills of sale, assignments and assumptions, novations and other instruments evidencing the conveyance of the Assets or delivered in accordance with this Agreement. Each Closing Document constitutes the valid and binding obligation of Seller or Shareholders enforceable in accordance with its terms.

Section 5.4 Subsidiaries. The Seller and the Shareholders do not own or control, directly or indirectly, or hold any rights to acquire, any interest in any other corporation, limited liability company, association or other business entity, and the Seller and the Shareholders have never held such interest. Neither the Seller nor the Shareholders area participant in any joint venture, partnership or similar arrangement, nor has Seller or the Shareholders ever been a participant in any such arrangement.

Section 5.5 Financial Information. Seller has delivered to Buyer (a) unaudited balance sheets of Seller as at December 31 for each of the fiscal years 2001 through 2003, and the related unaudited statements of income for each of the fiscal years then ended, and (b) an unaudited balance sheet as at the

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two month period ended February 29, 2004, and the related unaudited statements of income for the period then ended (all attached in Exhibit G hereto). The financial statements referred to in this Section 5.5 are sometimes collectively referred to in this Agreement as the “Financial Statements.” Except as set forth on Schedule 5.5, each Financial Statement is complete and correct in all material respects, has not been audited or subject to review by any accounting firm, and has been prepared based on a consistent accrual basis, and each is in accordance with the books and records of Seller. Each Financial Statements fairly presents the financial position of Seller as of its respective date for balance sheets and for the periods indicated for the statements of income. Without limitation, the Financial Statements reflect all sales which have been made with respect to services or personal property to be provided in the future by Seller, and no income has been accrued by Seller which has not yet been earned. No Financial Statement contains any untrue statement of material fact or omits or fails to state any material fact necessary to make such Financial Statement not misleading to a Person contemplating an acquisition of Seller, the Assets, or any portion thereof. Seller has not received any letters from Seller’s accountant(s) or bookkeeper(s) during the thirty-six (36) months preceding the execution of this Agreement.

Section 5.6 Absence of Certain Changes and Events. Since February 29, 2004:

(a) There has not been any change in the method of operating Seller’s business, and there has not been any change in the assets, liabilities, financial condition or operating results of Seller from that reflected in the Financial Statements, except for changes which, individually or in the aggregate, have not had, and could not be expected to have, a Material Adverse Effect;

(b) No Person has made, with respect to Seller or the Assets, any capital expenditures or incurred or paid expenses exceeding $10,000 in the aggregate of all such capital expenditures or expenses;, except to the extent of continuing operational losses incurred in the ordinary course of business;

(c) No Person has created, incurred, assumed, or guaranteed any indebtedness, relating to Seller or the Assets;

(d) There has not been the loss of any vendor to Seller whose services could not easily and promptly be replaced on substantially the same terms;

(e) No Person has made any change in any of the banking or safe deposit arrangements relating to Seller or the Assets;

(f) There has not been any dividend or distribution (or declaration of any dividend or other distribution) to any shareholder or other holder of any beneficial interest in, or cash or property of, Seller;

(g) No Person other than Buyer has entered into any transaction relating to Seller other than in the ordinary course of business consistent with prior practice; or

(h) There has not been any other event or condition of any character that has had a Material Adverse Effect or could be expected to have a Material Adverse Effect.

Section 5.7 No Undisclosed Liabilities. Except as set forth in the Financial Statements and for liabilities incurred in the normal course of business since February 29, 2004 or connected with the negotiation, execution and delivery of this Agreement, the Ancillary agreements and the Closing Documents and the transactions contemplated hereby and thereby,

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there are no debts, claims, liabilities, or obligations with respect to Seller or to which the Assets are subject, whether liquidated, unliquidated, accrued, absolute, contingent or otherwise. Except as disclosed in Schedule 5.7, Seller is not a guarantor or indemnitor of any indebtedness of any other Person. Seller’s “Net Current Liabilities” as of the Closing Date were not in excess of One Million Nine Hundred Thousand Dollars ($1,900,000) and no disclosure elsewhere in this Agreement or in the Disclosure Schedules shall be deemed to qualify or create an exception to this representation. As used in this Agreement, “Net Current Liabilities” means all current liabilities of Seller (excluding deferred compensations owed to Messrs. Silinski and Chick and expenses related to the negotiation, execution and delivery of this Agreement and the other agreements and documents contemplated hereby), including amounts owed to customers, accounts payable, arrearages on leases and contracts, taxes, interests and penalties, liabilities owed or payable to employees, credit card processing fees and the liabilities of Seller listed in Schedule 3.1, less cash, bank accounts, cash equivalents, accounts receivable (net of reserves on the books) and unbilled customer receivables. Net Current Liabilities shall be determined in accordance with Seller’s customary accounting practices as more fully described in the schedules of assets and liabilities.

Section 5.7(a) Seller has not, at any time, (i) made a general assignment for the benefit of creditors, (ii) filed, or had filed against it, any bankruptcy petition or similar filing, (iii) suffered the attachment or other judicial seizure of all or a substantial portion of its assets, (iv) admitted in writing its inability to pay its debts as they become due, (v) been convicted of, or pleaded guilty or no contest to, any felony. As of and based on the financial condition of Seller as of the Closing Date, after giving effect to the transactions contemplated hereby and the receipt by Seller of the amount to be paid on the Closing Date under Section 4.2 hereunder, the fair saleable value of Seller’s remaining assets exceeds the amount that will be required to be paid on or in respect of Seller’s debts and other liabilities (including known contingent liabilities and any Unassumed Liability) as they mature.

Section 5.8 Compliance with Law; Permits.

(a) Seller has complied and is in material compliance with all applicable federal, state, and local laws, statutes, licensing requirements, rules, and regulations, and judicial or administrative decisions applicable to Seller, its business or the Assets. There is no order issued, investigation, or proceeding pending or threatened, or notice served with respect to any violation of any law, ordinance, order, writ, decree, rule, or regulation issued by any federal, state, local, or foreign court or governmental or regulatory agency or instrumentality applicable to Seller, its business or the Assets.

(b) Seller and its employees have been granted all Permits from federal, state, and local government regulatory bodies necessary to carry on the Business, all of which are currently valid and in full force and effect. Schedule 2.1(e) correctly describes each Permit materially affecting, or relating in any material way to, Seller’s business or the Assets, together with the name of the government agency or entity issuing such Permit. Except as set forth on Schedule 5.8: (i) each such Permit that is identified on Schedule 2.1(e) is transferable by Seller to Buyer; and (ii) none of such Permits will be terminated or impaired or become terminable as a result of the transactions contemplated by this Agreement; and (iii) upon consummation of the transactions contemplated by this Agreement, Buyer will have all of the right, title and interest in such Permits.

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Section 5.9 Governmental Consents. No consent, approval, order, or authorization of, or registration, qualification, designation, declaration, or filing with any federal, state, local, or foreign governmental authority on the part of Seller is required in connection with the consummation of the transactions contemplated hereunder.

Section 5.10 Proprietary Rights.

(a) Set forth on the Schedule 2.1(f) is a complete and accurate list and brief description of all Proprietary Rights owned, used or held by Seller. The Proprietary Rights are all the intellectual property and proprietary rights necessary or useful for the operation of the Business as it is currently conducted and has been conducted prior to the Closing, excluding shrink wrap licenses. Seller has complete and undisputed title and ownership of or adequate rights (license or otherwise) to utilize all Proprietary Rights without any conflict with or infringement of the rights of any other Person. There are no outstanding options, licenses, or agreements of any kind relating to the Proprietary Rights, nor is Seller or the Business bound by or a party to any options, licenses or agreements of any kind with respect to the proprietary rights of any other Person (except for software licenses rightfully obtained by Seller arising from the purchase of “off the shelf” or other standard products).

(b) Neither Seller nor any Affiliate, director, officer, employee or agent of Seller has infringed, or is currently infringing in connection with the Business on, any proprietary right of any other Person. Neither Seller nor any Affiliate, director, officer, employee, consultant, contractor, representative, agent or advisor is aware that any Person has alleged or is alleging that Seller (or any director, officer, employee, consultant, contractor or agent of Seller) has violated in connection with the business any proprietary right of any other Person.

(c) Neither Seller nor the Shareholders are aware that any of its directors, officers, employees, consultants or contractors of Seller are obligated under any agreement (including without limitation licenses, covenants or commitments of any nature), or subject to any judgment, decree, writ or order of any court or administrative agency, that would interfere with the use of such director’s, officer’s, employee’s, consultant’s or contractor’s best efforts to promote the interests of Seller or that would conflict with the Business as currently conducted or proposed to be conducted. Neither the execution nor delivery of this Agreement or any other Closing Document, nor the carrying on of the Business as currently conducted or proposed to be conducted, will conflict with or result in a breach of the terms, conditions or provisions of, or constitute a default under, any contract, covenant or instrument under which Seller uses the Proprietary Rights.

(d) None of the trade secrets or other confidential or proprietary information relating to Seller or the Business, the value of which to Seller is contingent upon maintenance of the confidentiality thereof (including, without limitation, standards, processes, procedures, formulae, techniques, know-how, research and development results, business or product information or plans, and customer lists), has been disclosed by Seller (or any of its directors, officers or employees) to any Person other than officers, employees of or consultants to Seller. Each officer or employee of, or consultant to, Seller has executed a written agreement with Seller protecting the Proprietary Rights, preventing the disclosure of such Proprietary Rights, and assigning to Seller any rights such Person has or might have in such Proprietary Rights. Seller and the Shareholders, after reasonable investigation, are not aware that any of Seller’s employees, officers or consultants are in violation of any such agreement, and Seller and the Shareholders will use their best efforts to prevent any such violation through the Closing Date.

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Section 5.11 Contracts and Commitments.

(a) The Contracts described on Schedule 2.1(c) list all outstanding agreements, contracts, contract rights, leases, licenses, purchase and sale orders, and other agreements to which Seller is a party or to which any of the Assets are subject, including the parties and the dates thereto.

(b) Except as set forth on Schedule 5.11, Seller has performed all of its obligations under the terms of each Contract to the full extent that such obligations were required to be performed within the two year period prior to the date of this Agreement, and Seller is not in default under any such Contract; and Seller will perform, up to and through the Closing Date, all of Seller’s obligations under each such Contract to the full extent such obligations are required to be performed on or before the Closing Date. Except as set forth on Schedule 5.11, no event or omission has occurred which but for the giving of notice or lapse of time or both would constitute a default or breach by any party thereto under any such Contract. Each Contract is valid and binding on all parties thereto and in full force and effect. Neither Seller nor any of its directors, officers or employees has received any notice of default, cancellation, or termination in connection with any such Contract, nor is Seller or any of its directors, officers or employees aware of any intention of any party to any such Contract to provide any such notice.

(c) Schedule 5.11 lists completely and accurately all Contracts, under the heading “Contracts Requiring Novation or Consent to Assignment,” that by their written terms require any novation or consent in connection with or as a result of the assignment to Buyer pursuant to this agreement prior to the Closing Date. Seller shall seek to obtain the novation or consent to assignment with respect to each Contract listed under the heading “Contracts Requiring Novation or Consent to Assignment” on Schedule 5.11.

Section 5.12 Properties.

(a) Seller owns no real property. Schedule 5.12 lists all real or personal property leased or subleased to Seller. Seller has delivered to Buyer correct and complete copies of the leases and subleases (including any and all amendments to such leases and subleases) listed on Schedule 5.12.

(b) The equipment and other tangible assets that Seller owns or leases are free from material defects, have been maintained in accordance with normal industry practice, and are in operating condition and repair (subject to normal wear and tear) and are usable in the ordinary course of business.

(c) With respect to the property and assets it leases (whether such property or assets are real or personal), Seller is in material compliance with such leases and holds a valid leasehold interest free of any Liens except for Permitted Encumbrances.

Section 5.13 Assets; Title to the Assets.

(a) Seller has not experienced any damage, destruction, or loss (whether or not covered by insurance) to its property (including any Asset) which has had or could be expected to have a Material Adverse Effect. There has not occurred, during the twelve (12) months preceding the date of this Agreement and preceding the Closing Date, any sale, lease or disposition of, or any agreement to sell, lease or dispose of, any of the assets of Seller, other than sales, leases, or dispositions in the ordinary course of business consistent with prior practice.

(b) The Assets include, without limitation, (i) all property in which Seller has any right, title, and interest that is necessary to operate the Business in the same manner as the Business was operated by Seller prior to the Closing Date, and (ii) all of the operating assets of Seller relating to the Business. Except for Permitted Encumbrances or as set forth on Schedule 5.13, Seller has good and

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marketable title to the Assets free and clear of any Liens, except as listed as Permitted Encumbrances. Any and all Liens affecting the Assets, with the exception of Permitted Encumbrances, shall be terminated on or prior to the Closing, and Seller shall transfer the Assets to Buyer free and clear of all such Liens. By virtue of the deliveries made at the Closing, Buyer will obtain good and marketable title to the Assets.

Section 5.14 Litigation. Except as set forth on Schedule 5.14, there is no claim, litigation, arbitration, action, suit, or proceeding, administrative, judicial or otherwise, pending or threatened relating to Seller or the Business or involving the Assets, at law or in equity, before any federal, state, local, or foreign court, regulatory agency, or other governmental authority, including, without limitation, any unfair labor practice or grievance proceeding or otherwise, or before any private arbitration or mediation firm or panel. There are no judgments, or outstanding orders, injunctions, decrees, stipulations or awards (whether rendered by a court or administrative agency or by arbitration) relating to Seller or the Business or involving the Assets.

Section 5.15 No Conflict or Default. Neither the execution and delivery of this Agreement, the Ancillary Agreements executed and delivered by Seller or any of the other Closing Documents, nor compliance with the terms and provisions of this Agreement, any Ancillary Agreement or any other Closing Document, including without limitation, the consummation of the transactions contemplated by this Agreement, any Ancillary Agreement or any other Closing Document, will violate any statute, regulation, or ordinance of any governmental authority, or conflict with or result in the breach of any term, condition, or provision of any agreement, deed, contract, mortgage, indenture, writ, order, decree, legal obligation, or instrument to which Seller is a party or by which Seller or any of the Assets are or may be bound, or constitute a default (or an event which, with the lapse of time or the giving of notice, or both, would constitute a default) thereunder.

Section 5.16 Labor Relations.

(a) Except as set forth on Schedule 5.16, Seller is in material compliance in all material respects with Title VII of the Civil Rights Act of 1964, as amended, the Fair Labor Standards Act, as amended, the Occupational Safety and Health Act of 1970, as amended, all applicable federal, state, and local laws, rules, and regulations relating to employment, and all applicable laws, rules and regulations governing payment of minimum wages and overtime rates, and the withholding and payment of taxes from compensation of employees.

(b) There is no written or oral separation, severance or golden parachute agreement with any service provider of Seller, except as set forth on Schedule 5.16. All employment relationships, whether written or oral, between Seller and its employees associated with the Business are “at will.”

(c) Schedule 5.16 lists all the employees of Seller, under the heading “Employees,” and all the consultants to Seller, under the heading “Consultants,” that provide services for Seller and their applicable position, and the annual compensation (for employees, salary, bonuses and other benefits; and for consultants, consulting fees and other compensation) of each such employee or consultant as of the Closing Date. No officer or employee of Seller has resigned, excepting the employee listed in Schedule 5.16, or been terminated in the past twelve months; and neither Seller nor Shareholders are aware of the impending resignation or termination of any current officer or employee or of any reasonable basis therefore.

(d) At no time during the twelve (12) months preceding the date of this Agreement and preceding the Closing Date did Seller have one hundred (100) or more employees. Seller has not

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violated, and in connection with the consummation of the transactions contemplated by this Agreement will not violate, the Worker Adjustment and Retraining Notification Act or any similar state or local law, rule or regulation.

(e) Except as set forth on Schedule 5.16, all payments due from Seller on account of employee health and welfare insurance have been paid or will be paid prior to the Closing Date. Except as set forth on Schedule 5.16, all severance, bonus and vacation payments by Seller or the Business which are or were due under the terms of any agreement have been paid or will be paid prior to the Closing Date. All payments due and listed in Schedule 5.16 have been included in the determination of the Net Current Liabilities listed in Section 5.7 above.

(f) Except in the ordinary course of business consistent with prior practice, neither the Seller nor the Shareholders have made any loan to, entered into any transaction with, made any changes in any employment or consulting terms with, or granted any salary or compensation increase, bonus or extraordinary payment to, any director, officer or employee of or consultant to Seller or to any Affiliate of any of any such director, officer, employee or consultant.

(g) There does not exist any collective bargaining agreement relating to Seller, the Business or the Assets. No labor organization or group of employees of Seller has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions seeking a representation proceeding presently pending or threatened to be brought or filed, with the National Labor Relations Board or any other labor relations tribunal or authority. There are no organizing activities, strikes, work stoppages, slowdowns, lockouts, arbitrations or material grievances, or other labor disputes pending or threatened against or involving Seller.

Section 5.17 Brokers’ and Finders’ Fees. Except as referenced in the Schedule 5.17, neither the Seller nor the Shareholder are obligated to pay any fees or expenses of any broker or finder in connection with the origin, negotiation, or execution of this Agreement or any of the Ancillary Agreements or in connection with any transactions contemplated hereby or thereby.

Section 5.18 Customers. Seller has furnished Buyer with complete and accurate copies or descriptions of all current agreements with Seller’s customers, as such agreements exist as of the date of this Agreement. Seller shall provide Buyer with complete and accurate copies or descriptions of any customer agreements (or sales proposals made to customers) made, modified or terminated on or after the date of this Agreement through the Closing Date. Except as set forth on Schedule 5.18, neither Seller nor Shareholders have received any notice that there has been a loss of, or any business cancellation by, any customer of Seller, and neither Seller nor Shareholder knows of any reasonable basis for any such loss.

Section 5.19 Books and Records. The books of account, minute books, stock record books, and other records of Seller, all of which have been made available for inspection to Buyer and its representatives, are full, complete and accurate and have been maintained in accordance with sound and reasonable business practices. At the Closing, all of the books and records of Seller, other than the minute books and stock records, will be in the possession of Buyer and at the Facilities.

Section 5.20 Accounts Receivable. The amount of all Accounts Receivable, unbilled invoices and other debts due or recorded in the records and books of account of Seller as being due to Seller as at the Closing Date relating to the Business will be good and payable in the ordinary course of business consistent with past practice, net of allowances for doubtful accounts and discounts; no contest with respect to the amount or validity of any amount is pending; and none of such Accounts Receivable or other debts is or will be as of the Closing Date subject to any counterclaim, return or set-off, except for

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those debts set forth as “Bad Debts” in the Financial Statements. The values at which Accounts Receivable are carried reflect the accounts receivable valuation policy of Seller which is consistent with its past practice and in accordance with [the policy defined on Schedule 5.20.

Section 5.21 Insurance. Seller has in full force and effect fire and casualty insurance policies, with extended coverage, sufficient in amount (subject to reasonable deductibles) to allow it to replace any of its properties or assets that might be damaged or destroyed. Seller has in full force and effect comprehensive general liability and errors and omissions insurance policies in amounts customary for companies similarly situated, each of which policies have commercially reasonable terms and provisions. Each of Seller’s insurance policies (a) is listed and summarized on Schedule 5.21 and (b) shall remain binding and in full force and effect through the Closing Date and otherwise in accordance with their respective provisions. Schedule 5.21 includes (i) a list of all claims made by or against Seller or any other Person employed by or contracted with Seller (whether currently or in the past), under any insurance policy maintained with respect to Seller during any part of the last ten (10) years, including for each such claim the name of the insuring entity, the policy number, the amount of insurance coverage, any applicable deductible, the nature and amount of the claim, and the resolution and status of the claim, and (ii) a list of all liability insurance coverage maintained with respect to Seller during any part of the last ten (10) years, including, for each applicable policy, the name of the insuring entity and the applicable policy number as well as the amount of insurance coverage, the premiums and deductible therefore. Seller has made available to Buyer true and complete copies of all insurance policies listed on Schedule 5.21.

Section 5.22 Environmental Matters. Seller, and the operation of the Business are (and, at all times, have been) in material compliance with all applicable Environmental Laws (as defined below) and orders or directives of any governmental Person having jurisdiction under such Environmental Laws. Seller has not received any citation, directive, letter or other communication, written or oral, or any notice of any proceeding, claim or lawsuit, from any Person arising out of the occupation of any of the premises by the Seller, or the conduct of Seller’s operations (including, without limitation the Business), and neither Seller nor Shareholder is aware of any basis therefore. With respect to the Business and the operation thereof after the Closing, Seller has no knowledge that any material expenditures are or will be required in order to comply with any Environmental Laws. As used herein: “Environmental Laws” shall mean any federal, state, local or foreign law, ordinance, rule, regulation, permit and authorization pertaining to the protection of human health or the environment; “Hazardous Materials” means any chemical, pollutant, contaminant, waste, toxic substance, hazardous substance, hazardous waste, radioactive material, asbestos, genetically modified organism, or petroleum or petroleum product, as any such category is defined or otherwise described in any applicable Environmental Law; and “Reportable Release” means any release of Hazardous Materials that is required under any applicable Environmental Law to be reported to any governmental body or Person.

Section 5.23 Affiliate Relationships. Except as described in Schedule 5.23, neither Seller nor any director, officer or employee of Seller (nor any spouse of any such Person, or any trust, partnership, limited liability company, corporation, proprietorship, association or other business entity in which any such Person has or has had a material economic interest), has or has had, directly or indirectly, (a) an interest in any Person which provides or sells a material amount of services or products that Seller provides or sells or proposes to provide or sell, or (b) any interest in any Person that purchases from or sells or provides to Seller any material amount of products or services. Except as described in the Schedule 5.23, no director, officer or employee of Seller (or any spouse of any such Person, or any trust, partnership, limited liability company, corporation, proprietorship, association or other business entity in which any such Person has or has had a material economic interest), has or has had, directly or indirectly, any beneficial interest in any Contract, other than in its capacity as a director, officer, employee or shareholder.

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Section 5.24 Complete Disclosure. Seller or Shareholders have provided Buyer with all the information that Buyer (or its members, representatives or advisors) has requested for deciding whether to purchase the Assets and all information that Seller reasonably believes is necessary to enable Buyer to make such decision. No representation or warranty by Seller or Shareholders in this Agreement or any of the Ancillary Agreements or the Closing Documents contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact necessary to make the statements contained herein or therein in the context in which they were made not misleading.

ARTICLE VI: SHAREHOLDER REPRESENTATIONS

Each Shareholder for itself and only for itself represents as follows:

Section 6.1 Ownership. The Shareholder is the record and beneficial owner of all Issued Shares as listed next to its name on Schedule 5.2.

Section 6.2 Authority. The Shareholder has the authority to enter this Agreement and each Closing Document to which it is a party. This Agreement and each Ancillary Agreement to which it is a party have been duly executed by the Shareholder.

Section 6.3 Investment Representations. Each Shareholders acknowledges that any capital stock issued by Buyer to the Shareholder in connection with the Earnout Payment are being transferred in reliance upon exemptions from registration based, in part, upon Shareholders’ representations contained herein. The Shareholder is acquiring such securities for its own account and not with a view to, or for sale in connection with, any distribution thereof. The Shareholder acknowledges that such securities may not be sold or transferred unless such sale or transfer is registered or qualified with the appropriate securities authorities or unless an opinion of counsel, reasonably satisfactory to Buyer, is rendered that there then exists an exemption from such registration or qualification applicable to such sale or transfer or unless such securities are transferable pursuant to Rule 144.

Section 6.4 No Shareholder has ever (i) made a general assignment for the benefit of creditors, (ii) filed, or had filed against such Shareholder, any bankruptcy petition or similar filing, (iii) suffered the attachment or other judicial seizure of all or a substantial portion of such Shareholder’s assets, (iv) admitted in writing such Shareholder’s inability to pay his or her debts as they become due, or (v) taken or been the subject of any action that may have an adverse effect on his ability to comply with or perform any of his covenants or obligations under this Agreement or any of the Ancillary Agreements.

Section 6.5 Each Shareholder shall make best effort during his course of employment with the Buyer following the Closing Date to (i) obtain any consents with respect to the assignment to Buyer of any contractual rights of Seller and (ii) to convince as many of Seller’s customers (including those listed in Schedule 2.1(c)) to enter into the standard online registration agreements of Buyer so long as the Shareholders and Buyer mutually agree that such transition to Buyer’s agreements will not jeapordize the relationship with such customers.

Section 6.6 Immediately following the Closing Date, Seller shall cease using the name “Do It Sports” or any related names or logos.

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ARTICLE VII: EMPLOYEE BENEFIT PLANS AND EMPLOYEE MATTERS

Section 7.1 Employee Benefit Plan and Employment Representations. Seller and each Shareholder represents, warrants and covenants to Buyer that neither Seller nor the Business nor any ERISA Affiliate of Seller (i) maintains, contributes to or is required to contribute to any Employee Plan for the benefit of any Employee, or with respect to which Seller or any ERISA Affiliate of Seller has had, currently has or may have any liability or obligation, or (ii) has ever maintained, contributed to, or been required to contribute to any such Employee Plan.

Section 7.2 Benefit Plan and Employment Agreement Liabilities Not Assumed. Except for those liabilities expressly set forth on Schedule 3.1a, Seller and its ERISA Affiliates shall retain any and all liabilities relating to, arising from, or resulting out of any Employee Plan or any Employment Agreement and any and all such liabilities shall be Unassumed Liabilities.

Section 7.3 Employees and Offers of Employment. Any offers of employment by Buyer to Seller’s employees shall be at such salary or wage and benefit levels and on such other terms and conditions as Buyer shall in its sole discretion deem appropriate. Buyer has made offers of employment effective and contingent upon the Closing to the employees of Seller listed on Schedule 7.3 hereto, and Seller shall use its best efforts to assist Buyer in securing an employment relationship with each such individual.

Section 7.4 Certain Employee-Related Definitions. As used in this Article VI or otherwise in this Agreement, the following terms have the following meanings: (a) “ERISA Affiliate” shall mean any other Person under common control with the Seller within the meaning of Code Section 414(b), (c), (m) or (o) and the regulations issued thereunder; (b) “Employee Plan” shall mean any plan, program, policy, practice, contract, agreement or other arrangement providing for compensation, retirement, severance, separation or termination pay, deferred compensation, performance awards, stock or stock-related awards, fringe benefits, or other employee benefits or remuneration of any kind, whether written or unwritten or otherwise, funded or unfunded, including without limitation, each “employee benefit plan,” within the meaning of Section 3(3) of ERISA; (c) “Employee” shall mean any current or former or retired employee or consultant of Seller or any Affiliate of Seller; (d) “Employment Agreement” shall mean each management, employment, severance, consulting, relocation, repatriation, expatriation, visas, work permit or other agreement, contract or understanding between Seller or any Affiliate of Seller, on the one hand, and any Employee, on the other hand; and (e) “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

ARTICLE VIII: TAX MATTERS

Section 8.1 Tax Matters. Seller and Shareholders represent, warrant and covenant to Buyer that except as otherwise disclosed in Schedule 8.1:

(a) There is no basis for any authority or Person to assess any additional Taxes upon Seller or the Business for any period for which Tax Returns have been filed. There is no dispute or claim concerning any Tax liability of Seller or the Business either (i) claimed or raised by any authority in writing or (ii) as to which Seller or any Affiliate, employee, consultant, contractor, representative or agent of Seller has knowledge based upon personal contact with any agent of such authority. Seller has not granted any waiver of any statute of limitations with respect to any Tax.

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(b) Seller has paid all Taxes and all interest and penalties due thereon and payable by it which will have been required to be paid on or prior to the Closing Date, the non-payment of which would result in a Lien on any Asset, would otherwise adversely affect the Business or would result in Buyer becoming liable or responsible therefor.

(c) Seller has paid all Tax liabilities, assessments, interest and penalties which shall become due or shall have accrued (i) on account of the operations of Seller or the Business or the ownership of the Assets on or prior to the Closing or (ii) on account of the sale to Buyer of the Assets by Seller.

Section 8.2 Certain Tax-Related Definitions. As used in this Article VIII or otherwise in this Agreement: (a) the term “Tax” means any net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, franchise, capital, paid-up capital, profits, green-mail, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit tax, custom, duty or other tax, governmental fee or other like assessment or charge or any kind whatsoever, together with any interest or any penalty, addition to tax or additional amount imposed by any govern-mental authority (domestic or foreign) responsible for the imposition of any such tax; and (b) the term “Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

ARTICLE IX: REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller and to each Shareholder, as of the date hereof and as of the Closing Date, that:

Section 9.1 Organization of Buyer. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of California, and has all requisite power and authority to own and operate its business.

Section 9.2 Authorization and Enforceability. Buyer has full corporate power and corporate authority to make, execute, deliver, perform this Agreement and the agreements contemplated by this Agreement and to consummate the transactions contemplated hereby and thereby, and the execution, delivery and performance of and the consummation of this Agreement and the transactions contemplated hereby by Buyer, have been duly authorized by all necessary corporate action on the part of Buyer. This Agreement constitutes the legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with their terms, and the other documents and instruments contemplated hereby will be, when executed and delivered, by Buyer, the legal, valid and binding obligations of Buyer enforceable against each in accordance with their respective terms.

Section 9.3 No Violation of Laws or Agreements. The execution, delivery and performance of this Agreement do not, and the consummation of the transactions contemplated by this Agreement and the compliance with the terms, conditions and provisions of this Agreement and the other agreements contemplated hereby, will not, (a) contravene any provision of the Certificate of Incorporation or Bylaws (or other constitutive documents) of Buyer, or (b) violate or result in a breach of or constitute a default (or an event which might, with the passage of time or the giving of notice, or both, constitute a default) under, or result in or permit the termination or amendment of any provision of, or result in or permit the acceleration of the maturity or cancellation of performance of any obligation under any indenture, deed of trust, mortgage, loan or credit agreement, license, permit, contract, lease, or other agreement, instrument

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or commitment to which Buyer is a party or by which its assets may be bound or affected, or any judgment, decree or order of any court or Authority, domestic or foreign, or any applicable law, rule or regulation.

Section 9.4 Consents. Except as set forth in Schedule 9.4, no consent, approval or authorization of, or registration or filing with, any Person is required in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby by Buyer, the failure to obtain or make which, individually or in the aggregate, could be expected to prevent Buyer from consummating and performing the transactions contemplated hereby.

Section 9.5 Brokers’ and Finders’ Fees. Buyer is not a party to any agreement that would obligate any Person to pay any fees or expenses of any broker or finder as a consequence of the origin, negotiation, or execution of this Agreement or any transaction contemplated hereby.

ARTICLE X: COVENANTS OF SELLER

Section 10.1 Conduct of the Business.

(a) During the period from the date hereof through the Closing Date, Shareholders and Seller (directly and through its directors, officers, employees, consultants, contractors, representatives, agents and advisors) shall carry on and use their best efforts to preserve the Assets, the Business and relationships with customers, suppliers, employees, consultants, contractors, representatives, agents, licensees and others with respect to the Business in substantially the same manner as Seller did prior to the date hereof. If there occurs any deterioration in any relationship between Seller, on the one hand, and any customer, supplier, employee, consultant, contractor, representative, agent or advisor of Seller, on the other hand, then Seller will promptly bring such information to the attention of Buyer in writing and Seller will use its best efforts to repair and restore such relationship.

(b) During the period from the date hereof through the Closing Date, Seller or Shareholders will not and will not permit and will instruct their respective Affiliates, directors, officers, employees, consultants, contractors, representatives, agents or advisors of Seller to not, without the prior written consent of Buyer: (i) transfer or license to any Person any rights to any of the Proprietary Rights; (ii) change, in any way, Seller’s method of operating the Business or Seller’s accounting practices or record-keeping practices relating thereto; (iii) sell, lease, license or otherwise dispose of any of the Assets, except in the ordinary course of business consistent with prior practice; (iv) modify, waive, change, amend, release, rescind, make an accord and satisfaction of, or terminate any Contract or any term, condition, or provision thereof, other than by satisfying any such Contract by performance in accordance with the terms thereof in the ordinary course of business consistent with prior practice; (v) allow any of the Assets to become subject to any Lien except Permitted Encumbrances; (vi) commit any act or omission that might materially impair or jeopardize Buyer’s use or ownership of the Assets after the Closing Date; or (vii) take, or agree in writing or otherwise to take, any of the actions described in subsections (i) through (vi) above.

(c) Neither Seller or any Shareholder nor any director, officer, employee of Seller will (i) take or agree or commit to take any action that would make any representation and warranty of Seller or Shareholder hereunder inaccurate in any material respect at, or as of any time prior to, the Closing Date, or (ii) omit or agree to omit to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time, except for actions taken in the ordinary course of business.

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Section 10.2 Access to Information. From the date hereof until the Closing Date, Seller will: (a) give Buyer, its counsel, financial advisors and other authorized representatives full access to the offices, properties, books and records of Seller; (b) furnish to Buyer, its counsel, financial advisors and other authorized representatives such financial and operating data and other information relating Seller or the Assets as such Persons may reasonably request; and (c) instruct directors, officers, employees, consultants, contractors, representatives, agents and advisors (including legal counsel and financial or accounting advisors) of Seller to fully cooperate with Buyer in its investigation of Seller, the Business and the Assets.

Section 10.3 Notices of Certain Events. Seller shall promptly notify (to the extent Seller or any of Seller’s directors, officers, employees, representatives, agents or advisors has received notice or otherwise has knowledge thereof) Buyer in writing of: (a) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement; (b) any notice or other communication from any governmental or regulatory agency or authority in connection with the transactions contemplated by this Agreement; and (c) any actions, suits, claims, investigations or proceedings commenced or threatened against, relating to or involving or otherwise affecting Seller, the Business or the Assets that relate to the consummation of the transactions contemplated by this Agreement or that, if pending on the date of this Agreement, would have been required to have been disclosed.

Section 10.4 No Solicitations. Until such date, if any, as this Agreement is terminated pursuant to Article XIV (the “Termination Date”), Seller or Shareholders will not and will not permit and will instruct their respective Affiliates, directors, officers, employees, consultants, contractors, representatives, agents or advisors of Seller to not, without the prior written consent of Buyer: directly or indirectly or any Person retained by any of the foregoing) solicit or encourage (including by way of furnishing information), or take any other action to facilitate, any inquiries or the making of any proposal which constitutes, or may reasonably be expected to lead to, any proposal to (a) buy, or otherwise dispose of, any portion of the Assets or (b) regarding any acquisition of Seller, including without limitation any acquisition of any material portion of the assets of Seller (each, a “Third Party Acquisition”). Seller and Shareholders agree that any such actions (other than negotiations with Buyer) in progress as of the date of this Agreement will be suspended through the Termination Date and that, in no event, will Seller or Shareholders accept, agree to enter or otherwise enter into any agreement concerning any such Third Party Acquisition transaction from the date hereof through the Termination Date. Seller or Shareholders will notify Buyer in writing immediately after receipt by Seller or Shareholder (or any of their respective Affiliates, directors, officers, employees, consultants, contractors, representatives, agents or advisors) of any unsolicited offers or inquiries regarding a Third Party Acquisition. Such notice to Buyer will indicate in reasonable detail the identity of the Person seeking a Third Party Acquisition and the terms and conditions thereof.

Section 10.5 Lien Release. Prior to the Closing Date, Seller shall obtain a release of any and all Liens on each of the Assets, other than Permitted Encumbrances.

Section 10.6 Affiliate Relationships. Seller shall have cancelled, or modified on terms acceptable to Buyer in its sole discretion, each Contract to which Seller, on the one hand, and any Shareholder, any Shareholder family member, any Seller employee, any Affiliate of Seller or Shareholders, or any Affiliate of any of the foregoing, on the other hand, are among the parties thereto, except such contracts as were entered into in the Person’s capacity as an officer, employee, investor or shareholder. A list of all such contracts other than Excluded Assets is set forth in Schedule 10.6.

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Section 10.7 Assignment of Leases. On or before the Closing Date and contingent upon consummation of the Closing, Seller shall obtain the consent of the lessors of the Facilities to assign the leases for such Facilities to Buyer, if such consent can be reasonably obtained. If such consent cannot be so obtained, Seller and Buyer shall enter into such arrangements as will permit Buyer to occupy and use the Facilities as if it rather than the Seller was the lessee.

Section 10.8 Post Closing Delivery of Financial Statements. After the date hereof Seller shall deliver to Buyer, by the 17^th of April, the March 31, 2004 unaudited balance sheet and the related unaudited statements of income (the “Final Financial Statements”) prepared in a manner and containing information consistent with Seller’s current practices and certified by Seller and Shareholders as to compliance with Section 5.5. The Final Financial Statements shall be attached hereto as Exhibit G.

ARTICLE XI: COVENANTS OF THE PARTIES

The parties hereto each agree that:

Section 11.1 Best Efforts; Further Assurances.

(a) Subject to the terms and conditions of this Agreement, each party will use its best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable to consummate the transactions contemplated by this Agreement or any Ancillary Agreement or other Closing Document, including without limitation: (i) the subsequent transfer or assignment of any of the Assets (including without limitation any Contracts or Proprietary Rights) that were not transferred or assigned at the Closing; and (ii) obtaining any third-party consents to the transactions contemplated by this Agreement. Each party agrees to execute and deliver such other documents, certificates, agreements and other writings and to take such other actions as may be necessary or desirable in order to consummate or implement expeditiously the transactions contemplated by this Agreement, the Ancillary Agreements or the Closing Documents.

(b) Seller hereby constitutes and appoints, effective as of the Closing Date, Buyer and its successors and assigns as the true and lawful attorney of Seller with full power of substitution in the name of Buyer or in the name of Seller, but for the benefit of Buyer (i) to collect for the account of Buyer any Assets and (ii) to institute and prosecute all proceedings which Buyer may in its sole discretion deem proper in order to assert or enforce any right, title or interest in, to or under the Assets, and to defend or compromise any and all actions, suits or proceedings in respect of the Assets. Buyer shall be entitled to retain for its own account any amounts collected pursuant to the foregoing powers, including any amounts payable as interest in respect thereof.

Section 11.2 Confidentiality. Prior to and through the Closing Date, each party hereto shall treat as confidential all information it receives regarding (a) the existence and terms of this Agreement, (b) the transactions contemplated hereby and (c) the other parties, and no party will, without the prior written consent of the other parties hereto, disclose any such information to any Person other than to the members, employees, legal counsel, financial advisors or accountants of such party who have a reason to review such information in connection with the transactions contemplated hereby (each, an “Advisor”). Notwithstanding the foregoing, a party’s obligation to maintain confidentiality does not apply to information which (i) is or becomes generally available to the public other than as a result of a disclosure by such party or any Advisor thereof, (ii) was available to such party or any Advisor thereof on a non-confidential basis prior to its disclosure by such party or any Advisor thereof, (iii) becomes available to such party or any Advisor thereof from a Person other than such party or any Advisor thereof who is not

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otherwise known by such party or any Advisor thereof to be bound by a confidentiality agreement, (iv) is required to be disclosed pursuant to any law, rule or regulation or pursuant to any order or decree of any appropriate court or governmental agency, or (v) is independently developed by such party or any Advisor thereof without reliance on the disclosing party’s confidential information. Notwithstanding anything to the contrary in this provision or otherwise in this Agreement: Any party may disclose the terms of this Agreement and information regarding the transactions contemplated by this Agreement to the extent such information is reasonably required to be disclosed to third parties in furtherance of the transactions contemplated by this Agreement; and Buyer may disclose the terms of this Agreement and information regarding the transactions contemplated by this Agreement to the extent such information is reasonably required to be disclosed to third parties in furtherance of Buyer’s capital raising and financing activities including the filing of a Form S1 Registration Statement.

Section 11.3 Expenses. Except as otherwise expressly set forth in this Agreement, all costs and expenses incurred by any party hereto in connection with this Agreement or the transactions contemplated hereby shall be paid by the party incurring such expenses.

ARTICLE XII: CONDITIONS TO CLOSING

Section 12.1 Conditions to the Obligations of Each Party. The obligations of Buyer and Seller to consummate the Closing are subject to the satisfaction of the following conditions: (a) no provision of any applicable law or regulation and no judgment, injunction, order or decree shall (i) prohibit the consummation of the Closing or (ii) restrain, prohibit or otherwise interfere with the effective operation or enjoyment by Buyer of all or any material portion of the Assets; and (b) all actions by or in respect of or filings with any governmental body, agency, official or authority required to permit the consummation of the Closing shall have been taken or made.

Section 12.2 Conditions to Obligation of Buyer. The obligation of Buyer to consummate the Closing is subject to the satisfaction of each of the following further conditions, unless such conditions have been expressly waived by Buyer in writing:

(a) The results of the due diligence investigation into the state of Seller, its financial condition, the Assets and the future prospects of the Business are not materially different than set forth in the final Disclosure Schedules.

(b) (i) Seller and each Shareholder shall have performed in all material respects all of their respective obligations hereunder required to be performed by them at or prior to the Closing, (ii) the representations and warranties of Seller and the Shareholders contained in this Agreement or any Ancillary Agreement required to be executed and delivered by Seller or Shareholders or in any Closing Document delivered by Seller or Shareholders pursuant hereto, shall be true in all respects at and as of the Closing Date, as if made at and as of such time; and (iii) Buyer shall have received a certificate from each Shareholder and the President of Seller, signed by the party providing it, indicating such party’s satisfaction of clauses (i) and (ii) hereof.

(c) No court, arbitrator or governmental body, agency or official shall have issued any order, and there shall not be any statute, rule or regulation, restraining or prohibiting the consummation of the Closing or the ownership or effective operation by Buyer of the Assets after the Closing Date, and no proceeding challenging this Agreement or the transactions contemplated hereby or seeking to prohibit, alter, prevent or materially delay the Closing shall have been instituted by any Person before any court, arbitrator or governmental body, agency or official and be pending.

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(d) Seller shall have executed and delivered to Buyer each of the Ancillary Agreements and the Closing Documents required of it under this Agreement, including, without limitation, the Bill of Sale, the Assignment and Assumption Agreement and the Non-Competition Agreement.

(e) Seller and Buyer shall have obtained all necessary consents, novations, authorizations or approvals from all necessary governmental agencies or third parties, in each case in form and substance reasonably satisfactory to Buyer, and no such consent, novation authorization or approval shall have been revoked, withheld or violated.

(f) Buyer shall have received proof of the release of all Liens, except Permitted Encumbrances, with respect to the Assets.

(g) Each Permit identified on Schedule 2.1(e) shall have been transferred to Seller.

(h) Messr. Silinski and Chick of Seller shall have entered into the Employment Agreements and Non-Competition Agreements.

(i) Since February 29, 2004, there shall not have been any change in the business, operations or condition (financial or otherwise) of Seller, and no casualty shall have occurred to any of the Assets, which taken as a whole could have a Material Adverse Effect.

(j) The Shareholders shall deliver to Buyer executed agreements waiving their rights to pursue the Buyer under any deferred salary agreements.

Section 12.3 Conditions to Obligation of Seller. The obligation of Seller to consummate the Closing is subject to the satisfaction of the each of the following further conditions:

(a) No court, arbitrator or governmental body, agency or official shall have issued any order, and there shall not be any statute, rule or regulation, restraining or prohibiting the consummation of the Closing, and no proceeding challenging this Agreement or the transactions contemplated hereby or seeking to prohibit, alter, prevent or materially delay the Closing shall have been instituted by any Person before any court, arbitrator or governmental body, agency or official and be pending.

(b) Seller shall have received all documents it may reasonably request relating to the existence of Buyer and the authority of Buyer for this Agreement, all in form and substance satisfactory to Seller.

(c) Buyer shall have executed and delivered the Ancillary Agreements and other Closing Documents required of it under this Agreement.

(d) Seller shall have received the Purchase Price.

(e) The Ancillary Agreements shall be satisfactory to Seller.

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(f) The Company shall have entered into the Employment Agreements with Messrs. Silinski and Chick.

(g) The Escrow Agreement shall be satisfactory to Seller.

ARTICLE XIII: INDEMNIFICATION

Section 13.1 Indemnification of Buyer. Effective on the Closing Date and thereafter, Seller and Shareholders jointly and severally shall indemnify and hold harmless Buyer and its members, managers, shareholders, directors, officers, employees and agents (collectively, the “Indemnitees”), from and against, and shall compensate and reimburse each of the Indemnitees for, any and all damages, losses, penalties, deficiencies, obligations, claims, suits, proceedings, demands, assessments, judgments, expenses, costs, and liabilities, of any nature whatsoever, incurred by any of them, including without limitation reasonable attorneys’ and accountants’ fees (hereafter individually a “Loss” and collectively “Losses”), arising from or in connection with:

(a) any breach or alleged breach by Seller or Shareholders of any representation or warranty contained in this Agreement (including without limitation the Disclosure Schedule), any Ancillary Agreement or in any other Closing Document or document or writing delivered by Seller or Shareholders in connection with this Agreement;

(b) any breach or alleged breach of or any failure or alleged failure by Seller or Shareholders to perform or comply with any covenant, agreement or obligation contained in this Agreement (including without limitation the Disclosure Schedule), any Ancillary Agreement or any other Closing Document or document or writing delivered by Seller or Shareholder in connection with this Agreement;

(c) any claim made or litigation instituted by a third party relating to Seller’s ownership rights in and to the Assets;

(d) any liability or obligation (other than the Assumed Liabilities) of Seller or the Shareholders which relates to the ownership or use of any of the Assets, or the conduct of the Business or Seller or the Shareholders, for any period prior to or including the Closing Date, including but not limited to liabilities arising from or relating to any taxes imposed on Seller, the Business or any of the Assets for any period prior to or including the Closing Date;

(e) any liability or obligation, or claim made or litigation instituted, relating to the Unassumed Liabilities (including without limitation any liability or obligation, or claim made or litigation instituted, arising from, relating to, or in connection with any product or service provided by Seller (or any of its Affiliates, directors, officers, employees, consultants, contractors, representatives, agents or advisors), in whole or in part, on or prior to the Closing Date);

(f) any commission or compensation in the nature of any finder or brokerage fee for which Seller or either of the Shareholders, or any of their respective directors, officers, employees, representatives or agents, is or is claimed to be responsible;

(g) any Loss (other than the Assumed Liabilities) to which Buyer or any of the other Indemnitees may become subject and that arises directly or indirectly from or relates directly or indirectly to (A) any product produced or sold or any services performed by or on behalf of the Seller, (B) the

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presence of any Hazardous Material at any site owned, leased, occupied or controlled by the Seller on or at any time prior to the Closing Date, (C) the generation, manufacture, production, transportation, importation, use, treatment, refinement, processing, handling, storage, discharge, release or disposal of any Hazardous Material (whether lawfully or unlawfully) by or on behalf of the Seller, or (D) any failure to comply with any bulk transfer law or fraudulent transfer or conveyance law, or any similar law or regulation, in connection with any of the transactions contemplated by this Agreement; or

(h) any and all actions, suits, proceedings, demands, assessments or judgments, costs and expenses reasonably arising out of and relating directly or indirectly to any of the foregoing matters set forth in this Section 13.1.

Buyer’s right to indemnification, reimbursement or other remedy arising from or in connection with Seller’s or Shareholders’ representations, warranties, covenants, agreements or obligations contained in this Agreement (including without limitation the Disclosure Schedule), any Ancillary Agreement or any Closing document delivered by Seller or the Shareholders pursuant to this Agreement shall not be affected by (A) any investigation (including without limitation any environmental investigation or assessment) conducted by or on behalf of Buyer or (B) any information furnished to or any knowledge acquired (or capable of being acquired) by Buyer (or any of its Affiliates, members, managers, directors, officers, employees, representatives, agents or advisors) at any time, whether before or after the execution and delivery of this Agreement or the Closing Date. The waiver of any condition based upon the accuracy of any such representation or warranty, or on the performance of or compliance with any covenant, agreement or obligation, will not affect Buyer’s right to indemnification, reimbursement or other remedy arising from or in connection with such representations, warranties, covenants, agreements or obligations.

In the event Buyer exercises its right to indemnification pursuant to subsections 13.1(a) or (b), Buyer shall first seek indemnification from the Escrow Deposit pursuant to the terms of the Escrow Agreement. Only in the event the Escrow Deposit is not sufficient to satisfy all of Buyer’s indemnification rights under subsections 13.1(a) or (b), Buyer may seek indemnification from the Earn Out and the Additional Payment. The limitation on the indemnification obligations of the Seller and the Shareholders that is set forth in this paragraph shall not apply to any Loss arising directly or indirectly from any circumstance involving intentional misrepresentation or fraud on the part of Seller or either of the Shareholders, or any intentional breach of any covenant, agreement or obligation.

Section 13.2 Indemnification of Seller. Effective on the Closing Date and thereafter, Buyer shall indemnify and hold harmless Seller and its directors, officers, shareholders (including the Shareholders), employees and agents, from and against any and all Losses arising from or in connection with:

(a) any breach by Buyer of any representation or warranty contained in the this Agreement; or in any other agreement or document delivered in connection with this Agreement and the transaction contemplated by this Agreement;

(b) any breach of or any failure by Buyer to perform or comply with any covenant, agreement or obligation contained in this Agreement; or in any other agreement or document delivered in connection with this Agreement and the transaction contemplated by this Agreement;

(c) any claim made or litigation instituted by a third party relating to Buyer’s ownership rights in and to the Assets (unless such claim or litigation relates to the sale or transfer of the Assets from Seller to Buyer) or the Business;

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(d) any liability or obligation of Buyer which relates to the ownership or use of any of the Assets or the conduct of the Business subsequent to the Closing Date including liabilities arising out of the Assumed Liabilities, including but not limited to liabilities arising from or relating to any taxes imposed on Buyer or any of the Acquired Assets for any period subsequent to the Closing Date; or claim made or litigation instituted, relating to the failure to satisfy or make payment of Assumed Liabilities; or

(e) and all actions, suits, proceedings, demands, assessments or judgments, costs and expenses reasonably arising out of any of the foregoing matters set forth in this Section 13.2.

Section 13.3 Indemnification Procedure.

(a) Claims for Indemnification. Except for Third Party Claims described in Section 13.3(b) below, if an event giving rise to indemnification hereunder shall have occurred or is threatened, then the party seeking indemnification (“Indemnified Party”) promptly shall deliver to the party from whom indemnity is sought (“Indemnifying Party”) written notice thereof, stating that such event has occurred or is threatened, describing such event in reasonable detail and specifying or reasonably estimating the amount of the prospective Loss (which estimate or specification shall be non-binding) and the method of computation thereof (a “Claim”), all with reasonable particularity and containing a reference to the provisions of this Agreement in respect of which such right of indemnification is claimed or has arisen (the “Notice of Claim”). For purposes hereof, any Claim for indemnification shall be deemed to have been made as of the date on which the Notice of Claim is delivered in accordance with the terms of this Section 13.3.

(i) In the event the Indemnifying Party shall in good faith dispute the validity of all or any amount of a Claim for indemnification as set forth in the Notice of Claim, then such Indemnifying Party shall, within ten (10) days after delivery of the Notice of Claim, execute and deliver to the Indemnified Party a notice setting forth with reasonable particularity the grounds, amount of, and basis upon which the Claim is disputed (the “Dispute Statement”).

(ii) In the event the Indemnifying Party shall within ten (10) days after receipt of the Notice of Claim deliver to the Indemnified Party a Dispute Statement, then the portion of the claim described in the Notice of Claim disputed by such Indemnifying Party (the “Disputed Liability”) shall not be due and payable from such Indemnifying Party except in accordance with (A) a final decision of an arbitrator pursuant to an arbitration instituted under Section 14.1 of this Agreement or (B) a written agreement between the Indemnified Party and such Indemnifying Party stipulating the amount of the Admitted Liability.

(iii) In the event any Indemnifying Party shall not within ten (10) days after receipt of the Notice of Claim deliver to such Indemnifying Party a Dispute Statement identifying a Disputed Liability, then the amount of the claim described in the Notice of Claim, or if a Dispute Statement is delivered, the portion thereof not disputed as a Disputed Liability, shall be deemed to be admitted (the “Admitted Liability”) of such Indemnifying Party and shall, upon the incurring of an actual Loss arising therefrom, immediately be due and payable.

(b) Settlement of Third Party Claims. If the Indemnified Party shall receive notice of any Claim by a third party which is or may be subject to indemnification (a “Third Party Claim”), the Indemnified Party shall give the Indemnifying Party prompt written notice of such Third Party Claim and shall permit the Indemnifying Party, at its option, to participate in the defense of such Third Party Claim

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by counsel of its own choice and at its expense. If, however, the Indemnifying Party acknowledges in writing to the Indemnified Party the Indemnifying Party’s obligation to indemnify the Indemnified Party hereunder against all Losses that may result from such Third Party Claim, then the Indemnifying Party shall be entitled, at its option, to assume and control the defense of such Third Party Claim at its expense and through counsel of its choice after delivery of written notification.

(i) In the event the Indemnifying Party exercises its right to undertake the defense of any such Third Party Claim, the Indemnified Party shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party, at the Indemnifying Party’s expense, all witnesses, pertinent records, non-privileged materials and information in its possession or under its control relating thereto as is reasonably required by the Indemnifying Party. However, no such Third Party Claim may be settled by the Indemnifying Party without the written consent of the Indemnified Party, unless the settlement (A) involves only the payment of money by the Indemnifying Party, (B) does not include an admission of liability on the part of the Indemnified Party and (C) includes an unconditional release of the Indemnified Party. Similarly, no Third Party Claim shall be settled by the Indemnified Party without the written consent of the Indemnifying Party, which consent shall not be unreasonably withheld or delayed.

(ii) In the event the Indemnified Party is, directly or indirectly, conducting the defense against any such Third Party Claim, the Indemnifying Party shall cooperate with the Indemnified Party in such defense and make available to it all such witnesses, records, materials and information in its possession or under its control relating thereto as is reasonably required by the Indemnified Party.

13.4 Right of Setoff. Upon notice to Seller and each Shareholder specifying in reasonable detail the basis therefor, Buyer may set off any amount to which it may be entitled under this Article XIII against amounts otherwise payable under the Earnout Payment or the Additional Payment. Neither the exercise of nor the failure to exercise such right of setoff will constitute an election of remedies or limit Buyer in any manner in the enforcement of any other remedies that may be available to it.

13.5 Basket. No action or claim for indemnification shall be made or brought against Seller and the Shareholders unless the aggregate Loss of Buyer exceeds $50,000 in which event Buyer may seek indemnification for its entire Loss. No action or claim for indemnification shall be made or brought against Buyer unless the aggregate Loss of Seller and the Shareholders exceed $50,000, in which event Seller may seek indemnification for its entire Loss.

ARTICLE XIV: TERMINATION

Section 14.1 Grounds for Termination. This Agreement may be terminated at any time prior to the Closing: (a) by mutual written agreement of Seller and Buyer; (b) by either Seller or Buyer if, without fault of the terminating party, the Closing shall not have been consummated on or before the date five days after the date of execution of this Agreement; (c) by either Seller or Buyer if there shall be any law or regulation that makes the consummation of the transaction contemplated hereby illegal or otherwise prohibited or if consummation of the transactions contemplated hereby would violate any nonappealable final order, decree or judgment of any court or governmental body having competent jurisdiction; (d) by Buyer if Seller has breached or otherwise violated the provisions of Section 9.4; or (e) by either Buyer or Seller in the event of a material breach by the other party of any covenant, agreement, representation or warranty. The party desiring to terminate this Agreement pursuant to clauses (b), (c) or (e) shall give written notice of such termination to the other party.

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Section 14.2 Effect of Termination. In the event of a termination of this Agreement as provided in Section 14.1, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of Buyer or Seller or their respective officers, directors, shareholders, members, managers or Affiliates, except to the extent that such termination results from the material breach by a party hereto of any of its representations, warranties, covenants or agreements set forth in this Agreement; provided that Section 10.4 (No Solicitations), Section 11.2 (Confidentiality) Section 11.3 (Expenses), Article XIII (Indemnification), Section 14.2 (Effect of Termination), and Article XV (Miscellaneous) of this Agreement shall remain in full force and effect and survive any termination of this Agreement.

ARTICLE XV: MISCELLANEOUS

Section 15.1 Arbitration. Any controversy or claim arising out of or relating to this Agreement, or the making, performance, or interpretation thereof, including without limitation any controversy or claim arising out of or relating to Article XII, shall be settled by binding arbitration in the County of San Diego, State of California, under the then existing Commercial Arbitration Rules of the American Arbitration Association (except with respect to selection of the arbitrator(s), which shall be made in accordance with the provisions of this Section). The parties shall choose an arbitrator mutually acceptable to them; in the event the parties are unable to mutually agree upon an arbitrator within twenty (20) days after a party’s decision to arbitrate (and notice provided to the other parties of such decision), then the American Arbitration Association shall be asked to appoint one arbitrator to rule on the matter, such appointment to be in accordance with Commercial Arbitration Rules of the American Arbitration Association then in effect. The arbitrator selected shall be experienced in negotiating, making and consummating acquisition agreements. Each party to the dispute shall contribute equally to the payment of the arbitrator’s fees, including administrative fees of the American Arbitration Association. However, upon the arbitrator’s decision, the party against whom such decision is made shall pay the other side’s expenses, including without limitation attorneys’ fees and the arbitrator’s fees. Judgment on any award rendered by the arbitrator may be entered by any court of competent jurisdiction.

Section 15.2 Survival. The covenants, agreements, representations and warranties of the parties hereto contained in this Agreement or in any certificate or other writing delivered pursuant hereto or in connection herewith shall survive (without limitation): (i) the Closing and the sale of the Assets to Buyer; (ii) any sale or other disposition of any or all of the Assets by Buyer; and (iii) the death or dissolution of any party to this Agreement; provided, however, that, other than the representations and warranties contained in Section 5.3 hereof, which shall survive indefinitely, the representations and warranties of the parties hereto shall only survive until September 30, 2005; provided further, that if a Notice of Claim relating to any representation or warranty is given to an Indemnifying Party on or prior to September 30, 2005, then, notwithstanding anything to the contrary contained in this Section 15.2, such representation or warranty shall not so expire, but rather shall remain in full force and effect until such time as each and every Loss (including any indemnification claim asserted by any Indemnified Party) that is based directly or indirectly upon, or that relates directly or indirectly to, the matter described in such Notice of Claim has been fully and finally resolved, either by means of a written settlement agreement executed on behalf of the Indemnified Party and the Indemnifying Party or by means of a final, non-appealable judgment issued by a court of competent jurisdiction. In addition, notwithstanding anything to the contrary contained in this Section 15.2, if any Shareholder or the Seller had knowledge, on or prior to the Closing Date, of any circumstance that constitutes or that has given rise or could be expected to give rise, directly or indirectly, to any beach of any representation or warranty contained in this Agreement or in any certificate or other writing delivered pursuant hereto or in connection herewith, then such representation or warranty shall not expire, but rather shall remain in full force and effect for an unlimited

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period of time (regardless of whether any Notice of Claim relating to such representation or warranty is ever given).

Section 15.3 Notices. Any notices required or permitted to be given hereunder shall be in writing and shall be deemed delivered (a) two business days after being deposited in the mails, (b) one business day after being deposited with an express overnight courier service for delivery on the next business day or (c) the next business day after notice is sent by electronic facsimile transmission.

If to Buyer, to:	The Active Network, Inc. 1020 Prospect Street, Suite 250 La Jolla, CA 92037 Facsimile: 858.551.7619 Attention: Kory Vossoughi, General Counsel
If to Seller, to:	Do It Sports, Inc. 615 South Mansfield Ypsilanti, MI 48197 Facsimile: 734.544.7709 Attention: Thomas J. Silinski
and to:	180 Lake Shore Drive Lake Orion, MI 48362
With a copy to:	Pepper Hamilton LLP 100 Renaissance Center, Suite 3600 Detroit, MI 48243 Facsimile: 313.259.7926 Attention: Hugh D. Camitta
If to Shareholders, to: As set forth on Schedule of Shareholders with a copy to Pepper Hamilton LLP as provided above.

or to such other address a party gives notice of to the other parties.

Section 15.4 Amendments; No Waivers; Remedies. Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by Buyer and Seller, or in the case of a waiver, by the party against whom the waiver is to be effective. No failure or delay by either party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies provided in this Agreement shall be cumulative, and not exclusive, of any rights or remedies any party hereto may have at law, in equity, or otherwise.

Section 15.5 Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that neither Seller nor Shareholder may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of Buyer.

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Section 15.6 Governing Law. This Agreement shall be construed in accordance with and governed by the law of the State of California as applied to agreements among California residents entered into and to be performed entirely within California.

Section 15.7 Counterparts; Effectiveness. This Agreement may be executed in one or more counterparts, including by telefax signature, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

Section 15.8 Entire Agreement. This Agreement together with the Disclosure Schedule and Exhibits and the agreements contemplated by this Agreement constitute the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings and negotiations, both written and oral, between the parties with respect to the subject matter of this Agreement. No representation, inducement, promise, understanding, condition or warranty not set forth herein has been made or relied upon by either party hereto. Neither this Agreement nor any provision hereof is intended to confer upon any Person other than the parties hereto any rights or remedies hereunder.

Section 15.9 Severability. If any provision of this Agreement shall be held by a court of competent jurisdiction to be illegal, invalid or unenforceable, that provision shall be limited or eliminated to the minimum extent necessary so that this Agreement shall otherwise remain in full force and effect and enforceable.

Section 15.10 Captions. The captions and headings used herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.

Section 15.11 Legal Representation of the Parties. Each of the parties to this Agreement has been represented by such party’s own legal counsel in connection with this Agreement and the transactions contemplated hereby. This Agreement was negotiated by the parties with the benefit of the representation of such legal counsel, and any rule of construction or interpretation otherwise requiring this Agreement to be construed or interpreted against any party shall not apply to any construction or interpretation of this Agreement.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

SELLER:
DO IT SPORTS, INC.
By:	/s/ Thomas J. Silinski
Print:	Thomas J. Silinski
Title:	President & CEO
SHAREHOLDERS:
Sign:	/s/ Thomas J. Silinski
	Print: Thomas J. Silinski
Sign:	/s/ Bradford Chick
	Print: Bradford Chick
BUYER:
THE ACTIVE NETWORK, INC.
By:	/s/ Matt Landa
Name:	Matt Landa
Title:	President

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EX-3.1

Exhibit 3.1

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

THE ACTIVE NETWORK, INC.

THE ACTIVE NETWORK, INC., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “Corporation”), hereby certifies that:

ONE: The name of the Corporation is The Active Network, Inc. The corporation originally was incorporated under the name Racegate.com, Inc. and the original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware July 6, 1999.

TWO: Pursuant to Sections 242 and 245 of the General Corporation Law of the State of Delaware, this Amended and Restated Certificate of Incorporation restates and integrates and further amends the provisions of the Certificate of Incorporation of the Corporation as heretofore supplemented or amended.

THREE. The text of the Amended and Restated Certificate of Incorporation as heretofore amended or supplemented is hereby restated and further amended to read in its entirety as follows:

ARTICLE I.

The name of this corporation is The Active Network, Inc.

ARTICLE II.

The address of the registered office of the Corporation in the State of Delaware shall be 1209 Orange Street, Wilmington, County of New Castle, Delaware 19801 and the name of the registered agent of this Corporation in the State of Delaware at such address shall be The Corporation Trust Company.

ARTICLE III.

The purpose of this corporation is to engage in any lawful act or activity for which a corporation may be organized under the Delaware General Corporation Law (“DGCL”).

ARTICLE IV.

A. This corporation is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares

which the corporation is authorized to issue is one hundred ten million (110,000,000) shares. One hundred million (100,000,000) shares shall be Common Stock, each having a par value of one-tenth of one cent ($.001). Ten million (10,000,000) shares shall be Preferred Stock, each having a par value of one-tenth of one cent ($.001).

B. The Preferred Stock may be issued from time to time in one or more series. The Board of Directors is hereby expressly authorized to provide for the issue of all of any of the shares of the Preferred Stock in one or more series, and to fix the number of shares and to determine or alter for each such series, such voting powers, full or limited, or no voting powers, and such designation, preferences, and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such shares and as may be permitted by the DGCL. The Board of Directors is also expressly authorized to increase or decrease the number of shares of any series subsequent to the issuance of shares of that series, but not below the number of shares of such series then outstanding. In case the number of shares of any series shall be decreased in accordance with the foregoing sentence, the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the Common Stock, without a vote of the holders of the Preferred Stock, or of any series thereof, unless a vote of any such holders is required pursuant to the terms of any certificate of designation filed with respect to any series of Preferred Stock

C. Each outstanding share of Common Stock shall entitle the holder thereof to one vote on each matter properly submitted to the stockholders of the Corporation for their vote; provided, however, that, except as otherwise required by law, holders of Common Stock shall not be entitled to vote on any amendment to this Certificate of Incorporation (including any certificate of designation filed with respect to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon by law or pursuant to this Certificate of Incorporation (including any certificate of designation filed with respect to any series of Preferred Stock).

ARTICLE V.

For the management of the business and for the conduct of the affairs of the corporation, and in further definition, limitation and regulation of the powers of the corporation, of its directors and of its stockholders or any class thereof, as the case may be, it is further provided that:

A. BOARD OF DIRECTORS

1. The management of the business and the conduct of the affairs of the corporation shall be vested in its Board of Directors. The number of directors which shall constitute the

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Board of Directors shall be fixed exclusively by resolutions adopted by a majority of the authorized number of directors constituting the Board of Directors.

2. Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, the directors shall be divided into three classes designated as Class I, Class II and Class III, respectively. At the first annual meeting of stockholders following the initial classification of the Board of Directors, the term of office of the Class I directors shall expire and Class I directors shall be elected for a full term of three years. At the second annual meeting of stockholders following such initial classification, the term of office of the Class II directors shall expire and Class II directors shall be elected for a full term of three years. At the third annual meeting of stockholders following such initial classification, the term of office of the Class III directors shall expire and Class III directors shall be elected for a full term of three years. At each succeeding annual meeting of stockholders, directors shall be elected for a full term of three years to succeed the directors of the class whose terms expire at such annual meeting.

Notwithstanding the foregoing provisions of this section, each director shall serve until his successor is duly elected and qualified or until his death, resignation or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

3. Subject to the rights of the holders of any series of Preferred Stock, any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the number of directors, shall, unless the Board of Directors determines by resolution that any such vacancies or newly created directorships shall be filled by the stockholders, except as otherwise provided by law, be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board of Directors, and not by the stockholders. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the director for which the vacancy was created or occurred and until such director’s successor shall have been elected and qualified.

B.

1. BYLAW AMENDMENTS The Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws of the corporation. The stockholders shall also have power to adopt, amend or repeal the Bylaws of the corporation; provided, however, that, in addition to any vote of the holders of any class or series of stock of the corporation required by law or by this Certificate of Incorporation, the affirmative vote of the holders of at least sixty-six and two- thirds percent (66 2/3%) of the voting power of all of the then-outstanding shares of the capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to adopt, amend or repeal any provision of the Bylaws of the corporation.

2. The directors of the corporation need not be elected by written ballot unless the Bylaws so provide.

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3. No action shall be taken by the stockholders of the corporation except at an annual or special meeting of stockholders called in accordance with the Bylaws. No action shall be taken by the stockholders by written consent or electronic transmission.

4. Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the corporation shall be given in the manner provided in the Bylaws of the corporation.

ARTICLE VI.

A. The liability of the directors for monetary damages shall be eliminated to the fullest extent under applicable law. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the corporation shall be eliminated to the fullest extent permitted by the DGCL, as so amended.

B. Any repeal or modification of this Article VI shall be prospective and shall not affect the rights under this Article VI in effect at the time of the alleged occurrence of any act or omission to act giving rise to liability or indemnification.

ARTICLE VII.

A. The corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, except as provided in paragraph B. of this Article VII, and all rights conferred upon the stockholders herein are granted subject to this reservation.

B. Notwithstanding any other provisions of this Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of the corporation required by law or by this Certificate of Incorporation or any certificate of designation filed with respect to a series of Preferred Stock, the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the then-outstanding shares of capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to alter, amend or repeal Articles V, VI, and VII.

FOUR: This Amended and Restated Certificate of Incorporation has been duly approved by the Board of the Company.

FIVE: This Amended and Restated Certificate of Incorporation was approved by the holders of the requisite number of shares of said corporation in accordance with Section 228 of the General Corporation Law. This Amended and Restated Certificate of Incorporation has been duly adopted in accordance with the provisions of Sections 242 and 245 of the DGCL by the stockholders of the Company.

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IN WITNESS WHEREOF, this Certificate has been subscribed this              day of                     , 2004 by the undersigned who affirms that the statements made herein are true and correct.

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EX-3.2

Exhibit 3.2

AMENDED AND RESTATED BYLAWS

OF

THE ACTIVE NETWORK, INC.

(A DELAWARE CORPORATION)

TABLE OF CONTENTS

		PAGE
ARTICLE I	OFFICES	1
Section 1.	Registered Office	1
Section 2.	Other Offices	1
ARTICLE II	CORPORATE SEAL	1
Section 3.	Corporate Seal	1
ARTICLE III	STOCKHOLDERS’ MEETINGS	1
Section 4.	Place Of Meetings	1
Section 5.	Annual Meetings	1
Section 6.	Special Meetings	4
Section 7.	Notice Of Meetings	4
Section 8.	Quorum	5
Section 9.	Adjournment And Notice Of Adjourned Meetings	5
Section 10.	Voting Rights	6
Section 11.	Joint Owners Of Stock	6
Section 12.	List Of Stockholders	6
Section 13.	Action Without Meeting	6
Section 14.	Organization	7
ARTICLE IV	DIRECTORS	7
Section 15.	Number And Term Of Office	7
Section 16.	Powers	7
Section 17.	Classes of Directors	7
Section 18.	Vacancies	8
Section 19.	Resignation	8
Section 20.	Meetings	8
Section 21.	Quorum And Voting	9
Section 22.	Action Without Meeting	10
Section 23.	Fees And Compensation	10
Section 24.	Committees	10
Section 25.	Organization	11

i.

TABLE OF CONTENTS

(CONTINUED)

		PAGE
ARTICLE V	OFFICERS	11
Section 26.	Officers Designated	11
Section 27.	Tenure And Duties Of Officers	12
Section 28.	Delegation Of Authority	13
Section 29.	Resignations	13
Section 30.	Removal	13
ARTICLE VI	EXECUTION OF CORPORATE INSTRUMENTS AND VOTING OF SECURITIES OWNED BY THE CORPORATION	13
Section 31.	Execution Of Corporate Instruments	13
Section 32.	Voting Of Securities Owned By The Corporation	14
ARTICLE VII	SHARES OF STOCK	14
Section 33.	Form And Execution Of Certificates	14
Section 34.	Lost Certificates	14
Section 35.	Transfers	15
Section 36.	Fixing Record Dates	15
Section 37.	Registered Stockholders	15
ARTICLE VIII	OTHER SECURITIES OF THE CORPORATION	16
Section 38.	Execution Of Other Securities	16
ARTICLE IX	DIVIDENDS	16
Section 39.	Declaration Of Dividends	16
Section 40.	Dividend Reserve	16
ARTICLE X	FISCAL YEAR	17
Section 41.	Fiscal Year	17
ARTICLE XI	INDEMNIFICATION	17
Section 42.	Indemnification Of Directors, Executive Officers, Other Officers, Employees And Other Agents	17
ARTICLE XII	NOTICES	20
Section 43.	Notices	20
ARTICLE XIII	AMENDMENTS	21
Section 44.	The Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws of the corporation	21

ii.

TABLE OF CONTENTS

(CONTINUED)

		PAGE
ARTICLE XIV	LOANS TO OFFICERS	22
Section 45.	Loans To Officers	22

iii.

AMENDED AND RESTATED BYLAWS

OF

THE ACTIVE NETWORK, INC.

(A DELAWARE CORPORATION)

ARTICLE I

OFFICES

Section 1. Registered Office. The registered office of the corporation in the State of Delaware shall be in the City of Wilmington, County of New Castle.

Section 2. Other Offices. The corporation shall also have and maintain an office or principal place of business at such place as may be fixed by the Board of Directors, and may also have offices at such other places, both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the corporation may require.

ARTICLE II

CORPORATE SEAL

Section 3. Corporate Seal. The Board of Directors may adopt a corporate seal. The corporate seal shall consist of a die bearing the name of the corporation and the inscription, “Corporate Seal-Delaware.” Said seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

ARTICLE III

STOCKHOLDERS’ MEETINGS

Section 4. Place Of Meetings. Meetings of the stockholders of the corporation may be held at such place, either within or without the State of Delaware, as may be determined from time to time by the Board of Directors. The Board of Directors may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as provided under the Delaware General Corporation Law (“DGCL”).

Section 5. Annual Meetings.

(a) The annual meeting of the stockholders of the corporation, for the purpose of election of directors and for such other business as may lawfully come before it, shall be held on such date and at such time as may be designated from time to time by the Board of Directors. Nominations of persons for election to the Board of Directors of the corporation and the proposal

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of business to be considered by the stockholders may be made at an annual meeting of stockholders: (i) pursuant to the corporation’s notice of meeting of stockholders; (ii) by or at the direction of the Board of Directors; or (iii) by any stockholder of the corporation who was a stockholder of record at the time of giving the stockholder’s notice provided for in the following paragraph, who is entitled to vote at the meeting and who complied with the notice procedures set forth in Section 5.

(b) At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of Section 5(a) of these Bylaws, (i) the stockholder must have given timely notice thereof in writing to the Secretary of the corporation, (ii) such other business must be a proper matter for stockholder action under DGCL, (iii) if the stockholder, or the beneficial owner on whose behalf any such proposal or nomination is made, has provided the corporation with a Solicitation Notice (as defined in clause (iii) of the last sentence of this Section 5(b)), such stockholder or beneficial owner must, in the case of a proposal, have delivered a proxy statement and form of proxy to holders of at least the percentage of the corporation’s voting shares required under applicable law to carry any such proposal, or, in the case of a nomination or nominations, have delivered a proxy statement and form of proxy to holders of a percentage of the corporation’s voting shares reasonably believed by such stockholder or beneficial owner to be sufficient to elect the nominee or nominees proposed to be nominated by such stockholder, and must, in either case, have included in such materials the Solicitation Notice, and (iv) if no Solicitation Notice relating thereto has been timely provided pursuant to this section, the stockholder or beneficial owner proposing such business or nomination must not have solicited a number of proxies sufficient to have required the delivery of such a Solicitation Notice under this Section 5. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the ninetieth (90^th) day nor earlier than the close of business on the one hundred twentieth (120^th) day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced more than thirty (30) days prior to or delayed by more than thirty (30) days after the anniversary of the preceding year’s annual meeting, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the one hundred twentieth (120^th) day prior to such annual meeting and not later than the close of business on the later of the ninetieth (90^th) day prior to such annual meeting or the tenth (10^th) day following the day on which public announcement of the date of such meeting is first made. In no event shall the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a stockholder’s notice as described above. Such stockholder’s notice shall set forth: (A) as to each person whom the stockholder proposed to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “1934 Act”) and Rule 14a-4(d) thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (B) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial

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owner, if any, on whose behalf the proposal is made; and (C) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the corporation’s books, and of such beneficial owner, (ii) the class and number of shares of the corporation which are owned beneficially and of record by such stockholder and such beneficial owner, and (iii) whether either such stockholder or beneficial owner intends to deliver a proxy statement and form of proxy to holders of, in the case of the proposal, at least the percentage of the corporation’s voting shares required under applicable law to carry the proposal or, in the case of a nomination or nominations, a sufficient number of holders of the corporation’s voting shares to elect such nominee or nominees (an affirmative statement of such intent, a “Solicitation Notice”).

(c) Notwithstanding anything in the third sentence of Section 5(b) of these Bylaws to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors made by the corporation at least one hundred (100) days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section 5 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the corporation not later than the close of business on the tenth (10^th) day following the day on which such public announcement is first made by the corporation.

(d) Only such persons who are nominated in accordance with the procedures set forth in this Section 5 shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 5. Except as otherwise provided by law, the Chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made, or proposed, as the case may be, in accordance with the procedures set forth in these Bylaws and, if any proposed nomination or business is not in compliance with these Bylaws, to declare that such defective proposal or nomination shall not be presented for stockholder action at the meeting and shall be disregarded.

(e) Notwithstanding the foregoing provisions of this Section 5, in order to include information with respect to a stockholder proposal in the proxy statement and form of proxy for a stockholders’ meeting, stockholders must provide notice as required by the regulations promulgated under the 1934 Act. Nothing in these Bylaws shall be deemed to affect any rights of stockholders to request inclusion of proposals in the corporation proxy statement pursuant to Rule 14a-8 under the 1934 Act.

(f) For purposes of this Section 5, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the 1934 Act.

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Section 6. Special Meetings.

(a) Special meetings of the stockholders of the corporation may be called, for any purpose or purposes, by (i) the Chairman of the Board of Directors, (ii) the Chief Executive Officer, or (iii) the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board of Directors for adoption).

(b) If a special meeting is properly called by any person or persons other than the Board of Directors, the request shall be in writing, specifying the general nature of the business proposed to be transacted, and shall be delivered personally or sent by certified or registered mail, return receipt requested, to the Chairman of the Board of Directors, the Chief Executive Officer, or the Secretary of the corporation. No business may be transacted at such special meeting otherwise than specified in such notice. The Board of Directors shall determine the time and place of such special meeting, which shall be held not less than thirty-five (35) nor more than one hundred twenty (120) days after the date of the receipt of the request. Upon determination of the time and place of the meeting, the officer receiving the request shall cause notice to be given to the stockholders entitled to vote, in accordance with the provisions of Section 7 of these Bylaws. Nothing contained in this paragraph (b) shall be construed as limiting, fixing, or affecting the time when a meeting of stockholders called by action of the Board of Directors may be held.

(c) Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the corporation’s notice of meeting (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the corporation who is a stockholder of record at the time of giving notice provided for in these Bylaws who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 6(c). In the event the corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the corporation’s notice of meeting, if the stockholder’s notice required by Section 5(b) of these Bylaws shall be delivered to the Secretary at the principal executive offices of the corporation not earlier than the close of business on the one hundred twentieth (120^th) day prior to such special meeting and not later than the close of business on the later of the ninetieth (90^th) day prior to such meeting or the tenth (10^th) day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment of a special meeting commence a new time period for the giving of a stockholder’s notice as described above.

Section 7. Notice Of Meetings. Except as otherwise provided by law, notice, given in writing or by electronic transmission, of each meeting of stockholders shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting, such notice to specify the place, if any, date and hour, in the case of special meetings, the purpose or purposes of the meeting, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present

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in person and vote at any such meeting. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the corporation. Notice of the time, place, if any, and purpose of any meeting of stockholders may be waived in writing, signed by the person entitled to notice thereof, or by electronic transmission by such person, either before or after such meeting, and will be waived by any stockholder by his attendance thereat in person, by remote communication, if applicable, or by proxy, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Any stockholder so waiving notice of such meeting shall be bound by the proceedings of any such meeting in all respects as if due notice thereof had been given.

Section 8. Quorum. At all meetings of stockholders, except where otherwise provided by statute or by the Certificate of Incorporation, or by these Bylaws, the presence, in person, by remote communication, if applicable, or by proxy duly authorized, of the holders of a majority of the outstanding shares of stock entitled to vote shall constitute a quorum for the transaction of business. In the absence of a quorum, any meeting of stockholders may be adjourned, from time to time, either by the chairman of the meeting or by vote of the holders of a majority of the shares represented thereat, but no other business shall be transacted at such meeting. The stockholders present at a duly called or convened meeting, at which a quorum is present, may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Except as otherwise provided by statute or by applicable stock exchange or Nasdaq rules, or by the Certificate of Incorporation or these Bylaws, in all matters other than the election of directors, the affirmative vote of the majority of shares present in person, by remote communication, if applicable, or represented by proxy at the meeting and entitled to vote generally on the subject matter shall be the act of the stockholders. Except as otherwise provided by statute, the Certificate of Incorporation or these Bylaws, directors shall be elected by a plurality of the votes of the shares present in person, by remote communication, if applicable, or represented by proxy at the meeting and entitled to vote generally on the election of directors. Where a separate vote by a class or classes or series is required, except where otherwise provided by the statute or by the Certificate of Incorporation or these Bylaws, a majority of the outstanding shares of such class or classes or series, present in person, by remote communication, if applicable, or represented by proxy duly authorized, shall constitute a quorum entitled to take action with respect to that vote on that matter. Except where otherwise provided by statute or by the Certificate of Incorporation or these Bylaws, the affirmative vote of the majority (plurality, in the case of the election of directors) of shares of such class or classes or series present in person, by remote communication, if applicable, or represented by proxy at the meeting shall be the act of such class or classes or series.

Section 9. Adjournment And Notice Of Adjourned Meetings. Any meeting of stockholders, whether annual or special, may be adjourned from time to time either by the chairman of the meeting or by the vote of a majority of the shares present in person, by remote communication, if applicable, or represented by proxy at the meeting. When a meeting is adjourned to another time or place, if any, notice need not be given of the adjourned meeting if the time and place, if any, thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the corporation may transact any business which might have

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been transacted at the original meeting. If the adjournment is for more than thirty (30) days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

Section 10. Voting Rights. For the purpose of determining those stockholders entitled to vote at any meeting of the stockholders, except as otherwise provided by law, only persons in whose names shares stand on the stock records of the corporation on the record date, as provided in Section 12 of these Bylaws, shall be entitled to vote at any meeting of stockholders. Every person entitled to vote shall have the right to do so either in person, by remote communication, if applicable, or by an agent or agents authorized by a proxy granted in accordance with Delaware law. An agent so appointed need not be a stockholder. No proxy shall be voted after three (3) years from its date of creation unless the proxy provides for a longer period.

Section 11. Joint Owners Of Stock. If shares or other securities having voting power stand of record in the names of two (2) or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety, or otherwise, or if two (2) or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary is given written notice to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, their acts with respect to voting shall have the following effect: (a) if only one (1) votes, his act binds all; (b) if more than one (1) votes, the act of the majority so voting binds all; (c) if more than one (1) votes, but the vote is evenly split on any particular matter, each faction may vote the securities in question proportionally, or may apply to the Delaware Court of Chancery for relief as provided in the DGCL, Section 217(b). If the instrument filed with the Secretary shows that any such tenancy is held in unequal interests, a majority or even-split for the purpose of subsection (c) shall be a majority or even-split in interest.

Section 12. List Of Stockholders. The Secretary shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at said meeting, arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal place of business of the corporation. In the event that the corporation determines to make the list available on an electronic network, the corporation may take reasonable steps to ensure that such information is available only to stockholders of the corporation. The list shall be open to examination of any stockholder during the time of the meeting as provided by law.

Section 13. Action Without Meeting.

(a) No action shall be taken by the stockholders except at an annual or special meeting of stockholders called in accordance with these Bylaws, and no action shall be taken by the stockholders by written consent or by electronic transmission.

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Section 14. Organization.

(a) At every meeting of stockholders, the Chairman of the Board of Directors, or, if a Chairman has not been appointed or is absent, the President, or, if the President is absent, a chairman of the meeting chosen by a majority in interest of the stockholders entitled to vote, present in person or by proxy, shall act as chairman. The Secretary, or, in his absence, an Assistant Secretary directed to do so by the President, shall act as secretary of the meeting.

(b) The Board of Directors of the corporation shall be entitled to make such rules or regulations for the conduct of meetings of stockholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the Board of Directors, if any, the chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, establishing an agenda or order of business for the meeting, rules and procedures for maintaining order at the meeting and the safety of those present, limitations on participation in such meeting to stockholders of record of the corporation and their duly authorized and constituted proxies and such other persons as the chairman shall permit, restrictions on entry to the meeting after the time fixed for the commencement thereof, limitations on the time allotted to questions or comments by participants and regulation of the opening and closing of the polls for balloting on matters which are to be voted on by ballot. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be announced at the meeting. Unless and to the extent determined by the Board of Directors or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with rules of parliamentary procedure.

ARTICLE IV

DIRECTORS

Section 15. Number And Term Of Office. The authorized number of directors of the corporation shall be fixed in accordance with the Certificate of Incorporation. Directors need not be stockholders unless so required by the Certificate of Incorporation. If for any cause, the directors shall not have been elected at an annual meeting, they may be elected as soon thereafter as convenient at a special meeting of the stockholders called for that purpose in the manner provided in these Bylaws.

Section 16. Powers. The powers of the corporation shall be exercised, its business conducted and its property controlled by the Board of Directors, except as may be otherwise provided by statute or by the Certificate of Incorporation.

Section 17. Classes of Directors. Subject to the rights of the holders of any series of Preferred Stock to elect directors under specified circumstances, the directors shall be divided into three classes designated as Class I, Class II and Class III, respectively. At the first annual meeting of stockholders following the initial classification of the Board of Directors, the term of office of the Class I directors shall expire and Class I directors shall be elected for a full term of three years. At the second annual meeting of stockholders following such initial classification,

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the term of office of the Class II directors shall expire and Class II directors shall be elected for a full term of three years. At the third annual meeting of stockholders following such initial classification, the term of office of the Class III directors shall expire and Class III directors shall be elected for a full term of three years. At each succeeding annual meeting of stockholders, directors shall be elected for a full term of three years to succeed the directors of the class whose terms expire at such annual meeting.

Notwithstanding the foregoing provisions of this section, each director shall serve until his successor is duly elected and qualified or until his earlier death, resignation or removal. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

Section 18. Vacancies.

(a) Unless otherwise provided in the Certificate of Incorporation and subject to the rights of the holders of any series of Preferred Stock, any vacancies on the Board of Directors resulting from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the number of directors shall, unless the Board of Directors determines by resolution that any such vacancies or newly created directorships shall be filled by stockholders, be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board of Directors. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the director for which the vacancy was created or occurred and until such director’s successor shall have been elected and qualified. A vacancy in the Board of Directors shall be deemed to exist under this Section 18 in the case of the death, removal or resignation of any director.

Section 19. Resignation. Any director may resign at any time by delivering his or her notice in writing or by electronic transmission to the Secretary, such resignation to specify whether it will be effective at a particular time, upon receipt by the Secretary or at the pleasure of the Board of Directors. If no such specification is made, it shall be deemed effective at the pleasure of the Board of Directors. When one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each Director so chosen shall hold office for the unexpired portion of the term of the Director whose place shall be vacated and until his successor shall have been duly elected and qualified.

Section 20. Meetings.

(a) Regular Meetings. Unless otherwise restricted by the Certificate of Incorporation, regular meetings of the Board of Directors may be held at any time or date and at any place within or without the State of Delaware which has been designated by the Board of Directors and publicized among all directors, either orally or in writing, by telephone, including a voice-messaging system or other system designed to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or other electronic means. No further notice shall be required for regular meetings of the Board of Directors.

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(b) Special Meetings. Unless otherwise restricted by the Certificate of Incorporation, special meetings of the Board of Directors may be held at any time and place within or without the State of Delaware whenever called by the Chairman of the Board, the President or a majority of the authorized number of Directors.

(c) Meetings by Electronic Communications Equipment. Any member of the Board of Directors, or of any committee thereof, may participate in a meeting by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.

(d) Notice of Special Meetings. Notice of the time and place of all special meetings of the Board of Directors shall be orally or in writing, by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or other electronic means, during normal business hours, at least twenty-four (24) hours before the date and time of the meeting. If notice is sent by US mail, it shall be sent by first class mail, charges prepaid, at least three (3) days before the date of the meeting. Notice of any meeting may be waived in writing, or by electronic transmission, at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

(e) Waiver of Notice. The transaction of all business at any meeting of the Board of Directors, or any committee thereof, however called or noticed, or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present and if, either before or after the meeting, each of the directors not present who did not receive notice shall sign a written waiver of notice or shall waive notice by electronic transmission. All such waivers shall be filed with the corporate records or made a part of the minutes of the meeting.

Section 21. Quorum And Voting.

(a) Unless the Certificate of Incorporation requires a greater number, a quorum of the Board of Directors shall consist of a majority of the exact number of directors fixed from time to time by the Board of Directors in accordance with the Certificate of Incorporation; provided, however, at any meeting whether a quorum be present or otherwise, a majority of the directors present may adjourn from time to time until the time fixed for the next regular meeting of the Board of Directors, without notice other than by announcement at the meeting.

(b) At each meeting of the Board of Directors at which a quorum is present, all questions and business shall be determined by the affirmative vote of a majority of the directors present, unless a different vote be required by law, the Certificate of Incorporation or these Bylaws.

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Section 22. Action Without Meeting. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent thereto in writing or by electronic transmission, and such writing or writings or transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

Section 23. Fees And Compensation. Directors shall be entitled to such compensation for their services as may be approved by the Board of Directors, including, if so approved, by resolution of the Board of Directors, a fixed sum and expenses of attendance, if any, for attendance at each regular or special meeting of the Board of Directors and at any meeting of a committee of the Board of Directors. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity as an officer, agent, employee, or otherwise and receiving compensation therefor.

Section 24. Committees.

(a) Executive Committee. The Board of Directors may appoint an Executive Committee to consist of one (1) or more members of the Board of Directors. The Executive Committee, to the extent permitted by law and provided in the resolution of the Board of Directors shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopting, amending or repealing any bylaw of the corporation.

(b) Other Committees. The Board of Directors may, from time to time, appoint such other committees as may be permitted by law. Such other committees appointed by the Board of Directors shall consist of one (1) or more members of the Board of Directors and shall have such powers and perform such duties as may be prescribed by the resolution or resolutions creating such committees, but in no event shall any such committee have the powers denied to the Executive Committee in these Bylaws.

(c) Term. The Board of Directors, subject to any requirements of any outstanding series of Preferred Stock and the provisions of subsections (a) or (b) of this Bylaw, may at any time increase or decrease the number of members of a committee or terminate the existence of a committee. The membership of a committee member shall terminate on the date of his death or voluntary resignation from the committee or from the Board of Directors. The Board of Directors may at any time for any reason remove any individual committee member and the Board of Directors may fill any committee vacancy created by death, resignation, removal or increase in the number of members of the committee. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee, and, in addition, in the absence or disqualification of any member of a committee, the member or members thereof present at any

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meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.

(d) Meetings. Unless the Board of Directors shall otherwise provide, regular meetings of the Executive Committee or any other committee appointed pursuant to this Section 25 shall be held at such times and places as are determined by the Board of Directors, or by any such committee, and when notice thereof has been given to each member of such committee, no further notice of such regular meetings need be given thereafter. Special meetings of any such committee may be held at any place which has been determined from time to time by such committee, and may be called by any director who is a member of such committee, upon notice to the members of such committee of the time and place of such special meeting given in the manner provided for the giving of notice to members of the Board of Directors of the time and place of special meetings of the Board of Directors. Notice of any special meeting of any committee may be waived in writing at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends such special meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Unless otherwise provided by the Board of Directors in the resolutions authorizing the creation of the committee, a majority of the authorized number of members of any such committee shall constitute a quorum for the transaction of business, and the act of a majority of those present at any meeting at which a quorum is present shall be the act of such committee.

Section 25. Organization. At every meeting of the directors, the Chairman of the Board of Directors, or, if a Chairman has not been appointed or is absent, the President (if a director), or if the President is absent, the most senior Vice President (if a director), or, in the absence of any such person, a chairman of the meeting chosen by a majority of the directors present, shall preside over the meeting. The Secretary, or in his absence, any Assistant Secretary directed to do so by the President, shall act as secretary of the meeting.

ARTICLE V

OFFICERS

Section 26. Officers Designated. The officers of the corporation shall include, if and when designated by the Board of Directors, the Chairman of the Board of Directors, the Chief Executive Officer, the President, one or more Vice Presidents, the Secretary, the Chief Financial Officer, the Treasurer and the Controller, all of whom shall be elected at the annual organizational meeting of the Board of Directors. The Board of Directors may also appoint one or more Assistant Secretaries, Assistant Treasurers, Assistant Controllers and such other officers and agents with such powers and duties as it shall deem necessary. The Board of Directors may assign such additional titles to one or more of the officers as it shall deem appropriate. Any one person may hold any number of offices of the corporation at any one time unless specifically prohibited therefrom by law. The salaries and other compensation of the officers of the corporation shall be fixed by or in the manner designated by the Board of Directors.

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Section 27. Tenure And Duties Of Officers.

(a) General. All officers shall hold office at the pleasure of the Board of Directors and until their successors shall have been duly elected and qualified, unless sooner removed. Any officer elected or appointed by the Board of Directors may be removed at any time by the Board of Directors. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board of Directors.

(b) Duties of Chairman of the Board of Directors. The Chairman of the Board of Directors, when present, shall preside at all meetings of the stockholders and the Board of Directors. The Chairman of the Board of Directors shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the Board of Directors shall designate from time to time. If there is no President, then the Chairman of the Board of Directors shall also serve as the Chief Executive Officer of the corporation and shall have the powers and duties prescribed in paragraph (c) of this Section 28.

(c) Duties of President. The President shall preside at all meetings of the stockholders and at all meetings of the Board of Directors, unless the Chairman of the Board of Directors has been appointed and is present. Unless some other officer has been elected Chief Executive Officer of the corporation, the President shall be the chief executive officer of the corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the corporation. The President shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the Board of Directors shall designate from time to time.

(d) Duties of Vice Presidents. The Vice Presidents may assume and perform the duties of the President in the absence or disability of the President or whenever the office of President is vacant. The Vice Presidents shall perform other duties commonly incident to their office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time.

(e) Duties of Secretary. The Secretary shall attend all meetings of the stockholders and of the Board of Directors and shall record all acts and proceedings thereof in the minute book of the corporation. The Secretary shall give notice in conformity with these Bylaws of all meetings of the stockholders and of all meetings of the Board of Directors and any committee thereof requiring notice. The Secretary shall perform all other duties provided for in these Bylaws and other duties commonly incident to the office and shall also perform such other duties and have such other powers, as the Board of Directors shall designate from time to time. The President may direct any Assistant Secretary to assume and perform the duties of the Secretary in the absence or disability of the Secretary, and each Assistant Secretary shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time.

(f) Duties of Chief Financial Officer. The Chief Financial Officer shall keep or cause to be kept the books of account of the corporation in a thorough and proper manner and shall render statements of the financial affairs of the corporation in such form and as often as required by the Board of Directors or the President. The Chief Financial Officer, subject to the

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order of the Board of Directors, shall have the custody of all funds and securities of the corporation. The Chief Financial Officer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time. The President may direct the Treasurer or any Assistant Treasurer, or the Controller or any Assistant Controller to assume and perform the duties of the Chief Financial Officer in the absence or disability of the Chief Financial Officer, and each Treasurer and Assistant Treasurer and each Controller and Assistant Controller shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate from time to time.

Section 28. Delegation Of Authority. The Board of Directors may from time to time delegate the powers or duties of any officer to any other officer or agent, notwithstanding any provision hereof.

Section 29. Resignations. Any officer may resign at any time by giving notice in writing or by electronic transmission to the Board of Directors or to the President or to the Secretary. Any such resignation shall be effective when received by the person or persons to whom such notice is given, unless a later time is specified therein, in which event the resignation shall become effective at such later time. Unless otherwise specified in such notice, the acceptance of any such resignation shall not be necessary to make it effective. Any resignation shall be without prejudice to the rights, if any, of the corporation under any contract with the resigning officer.

Section 30. Removal. Any officer may be removed from office at any time, either with or without cause, by the affirmative vote of a majority of the directors in office at the time, or by the unanimous written consent of the directors in office at the time, or by any committee or superior officers upon whom such power of removal may have been conferred by the Board of Directors.

ARTICLE VI

EXECUTION OF CORPORATE INSTRUMENTS AND VOTING OF SECURITIES

OWNED BY THE CORPORATION

Section 31. Execution Of Corporate Instruments. The Board of Directors may, in its discretion, determine the method and designate the signatory officer or officers, or other person or persons, to execute on behalf of the corporation any corporate instrument or document, or to sign on behalf of the corporation the corporate name without limitation, or to enter into contracts on behalf of the corporation, except where otherwise provided by law or these Bylaws, and such execution or signature shall be binding upon the corporation.

All checks and drafts drawn on banks or other depositaries on funds to the credit of the corporation or in special accounts of the corporation shall be signed by such person or persons as the Board of Directors shall authorize so to do.

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Unless authorized or ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.

Section 32. Voting Of Securities Owned By The Corporation. All stock and other securities of other corporations owned or held by the corporation for itself, or for other parties in any capacity, shall be voted, and all proxies with respect thereto shall be executed, by the person authorized so to do by resolution of the Board of Directors, or, in the absence of such authorization, by the Chairman of the Board of Directors, the Chief Executive Officer, the President, or any Vice President.

ARTICLE VII

SHARES OF STOCK

Section 33. Form And Execution Of Certificates. Certificates for the shares of stock of the corporation shall be in such form as is consistent with the Certificate of Incorporation and applicable law. Every holder of stock in the corporation shall be entitled to have a certificate signed by or in the name of the corporation by the Chairman of the Board of Directors, or the President or any Vice President and by the Treasurer or Assistant Treasurer or the Secretary or Assistant Secretary, certifying the number of shares owned by him in the corporation. Any or all of the signatures on the certificate may be facsimiles. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued with the same effect as if he were such officer, transfer agent, or registrar at the date of issue. Each certificate shall state upon the face or back thereof, in full or in summary, all of the powers, designations, preferences, and rights, and the limitations or restrictions of the shares authorized to be issued or shall, except as otherwise required by law, set forth on the face or back a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional, or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Within a reasonable time after the issuance or transfer of uncertificated stock, the corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to this section or otherwise required by law or with respect to this section a statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

Section 34. Lost Certificates. A new certificate or certificates shall be issued in place of any certificate or certificates theretofore issued by the corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. The corporation may require, as a condition precedent to the issuance of a new certificate or certificates, the owner of such lost, stolen, or

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destroyed certificate or certificates, or the owner’s legal representative, to agree to indemnify the corporation in such manner as it shall require or to give the corporation a surety bond in such form and amount as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost, stolen, or destroyed

Section 35. Transfers.

(a) Transfers of record of shares of stock of the corporation shall be made only upon its books by the holders thereof, in person or by attorney duly authorized, and upon the surrender of a properly endorsed certificate or certificates for a like number of shares.

(b) The corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the corporation to restrict the transfer of shares of stock of the corporation of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.

Section 36. Fixing Record Dates.

(a) In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix, in advance, a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall, subject to applicable law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

(b) In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

Section 37. Registered Stockholders. The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

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ARTICLE VIII

OTHER SECURITIES OF THE CORPORATION

Section 38. Execution Of Other Securities. All bonds, debentures and other corporate securities of the corporation, other than stock certificates (covered in Section 34), may be signed by the Chairman of the Board of Directors, the President or any Vice President, or such other person as may be authorized by the Board of Directors, and the corporate seal impressed thereon or a facsimile of such seal imprinted thereon and attested by the signature of the Secretary or an Assistant Secretary, or the Chief Financial Officer or Treasurer or an Assistant Treasurer; provided, however, that where any such bond, debenture or other corporate security shall be authenticated by the manual signature, or where permissible facsimile signature, of a trustee under an indenture pursuant to which such bond, debenture or other corporate security shall be issued, the signatures of the persons signing and attesting the corporate seal on such bond, debenture or other corporate security may be the imprinted facsimile of the signatures of such persons. Interest coupons appertaining to any such bond, debenture or other corporate security, authenticated by a trustee as aforesaid, shall be signed by the Treasurer or an Assistant Treasurer of the corporation or such other person as may be authorized by the Board of Directors, or bear imprinted thereon the facsimile signature of such person. In case any officer who shall have signed or attested any bond, debenture or other corporate security, or whose facsimile signature shall appear thereon or on any such interest coupon, shall have ceased to be such officer before the bond, debenture or other corporate security so signed or attested shall have been delivered, such bond, debenture or other corporate security nevertheless may be adopted by the corporation and issued and delivered as though the person who signed the same or whose facsimile signature shall have been used thereon had not ceased to be such officer of the corporation.

ARTICLE IX

DIVIDENDS

Section 39. Declaration Of Dividends. Dividends upon the capital stock of the corporation, subject to the provisions of the Certificate of Incorporation and applicable law, if any, may be declared by the Board of Directors pursuant to law at any regular or special meeting. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation and applicable law.

Section 40. Dividend Reserve. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the Board of Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the Board of Directors shall think conducive to the interests of the corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created.

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ARTICLE X

FISCAL YEAR

Section 41. Fiscal Year. The fiscal year of the corporation shall be fixed by resolution of the Board of Directors.

ARTICLE XI

INDEMNIFICATION

Section 42. Indemnification Of Directors, Executive Officers, Other Officers, Employees And Other Agents.

(a) Directors and Executive officers. The corporation shall indemnify its directors and executive officers (for the purposes of this Article XI, “Executive Officers” shall have the meaning defined in Rule 3b-7 promulgated under the 1934 Act) to the fullest extent not prohibited by the DGCL or any other applicable law; provided, however, that the corporation may modify the extent of such indemnification by individual contracts with its directors and Executive Officers; and, provided, further, that the corporation shall not be required to indemnify any director or Executive Officer in connection with any proceeding (or part thereof) initiated by such person unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board of Directors of the corporation, (iii) such indemnification is provided by the corporation, in its sole discretion, pursuant to the powers vested in the corporation under the DGCL or any other applicable law or (iv) such indemnification is required to be made under subsection (d).

(b) Other Officers, Employees and Other Agents. The corporation shall have power to indemnify its other officers, employees and other agents as set forth in the DGCL or any other applicable law. The Board of Directors shall have the power to delegate the determination of whether indemnification shall be given to any such person to such officers or other persons as the Board of Directors shall determine.

(c) Expenses. The corporation shall advance to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or executive officer, of the corporation, or is or was serving at the request of the corporation as a director or executive officer of another corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefor, all expenses incurred by any director or Executive Officer in connection with such proceeding provided, however, that if the DGCL requires, an advancement of expenses incurred by a director or executive officer in his or her capacity as a director or executive officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the corporation of an undertaking (hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final

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adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under this Section 43 or otherwise.

Notwithstanding the foregoing, unless otherwise determined pursuant to paragraph (e) of this Section 43, no advance shall be made by the corporation to an executive officer of the corporation (except by reason of the fact that such executive officer is or was a director of the corporation in which event this paragraph shall not apply) in any action, suit or proceeding, whether civil, criminal, administrative or investigative, if a determination is reasonably and promptly made (i) by a majority vote of directors who were not parties to the proceeding, even if not a quorum, or (ii) by a committee of such directors designated by a majority vote of such directors, even though less than a quorum, or (iii) if there are no such directors, or such directors so direct, by independent legal counsel in a written opinion, that the facts known to the decision-making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the corporation.

(d) Enforcement. Without the necessity of entering into an express contract, all rights to indemnification and advances to directors and executive officers under this Bylaw shall be deemed to be contractual rights and be effective to the same extent and as if provided for in a contract between the corporation and the director or executive officer. Any right to indemnification or advances granted by this Section 43 to a director or executive officer shall be enforceable by or on behalf of the person holding such right in any court of competent jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition of such claim is made within ninety (90) days of request therefor. The claimant in such enforcement action, if successful in whole or in part, shall be entitled to be paid also the expense of prosecuting the claim. In connection with any claim for indemnification, the corporation shall be entitled to raise as a defense to any such action that the claimant has not met the standards of conduct that make it permissible under the DGCL or any other applicable law for the corporation to indemnify the claimant for the amount claimed. In connection with any claim by an executive officer of the corporation (except in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such executive officer is or was a director of the corporation) for advances, the corporation shall be entitled to raise a defense as to any such action clear and convincing evidence that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the corporation, or with respect to any criminal action or proceeding that such person acted without reasonable cause to believe that his conduct was lawful. Neither the failure of the corporation (including its Board of Directors, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct set forth in the DGCL or any other applicable law, nor an actual determination by the corporation (including its Board of Directors, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that claimant has not met the applicable standard of conduct. In any suit brought by a director or executive officer to enforce a right to indemnification or to an advancement of expenses hereunder, the burden of proving that the director or executive officer is not entitled to

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be indemnified, or to such advancement of expenses, under this Section 43 or otherwise shall be on the corporation.

(e) Non-Exclusivity of Rights. The rights conferred on any person by this Bylaw shall not be exclusive of any other right which such person may have or hereafter acquire under any applicable statute, provision of the Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding office. The corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the DGCL, or by any other applicable law.

(f) Survival of Rights. The rights conferred on any person by this Bylaw shall continue as to a person who has ceased to be a director or executive officer and shall inure to the benefit of the heirs, executors and administrators of such a person.

(g) Insurance. To the fullest extent permitted by the DGCL or any other applicable law, the corporation, upon approval by the Board of Directors, may purchase insurance on behalf of any person required or permitted to be indemnified pursuant to this Section 43.

(h) Amendments. Any repeal or modification of this Section 43 shall only be prospective and shall not affect the rights under this Bylaw in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any proceeding against any agent of the corporation.

(i) Saving Clause. If this Bylaw or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the corporation shall nevertheless indemnify each director and executive officer to the full extent not prohibited by any applicable portion of this Section 43 that shall not have been invalidated, or by any other applicable law. If this Section 43 shall be invalid due to the application of the indemnification provisions of another jurisdiction, then the corporation shall indemnify each director and executive officer to the full extent under any other applicable law.

(j) Certain Definitions. For the purposes of this Bylaw, the following definitions shall apply:

(1) The term “proceeding” shall be broadly construed and shall include, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative.

(2) The term “expenses” shall be broadly construed and shall include, without limitation, court costs, attorneys’ fees, witness fees, fines, amounts paid in settlement or judgment and any other costs and expenses of any nature or kind incurred in connection with any proceeding.

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(3) The term the “corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Section 43 with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.

(4) References to a “director,” “executive officer,” “officer,” “employee,” or “agent” of the corporation shall include, without limitation, situations where such person is serving at the request of the corporation as, respectively, a director, executive officer, officer, employee, trustee or agent of another corporation, partnership, joint venture, trust or other enterprise.

(5) References to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the corporation” as referred to in this Section 43.

ARTICLE XII

NOTICES

Section 43. Notices.

(a) Notice To Stockholders. Written notice to stockholders of stockholder meetings shall be given as provided in Section 7 herein. Without limiting the manner by which notice may otherwise be given effectively to stockholders under any agreement or contract with such stockholder, and except as otherwise required by law, written notice to stockholders for purposes other than stockholder meetings may be sent by US mail or nationally recognized overnight courier, or by facsimile, telegraph or telex or by electronic mail or other electronic means.

(b) Notice To Directors. Any notice required to be given to any director may be given by the method stated in subsection (a), as otherwise provided in these Bylaws, or by overnight delivery service, facsimile, telex or telegram, except that such notice other than one which is delivered personally shall be sent to such address as such director shall have filed in writing with the Secretary, or, in the absence of such filing, to the last known post office address of such director.

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(c) Affidavit Of Mailing. An affidavit of mailing, executed by a duly authorized and competent employee of the corporation or its transfer agent appointed with respect to the class of stock affected, or other agent, specifying the name and address or the names and addresses of the stockholder or stockholders, or director or directors, to whom any such notice or notices was or were given, and the time and method of giving the same, shall in the absence of fraud, be prima facie evidence of the facts therein contained.

(d) Methods of Notice. It shall not be necessary that the same method of giving notice be employed in respect of all recipients of notice, but one permissible method may be employed in respect of any one or more, and any other permissible method or methods may be employed in respect of any other or others.

(e) Notice To Person With Whom Communication Is Unlawful. Whenever notice is required to be given, under any provision of law or of the Certificate of Incorporation or Bylaws of the corporation, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting which shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the corporation is such as to require the filing of a certificate under any provision of the DGCL, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.

(f) Notice to Stockholders Sharing an Address. Except as otherwise prohibited under DGCL, any notice given under the provisions of DGCL, the Certificate of Incorporation or the Bylaws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. Such consent shall have been deemed to have been given if such stockholder fails to object in writing to the corporation within 60 days of having been given notice by the corporation of its intention to send the single notice. Any consent shall be revocable by the stockholder by written notice to the corporation.

ARTICLE XIII

AMENDMENTS

Section 44. The Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws of the corporation. The stockholders shall also have power to adopt, amend or repeal the Bylaws of the corporation; provided, however, that, in addition to any vote of the holders of any class or series of stock of the corporation required by law or by the Certificate of Incorporation, the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3% of the voting power of all of the then-outstanding shares of the capital stock of the corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required to adopt, amend or repeal any provision of the Bylaws of the corporation.

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ARTICLE XIV

LOANS TO OFFICERS

Section 45. Loans To Officers. Except as otherwise prohibited by applicable law, the corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiaries, including any officer or employee who is a Director of the corporation or its subsidiaries, whenever, in the judgment of the Board of Directors, such loan, guarantee or assistance may reasonably be expected to benefit the corporation. The loan, guarantee or other assistance may be with or without interest and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in these Bylaws shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute.

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EX-4.2

Exhibit 4.2

FIFTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

THIS FIFTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of the 29th day of November, 2001, by and among The Active Network, Inc., a Delaware corporation (the “Company”), and the persons identified on Schedule A attached hereto (the “Shareholders”).

WHEREAS, the Company previously entered into the Fourth Amended and Restated Investors’ Rights Agreement dated November 8, 2000 (the “Prior Agreement”) with the Shareholders other than the Series I Investors and the holders of the Series J Preferred Stock (as defined below);

WHEREAS, the parties to the Prior Agreement desire to terminate the Prior Agreement and to accept the rights created pursuant hereto in lieu of the rights granted to them under the Prior Agreement;

WHEREAS, the Company is a party to the Series I Preferred Stock Purchase Agreement of even date herewith (the “Series I Purchase Agreement”) with the parties identified on Schedule A as Series I Investors (the “Series I Investors”) pursuant to which the Series I Investors are purchasing shares of the Company’s Series I Preferred Stock;

WHEREAS, the amendment and restatement of the Prior Agreement in the manner set forth herein is a condition of the Series I Purchase Agreement.

NOW THEREFORE, in consideration of the mutual promises and covenants set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1

Registration Rights

1.1 Certain Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:

(a) “Affiliate” shall mean with respect to any Person, any Person which directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person.

(b) “Commission” shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

(c) “Common Stock” shall mean shares of the Company’s common stock.

(d) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time.

(e) “Holder” shall mean any Investor who holds Registrable Securities and any holder of Registrable Securities to whom the registration rights conferred by this Agreement have been transferred in compliance with Section 1.11 hereof.

(f) “Initiating Holders” shall mean any Holder or Holders who in the aggregate hold not less than fifty-one percent (51%) of the then outstanding Registrable Securities. For purposes of such calculation, holders of Shares shall be considered to hold the shares of Common Stock then issuable upon conversion of such Shares.

(g) “Investors” shall mean holders of Series I Preferred Stock, Series G Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D-l Preferred Stock, Series F Preferred Stock, Series H Preferred Stock, Series D-2 Preferred Stock, Series E Preferred Stock and Series J Preferred Stock.

(h) “Kettle/Austin Warrants” shall mean those certain Warrants to purchase 658,101 shares of Common Stock of the Company held by Kettle Partners LP and Austin Ventures VI, LP.

(i) “Other Shareholders” shall mean persons other than Holders who, by virtue of agreements with the Company, are entitled to include their securities in certain registrations hereunder.

(j) “Person” shall mean an individual, a corporation, a partnership, a limited liability company, a trust or unincorporated organization or any other entity or organization.

(k) “Registrable Securities” shall mean (i) shares of Common Stock issued or issuable pursuant to the conversion of the Shares, (ii) shares of Common Stock issued or issuable upon exercise of the Kettle/Austin Warrants, and (iii) any Common Stock issued as a dividend or other distribution with respect to or in exchange for or in replacement of the shares referenced in (i) and (ii) above, provided, however, that Registrable Securities shall not include any shares of Common Stock which have previously been registered, which have been sold to the public, or which have been sold to a transferee in a transaction in which the transferor’s registration rights were not assigned.

(l) The terms “register,” “registered” and “registration” shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement.

(m) “Registration Expenses” shall mean all expenses incurred in effecting any registration pursuant to this Agreement, including, without limitation, all registration, qualification, and filing fees, printing expenses, escrow fees, fees and disbursements of counsel for the Company, blue sky fees and expenses, expenses of any regular or special audits incident to or required by any such registration and fees and disbursements of one special counsel for the

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selling Holders, but shall not include Selling Expenses (but excluding the compensation of regular employees of the Company, which shall be paid in any event by the Company).

(n) “Rule 144” shall mean Rule 144 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission.

(o) “Rule 145” shall mean Rule 145 as promulgated by the Commission under the Securities Act, as such Rule may be amended from time to time, or any similar successor rule that may be promulgated by the Commission.

(p) “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar successor federal statute and the rules and regulations thereunder, all as the same shall be in effect from time to time.

(q) “Selling Expenses” shall mean all underwriting discounts and selling commissions applicable to the sale of Registrable Securities and all fees and disbursements of counsel for the selling Holders in excess of $10,000.

(r) “Shares” shall mean the Company’s Series I Preferred Stock, Series G Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D-l Preferred Stock, Series F Preferred Stock, Series H Preferred Stock, Series D-2 Preferred Stock, Series E Preferred Stock and Series J Preferred Stock.

1.2 Requested Registration.

(a) Request for Registration. If the Company shall receive from Initiating Holders at any time or times not earlier than the earlier of (i) April 30, 2004 or (ii) six (6) months after the effective date of the first registration statement filed by the Company covering an underwritten offering of any of its securities to the general public (other than a registration statement relating either to the sale of securities to employees of the Company pursuant to a stock option, stock purchase or similar plan or a Commission Rule 145 transaction), a written request that the Company effect a registration with respect to at least thirty percent (30%) of the Registrable Securities then outstanding (or a lesser percent if the anticipated aggregate offering price, net of underwriting discounts and commissions, would exceed $5,000,000), the Company will:

(i) promptly give written notice of the proposed registration to all other Holders; and

(ii) as soon as practicable, use its best efforts to effect such registration (including, without limitation, filing post-effective amendments, appropriate qualifications under applicable blue sky or other state securities laws, and appropriate compliance with the Securities Act) and as would permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder or Holders joining in such request as are specified in a

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written request received by the Company within twenty (20) days after such written notice from the Company is effective.

The Company shall not be obligated to effect, or to take any action to effect, any such registration pursuant to this Section 1.2:

(A) After the Company has initiated two (2) such registrations pursuant to this Section 1.2(a) (counting for these purposes only a registration which has been declared or ordered effective and pursuant to which securities have been sold and registrations which have been withdrawn by the Holders as to which the Holders have not elected to bear the Registration Expenses pursuant to Section 1.4 hereof and would, absent such election, have been required to bear such expenses); or

(B) Where the registration requested is for a second registration and the period of time is less than one (1) year from the date of the first registration; or

(C) During the period starting with the date thirty (30) days prior to the Company’s good faith estimate of the date of filing of, and ending on a date one hundred eighty (180) days after the effective date of, a registration subject to Section 1.3 hereof; provided that the Company is actively employing in good faith all reasonable efforts to cause such registration statement to become effective.

(b) Subject to the foregoing clauses (A) through (C), the Company shall file a registration statement covering the Registrable Securities so requested to be registered as soon as practicable after receipt of the request or requests of the Initiating Holders; provided, however, that if (i) in the good faith judgment of the Board of Directors of the Company, such registration would be seriously detrimental to the Company and the Board of Directors of the Company concludes, as a result, that it is essential to defer the filing of such registration statement at such time, and (ii) the Company shall furnish to such Holders a certificate signed by the President of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company for such registration statement to be filed in the near future and that it is, therefore, essential to defer the filing of such registration statement, then the Company shall have the right to defer such filing for the period during which such filing would be seriously detrimental, provided that (except as provided in clause (C) above) the Company may not defer the filing for a period of more than ninety (90) days after receipt of the request of the Initiating Holders, and, provided further, that the Company shall not defer its obligation in this manner more than once in any twelve-month period.

The registration statement filed pursuant to the request of the Initiating Holders may, subject to the provisions of Section 1.13 hereof, include other securities of the Company, with respect to which registration rights have been granted, and may include securities of the Company being sold for the account of the Company.

(c) Underwriting. If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the

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Company as a part of their request made pursuant to Section 1.2 and the Company shall include such information in the written notice referred to in Section 1.2(a). The right of any Holder to registration pursuant to Section 1.2 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Initiating Holders and such Holder with respect to such participation and inclusion) to the extent provided herein. A Holder may elect to include in such underwriting all or a part of such Holder’s Registrable Securities.

(d) Procedures. If other Persons shall request inclusion in any registration pursuant to Section 1.2, the Initiating Holders shall, on behalf of all Holders, offer to include such securities in the underwriting and may condition such offer on their acceptance of the further applicable provisions of this Section 1 (including Section 1.12). The Company shall (together with all Holders and other Persons proposing to distribute their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected for such underwriting by the Company and shall be reasonably acceptable to a majority in interest of the Initiating Holders. Notwithstanding any other provision of this Section 1.2, if the representative of the underwriters advises the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, the number of shares to be included in the underwriting or registration shall be allocated as set forth in Section 1.13 hereof. If a Person who has requested inclusion in such registration as provided above does not agree to the terms of any such underwriting, such Person shall be excluded therefrom by written notice from the Company, the underwriter or the Initiating Holders. The securities so excluded shall also be withdrawn from registration. Any Registrable Securities or other securities excluded shall also be withdrawn from such registration. If shares are so withdrawn from the registration and if the number of shares to be included in such registration was previously reduced as a result of marketing factors pursuant to this Section 1.2(d), then the Company shall offer to all Holders and other Persons who have retained rights to include securities in the registration the right to include additional securities in the registration in an aggregate amount equal to the number of shares so withdrawn, with such shares to be allocated among such Holders requesting additional inclusion in accordance with Section 1.13.

1.3 Company Registration.

(a) If the Company shall determine to register any of its securities either for its own account or the account of a security holder or holders exercising their respective demand registration rights (other than pursuant to Section 1.2 or 1.5 hereof), other than a registration relating solely to employee benefit plans, or a registration relating solely to a Rule 145 transaction, or a registration on any registration form that does not permit secondary sales, the Company will:

(i) promptly give to each Holder written notice thereof; and

(ii) use its best efforts to include in such registration (and any related qualification under blue sky laws or other compliance), except as set forth in Section 1.3(b) below, and in any underwriting involved therein, all of such Holder’s Registrable Securities specified in a written request or requests within

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twenty (20) days after the written notice from the Company described in clause (i) above is given. Such written request may specify all or a part of a Holder’s Registrable Securities.

(b) Underwriting. If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Holders as a part of the written notice given pursuant to Section 1.3(a)(i). In such event, the right of any Holder to registration pursuant to this Section 1.3 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company and the other holders of securities of the Company with registration rights to participate therein distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected by the Company.

Notwithstanding any other provision of this Section 1.3, if the representative of the underwriters advises the Company in writing that marketing factors require a limitation on the number of shares to be underwritten, the representative may (subject to the limitations set forth below) exclude all Registrable Securities from, or limit the number of Registrable Securities to be included in, the registration and underwriting. If the registration is the first Company-initiated registered offering of the Company’s securities to the general public, the Company may limit, to the extent so advised by the underwriters, the amount of securities (including Registrable Securities) to be included in the registration by the Company’s shareholders (including the Holders), or may exclude, to the extent so advised by the underwriters, such underwritten securities entirely from such registration. If such registration is the second or any subsequent Company-initiated registered offering of the Company’s securities to the general public, the Company may limit, to the extent so advised by the underwriters, the amount of securities to be included in the registration by the Company’s shareholders (including the Holders); provided, however, that the aggregate value of Registrable Securities to be included in such registration by Holders may not be so reduced to less than thirty percent (30%) of the total amount of such securities included in such registration.

The Company shall so advise all Holders and other shareholders requesting registration pursuant to this Section 1.3, and the number of shares of securities that are entitled to be included in the registration and underwriting shall be allocated first to the Company for securities being sold for its own account and thereafter as set forth in Section 1.13. If any Person does not agree to the terms of any such underwriting, he shall be excluded therefrom by written notice from the Company or the underwriter. Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall be withdrawn from such registration.

If shares are so withdrawn from the registration or if the number of shares of Registrable Securities to be included in such registration was previously reduced as a result of marketing factors, the Company shall then offer to all Persons who have retained the right to include securities in the registration the right to include additional securities in the registration in an aggregate amount equal to the number of shares so withdrawn, with such shares to be allocated among the Persons requesting additional inclusion in accordance with Section 1.13 hereof.

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1.4 Expenses of Registration. All Registration Expenses incurred in connection with any registration, qualification or compliance pursuant to Sections 1.2, 1.3, and 1.5 hereof shall be borne by the Company; provided, however, that if the Holders bear the Registration Expenses for any registration proceeding begun pursuant to Section 1.2 and subsequently withdrawn by the Holders registering shares therein, such registration proceeding shall not be counted as a requested registration pursuant to Section 1.2 hereof, except in the event that such withdrawal is based upon material adverse information relating to the Company that is different from the information known or available (upon request from the Company or otherwise) to the Holders requesting registration at the time of their request for registration under Section 1.2, in which event such registration shall not be treated as a counted registration for purposes of Section 1.2 hereof, even though the Holders do not bear the Registration Expenses for such registration. All Selling Expenses relating to securities so registered shall be borne by the holders of such securities pro rata on the basis of the number of shares of securities so registered on their behalf.

1.5 Registration on Form S-3.

(a) After its initial public offering, the Company shall use its best efforts to qualify for registration on Form S-3 or any comparable or successor form or forms. After the Company has qualified for the use of Form S-3, in addition to the rights contained in the foregoing provisions of this Section 1, the Holders of at least fifteen percent (15%) of the Registrable Securities then outstanding shall have the right to request registrations on Form S-3 (such requests shall be in writing and shall state the number of shares of Registrable Securities to be disposed of and the intended methods of disposition of such shares by such Holder or Holders); provided, however, that the Company shall not be obligated to effect any such registration if (i) the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) on Form S-3 at an aggregate price to the public of less than $1,000,000, (ii) in the event that the Company shall furnish the certification described in paragraph 1.2(b) (but subject to the limitations set forth therein) or (iii) in a given twelve-month period, the Company has effected three (3) such registrations in any such period.

(b) If a request complying with the requirements of Section 1.5(a) hereof is delivered to the Company, the provisions of Sections 1.2(a)(i) and (ii) and Section 1.2(b) hereof shall apply to such registration. If the registration is for an underwritten offering, the provisions of Sections 1.2(c) and 1.2(d) hereof shall apply to such registration.

1.6 Registration Procedures. In the case of each registration effected by the Company pursuant to Section 1, the Company will keep each Holder advised in writing as to the initiation of each registration and as to the completion thereof. At its expense, the Company will as expeditiously as reasonably possible:

(a) Prepare and file with the Commission after receipt of a request to file a registration statement on any form for which the Company then qualifies or which counsel for the Company shall deem appropriate and which form shall be available for the sale of the Registrable Securities in accordance with the intended method of distribution thereof, and use its best efforts to cause such registration statement to become effective, provided that before filing a registration statement or prospectus or any amendments or supplements thereto, the Company

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will (i) furnish to counsel selected by the Holders of the Registrable Securities covered by such registration statement copies of all such documents proposed to be filed, which documents will be subject to the review of such counsel and (ii) notify each Holder of Registrable Securities of any stop order issued or threatened by the Commission or any state regulatory authority and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered;

(b) Keep such registration effective for a period of one hundred twenty (120) days or until the Holder or Holders have completed the distribution described in the registration statement relating thereto, whichever first occurs; provided, however, that (i) such 120-day period shall be extended for a period of time equal to the period the Holder refrains from selling any securities included in such registration at the request of an underwriter of Common Stock (or other securities) of the Company; and (ii) in the case of any registration of Registrable Securities on Form S-3 which are intended to be offered on a continuous or delayed basis, such 120-day period shall be extended, if necessary, to keep the registration statement effective until all such Registrable Securities are sold, provided that Rule 415, or any successor rule under the Securities Act, permits an offering on a continuous or delayed basis; and provided further, that applicable rules under the Securities Act governing the obligation to file a post-effective amendment permit, in lieu of filing a post-effective amendment that (I) includes any prospectus required by Section 10(a)(3) of the Securities Act or (II) reflects facts or events representing a material or fundamental change in the information set forth in the registration statement, the incorporation by reference of information required to be included in (I) and (II) above to be contained in periodic reports filed pursuant to Section 13 or 15(d) of the Exchange Act in the registration statement;

(c) Prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement;

(d) Furnish such number of prospectuses and other documents incident thereto, including any amendment of or supplement to the prospectus, as a Holder from time to time may reasonably request;

(e) Use its best efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as any Holder reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such Holder to consummate the disposition in such jurisdictions of the Registrable Securities owned by such Holder, provided that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph (e), (ii) subject itself to taxation in any such jurisdiction, or (iii) consent to general service of process in any such jurisdiction;

(f) Use its best efforts to cause the Registrable Securities covered by such registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company to enable the Holder or Holders thereof to consummate the disposition of such Registrable Securities;

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(g) Notify each Holder of such Registrable Securities at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and the Company will prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein, in light of the circumstances under which they were made, or necessary to make the statements therein not misleading;

(h) Use its best efforts to cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed, provided that the applicable listing requirements are satisfied;

(i) In connection with any underwritten offering pursuant to a registration statement filed pursuant to Section 1.2 hereof, the Company will enter into an underwriting agreement reasonably necessary to effect the offer and sale of Common Stock, provided such underwriting agreement contains customary underwriting provisions and provided further that if the underwriter so requests the underwriting agreement will contain customary contribution provisions;

(j) Use its best efforts to obtain a cold comfort letter from the Company’s independent public accountants in customary form and covering such matters of the type customarily covered by cold comfort letters as the Holders of a majority of the Registrable Securities being sold reasonably request;

(k) Use its best efforts to obtain an opinion letter from the Company’s legal counsel in customary form and covering such matters of the type customarily covered by opinion letters as the Holders of a majority of the Registrable Securities being sold reasonably request;

(l) Use its best efforts to take all other steps necessary to effect the registration of the Registrable Securities covered by the registration statement contemplated hereby; and

(m) Otherwise use its best efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering a period of twelve (12) months, beginning within three (3) months after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11 (a) of the Securities Act and Rule 158 thereunder.

1.7 Indemnification.

(a) The Company will indemnify each Holder, each of its officers, directors and partners, legal counsel, and accountants and each Person controlling such Holder within the meaning of Section 15 of the Securities Act, with respect to which registration, qualification, or compliance has been effected pursuant to this Section 1, and each underwriter, if any, and each Person who controls within the meaning of Section 15 of the Securities Act any underwriter,

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against all expenses, claims, losses, damages, and liabilities (or actions, proceedings, or settlements in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein, any prospectus, incident to any such registration, qualification, or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of the Securities Act or any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification, or compliance, and will reimburse each such Holder, each of its officers, directors, partners, legal counsel, and accountants and each Person controlling such Holder, each such underwriter, and each Person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, loss, damage, liability, or action, provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by such Holder or underwriter and stated to be specifically for use therein. It is agreed that the indemnity agreement contained in this Section 1.7(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent has not been unreasonably withheld).

(b) Each Holder will, if Registrable Securities held by him are included in the securities as to which such registration, qualification, or compliance is being effected, indemnify the Company, each of its directors, officers, partners, legal counsel, and accountants and each underwriter, if any, of the Company’s securities covered by such a registration statement, each Person who controls the Company or such underwriter within the meaning of Section 15 of the Securities Act, each other such Holder and Other Investors, and each of their officers, directors, and partners, and each Person controlling such Holder or Other Investor, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, including any preliminary prospectus or final prospectus contained therein, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and such Holders, Other Investors, directors, officers, partners, legal counsel, and accountants, Persons, underwriters, or control Persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability, or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, including any preliminary prospectus or final prospectus contained therein in reliance upon and in conformity with written information furnished to the Company by such Holder expressly for use in such registration statement, including any preliminary prospectus or final prospectus contained therein; provided, however, that the obligations of such Holder hereunder shall not apply to amounts paid in settlement of any such claims, losses, damages, or liabilities (or actions in respect thereof) if such settlement is effected without the consent of such Holder (which consent shall not be unreasonably withheld); and provided further, that Holder will not be liable under this Section for any losses, costs, damages or expenses exceeding the gross proceeds received by Holder in such registration or offering.

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(c) Each party entitled to indemnification under this Section 1.7 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in such defense at such party’s expense, and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 1, to the extent such failure is not prejudicial. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom.

(d) If the indemnification provided for in this Section 1.7 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, liability, claim, damage, or expense referred to therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.

(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

1.8 Information by Holder. Each Holder of Registrable Securities shall furnish to the Company such information regarding such Holder and the distribution proposed by such Holder as the Company may reasonably request in writing and as shall be reasonably required in connection with any registration, qualification, or compliance referred to in this Section 1.

1.9 Limitations on Registration of Issues of Securities. From and after the date of this Agreement, the Company shall not, without the prior written consent of a majority in interest of the Holders, enter into any agreement with any holder or prospective holder of any securities of the Company giving such holder or prospective holder any registration rights, unless the terms of

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such agreement provide that such registration rights are subordinate to the registration rights granted to the Holders hereunder.

1.10 Rule 144 Reporting. With a view to making available the benefits of certain rules and regulations of the Commission that may permit the sale of the Registrable Securities to the public without registration, the Company agrees to use its best efforts to:

(a) Make and keep public information regarding the Company available as those terms are understood and defined in Rule 144 under the Securities Act, at all times from and after ninety (90) days following the effective date of the first registration under the Securities Act filed by the Company for an offering of its securities to the general public;

(b) File with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act at any time after it has become subject to such reporting requirements; and

(c) So long as a Holder owns any Registrable Securities, furnish to the Holder forthwith upon written request (i) a written statement by the Company as to its compliance with the reporting requirements of Rule 144 (at any time from and after ninety (90) days following the effective date of the first registration statement filed by the Company for an offering of its securities to the general public), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), (ii) a copy of the most recent annual or quarterly report of the Company and (iii) such other reports and documents so filed as a Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing a holder to sell any such securities without registration.

1.11 Transfer or Assignment of Registration Rights. The rights to cause the Company to register securities granted to a Holder by the Company under this Section 1 may be transferred or assigned by a Holder only to a transferee or assignee (a) who acquires at least fifty thousand (50,000) shares of Registrable Securities, (b) who is a Holder of Registrable Securities and already possesses such registration rights, or (c) that is an affiliated limited partnership, a limited partner, general partner, or other affiliate of the Holder; provided that the Company is given written notice at the time of or within a reasonable time after said transfer or assignment, stating the name and address of the transferee or assignee and identifying the securities with respect to which such registration rights are being transferred or assigned, and, provided further, that the transferee or assignee acquires such Registrable Securities in a private transaction in compliance with that certain Stock Restriction and Co-Sale Agreement of even date herewith and assumes the obligations of such Holder under this Section 1, and, provided further, that all assignees who would not qualify for assignment of registration rights individually shall have a single attorney in fact appointed by such assignees for the purpose of exercising any rights, receiving notices or taking actions under this Section 1.

1.12 “Market Stand-Off” Agreement. If requested by the Company and an underwriter of Common Stock (or other securities) of the Company, a Holder shall not sell or otherwise transfer or dispose of any Common Stock (or other securities) of the Company held by such Holder (other than those included in the registration) during a reasonable and customary period of time as agreed to by the Company and the underwriters, not to exceed (a) one hundred eighty

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(180) days, following the effective date of the first registration statement of the Company filed under the Securities Act and (b) ninety (90) days following the effective date of any subsequent registration statement of the Company, provided that:

(i) all officers and directors of the Company and all other Persons with registration rights (whether or not pursuant to this Agreement) enter into similar agreements; and

(ii) any discretionary waiver or termination of the restrictions of any such agreement by the Company or representatives of the underwriters shall apply to Holders on a pro rata basis together with any holder of securities other than a Holder.

The obligations described in this Section 1.12 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a Commission Rule 145 transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions with respect to the shares (or securities) subject to the foregoing restriction until the end of such period.

1.13 Allocation of Registration Opportunities. In any circumstance in which all of the Registrable Securities and other shares of Common Stock of the Company (including shares of Common Stock issued or issuable upon conversion of shares of any currently unissued series of Preferred Stock of the Company) with registration rights (the “Other Shares”) requested to be included in a registration on behalf of the Holders or other selling shareholders cannot be so included as a result of limitations of the aggregate number of shares of Registrable Securities and Other Shares that may be so included, the number of shares of Registrable Securities and Other Shares that may be so included shall be reduced first, amongst the other selling shareholders requesting inclusion of shares (other than Holders) pro rata on the basis of the number of shares of Other Shares to be included in such registration, assuming conversion and, if after such Other Shares are excluded, reduction to the number of Registrable Securities to be offered is necessary, then pro rata amongst all Holders on the basis of the number of shares of Registrable Securities to be included in such registration, assuming conversion; provided, however, so that such allocation shall not operate to reduce the aggregate number of Registrable Securities and Other Shares to be included in such registration, if any Holder or other selling shareholder does not request inclusion of the maximum number of shares of Registrable Securities and Other Shares allocated to him pursuant to the above-described procedure, the remaining portion of his allocation shall be reallocated among those requesting Holders and other selling shareholders whose allocations did not satisfy their requests, and this procedure shall be repeated until all the shares of Registrable Securities and Other Shares which may be included in the registration on behalf of the Holders and other selling shareholders have been so allocated. The Company shall not limit the number of Registrable Securities or Other Shares to be included in a registration pursuant to this Agreement in order to include shares held by shareholders with no registration rights or to include other shares of stock issued to employees, officers, directors, or consultants, or with respect to registrations under Section 1.2 or 1.5 hereof, in order to include in such registration securities registered for the Company’s own account.

13

1.14 Termination of Registration Rights. The right of any Holder to request registration or inclusion in any registration pursuant to Section 1.2, 1.3 or 1.5 shall terminate on the earlier of (i) such date after the closing of the first Company-initiated registered public offering of Common Stock of the Company as all shares of Registrable Securities held or entitled to be held upon conversion by such Holder may immediately be sold under Rule 144 during any three (3)-month period or (ii) the expiration of five (5) years after the closing of the first registered public offering of Common Stock of the Company.

SECTION 2

Covenants of the Company

2.1 Basic Financial Information. With respect to each Holder, so long as such Holder holds at least 200,000 shares of Common Stock issued or issuable upon conversion of Shares held by such Holder, the Company will furnish to each such Holder:

(a) Within 30 days after the end of each quarterly fiscal period, an unaudited balance sheet and income statement as of the end of such period, together with statements of retained earnings and cash flow for such period, and a comparison by reasonable categories, including a reasonable explanation of any differences, of the actual results to the applicable budget and the comparable figures for the prior year, all in detail reasonably satisfactory to the Holder and furnished with a certificate executed by the Chief Executive Officer or the Chief Financial Officer of the Company (in either event, an “Officer”) stating that, to such individual’s knowledge, such statements present fairly the financial position and results of operations of the Company for such period and that such statements have been prepared in accordance with the books and records of the Company applied on a consistent basis.

(b) Within 90 days after the end of each fiscal year, an audited balance sheet and income statement as of the end of such fiscal year, together with statements of retained earnings and cash flow for such fiscal year, all in reasonable detail and certified by a recognized national firm of independent accountants as presenting fairly the financial position and results of operations of the Company and as having been prepared in accordance with generally accepted accounting principals consistently applied, including such accountants’ opinion thereon.

2.2 Inspection Rights. The Company will permit each Holder, at such Holder’s expense (or its representative), to visit and inspect any of the properties of the Company, including its books of account and other records (and make copies thereof and take extracts therefrom), and to discuss its affairs, finances and accounts with the Company’s officers and its independent public accountants, during reasonable business hours following reasonable notice and as often as any such Person may reasonably request; provided, however, that the Company shall not be required pursuant to this Section 2.2 to provide access to any information which it reasonably considers to be a trade secret or similar confidential information without the Holder first entering into a confidentiality agreement in form acceptable to the Company.

2.3 Right of First Refusal. The Company hereby grants to each Shareholder the right of first refusal to purchase a pro rata share of New Securities (as defined in this Section 2.3) which the Company may, from time to time, propose to sell and issue. A Shareholder’s pro rata

14

share, for purposes of this right of first refusal, is the ratio of the number of shares of Common Stock owned by such Shareholder immediately prior to the issuance of New Securities (assuming full conversion of all shares held by the Shareholders) to the total number of shares of Common Stock outstanding immediately prior to the issuance of New Securities, assuming full conversion of all Shares held by the Shareholders. Each Shareholder shall have a right of over-allotment such that if any Shareholder fails to exercise its right hereunder to purchase its pro rata share of New Securities, the other Shareholders may purchase the nonpurchasing Shareholder’s portion on a pro rata basis within ten (10) days from the date such nonpurchasing Shareholder fails to exercise its right hereunder to purchase its pro rata share of New Securities. This right of first refusal shall be subject to the following provisions:

(a) “New Securities” shall mean any capital stock (including Common Stock and/or Preferred Stock) of the Company whether now authorized or not, and rights, options or warrants to purchase such capital stock, and securities of any type whatsoever that are, or may become, convertible into capital stock; provided that the term “New Securities” does not include (i) any securities issued by the Company prior to the date of this Agreement or the Series I Preferred Stock issued pursuant to the Series I Purchase Agreement; (ii) securities issued upon conversion of any securities issued by the Company prior to the date of this Agreement or the Series I Preferred Stock; (iii) securities issued pursuant to the acquisition of another business entity or business segment of any such entity by the Company (including, without limitation, the Series J Preferred Stock) by merger, purchase of substantially all the assets or other reorganization whereby the Company will own not less than fifty-one percent (51%) of the voting power of such business entity or business segment of any such entity; (iv) shares of Common Stock or Preferred Stock of the Company issued or issuable to employees, directors, consultants or advisors, directly or pursuant to any stock option or restricted stock purchase agreements approved by the Compensation Committee of the Board of Directors; (v) securities issued to Persons with which the Company has a potential or existing customer or supplier or other strategic relationship, so long as such issuance is approved by the Board of Directors; (vi) securities issued in connection with a bona fide lease transaction, or bank financing approved by the Board of Directors, but not exceeding 1,568,975 shares, as adjusted for any stock dividend, stock split, recapitalization or other change affecting such securities, in the aggregate with respect to all such lease transactions and bank financings; (vii) securities issued in a firm commitment underwritten public offering pursuant to a registration under the Securities Act other than a registration relating solely to a transaction under Rule 145 (or any successor thereto) or to an employee benefit plan of the Company where (x) the market capitalization of the Company, based on the initial offering price per share in such offering (but excluding the shares sold by the Company in such offering), is at least $125,000,000, (y) after such public offering, the shares are listed on a United States national securities exchange or The Nasdaq Stock Market (or any successor organization thereto) and (z) the Company receives gross proceeds of at least $25,000,000 (before payment of any underwriter discounts and commissions and offering expenses) (a “Qualified Public Offering”); (viii) securities issued in connection with any stock split, stock dividend or recapitalization of the Company; (ix) any right, option or warrant to acquire any security convertible into the securities excluded from the definition of New Securities pursuant to subsections (i) through (viii) above.

(b) In the event the Company proposes to undertake an issuance of New Securities, it shall give each Shareholder written notice of its intention, describing the type of

15

New Securities, and their price and the general terms upon which the Company proposes to issue the same. Each Shareholder shall have twenty (20) days after any such notice is effective to agree to purchase such Shareholder’s pro rata share of such New Securities for the price and upon the terms specified in the notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased.

(c) In the event the Shareholders fail to exercise fully the right of first refusal within said twenty (20) day period and after the expiration of the ten-day period for the exercise of the over-allotment provisions of this Section 2.3, the Company shall have one hundred twenty (120) days thereafter to sell or enter into an agreement (pursuant to which the sale of New Securities covered thereby shall be closed, if at all, within one hundred twenty (120) days from the date of said agreement) to sell the New Securities respecting which the Shareholders’ right of first refusal option set forth in this Section 2.3 was not exercised, at a price and upon terms no more favorable to the purchasers thereof than specified in the Company’s notice to the Shareholders pursuant to Section 2.3(b). In the event the Company has not sold within such 120- day period or entered into an agreement to sell the New Securities in accordance with the foregoing within one hundred twenty (120) days from the date of said agreement), the Company shall not thereafter issue or sell any New Securities, without first again offering such securities to the Investors in the manner provided in Section 2.3(b) above.

(d) The right of first refusal granted under this Agreement shall expire upon, and shall not be applicable to, the first sale of Common Stock of the Company to the public effected pursuant to a Qualified Public Offering, as defined in Section 2.3(a)(vii) above.

(e) The right of first refusal set forth in this Section 2.3 may not be assigned or transferred by a Shareholder, except that (i) such right is assignable by each Investor in connection with a sale or transfer of Registrable Securities and (ii) such right is assignable between and among any of the Shareholders.

2.4 Proprietary Information and Inventions Agreements. The Company will cause each person now or hereafter employed by it or any subsidiary with access to confidential information to enter into a proprietary information and inventions agreement substantially in the form approved by the Board of Directors.

2.5 Employee and Other Stock Arrangements. The Company will not, without the approval of the Board of Directors, issue any of its capital stock, or grant an option or rights to subscribe for, purchase or acquire any of its capital stock, to any employee, consultant, officer or director of the Company or a subsidiary. Except as otherwise approved by the Board of Directors, each acquisition of any shares of capital stock of the Company or any option or right to acquire any shares of capital stock of the Company by an employee, consultant, officer or director of the Company will be (a) subject to vesting over a four (4)-year period on a monthly basis, commencing one (1) year after the grant date or commencement of service date and (b) conditioned upon the execution and delivery by the Company and such employee, consultant, officer or director of an agreement substantially in a form approved by the Board of Directors of the Company.

16

SECTION 3

Miscellaneous

3.1 Aggregation of Stock. All Registrable Securities held or acquired by affiliated entities or Persons shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

3.2 Governing Law. This Agreement shall be governed in all respects by the laws of the State of Delaware, without regard to the conflicts of law principles thereof.

3.3 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.

3.4 Entire Agreement; Amendment; Waiver. This Agreement, together with all schedules and exhibits hereto, constitutes the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior agreements (including the Prior Agreement), understandings, negotiations and discussions, whether oral or written, of the parties. All provisions of, rights granted and covenants made in the Prior Agreement are hereby waived, released and terminated in their entirety and shall have no further force or effect whatsoever. Neither this Agreement nor any term hereof may be amended, waived, discharged or terminated, except by a written instrument signed by the Company and the Shareholders holding at least fifty percent (50%) of the Registrable Securities. Any amendment, waiver, discharge or termination made in accordance with this Section 3.4 shall be binding on all the Shareholders but in no event shall the obligations of any Shareholder hereunder be materially increased, except upon the written consent of such Shareholder and in no event may any amendment, waiver, discharge or termination adversely affect any Shareholder disproportionately to any other Shareholder without the written consent of such Shareholder.

3.5 Notices, Etc. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by United States first-class mail, postage prepaid, or delivered personally addressed by hand or special courier (a) if to a Shareholder, as indicated on the signature page hereto, or at such other address as such Shareholder or permitted assignee shall have furnished to the Company in writing, or (b) if to the Company, at 1020 Prospect Street, Suite 250, La Jolla, CA 92037, or at such other address as the Company shall have furnished to each Shareholder in writing. All such notices and other written communications shall be effective (i) if mailed, five (5) days after mailing and (ii) if delivered, upon delivery.

3.6 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any Holder, upon any breach or default of the Company under this Agreement shall impair any such right, power or remedy of such Holder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Holder of any breach or

17

default under this Agreement or any waiver on the part of any Holder of any provisions or conditions of this Agreement must be made in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any Holder, shall be cumulative and not alternative.

3.7 Rights, Severability. Unless otherwise expressly provided herein, an Holder’s rights hereunder are several rights, not rights jointly held with any of the other Holders. In case any provision of the Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

3.8 Information Confidential. Each Holder acknowledges that the information received by them pursuant hereto may be confidential and for its use only, and it will not use such confidential information in violation of the Exchange Act or reproduce, disclose or disseminate such information to any other Person (other than its employees or agents having a need to know the contents of such information, and its attorneys), except in connection with the exercise of rights under this Agreement, unless the Company has made such information available to the public generally or such Holder is required to disclose such information by a governmental body.

3.9 Titles and Subtitles. The titles of the paragraphs and subparagraphs of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

18

3.10 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amended and Restated Investors’ Rights Agreement effective as of the day and year first above written.

The Active Network, Inc.
By:	/s/    David Alberga
Title:	CEO
Address:	1020 Prospect Street Suite 250 La Jolla, CA 92037

Enterprise Partners IV, L.P.
By:	Enterprise Management Partners IV, L.P., its General Partner
	By:	/s/    William Stensrud
		William R. Stensrud its General Partner
Address:		7979 Ivanhoe Avenue Suite 550 La Jolla, CA 92037

Enterprise Partners IV Associates, L.P.
By:	Enterprise Management Partners IV, L.P., its General Partner
	By:	/s/    William Stensrud
		William R. Stensrud its General Partner

19

[Signature page to Fifth Amended and Restated Investors’ Rights Agreement]

Address: 7979 Ivanhoe Avenue Suite 550 La Jolla, CA 92037

/s/    Scott Kyle
Scott Kyle
Address:	1295 Prospect Street La Jolla, CA 92037

Frederick Mitchell Thrower, III Separate Property Trust, U.T.D. September 28, 1999
By:	/s/    Mitchell Thrower
Its:	Trustee Mitchell Thrower 11/01
Address:		1295 Prospect Street La Jolla, CA 92037

/s/    Richard A. Fink
Richard A. Fink
Address:	P.O. Box 1647 Rancho Santa Fe, CA 92067

PM&S Venture Fund II LLC
By:	/s/    Illegible
	Its Managing Member
Address:		101 West Broadway Suite 1800 San Diego, CA 92101-8219

20

[Signature page to Fifth Amended and Restated Investors’ Rights Agreement]

Kettle Partners LP
By:	Moraine L.L.C.
By:	/s/ Illegible
	Its Member
Address:		350 West Hubbard Street Suite 350 Chicago, IL 60610

Kettle Partners Limited Partnership II
By:	Moraine II LLC, its General Partner
By:	/s/ Lee Rosenberg
	Lee Rosenberg, its General Partner
Address:		350 West Hubbard Street Suite 350 Chicago, IL 60610

Austin Ventures VI, L.P.
By:	A.V. Partners VI, L.P., its general partner
By:	/s/ John Thorton
	John Thorton
	Its:
Address:		114 W. 7th Street Suite 1300 Austin, TX 78701

/s/ James Woodman
James Woodman
Address:	3805 Torrey Hill Lane San Diego, CA 92130

21

[Signature page to Fifth Amended and Restated Investors’ Rights Agreement]

TicketMaster Online-CitySearch, Inc.
By:	/s/     Illegible

Title:     EVP

Address: 3701 Wilshire Blvd. Los Angeles, CA 90010

/s/     Matthew S. McAdams
Matthew S. McAdams
Address:	728 Clarkson Street Denver, CO 80209

Growth Partners
By:	/s/     Illegible

Title:

Address: 200 South Wacker Drive Suite 700 Chicago, IL 60606

David A. Sherman Living Trust
/s/     David Sherman
David Sherman, Trustee
Address:	2 North LaSalle Street Suite 1725 Chicago, IL 60602

22

[Signature page to Fifth Amended and Restated Investors’ Rights Agreement]

/s/     Lindsey S. Rabushka
Lindsey S. Rabushka
Address:	389 Landris Lane Deerfield, IL 60015

/s/     Arnold H. Heltzer
Arnold H. Heltzer
Address:	707 Skokie Boulevard Suite 300 Northbrook, IL 60062
	and
	c/o Bear Stearns & Co. Attn: Jim Tarsy 245 Park Avenue, 9th Floor New York, NY 10167

/s/     Arthur Roldan
Arthur Roldan
Address:	1260 South Fiore Drive Lake Forest, IL 60045

Dodi Ventures, L.L.C.
By:	/s/     Illegible

Title:

Address: 450 East Devon, Suite 250 Itasca, IL 60143

23

[Signature page to Fifth Amended and Restated Investors’ Rights Agreement]

/s/    David Robert Lack
David Robert Lack
Address:	79 Norfolk Avenue Clarendon Hills, IL 60514

/s/    Jeffrey Stuart Lack
Jeffrey Stuart Lack
Address:	3710 Tartan Houston TX 7702

/s/    Melvin Lack
Melvin Lack
Address:	P.O. Box 2550 Victoria, TX 77901

/s/    Ross Stevens
Ross Stevens
Address:	One Union Square South Apt. 23B New York, New York 10003

/s/    Kermit King
Kermit King
Address:	10 W. Elm Street, Apt. D Chicago, IL 60610

24

[Signature page to Fifth Amended and Restated Investors’ Rights Agreement]

/s/    Kendall A. Itoku
Kendall A. Itoku
Address:	2320 Wellington Estate Drive Chesterfield, MO 63017

New World Venture Investors I, L.P.
By:	New World Venture Partner LLC its General Partner
By:	/s/    Christopher Girgenti
Title:	Managing Director
Address:		1603 Orrington, Suite 1070 Evanston, IL 60201 Attn: Christopher E. Girgenti

NW Equity Investors, L.L.C.
By:	/s/     Illegible
Title:
Address:		1603 Orrington, Suite 1070 Evanston, IL 60201 Attn: Christopher E. Girgenti

KB Partners Venture Fund I, L.P.
By:	/s/    Keith Bank
Title:	Managing Director
Address:		1101 Skokie Boulevard Suite 260 Northbrook, IL 60062

25

[Signature page to Fifth Amended and Restated Investors’ Rights Agreement]

LeagueLink Investors, L.L.C.
By:	/s/     Illegible
Title:
Address:		c/o New World Ventures 1603 Orrington, Suite 1070 Evanston, IL 60201 Attn: Christopher E. Girgenti

/s/     Joseph Piscopo
Joseph Piscopo
Address:	18 Natoma Drive Oak Brook, IL 60523

ABS Ventures IT, L.P.
By:	Calvert Capital II L.L.C.
By:	/s/    Illegible
	Name:
	Title:	Manager
Address:		1 South Street, Suite 2150 Baltimore, MD 21202

26

[Signature page to Fifth Amended and Restated Investors’ Rights Agreement]

Austin Ventures VI, L.P.
By:	A.V. Partners VI, L.P., its General Partner
	By:	/s/    John Thornton
		John Thornton
	Title:
Address:		114 W. 7th Street Suite 1300 Austin, TX 78701

Austin Ventures VI Affiliates Fund, L.P.
By:	A.V. Partners VI, L.P., its General Partner
	By:	/s/    John Thornton
		John Thornton
	Title:
Address:		114 W. 7th Street Suite 1300 Austin, TX 78701

/s/    John Griffin        

John Griffin

Address:

27

[Signature page to Fifth Amended and Restated Investors’ Rights Agreement]

Hambrecht Eu Capital
By:	/s/    Illegible
Title:	Manager

Address:	1356 Greenwich St.
	SF, CA 94109

/s/    Duane Harlan
Duane Harlan
Address:	937 Enterprise Drive Sacramento, CA 95825

John Kirtley

Address:

Brian and Jennifer Maxwell Living Trust dated 3/7/94
By:
	Brian Maxwell, Trustee
By:
	Jennifer Maxwell, Trustee

Address: 47 Laurel Grove P.O. Box 1725 Ross, CA 94957

28

[Signature page to Fifth Amended and Restated Investors’ Rights Agreement]

/s/     Jeffrey Leck        

Jeffrey Leck

Address:

Canaan Equity II L.P.
By:	Canaan Equity Partners II L.L.C., its General Partner

By:	/s/    Stephen L. Green
	Stephen L. Green
Title:	Member/Manager

Address:   105 Rowayton Avenue   Rowayton, CT 06853

Canaan Equity II L.P. (QP)
By:	Canaan Equity Partners II L.L.C., its General Partner

By:	/s/ Stephen L. Green
	Stephen L. Green
Title:	Member/Manager

Address:   105 Rowayton Avenue   Rowayton, CT 06853

29

[Signature page to Fifth Amended and Restated Investors’ Rights Agreement]

Canaan Equity II Entrepreneurs L.L.C.
By:	Canaan Equity Partners II L.L.C.,

By:	/s/    Stephen L. Green
	Stephen L. Green
Title:	Member/Manager

Address:   105 Rowayton Avenue   Rowayton, CT 06853

Charles River Partnership IX, a Limited Partnership
By:	Charles River IX GP Limited Partnership, its General Partner

By:	/s/    Illegible
Title:

Address:   1000 Winter Street, Suite 3300   Waltham, MA 02451

Charles River Partnership IX-A, a Limited Partnership
By:	Charles River IX GP Limited Partnership, its General Partner

By:	/s/    Illegible
Title:

Address:   1000 Winter Street, Suite 3300   Waltham, MA 02451

30

[Signature page to Fifth Amended and Restated Investors’ Rights Agreement]

Charles River IX-B LLC
By:	Charles River VII Friends, Inc., its Manager
	By:	/s/    Illegible
	Title:
Address:		1000 Winter Street, Suite 3300 Waltham, MA 02451

Charles River IX-C LLC
By:	Charles River VII Friends, Inc., its Manager
	By:	/s/    Illegible
	Title:
Address:		1000 Winter Street, Suite 3300 Waltham, MA 02451

31

[Signature page to Fifth Amended and Restated Investors’ Rights Agreement]

North Bridge Venture Partners III, L.P., a Limited Partnership
By:	North Bridge Venture Management III, L.P., its General Partner
	By:	/s/    Illegible
	Title:
Address:		950 Winter Street, Suite 4600 Waltham, MA 02451

Dominion Fund V, a Delaware Limited Partnership
By:	Dominion Ventures, LLC, its General Partner
	By:	/s/    Illegible
	Title:
Address:		One Post Office Square, 38th Floor Boston, MA 02110

32

[Signature page to Fifth Amended and Restated Investors’ Rights Agreement]

Wand Equity Portfolio II, L.P.
	By:	/s/    Illegible
	Title:
Address:

Wand Affiliates Fund, L.P.
	By:	/s/    Illegible
	Title:
Address:

33

[Signature page to Fifth Amended and Restated Investors’ Rights Agreement]

Comdisco, Inc.
	By:	/s/    Illegible
	Title:
Address:

34

[Signature page to Fifth Amended and Restated Investors’ Rights Agreement]

SCHEDULE A

List of Shareholders

Enterprise Partners IV, L.P.

Enterprise Partners IV Associates, L.P.

Richard A. Fink

PM&S Venture Fund II LLC

Scott Kyle

Frederick Mitchell Thrower, III Separate Property Trust, U.T.D. September 28, 1999

Jim Woodman

Kettle Partners LP

Austin Ventures VI, L.P.

TicketMaster Online-CitySearch, Inc.

Matthew S. McAdams

Growth Partners

David A. Sherman Living Trust

Lindsey S. Rabushka

Arnold H. Heltzer

Arthur Roldan

Dodi Ventures, L.L.C.

David Robert Lack

Jeffrey Stuart Lack

Melvin Lack

Ross Stevens

Kermit King

Kendall A. Itoku

New World Venture Investors I, L.P.

NW Equity Investors, L.L.C.

KB Partners Venture Fund I, L.P.

LeagueLink Investors, L.L.C.

Joseph Piscopo

Duane Harlan

ABS Ventures ACT L.L.C.

ABS Investors L.L.C.

Austin Ventures VI, L.L.P.

Austin Ventures VI Affiliates Fund, L.P.

Dodi Ventures, L.L.C.

Enterprise Partners IV, L.P.

Enterprise Partners IV Associates, L.P.

John Griffin

Hambrecht Eu Capital

Kettle Partners Limited Partnership II

John Kirtley

David Robert Lack

Melvin Lack

Jeffrey Leck

Brian and Jennifer Maxwell Living Trust dated 3/7/94

TicketMaster Online-CitySearch, Inc.

Series I Investors

Canaan Equity II L.P.

Canaan Equity II L.P. (QP)

Canaan Equity II Entrepreneurs L.L.C.

Charles River Partnership IX

Charles River Partnership IX-A

Charles River Partnership IX-B LLC

Charles River Partnership IX-C LLC

North Bridge Venture Partners III, L.P.

Dominion Fund V

ABS Investors L.L.C.

ABS Ventures IT, L.P.

Austin Ventures VI, L.P.

Austin Ventures VI Affiliates Fund, L.P.

TicketMaster Online-CitySearch, Inc.

Liberty Mutual Insurance Company

Series J Investors

Wand Equity Portfolio II, L.P.

Wand Affiliates Fund, L.P.

Comdisco, Inc.

EX-10.1

Exhibit 10.1

STANDARD OFFICE LEASE–NET

AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION

[GRAPHIC]

1. Basic Lease Provisions (“Basic Lease Provisions”)

1.1 Parties: This Lease, dated, for reference purposes only, September 20, 1995 is made by and between Duane A. Harlan (herein called “Lessor”) and Sierra Digital, Inc., a California corporation doing business under the name of                                                                                (herein called “Lessee”).

1.2 Promises: Suite Number(s)                                                       floors, consisting of approximately                          square feet, more or less, is defined in paragraph 2 and as shown on Exhibit “A” hereto (the “Premises”).

1.3 Building: Commonly described as being located at 937 Enterprise Drive in the City of Sacramento, County of Sacramento, State of California, as more particularly described in Exhibit A hereto, and as defined in paragraph 2.

1.4 Use: Office subject to paragraph 6.

1.5 Term: See Addendum commencing                                                                                   (“Commencement Date”) and ending                                                                                                                                                     as defined in paragraph 3.

1.6 Base Rent: See Addendum per month, payable on the _______ day of each month, per paragraph 4.1                                                                                                                                                                                                                  

1.7 Base Rent Increase: On September 1st of each year the monthly Base Rent payable under paragraph 1.6 above shall be adjusted as provided in paragraph 4.3 below.

1.8 Rent Paid Upon Execution: None for                                                                                                                   

1.9 Security Deposit: None

1.10 Lessee’s Share of Operating Expenses:                 % as defined in paragraph 4.2.

2. Promises, Parking and Common Areas.

2.1 Premises: The Premises are a portion of a building, herein sometimes referred to as the “Building” identified in paragraph 1.3 of the Basic Lease Provisions. “Building” shall include adjacent parking structures used in connection therewith. The Premises, the Building, the Common Areas, the land upon which the same are located, along with all other buildings and improvements hereon or thereunder, are herein collectively referred to as the “Office Building Project.” Lessor hereby leases to Lessee and Lessee leases from Lessor for the term, at the rental, and upon all of the conditions set forth herein, the real property referred to in the Basic Lease Provisions, paragraph 1.2, as the “Premises,” including rights to the Common Areas as hereinafter specified.

2.2 Vehicle Parking: So long as Lessee is not in default, and subject to the rules and regulations attached hereto, and as established by Lessor from time to time, Lessee shall be entitled to rent and use                  parking spaces in the Office Building Project at the monthly rate applicable from time to time for monthly parking as set by Lessor and/or its licensee.

2.2.1 If Lessee commits, permits or allows any of the prohibited activities described in the Lease or the rules then in effect, then Lessor shall have the right, without notice, in addition to such other rights and remedies that it may have, to remove or tow away the vehicle involved and charge the cost to Lessee, which cost shall be immediately payable upon demand by Lessor.

2.2.2 The monthly parking rate per parking space will be $                     per month at the commencement of the term of this Lease, and is subject to change upon five (5) days prior written notice to Lessee. Monthly parking fees shall be payable one month in advance prior to the first day of each calendar month.

2.3 Common Areas–Definition. The term “Common Areas” is defined as all areas and facilities outside the Premises and within the exterior boundary line of the Office Building Project that are provided and designated by the Lessor from time to time for the general non-exclusive use of Lessor, Lessee and of other lessees of the Office Building Project and their respective employees, suppliers, shippers, customers and invitees, including but not limited to common entrances, lobbies, corridors, stairways and stairwells, public restrooms, elevators, escalators, parking areas to the extent not otherwise prohibited by this Lease, loading and unloading areas, trash areas, roadways, sidewalks, walkways, parkways, ramps, driveways, landscaped areas and decorative walls.

                2.4 Common Areas–Rules and Regulations. Lessee agrees to abide by and conform to the rules and regulations attached hereto as Exhibit B with respect to the Office Building Project and Common Areas, and to cause its employees, suppliers, shippers, customers, and invitees to so abide and conform. Lessor or such other person(s) as Lessor may appoint shall have the exclusive control and management of the Common Areas, and shall have the right, from time to time, to modify, amend and enforce said rules and regulations. Lessor shall not be responsible to Lessee for the non-compliance with said rules and regulations by other lessees, their agents, employees and invitees of the Office Building Project.

2.5 Common Areas–Changes. Lessor shall have the right, in Lessor’s sole discretion, from time to time:

(a) To make changes to the Building interior and exterior and Common Areas, including, without limitation, changes in the location, size, shape, number, and appearance thereof, including but not limited to the lobbies, windows, stairways, air shafts, elevators, escalators, restrooms, driveways, entrances, parking spaces, parking areas, loading and unloading areas, ingress, egress, direction of traffic, decorative walls, landscaped areas and walkways; provided, however, Lessor shall at all times provide the parking facilities required by applicable law;

(b) To close temporarily any of the Common Areas for maintenance purposes so long as reasonable access to the Premises remains available;

(c) To designate other land and improvements outside the boundaries of the Office Building Project to be a part of the Common Areas, provided that such other land and improvements have a reasonable and functional relationship to the Office Building Project;

(d) To add additional buildings and improvements to the Common Areas;

(e) To use the Common Areas while engaged in making additional improvements, repairs or alterations to the Office Building Project, or any portion thereof;

(f) To do and perform such other acts and make such other changes in, to or with respect to the Common Areas and Office Building Project as Lessor may, in the exercise of sound business judgment deem to be appropriate.

3. Term.

3.1 Term. The term and Commencement Date of this Lease shall be as specified in paragraph 1.5 of the Basic Lease Provisions.

3.2 Delay in Possession. Notwithstanding said Commencement Date, if for any reason Lessor cannot deliver possession of the Premises to Lessee on said date and subject to paragraph 3.2.2, Lessor shall not be subject to any liability thereof, nor shall such failure affect the validity of this Lease or the obligations of Lessee hereunder or extend the term hereof; but in such case, Lessee shall not be obligated to pay rent or perform any other obligation of Lessee under the terms of this Lease, except as may be otherwise provided in this Lease, until possession of the Premises is tendered to Lessee, as hereinafter defined; provided, however, that if Lessor shall not have delivered possession of the Premises within sixty (60) days following said Commencement Date, as the same may be extended under the terms of a Work Letter executed by Lessor and Lessee, Lessee may, at Lessee’s option, by notice in writing to Lessor within ten (10) days thereafter, cancel this Lease, in which event the parties shall be discharged from all obligations hereunder; provided, however, that as to Lessee’s obligations, Lessee first reimburses Lessor for all costs incurred for Non-Standard improvements and, as to Lessor’s obligations, Lessor shall return any money previously deposited by Lessee (less any offsets due Lessor for Non-Standard improvements); and provided further, that if such written notice by Lessee is not received by Lessor within said ten (10) day period, Lessee’s right to cancel this Lease hereunder shall terminate and be of no further force or effect.

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3.2.1 Possession Tendered – Defined. Possession of the Premises shall be deemed tendered to Lessee (“Tender of Possession”) when (1) the improvements to be provided by Lessor under this Lease are substantially completed, (2) the Building utilities are ready for use in the Premises, (3) Lessee has reasonable access to the Premises, and (4) ten (10) days shall have expired following advance written notice to Lessee of the occurrence of the matters described in (1), (2) and (3), above of this paragraph 3.2.1.

3.2.2 Delays Caused by Lessee. There shall be no abatement of rent, and the sixty (60) day period following the Commencement Date before which Lessee’s right to cancel this Lease accrues under paragraph 3.2, shall be deemed extended to the extent of any delays caused by acts or omissions of Lessee, its agents, employees and contractors.

3.3 Early Possession. If Lessee occupies the Premises prior to said Commencement Date, such occupancy shall be subject to all provisions of this Lease, such occupancy shall not change the termination date, and Lessee shall pay rent for such occupancy.

3.4 Uncertain Commencement. In the event commencement of the Lease term is defined as the completion of the improvements. Lessee and Lessor shall execute an amendment to this Lease establishing the date of Tender of Possession (as defined in paragraph 3.2.1) or the actual taking of possession by Lessee, whichever first occurs, as the Commencement Date.

4. Rent.

4.1 Base Rent. Subject to adjustment as hereinafter provided in paragraph 4.3, and except as may be otherwise expressly provided in this Lease, Lessee shall pay to Lessor the Base Rent for the Premises set forth in paragraph 1.6 of the Basic Lease Provisions, without offset or deduction. Lessee shall pay Lessor upon execution hereof the advance Base Rent described in paragraph 1.8 of the Basic Lease Provisions. Rent for any period during the term hereof which is for less than one month shall be prorated based upon the actual number of days of the calendar month involved. Rent shall be payable in lawful money of the United States to Lessor at the address stated herein or to such other persons or at such other places as Lessor may designate in writing.

4.2 Operating Expenses. Lessee shall pay to Lessor during the term hereof, in addition to the Base Rent, Lessee’s Share, as hereinafter defined, of all Operating Expenses, as hereinafter defined, during each calendar year of the term of this Lease, in accordance with the following provisions:

(a) “Lessee’s Share” is defined, for purposes of this Lease, as the percentage set forth in paragraph 1.10 of the Basic Lease Provisions which percentage has been determined by dividing the approximate square footage of the Premises by the total approximate square footage of the rentable space contained in the Office Building Project. It is understood and agreed that the square footage figures set forth in the Basic Lease Provisions are approximations which Lessor and Lessee agree are reasonable and shall not be subject to revision except in connection with an actual change in the size of the Premises or a change in the space available for lease in the Office Building Project.

(b) “Operating Expenses” is defined, for purposes of this Lease, to include all costs, if any, incurred by Lessor in the exercise of its reasonable discretion, for:

(i) The operation, repair, maintenance and replacement, in neat, clean, safe, good order and condition, of the Office Building Project, including but not limited to, the following:

(aa) The Common Areas, including their surfaces, coverings, decorative items, carpets, drapes and window coverings, and including parking areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways, stairways, parkways, driveways, landscaped areas, striping, bumpers, irrigation systems, Common Area lighting facilities, building exteriors and roofs, fences and gates;

(bb) All heating, air conditioning, plumbing, electrical systems, life safety equipment, telecommunication and other equipment used in common by or for the benefit of, lessees or occupants of the Office Building Project, including elevators and escalators, tenant directories, fire detection systems including sprinkler system maintenance and repair.

(ii) Trash disposal, janitorial and security services;

(iii) Any other service to be provided by Lessor that is elsewhere in this Lease stated to be an “Operating Expense”;

(iv) The cost of the premiums for the liability and property insurance policies to be maintained by Lessor under paragraph B hereof;

(v) The amount of the real property taxes to be paid by Lessor under paragraph 10.1 hereof;

(vi) The cost of water, sewer, gas, electricity, and other publicly mandated services to the Office Building Project;

(vii) Labor, salaries and applicable fringe benefits and costs, materials, supplies and tools used in maintaining and/or cleaning the Office Building Project and accounting and a management fee attributable to the operation of the Office Building Project;

(viii) Replacing and/or adding improvements mandated by any governmental agency and any repairs or removals necessitated and hereby amortized over its useful life according to Federal income tax regulations or guidelines for depreciation thereof (including interest or the unamortized balance as is then reasonable in the judgment of Lessor’s accountants);

(ix) Replacements of equipment or improvements that have a useful life for depreciation purposes according to Federal income tax guidelines of five (5) years or less, as amortized over such life.

(c) Operating Expenses shall not include the costs of replacements of equipment or improvements that have a useful life for Federal Income tax purposes in excess of five (5) years unless it is of the type described in paragraph 4.2(b)(viii), in which case their cost shall be included as above provided.

(d) Operating Expenses shall not include any expenses paid by the lessee directly to third parties, or as to which Lessor is otherwise reimbursed by any third party, other tenant, or by insurance proceeds.

(e) Lessee’s Share of Operating Expenses shall be payable by Lessee within ten (10) days after a reasonably detailed statement of actual expenses is presented to Lessee by Lessor. At Lessor’s option, however, an amount may be estimated by Lessor from time to time of Lessee’s Share of annual Operating Expenses and the same shall be payable monthly or quarterly, as Lessor shall designate, during each calendar year of the Lease term, on the same day as the Base Rent is due hereunder. In the event that Lessee pays Lessor’s estimate of Lessee’s Share of Operating Expenses as aforesaid, Lessor shall deliver to Lessee within sixty (60) days after the expiration of each calendar year a reasonably detailed statement showing Lessee’s Share of the actual Operating Expenses incurred during the preceding year. If Lessee’s payments under this paragraph 4.2(e) during said preceding calendar year exceed Lessee’s Share as indicated on said statement, Lessee shall be entitled to credit the amount of such overpayment against Lessee’s Share of Operating Expenses next falling due. If Lessee’s payments under this paragraph during said preceding calendar year were less than Lessee’s Share as indicated on said statement, Lessee shall pay to Lessor the amount of the deficiency within ten (10) days after delivery by Lessor to Lessee of said statement.

4.3 Rent Increase.

4.3.1 At the times set forth in paragraph 1.7 of the Basic Lease Provisions, the monthly Base Rent payable under paragraph 4.1 of this Lease shall be adjusted by the increase, if any, in the Consumer Price Index of the Bureau of Labor Statistics of the Department of Labor for All Urban Consumers, (1967=100), “All Items,” for the city nearest the location of the Building, herein referred to as “C.P.I,” since the date of this Lease.

4.3.2 The monthly Base Rent payable pursuant to paragraph 4.3.1 shall be calculated as follows: the Base Rent payable for the first month of the term of this Lease, as set forth in paragraph 4.1 of this Lease, shall be multiplied by a fraction the numerator of which shall be the C.P.I. of the calendar month during which the adjustment is to take effect, and the denominator of which shall be the C.P.I. for the calendar month in which the original Lease term commences. The sum so calculated shall constitute the new monthly Base Rent hereunder, but, in no event, shall such new monthly Base Rent be less than the Base Rent payable for the month immediately preceding the date for the rent adjustment.

4.3.3 In the event the compilation and/or publication of the C.P.I. shall be transferred to any other governmental department or bureau or agency or shall be discontinued, then the index most nearly the same as the C.P.I. shall be used to make such calculations. In the event that Lessor and Lessee cannot agree on such alternative index, then the matter shall be submitted for decision to the American Arbitration Association in the county in which the Premises are located, in accordance with the then rules of said association and the decision of the arbitrators shall be binding upon the parties, notwithstanding one party failing to appear after due notice of the proceeding. The cost of said Arbitrators shall be paid equally by Lessor and Lessee.

4.3.4 Lessee shall continue to pay the rent at the rate previously in effect until the increase, if any, is determined, Within five (5) days following the date on which the increase is determined, Lessee shall make such payment to Lessor as will bring the increased rental current commencing with the effective date of such increase through the date of any rental installments then due. Thereafter the rental shall be paid at the increased rate.

4.3.5 At such time as the amount of any change in rental required by this Lease is known or determined, Lessor and Lessee shall execute an amendment to this Lease setting forth such change.

5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the security deposit set forth in paragraph 1.9 of the Basic Lease Provisions as security for Lessee’s faithful performance of Lessee’s obligations hereunder. If Lessee fails to pay rent or other charges due hereunder, or otherwise defaults with respect to any provision of this Lease, Lessor may use, apply or retain all or any portion of said deposit for the payment of any rent or other charge in default for the payment of any other sum to which Lessor may become obligated by reason of Lessee’s default, or to

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compensate Lessor for any loss or damage which Lessor may suffer thereby. If Lessor so uses or applies all or any portion of said deposit, Lessee shall within ten (10) days after written demand therefor deposit cash with Lessor in an amount sufficient to restore said deposit to the full amount then required of Lessee. If the monthly Base Rent shall, from time to time, increase during the term of this Lease, Lessee shall, at the time of such increase, deposit with Lessor additional money as a security deposit so that the total amount of the security deposit held by Lessor shall at all times bear the same proportion to the then current Base Rent as the initial security deposit bears to the initial Base Rent set forth in paragraph 1.6 of the Basic Lease Provisions. Lessor shall not be required to keep said security deposit separate from its general accounts. If Lessee performs all of Lessee’s obligations hereunder, said deposit, or so much thereof as has not heretofore been applied by Lessor, shall be returned, without payment of interest or other increment for its use, to Lessee (or, at Lessor’s option, to the last assignee, if any, of Lessee’s interest hereunder) on the expiration of the term hereof, and after Lessee has vacated the Premises. No trust relationship is created herein between Lessor and Lessee with respect to said Security Deposit.

6. Use.

6.1 Use. The Premises shall be used and occupied only for the purpose set forth in paragraph 1.4 of the Basic Lease Provisions or any other use which is reasonably comparable to that use and for no other purpose.

6.2 Compliance with Law.

(a) Lessor warrants to Lessee that the Premises, in the state existing on the date that the Lease term commences, but without regard to alterations or improvements made by Lessee or the use for which Lessee will occupy the Premises does not violate any covenants or restrictions of record, or any applicable building code, regulation or ordinance in effect on such Lease term Commencement Date. In the event it is determined that this warranty has been violated, then it shall be the obligation of the Lessor, after written notice from Lessee, to promptly, at Lessor’s sole cost and expense, rectify any such violation.

(b) Except as provided in paragraph 6.2(a) Lessee shall, at Lessee’s expense, promptly comply with all applicable statutes, ordinances, rules, regulations, orders, covenants and restrictions of record and requirements of any fire insurance underwriters or rating bureaus, now in effect or which may hereafter come into effect, whether or not they reflect a change in policy from that now existing, during the term or any part of the term hereof, relating in any manner to the Premises and the occupation and use by Lessee of the Premises. Lessee shall conduct its business in a lawful manner and shall not use or permit the use of the Premises or the Common Areas in any manner that will tend to create waste or a nuisance or shall tend to disturb other occupants of the Office Building Project.

6.3 Condition of Premises.

(a) Lessor shall deliver the Premises to Lessee in a clean condition on the Lease Commencement Date (unless Lessee is already in possession) and Lessor warrants to Lessee that the plumbing, lighting, air conditioning, and heating system in the Premises shall be in good operating condition. In the event that it is determined that this warranty has been violated, then it shall be the obligation of Lessor, after receipt of written notice from Lessee setting forth with specificity the nature of the violation, to promptly, at Lessor’s sole cost, rectify such violation.

(b) Except as otherwise provided in this Lease, Lessee hereby accepts the Premises and the Office Building Project in their condition existing as of the Lease Commencement Date or the date that Lessee takes possession of the Premises, whichever is earlier, subject to all applicable zoning, municipal, county and state laws, ordinances and regulations governing and regulating the use of the Premises, and any easements, covenants or restrictions of record, and accepts this Lease subject thereto and to all matters disclosed thereby and by any exhibits attached hereto. Lessee acknowledges that it has satisfied itself by its own independent investigation that the Premises are suitable for its intended use, and that neither Lessor nor Lessor’s agent or agents has made any representation or warranty as to the present or future suitability of the Premises, Common Areas, or Office Building Project for the conduct of Lessee’s business.

7. Maintenance, Repairs, Alterations and Common Area Services.

7.1 Lessor’s Obligations. Lessor shall keep the Office Building Project, including the Premises, interior and exterior walls, roof, and common areas, and the equipment whether used exclusively for the Premises or in common with other premises, in good condition and repairs; provided, however, Lessor shall not be obligated to paint, repair or replace wall coverings, or to repair or replace any improvements that are not ordinarily a part of the Building or are above then Building standards. Except as provided in paragraph 9.5, there shall be no abatement of rent or liability of Lessee on account of any injury or interference with Lessee’s business with respect to any improvements, alterations or repairs made by Lessor or to the Office Building Project or any part thereof, Lessee expressly waives the benefits of any statute now or hereafter in effect which would otherwise afford lessee the right to make repairs at Lessor’s expense or to terminate their Lease because of Lessor’s failure to keep the Premises in good order, condition and repair.

7.2 Lessee’s Obligations.

(a) Notwithstanding Lessor’s obligation to keep the Premises in good condition and repair, Lessee shall be responsible for payment of the cost thereof to Lessor as additional rent for that portion of the cost of any maintenance and repair of the Premises, or any equipment (wherever located) that serves only Lessee or the Premises, to the extent such cost is attributable to causes beyond normal wear and tear. Lessee shall be responsible for the cost of painting, repairing or replacing wall coverings, and to repair or replace any Premises improvements that are not ordinarily a part of the Building or that are above then Building standards. Lessor may, at its option, upon reasonable notice, elect to have Lessee perform any particular such maintenance or repairs the cost of which is otherwise Lessee’s responsibility hereunder.

(b) On the last day of the term hereof, or on any sooner termination, Lessee shall surrender the Premises to Lessor in the same condition as received, ordinary wear and tear excepted, clean and free of debris. Any damage or deterioration of the Premises shall not be deemed ordinary wear and tear if the same could have been prevented by good maintenance practices by Lessee. Lessee shall repair any damage to the Premises occasioned by the installation or removal of Lessee’s trade fixtures, alterations, furnishings and equipment. Except as otherwise stated in this Lease, Lessee shall leave the air lines, power panels, electrical distribution systems, lighting fixtures, air conditioning, window coverings, wall coverings, carpets, wall panelling, ceilings and plumbing on the Premises and in good operating condition.

7.3 Alterations and Additions.

(a) Lessee shall not, without Lessor’s prior written consent make any alterations, improvements, additions, Utility Installations or repairs in, on or about the Premises, or the Office Building Project. As used in this paragraph 7.3 the term “Utility Installation” shall mean carpeting, window and wall coverings, power panels, electrical distribution systems, lighting fixtures, air conditioning, plumbing, and telephone and telecommunications wiring and equipment. At the expiration of the term, Lessor may require the removal of any or all of said alterations, improvements, additions or Utility Installations, and the restoration of the Premises and the Office Building Project to their prior condition, at Lessee’s expense. Should Lessor permit Lessee to make its own alterations, improvements, additions or Utility Installations, Lessee shall use only such contractor as has been expressly approved by Lessor, and Lessor may require Lessee to provide Lessor, at Lessee sole cost and expense, a lien and completion bond in an amount equal to one and one half times the estimated cost of such improvements, to insure Lessor against any liability for mechanic’s and materialmen’s liens and to ensure completion of the work. Should Lessee make any alterations, improvements, additions or Utility Installations without the prior approval of Lessor, or use a contractor not expressly approved by Lessor, Lessor may, at any time during the term of the Lease, require the Lessee remove any part or all of the same.

(b) Any alterations, improvements, additions or Utility Installations in or about the Premises or the Office Building Project that Lessee shall desire to make shall be presented to Lessor in written form, with proposed detailed plans. If Lessor shall give its consent to Lessee’s making such alteration, improvement, addition or Utility Installation, the consent shall be deemed conditioned upon Lessee acquiring a permit to do so from the applicable governmental agencies, furnishing a copy thereof to Lessor prior to the commencement of the work, and compliance by Lessee with all conditions of said permit in a prompt and expeditious manner.

(c) Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee at or for use in the Premises, which claims are or may be secured by any mechanic’s or materialmen’s lien against the Premises, the Building or the Office Building Project, or any interest therein.

(d) Lessee shall give Lessor not less than ten (10) days’ notice prior to the commencement of any work in the Premises by Lessee, and Lessor shall have the right to post notices of non-responsibility in or on the Premises or the Building as provided by law. If Lessee shall, in good faith, contest the validity of any such lien, claim or demand, then Lessee shall, at its sole expense defend itself and Lessor against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof against the Lessor or the Premises, the Building or the Office Building Project, upon the condition that if Lessor shall require, Lessee shall furnish to Lessor a surety bond satisfactory to Lessor in an amount equal to such contested lien claim or demand indemnifying Lessor against liability for the same and holding the Premises, the Building and the Office Building Project free from the effect of such lien or claim. In addition, Lessor may require Lessee to pay Lessor’s reasonable attorneys fees and costs in participating in such action if Lessor shall decide it is to Lessor’s best interest so to do.

(e) All alterations, improvements, additions and Utility Installations (whether or not such Utility Installations constitute trade fixtures of Lessee), which may be made to the Premises by Lessee, including but not limited to, floor coverings, panelings, doors, drapes, built-ins, moldings, sound attenuation, and lighting and telephone or communication systems, conduit, wiring and outlets, shall be made and done in a good and workmanlike manner and of good and sufficient quality and materials and shall be the property of Lessor and remain upon and be surrendered with the Premises at the expiration of the Lease term, unless Lessor requires their removal pursuant to paragraph 7.3(a). Provided Lessee is not in default, notwithstanding the provisions of this paragraph 7.3(e), Lessee’s personal property and equipment, other than that which is affixed to the Premises so that it cannot be removed without material damage to the Premises or the Building, and other than Utility Installations, shall remain the property of Lessee and may be removed by Lessee subject to the provisions of paragraph 7.2.

(f) Lessee shall provide Lessor with as-built plans and specifications for any alterations, improvements, additions, or Utility Installations.

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7.4 Utility Additions. Lessor reserves the right to install new or additional utility facilities throughout the Office Building Project for the benefit of Lessor or Lessee, or any other lessee of the Office Building Project; including, but not by way of limitation, such utilities as plumbing, electrical systems, security systems, communication systems, and fire protection and detection systems, so long as such installations do not unreasonably interfere with Lessee’s use of the Premises.

8. Insurance; Indemnity.

8.1 Liability Insurance–Lessee. Lessee shall, at Lessee’s expense, obtain and keep in force during the term of this Lease a policy of Comprehensive General Liability insurance utilizing an Insurance Services Office standard form with Board Form General Liability Endorsement (G0404), or equivalent, in an amount of not less than $1,000,000 per occurrence of bodily injury and property damage combined or in a greater amount as reasonably determined by Lessor and shall insure Lessee with Lessor as an additional insured against liability arising out of the use occupancy or maintenance of the Premises, Compliance with the above requirement shall not, however, limit the liability of Lessee hereunder.

8.2 Liability Insurance–Lessor. Lessor shall obtain and keep in force during the term of this Lease a policy of Combined Single Limit Bodily Injury and Broad Form Property Damage Insurance, plus coverage against such other risks Lessor deems advisable from time to time insuring Lessor, but not Lessee, against liability arising out of the ownership, use, occupancy or maintenance of the Office Building Project in an amount not less than $5,000,000.00 per occurrence.

8.3 Property Insurance–Lessee. Lessee shall, at Lessee’s expense, obtain and keep in force during the term of this Lease for the benefit of Lessee, replacement cost fire and extended coverage insurance, with vandalism and malicious mischief, sprinkler leakage and earthquake sprinkler leakage endorsements, in an amount sufficient to cover not less than 100% of the full replacement cost, as the same may exist from time to time of all of Lessee’s personal property, fixtures, equipment and tenant improvements.

8.4 Property Insurance–Lessor. Lessor shall obtain and keep in force during the term of this Lease a policy or policies of insurance covering loss or damage to the Office Building Project Improvements, but not Lessee’s personal property, fixtures, equipment or tenant improvements, in the amount of the full replacement cost thereof, as the same may exist from time to time, utilizing Insurance Services Office standard form, or equivalent, providing protection against all perils included within the classification of fire, extended coverage, vandalism, malicious mischief plate glass, and such other perils as Lessor deems advisable or may be required by a lender having a lien on the Office Building Project. In addition, Lessor shall obtain and keep in force, during the term of this Lease, a policy of rental value insurance covering a period of one year, with loss payable to Lessor, which insurance shall also cover all Operating Expenses for said period. Lessee will not be named in any such policies carried by Lessor and shall have no right to any proceeds therefrom. The policies required by these paragraphs 8.2 and 8.4 shall contain such deductibles as Lessor or the aforesaid lender may determine. In the event that the Premises shall suffer an insured loss as defined in paragraph 9.1(1) hereof, the deductible amounts under the applicable insurance policies shall be deemed an Operating Expense. Lessee shall not do or permit to be done anything which shall invalidate the insurance policies carried by Lessor. Lessee shall pay the entirety of any increase in the property insurance premium for the Office Building Project over what it was immediately prior to the commencement of the term of this Lease if the increase is specified by Lessor’s insurance carrier as being caused by the nature of Lessee’s occupancy or any act or omission of Lessee.

8.5 Insurance Policies. Lessee shall deliver to Lessor copies of liability insurance policies required under paragraph 8.1 or certificates evidencing the existence and amounts of such insurance within seven (7) days after the Commencement Date of this Lease. No such policy shall be cancellable or subject to reduction of coverage or other modification except after thirty (30) days prior written notice to Lessor. Lessee shall, at least thirty (30) days prior to the expiration of such policies, furnish Lessor with renewals thereof.

8.6 Waiver of Subrogation. Lessee and Lessor each hereby release and relieve the other, and waive their entire right of recovery against each other, for direct or consequential loss or damage arising out of or incident to the perils covered by property insurance carried by such party, whether due to the negligence of Lessor or Lessee or their agents, employees, contractors and/or invitees if necessary all property insurance policies required under this Lease shall be endorsed to so provide.

8.7 Indemnity. Lessee shall indemnify and hold harmless Lessor and its agents, Lessor’s master or ground lessor, partners and lenders from and against any and all claims for damage to the person or property of anyone or any entry arising from Lessee’s use of the Office Building Project, or from the conduct of Lessee’s business or from any activity, work or things done, permitted or suffered by Lessee in or about the Premises or elsewhere and shall further indemnify and hold harmless Lessor from and against any and all claims, costs and expenses arising from any breach or default in the performance of any obligation on Lessee’s part to be performed under the terms of this Lease, or arising from any act or omission of Lessee, or any of Lessee’s agents, contractors, employees or invitees and from and against all costs, attorney’s fees, expenses and liabilities incurred by Lessor as the result of any such use, conduct, activity, work, things done, permitted or suffered, breach, default or negligence, and in dealing reasonably therewith, including but not limited to the defense or pursuit of any claim or any action or proceeding involved therein; and in case any action or proceeding be brought against Lessor by reason of any such matter. Lessor upon notice from Lessor shall defend the same at Lessee’s expense by counsel reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee in such defense, Lessor need not have first paid any such claim in order to be so indemnified. Lessee, as a material part of the consideration to Lessor, hereby assumes all risk of damage to property of Lessee or injury to persons, in, upon or about the Office Building Project arising from any cause and Lessee hereby waives all claims with respect thereof against Lessor.

8.8 Exemption of Lessor from Liability. Lessee hereby agrees that Lessor shall not be liable for injury to Lessee’s business or any loss of income therefrom or for loss of or damage to the goods, wares, merchandise or other property of Lessee, Lessee’s employees, invitees customers, or any other person in or about the Premises of the Office Building Project, nor shall Lessor be liable for injury to the person of Lessee, Lessee’s employees, agents or contractors, whether such damage or injury is caused by or results from theft fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing air conditioning or lighting fixtures, or from any other cause, whether said damage or injury results from conditions arising upon the Premises or upon other portions of the Office Building Project or from other sources or places, or from new construction or the repair, alteration or improvement of any part of the Office Building Project of the equipment, fixtures or appurtenances applicable thereto, and regardless of whether the cause of such damage or injury or the means of repairing of same is inaccessible, Lessor shall not be liable for any damages arising from any act or neglect of any either lessee, occupant, or user of the Office Building Project, nor from the failure of Lessor to enforce the provisions of any other lease of any other lessee of the Office Building Project.

8.9 No Representation of Adequate Coverage. Lessor makes no representation that the limits or forms of coverage of insurance specified in this paragraph 8 are adequate to cover Lessee’s property or obligations under this Lease.

9. Damage or Destruction.

9.1 Definitions.

(a) “Premises Damage” shall mean if the Premises are damaged or destroyed to any extent.

(b) “Premises Building Partial Damage” shall mean if the Building of which the Premises are a part is damaged or destroyed to the extent that the cost to repair is less than fifty percent (50%) of the then Replacement Cost of the Building.

(c) “Premises Building Total Destruction” shall mean if the Building of which the Premises are a part is damaged or destroyed to the extent that the cost to repair is fifty percent (50%) or more of the then Replacement Cost of the Building.

(d) “Office Building Project Buildings” shall mean all of the buildings on the Office Building Project site.

(e) “Office Building Project Buildings Total Destruction” shall mean if the Office Building Project Buildings are damaged or destroyed to the extent that the cost of repair is fifty percent (50%) or more of the then Replacement Cost of the Office Building Project Buildings.

(f) “Insured Loss” shall mean damage or destruction which was caused by an event required to be covered by the insurance described in paragraph 8. The fact that an insured Loss has a deductible amount shall not make the loss an uninsured loss.

(g) “Replacement Cost” shall mean the amount of money necessary to be spent in order to repair or rebuild the damaged tree to the condition that existed immediately prior to the damage occurring, excluding all improvements made by lessees, other than those installed by Lessor at Lessee’s expense.

9.2 Premises Damage; Premises Building Partial Damage.

(a) Insured Loss: Subject to the provisions of paragraphs 9.4 and 9.5. If at any time during the term of this Lease there is damage which is an Insured Loss and which falls into the classification of either Premises Damage or Premises Building Partial Damage, then Lessor shall as soon as reasonably possible and to the extent the required materials and labor are readily available through usual commercial channels, at Lessor’s expense, repair such damage, (but not Lessee’s fixtures, equipment or tenant improvements originally paid for by Lessee) to its condition existing at the time of the damage, and this Lease shall continue in full force and effect.

(b) Uninsured Loss: Subject to the provisions of paragraphs 9.4 and 9.5. If at any time during the term of this Lease there is damage which is not an Insured Loss and which falls within the classification of Premises Damage or Premises Building Partial Damage, unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessor’s expense), which damage prevents Lessee from making a substantial use of the Premises. Lessor may at Lessor’s option either (i) repair such damage as soon as reasonably possible at Lessor’s expense, in which event this Lease shall continue in full force and effect, or (ii) give written notice to Lessee within thirty (30) days after the date of the occurrence of such damage of Lessor’s intention to cancel and terminate this Lease as of the date of the occurrence of such damage, in which event this Lease shall terminate as of the date of the occurrence of such damage.

9.3 Premises Building Total Destruction; Office Building Project Total Destruction. Subject to the provisions of paragraphs 9.4 and 9.5, if at any time during the term of this Lease there a damage, whether or not it is an Insured Loss, which falls into the classifications of either (i) Premises

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Building Total Destruction. or (ii) Office Building Project Total Destruction, then Lessor may at Lessor’s option either (i) repair such damage or destruction as soon as reasonably possible at Lessor’s expense (to the extent the required materials are readily available through usual commercial channels) to its condition existing at the time of the damage, but not Lessee’s fixtures, equipment or tenant improvements, and this Lease shall continue in full force and effect, or (ii) give written notice to Lessee within thirty (30) days after the date of occurrence of such damage of Lessor’s intention to cancel and terminate this Lease, in which case this Lease shall terminate as of the date of the occurrence of such damage.

9.4 Damage Near End of Term.

(a) Subject to paragraph 9.4(b), if at any time during the last twelve (12) months of the term of this Lease there is substantial damage to the Premises, Lessor may at Lessor’s option cancel and terminate this Lease as of the date of occurrence of such damage by giving written notice to Lessee of Lessor’s election to do so within 30 days after the date of occurrence of such damage.

(b) Notwithstanding paragraph 9.4(a), in the event that Lessee has an option to extend or renew this Lease, and the time within which said option may be exercised has not yet expired, Lessee shall exercise such option, if it is to be exercised at all, no later than twenty (20) days after the occurrence of an Insured Loss falling within the classification of Premises Damage during the last twelve (12) months of the term of this Lease. If Lessee duly exercises such option during said twenty (20) day period, Lessor shall, at Lessor’s expense, repair such damage, but not Lessee’s fixtures, equipment or tenant improvements, as soon as reasonably possible and this Lease shall continue in full force and effect. If Lessee fails to exercise such option during said twenty (20) day period, then Lessor may at Lessor’s option terminate and cancel this Lease as of the expiration of said twenty (20) day period by giving written notice to Lessee of Lessor’s election to do so within ten (10) days after the expiration of said twenty (20) day period, notwithstanding any term or provision in the grant of option to the contrary.

9.5 Abatement of Rent; Lessee’s Remedies.

(a) In the event Lessor repairs or restores the Building or Premises pursuant to the provisions of this paragraph 9, and any part of the Premises are not usable (including loss of use due to loss of access or essential services), the rent payable hereunder (including Lessee’s Share of Operating Expenses) for the period during which such damage, repair or restoration continues shall be abated, provided (1) the damage was not the result of the negligence of Lessee, and (2) such abatement shall only be to the extent the operation and profitability of Lessee’s business as operated from the Premises is adversely affected. Except for said abatement of rent, if any, Lessee shall have no claim against Lessor for any damage suffered by reason of any such damage, destruction, repair or restoration.

(b) If Lessor shall be obligated to repair or restore the Premises or the Building under the provisions of this Paragraph 9 and shall not commence such repair or restoration within ninety (90) days after such occurrence, or if Lessor shall not complete the restoration and repair within six (6) months after such occurrence. Lessee may at Lessee’s option cancel and terminate this Lease by giving Lessor written notice of Lessee’s election to do so at any time prior to the commencement of completion, respectively, of such repair or restoration. In such event this Lease shall terminate as of the date of such notice.

(c) Lessee agrees to cooperate with Lessor in connection with any such restoration and repair, including but not limited to the approval; and/or execution of plans and specifications required.

9.6 Termination-Advance Payments. Upon termination of this Lease pursuant to this paragraph 9, an equitable adjustment shall be made concerning advance rent and any advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so much of Lessee’s security deposit as has not theretofore been applied by Lessor.

9.7 Waiver. Lessor and Lessee waive the provisions of any statute which relate to termination of leases when leased property is destroyed and agree that such event shall be governed by the terms of the Lease.

10. Real Property Taxes.

10.1 Payment of Taxes. Lessor shall pay the real property tax, as defined in paragraph 10.3. applicable to the Office Building Project subject to reimbursement by Lessee of Lessee’s Share of such taxes in accordance with the provisions of paragraph 4.2, except as otherwise provided in paragraph 10.2.

10.2 Additional Improvements. Lessee shall not be responsible for paying any increase in real property tax specified in the tax assessor’s records and work sheets as being caused by additional improvements placed upon the Office Building Project by other lessees or by Lessor for the exclusive enjoyment of any other lessee. Lessee shall, however, pay to Lessor at the time that Operating Expenses are payable under paragraph 4.2(c) the entirety of any increase in real property tax if assessed solely by reason of additional improvements placed upon the Premises by Lessee or at Lessee’s request.

10.3 Definition of “Real Property Tax.” As used herein, the term “real property tax” shall include any form of real estate tax or assessment, general, special, ordinary or extraordinary, and any license fee, commercial rental tax, improvement bond or bonds, levy or tax (other than inheritance, personal income or estate taxes) imposed on the Office Building Project or any portion thereof by any authority having direct or indirect power to tax, including any city, county, state or federal government, or any school, agricultural, sanitary, fire, street, drainage or other improvement district hereof, as against any legal or equitable interest of Lessor in the Office Building Project or in any portion thereof, as against Lessor’s right to rent or other income therefrom, and as against Lessor’s business of leasing the Office Building Project. The term “real property tax” shall also include any tax, fee, levy, assessment or charge (i) in substitution of partially or totally, any tax, fee, levy, assessment or charge hereinabove included within the definition of “real property tax” or (ii) the nature of which was hereinbefore included within the definition of “real property tax,” or (iii) which is imposed for a service or right not charged prior to June 1, 1978, or, if previously charged, has been increased since June 1, 1978, or (iv) which is imposed as a result of a change in ownership, as defined by applicable local statutes for property tax purposes, of the Office Building Project or which is added to a tax or charge hereinbefore included within the definition of real property tax by reason of such change of ownership, or (v) which is imposed by reason of this transaction, any modifications or changes hereto, or any transfers hereof.

10.4 Joint Assessment. If the improvements or property, the taxes for which are to be paid separately by Lessee under paragraph 10.2 or 10.5 are not separately assessed, Lessee’s portion of that tax shall be equitably determined by Lessor from the respective valuations assigned in the assessor’s work sheets or such other information (which may include the cost of construction) as may be reasonably available. Lessor’s reasonable determination thereof, in good faith, shall be conclusive.

10.5 Personal Property Taxes.

(a) Lessee shall pay prior to delinquency all taxes assessed against and levied upon trade fixtures, furnishings, equipment and all other personal property of Lessee contained at the Premises or elsewhere.

(b) If any of Lessee’s said personal property shall be assessed with Lessor’s real property. Lessee shall pay to Lessor the taxes attributable to Lessee within ten (10) days after receipt of a written statement setting forth the taxes applicable to Lessee’s property.

11. Utilities.

11.1 Services Provided by Lessee. Lessor shall provide heating, ventilation, air conditioning, and; sanitorial service as reasonably required, reasonable amounts of electricity for normal lighting and office machines, water for reasonable and normal drinking and lavatory use, and replacement light bulbs and/or fluorescent tubes and ballasts for standard overhead fixtures.

11.2 Services Exclusive to Lessee. Lessee shall pay for all water, gas, heat, light, power, telephone and other utilities and services specially or exclusively supplied and/or metered exclusively to the Premises or to Lessee, together with any taxes thereon. If any such services are not separately metered to the Premises, Lessee shall pay at Lessor’s option, either Lessee’s Share of a reasonable proportion to be determined by Lessor of all charges jointly metered with other premises in the Building.

11.3 Hours of Service. Said services and utilities shall be provided during generally accepted business days and hours or such other days or hours as may hereafter be set forth. Utilities and services required at other times shall be subject to advance request and reimbursement by Lessee to Lessor of the cost thereof.

11.4 Excess Usage by Lessee. Lessee shall not make connection to the utilities except by or through existing outlets and shall not install or use machinery or equipment in or about the Premises that uses excess water, lighting or power, or sulfer or permit any actual causes extra burden upon the utilities or services, including but not limited to security services, over standard office usage for the Office Building Project. Lessor shall require Lessee to reimburse Lessor for any excess expenses or costs that may arise out of a breach of this subparagraph by Lessee. Lessor may, in its sole discretion, install at Lessee’s expense supplemental equipment and/or separate metering applicable to Lessee’s excess usage of loading.

11.5 Interruptions. There shall be no abatement of rent and Lessor shall not be liable in any respect whatsoever for the inadequacy, stoppage, interruption or discontinuance of any utility of service due to riot, strike, labor dispute, breakdown, accident, repair or other causes beyond Lessor’s reasonable control or in cooperation with governmental request or directions.

12. Assignment and Subletting.

12.1 Lessor’s Consent Required. Lessee shall not voluntarily or by operation of law assign, transfer, mortgage, sublet, or otherwise transfer or encumber all or any part of Lessee’s interest in the Lease or in the Premises, without Lessor’s prior written consent, which Lessor shall not unreasonably withhold. Lessor shall respond to Lessee’s request for consent hereunder in a timely manner and any attempted assignment, transfer, mortgage, encumbrance or subletting without such consent shall be void, and shall constitute a material default and breach of this Lease without the need for notice to Lessee under paragraph 13.1. “Transfer” within the meaning of this paragraph 12 shall include the transfer or transfers aggregating: (a) if

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Lessee is a corporation, more than twenty-five percent (25%) of the voting stock of such corporation, or (b) If Lessor is a partnership, more than twenty-five percent (25%) of the profit and loss participation in such partnership.

12.2 Lessee Affiliate. Notwithstanding the provisions of paragraph 12.1 hereof, Lessee may assign or sublet the Premises, or any portion thereof, without Lessor’s consent, to any corporation which controls, is controlled by or is under common control with Lessee, or to any corporation resulting from the merger or consolidation with Lessee, or to any person or entity which acquires all the assets of Lessee as a going concern of the business that is being conducted on the Premises, all of which are referred to as “Lessee Affiliate”; provided that before such assignment shall be active, (a) said assignee shall assume, in full, the obligations of Lessee under this Lease and (b) Lessor shall be given written notice of such assignment and assumption. Any such assignment shall not, in any way, affect or limit the liability of Lessee under the terms of this Lease even if after such assignment or subletting the terms of this Lease are materially changed or altered without the consent of Lessee, the consent of whom shall not be necessary.

12.3 Terms and Conditions Applicable to Assignment and Subletting.

(a) Regardless of Lessor’s consent, no assignment or subletting shall release Lessee of Lessee’s obligations hereunder or alter the primary liability of Lessee to pay the rent and other sums due Lessor hereunder including Lessee’s Share of Operating Expenses, and to perform all other obligations to be performed by Lessee hereunder.

(b) Lessor may accept rent from any person other than Lessee pending approval or disapproval of such assignment.

(c) Neither a delay in the approval or disapproval of such assignment or subletting, nor the acceptance of rent, shall constitute a waiver or estoppel of Lessor’s right to exercise its remedies for the breach of any of the terms or conditions of this paragraph 12 or this Lease.

(d) If Lessee’s obligations under this Lease have been guaranteed by third parties, then an assignment or sublease, and Lessor’s consent thereto, shall not be effective unless said guarantors give their written consent to such sublease and the terms thereof.

(e) The consent by Lessor to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting by Lessee or to any subsequent or successive assignment or subletting by the sublessee. However, Lessor may consent to subsequent sublettings and assignments of the sublease or any amendments or modifications thereto without notifying Lessee or anyone else liable on the Lease or Sublease and without obtaining their consent and such action shall not relieve such persons from liability under this Lease or said sublease; provided however, such persons shall not be responsible to the extent any such amendment or modification enlarges or increases the obligations of the Lessee or sublessee under this Lease or such sublease.

(f) In the event of any default under this Lease, Lessor may proceed directly against Lessee, any guarantors or any one else responsible for the performance of this Lease, including the sublessee, without first exhausting Lessor’s remedies against any other person or entity responsible therefor to Lessor, or any security held by Lessor or Lessee.

(g) Lessor’s written consent to any assignment or subletting of the Premises by Lessee shall not constitute an acknowledgment that no default then exists under this Lease of the obligations to be performed by Lessee nor shall such consent be deemed a waiver of any the existing default, except as may be otherwise stated by Lessor at the time.

(h) The discovery of the fact that any financial statement relied upon by Lessor in giving its consent to any assignment or subletting was materially false shall, at Lessor’s election, render Lessor’s said consent null and void.

12.4 Additional Terms and Conditions Applicable to Subletting. Regardless of Lessor’s consent, the following terms and conditions shall apply to any subletting by Lessee of all or any part of the Premises and shall be deemed included in all subleases under this Lease whether or not expressly incorporated therein;

(a) Lessee hereby assigns and transfers to Lessor all of Lessee’s interest in all rentals and income arising from any sublease heretofore or hereafter made by Lessee, and Lessor may collect such rent and income and apply same toward Lessee’s obligations under this Lease provided, however, that until a default shall occur in the performance of Lessee’s obligations under this Lease, Lessee may receive, collect and enjoy the rents accruing under such sublease. Lessor shall not, by reason of this or any other assignment of such sublease to Lessor nor by reason of the collection of the rents from a sublessee, be deemed liable to the sublessee for any failure of Lessee to perform and comply with any of Lessee’s obligations to such sublessee under such sublease. Lessee hereby irrevocably authorizes and directs any such sublessee, upon receipt of a written notice from Lessor stating that a default exists in the performance of Lessee’s obligations under his Lease to pay to Lessor the rents due and to become due under the sublease. Lessee agrees that such sublessee shall have the right to rely upon any such statement and request from Lessor, and that such sublessee shall pay such rents Lessor without any obligation or right to inquire as to whether such default exists and notwithstanding any notice from or claim from Lessee to the contrary. Lessee shall have no right or claim against said sublessee or Lessor for any such rents so paid by said sublessee to Lessor.

        (b) No sublease entered into by Lessee shall be effective unless and until has been approved in writing by Lessor. In entering into any sublease, Lessee shall use only such form of sublease as is satisfactory to Lessor, and once approved by Lessor, such sublease shall not be changed or modified without Lessor’s prior written consent. Any sublessee shall, by reason of entering into a sublease under his Lease, be deemed, for the benefit of Lessor, to have assumed and agreed to conform and comply with each and every obligation herein to be performed by Lessee other than such obligations as are contrary to or inconsistent with provisions contained in a sublease to which Lessor has expressly consented in writing.

(c) In the event Lessee shall default in the performance of its obligations under this Lease, Lessor, at its option and without any obligation to do so, may require any sublessee to return to Lessor, in which event Lessor shall undertake the obligations of Lessee under such sublease from the time of the exercise of said option of the termination of such sublease; provided, however, Lessor shall not be liable for any prepaid rents or security deposit paid by such sublessee to Lessee or for any other prior defaults of Lessee under such sublease.

(d) No sublessee shall further assign or sublet all or any part of the Premises without Lessor’s prior written consent.

(e) With respect to any subletting of which Lessor has consented, Lessor agrees to deliver a copy of any notice of default by Lessee to the sublessee. Such sublessee shall have the right to cure a default of Lessee within three (3) days after service of said notice of default upon such sublessee, and the sublessee shall have a right of reimbursement and offset from and against Lessee for any such defaults cured by the sublessee.

12.5 Lessor’s Expenses. In the event Lessee shall assign or sublet the Premises or request the consent of Lessor to any assignment or subletting or if Lessee shall request the consent of Lessor for any act Lessee proposes to do then Lessee shall pay Lessor’s reasonable costs and expenses incurred in connection therewith, including attorneys’, architects’, engineers’ or other consultants’ fees.

12.6 Conditions to Consent. Lessor reserves the right to condition any approval to assign or sublet upon Lessor’s determination that (a) the proposed assignee or sublessee shall conduct a business on the Premises of a quality substantially equal to that of Lessee and consistent with the general character of the other occupants of the Office Building Project and not in violation of any exclusives or rights then held by other tenants, and (b) the proposed assignee or sublessee be at least as financially responsible as Lessee was expected to be at the time of the execution of this Lease or of such assignment or subletting, whichever is greater.

13. Default; Remedies.

13.1 Default. The occurrence of any one or more of the following events shall constitute a material default of this Lease by Lessee:

(a) The vacation or abandonment of the Premises by Lessee. Vacation of the Premises shall include the failure to occupy the Premises for a continuous period of sixty (60) days or more, whether or not the rent is paid.

(b) The breach by Lessee of any of the covenants, conditions or provisions of paragraphs 7.3(a), (b) or (d) (alterations), 12.1 (assignment or subletting), 13.1(a) (vacation or abandonment), 13.1(c) (insolvency), 13.1(f) (false statement), 16(a) (estoppel certificate), 30(b) (subordination), 33 (auctions), or 41.1 (easements), all of which are hereby deemed to be material, non-curable defaults without the necessity of any notice by Lessor to Lessee thereof.

(c) The failure by Lessee to make any payment of rent or any other payment required to be made by Lessee hereunder as and when due, where such failure shall continue for a period of three (3) days after written notice thereof from Lessor to Lessee. In the event that Lessor serves Lessee with a Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes such Notice to Pay Rent or Quit shall also constitute the notice required by this subparagraph.

(d) The failure by Lessee to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed by Lessee other than those referenced in subparagraphs (b) and (c), above, where such failure shall continue for a period of thirty (30) days after written notice thereof from Lessor to Lessee; provided, however, that if the nature of Lessee’s noncompliance is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be deemed to be in default if Lessee commenced such cure within said thirty (30) day period and thereafter diligently pursues such cure to completion. To the extent permitted by law; such thirty (30) day notice shall constitute the sole and exclusive notice required to be given to Lessee under applicable Unlawful Detainer statutes.

(e) (i) The making by Lessee of any general arrangement or general assignment for the benefit of creditors; (iii) Lessee becomes a “debtor” as defined in II U.S.C. §101 or any successor statutes thereto (unless, in the case of a petition filed against Lessee, the same is dismissed within sixty (60) days; (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where possession is not returned to Lessee within thirty (30) days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where such seizure is not discharged within thirty (30) days. In the event that any provision of this paragraph 13.1(e) is contrary to any applicable law, such provision shall be of no force or effect.

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(f) The discovery by Lessor that any financial statement given to Lessor by Lessee, or its successor in interest or by any guarantor or Lessee’s obligation hereunder, was materially false.

13.2 Remedies. In the event of any material default or breach of this Lease by Lessee, Lessor may at any time thereafter, with or without notice or demand and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such default:

(a) Terminate Lessee’s right to possession of the Premises by any lawful means, in which case this Lease and the terms hereof shall terminate and Lessee shall immediately surrender possession of the Premises to Lessor. In such event Lessor shall be entitled to recover from Lessee all damages incurred by Lessor by reason of Lessee’s default including, but not limited to, the cost of recovering possession of the Premises; expenses of reletting including necessary renovation and alteration of the Premises, reasonable attorneys’ fees, and any real estate commission actually paid; the worth the time of award by the court having jurisdiction thereof of the amount by which the unpaid rent for the balance of the term after the time of such award exceeds the amount of such rental loss for the same period that Lessee proves could be reasonably avoided; that portion of the leasing commission paid by Lessor pursuant to paragraph 15 applicable to the unexpired term of this Lease.

(b) Maintain Lessee’s right to possession in which case this Lease shall continue in effect whether or not Lessee shall have vacated or abandoned the Premises in such event Lessor shall be entitled to enforce all of Lessor’s rights and remedies under this Lease, including the right to recover the rent as it becomes due hereunder.

(c) Pursue any other remedy now or hereafter available to Lessor under the laws or judicial decisions of the state wherein the Premises are located. Unpaid installments of rent and other unpaid monetary obligations of Lessee under the terms of this Lease shall bear interest from the date due at the maximum rate then allowable by law.

13.3 Default by Lessor. Lessor shall not be in default unless Lessor fails to perform obligations required of Lessor within a reasonable time, but in no event later than thirty (30) days after written notice by Lessee to Lessor and to the holder of any first mortgage or deed of trust covering the Premises whose name and address shall have theretofore been furnished to Lessee in writing, specifying wherein Lessor has failed to perform such obligation; provided, however, that if the nature of Lessor’s obligation is such that more than thirty (30) days are required for performance then Lessor shall not be in default if Lessor commences performance within such 30-day period and thereafter diligently pursues the same to completion.

13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee to Lessor of Base Rent, Lessee’s Share of Operating Expenses or other sums due hereunder will cause Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed on Lessor by the terms of any mortgage or trust deed covering the Office Building Project. Accordingly, if any installment of Base Rent, Operating Expenses to any other sum due from Lessee shall not be received by Lessor or Lessor’s designee within ten (10) days after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall pay to Lessor a late charge equal to 6% of such overdue amount. The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of late payment by Lessee. Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee’s default with respect to such overdue amount, nor prevent Lessor from exercising any of the other rights and remedies granted hereunder.

14. Condemnation. If the Premises or any portion thereof or the Office Building Project are taken under the power of eminent domain, or sold under the threat of the exercise of said power (all of which are herein called “condemnation”), this Lease shall terminate as to the part so taken as to the date the condemning authority takes title or possession, whichever first occurs; provided that if so much of the Premises or the Office Building Project are taken by such condemnation as would substantially and adversely affect the operation and profitability of Lessee’s business conducted from the Premises. Lessee shall have the option, to be exercised only in writing within thirty (30) days after Lessor shall have given Lessee written notice of such taking (or in the absence of such notice, within thirty (30) days after the condemning authority shall have taken possession), to terminate this Lease as of the date the condemning authority takes such possession. If Lessee does not terminate this Lease in accordance with the foregoing, this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the rent and Lessee’s Share of Operating Expenses shall be reduced in the proportion that the floor area of the Premises taken bears to the total floor area of the Premises. Common Areas taken shall be excluded from the Common Areas usable by Lessee and no reduction of rent shall occur with respect thereto or by reason thereof. Lessor shall have the option in its sole discretion to terminate this Lease as of the taking of possession by the condemning authority, by giving written notice to Lessee of such election within thirty (30) days after receipt of notice of a taking by condemnation of any part of the Premises or the Office Building Project. Any award for the taking of all or any part of the Premises or the Office Building Project under the power of eminent domain or any payment made under threat of the exercise of such power shall be the property of Lessor, whether such award shall be made as compensation for determination in value of the leasehold or for the taking of the fan, or as severance damages; provided, however, that Lessee shall be entitled to any separate award for loss of or damage to Lessee’s trade fixtures, removable personal property and unamortized tenant improvements that have been paid for by Lessee. For that purpose the cost of such improvements shall be amortized over the original term of this Lease excluding any options, in the event that this Lease is not terminated by reason of such condemnation, Lessor shall to the extent of severance damages received by Lessor in connection with such condemnation, repair any damage to the Premises caused by such condemnation except to the extent that Lessee has been reimbursed therefore by the condemning authority. Lessee shall pay any amount in excess of such severance damages required to complete such repair.

15. Broker’s Fee.

(a) The brokers involved in this transaction are ___________ as “listing broker” and ___________ as “cooperating broker,” licensed real estate broker(s). A “cooperating broker” is defined as any broker other than the listing broker entitled to a share of any commission arising under this Lease. Upon execution of this Lease by both parties, Lessor shall pay to said brokers jointly, or in such separate shares as they may mutually designate in writing, a fee as set forth in a separate agreement between Lessor and said broker(s), or in the event there is no separate agreement between Lessor and said broker(s), the sum of $_____ for brokerage services rendered by said broker(s) to Lessor in this transaction.

(b) Lessor further agrees that (i) if Lessee exercises any Option, as defined in paragraph 39.1 of this Lease, which is granted to Lessee under this Lease, or any subsequently granted option which is substantially similar to an Option granted to Lessee under this Lease, or (ii) if Lessee acquires any rights to the Premises or other premises described in this Lease which are substantially similar to what Lessee would have acquired had an Option herein granted to Lessee been exercised, or (iii) if Lessee remains in possession of the Premises after the expiration of the term of this Lease after having failed to exercise an Option, or (iv) if said broker(s) are the procuring cause or any other lease or sale entered into between the parties pertaining to the Premises and/or any adjacent property in which Lessor has an interest, or (v) if the Base Rent is increased, whether by agreement or operation of an escalation clause contained herein, then as to any of said transactions or rent increases, Lessor shall pay said broker(s) a fee in accordance with the schedule of said broker(s) in effect at the time of execution of this Lease. Said fee shall be paid at the time such increased rental is determined.

(c) Lessor agrees to pay said fee not only on behalf of Lessor but also on behalf of any person, corporation, association, or other entity having an ownership interest in said real property or any part thereof, when such fee is due hereunder. Any transferee of Lessor’s interest in this Lease, whether such transfer is by agreement or by operation of law, shall be deemed to have assumed Lessor’s obligation under this paragraph 15. Each listing and cooperating broker shall be a third party beneficiary of the provisions of this paragraph 15 to the extent of their interest in any commission arising under this Lease and may enforce that right directly against Lessor; provided, however, that all brokers having a right to any part of such total commission shall be a necessary party to any suit with respect thereto.

(d) Lessee and Lessor each represent and warrant to the other that neither has had any dealings with any person, firm, broker or finder (other than the person(s), if any, whose names are set forth in paragraph 15(a), above) in connection with the negotiation of this Lease and/or the consummation of the transaction contemplated hereby, and no other broker or other person, firm or entity is entitled to any commission or finder’s fee in connection with said transaction and Lessee and Lessor do each hereby indemnify and hold the other harmless from and against any costs, expenses, attorneys’ fees or liability for compensation or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of the indemnifying party.

16. Estoppel Certificate.

(a) Each party (as “responding party”) shall at any time upon not less than ten (10) days’ prior written notice from the other party (“requesting party”) execute, acknowledge and deliver to the requesting party a statement in writing (i) certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect) and the date to which the rent and other charges are paid in advance, if any, and (ii) acknowledging that there are not, to the responding party’s knowledge, any uncured defaults on the part of the requesting party, or specifying such defaults if any are claimed. Any such statement may be conclusively relied upon by any prospective purchaser or encumbrance of the Office Building Project or of the business of Lessee.

(b) At the requesting party’s option, the failure to deliver such statement within such time shall be a material default of this Lease by the party who is to respond, without any further notice to such party, or it shall be conclusive upon such party that (i) this Lease is in full force and effect, without modification except as may be represented by the requesting party, (ii) there are no uncured defaults in the requesting party’s performance, and (iii) if Lessor is the requesting party, not more than one month’s rent has been paid in advance.

(c) If Lessor desires to finance, refinance, or sell the Office Building Project, or any part thereof, Lessee hereby agrees to deliver to any tender or purchaser designated by Lessor such financial statements of Lessee as may be reasonably required by such tender or purchaser. Such statements shall include the past three (3) years’ financial statements of Lessee. All such financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be used only for the purposes herein set forth.

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17. Lessor’s Liability. The term “Lessor” as used herein shall mean only the owner or owners, at the time in question, of the fee title or lessee’s interest in a ground lease of the Office Building Project, and except as expressly provided in paragraph 15. In the event of any transfer of such title or interest, Lessor herein named (and in case of any subsequent transfers then the grantor) shall be relieved from and after the date of such transfer of all liability as respects Lessor’s obligations thereafter to be performed provided that any funds in the hands of Lessor or the then grantor at the time of such transfer, in which Lessee has an interest shall be delivered to the grantee. The obligations contained in this Lease to be performed to Lessor shall, subject as aforesaid be binding on Lessor’s successors and assigns only during their respective periods of ownership.

18. Severability. The invalidity of any provision of this Lease as determined by a court of competent jurisdiction shall in no way affect the validity of any other provision hereof.

19. Interest on Past-due Obligation. Except as expressly herein provided, any amount due to Lessor not paid when due shall bear interest at the maximum rate then allowable by law or judgments from the date due. Payment of such interest shall not excuse or cure any default by Lessee under this Lease; provided, however, that interest shall not be payable on late charges incurred by Lessee nor on any amounts upon which late charges are paid by Lessee.

20. Time of Essence. Time is of the essence with respect to the obligations to be performed under this Lease.

21. Additional Rent. All monetary obligations of Lessee to Lessor under the terms of this Lease including but not limited to Lessee’s Share of Operating Expense and any other expenses payable by Lessee hereunder shall be deemed to be rent.

22. Incorporation of Prior Agreements; Contemporaneous Amendments. This Lease contains all agreements of the parties with respect to any matter mentioned herein. No prior or contemporaneous agreement or understanding pertaining to any such matter shall be effective. This Lease may be modified in writing only, signed by the parties in interest at the time of the modification. Except as otherwise stated in this Lease, Lessee hereby acknowledges that neither the real estate broker listed in paragraph 15 hereof nor any cooperating broker on this transaction nor the Lessor or any employee or agents of any of said persons has made any oral or written warranties or representations to Lessee relative to the condition or use by Lessee of the Premises or the Office Building Project and Lessee acknowledges that Lessee assumes all responsibility regarding the Occupational Safety Health Act, the level used and adaptability of the Premises and the compliance thereof with all applicable laws and regulations in effect during the term of this Lease.

23. Notices. Any notice required or permitted to be given hereunder shall be in writing and may be given by personal delivery or by certified or registered mail, and shall be deemed sufficiently given if delivered or addressed to Lessee or to Lessor at the address noted below or adjacent to the signature of the respective parties, as the case may be. Mailed notices shall be deemed given upon actual receipt at the address required, or forty eight hours following deposit in the mail, postage prepaid, whichever first occurs. Either party may by notice to the other specify a different address for notice purposes except that upon Lessee’s taking possession of the premises, the premises shall constitute Lessee’s address for notice purposes. A copy of all notices required or permitted to be given to Lessor hereunder shall be concurrently transmitted to such party or parties at such addresses as Lessor may from time to time hereafter designate by notice to Lessee.

24. Waivers. No waiver by Lessor of any provision hereof shall be deemed a waiver of any other provision hereof or of any subsequent breach by Lessee of the same or any other provision. Lessor’s consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Lessor’s consent to or approval of any subsequent act by Lessee. The acceptance of rent hereunder by Lessor shall not be a waiver of any preceding breach by Lessee of any provision hereof, other than the failure of Lessee to pay the particular rent so accepted, regardless of Lessor’s knowledge of such preceding breach at the time of acceptance of such rent.

25. Recording. Either Lessor or Lessee shall, upon request of the other, execute, acknowledge and deliver to the other a “short form” memorandum of this Lease for recording purposes.

26. Holding Over. If Lessee, with Lessor’s consent, remains in possession of the Premises or any part thereof after the expiration of the term hereof, such occupancy shall be a tenancy from month to month upon all the provisions of this Lease pertaining to the obligations of Lessee except that the rent payable shall be two hundred percent (200%) of the rent payable immediately preceding the termination date of this Lease, and all Options, if any, granted under the terms of this Lease shall be deemed terminated and be of no further effect during said month to month tenancy.

27. Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.

28. Covenants and Conditions. Each provision of this Lease performable by Lessee shall be deemed both a covenant and a condition.

29. Binding Effect; Choice of Law. Subject to any provisions hereof restricting assignment or submitting by Lessee and subject to the provision of paragraph 17, this Lease shall bind the parties, their personal representatives, successor and assigns. This Lease shall be governed by the laws of the State where the Office Building Project is located and any litigation concerning this Lease between the parties hereto shall be initiated in the county in which the Office Building Project is located.

30. Subordination.

(a) This Lease, and any Option or right of first refusal granted hereby, at Lessor’s option, shall be subordinate to any ground lease, mortgage, deed of trust or any other hypothecation or security now or hereafter placed upon the Office Building Project and to any and all advances made on the security thereof and to all renewals, modifications, consolidations, replacements and extensions thereof. Notwithstanding such subordination Lessee’s right to quiet possession of the Premises shall not be disturbed if Lessee is not in default and so long as Lessee shall pay the rent and observe and perform all of the provisions of this Lease. Unless this Lease is otherwise terminated pursuant to its terms. If any mortgages, trustees or ground lessor shall elect to have this Lease and any Options granted hereby prior to the lien of its mortgage, deed of trust or ground lease, and that give written notice thereof to Lessee, this Lease and such Options shall be deemed prior to such mortgage, deed of trust or ground lease, whether this lease or such Options are dated prior or subsequent to the date of said mortgage, deed of trust or ground lease or the date of recording thereof.

(b) Lessee agrees to execute any documents required to effectuate an attornment, a subordination, or to make this Lease or any Option granted herein prior to the lien of any mortgage, deed of trust or ground lease, as the case may be. Lessee’s failure to execute such documents within ten (10) days after written demand shall constitute a material default by Lessee hereunder without further notice to Lessee or, at Lessor’s option, Lessor shall execute such documents on behalf of Lessee as Lessee’s attorney-in-fact. Lessee does hereby make, constitute and irrevocably appoint Lessor as Lessee’s attorney-in-fact and in Lessee’s name, place and stead, to execute such documents in accordance with this paragraph 30(b).

31. Attorneys’ Fees.

31.1 If either party or the broker(s) named herein bring an action to enforce the terms hereby or declare rights hereunder, the prevailing party in any such action, trial or appeal thereon, shall be entitled to his reasonable attorneys’ fees to be paid by the losing party as fixed by the court in the same or a separate suit, and whether or not such action is pursued to decision or judgment. The provisions of this paragraph shall inure to the benefit of the broker named herein who seeks to enforce a right hereunder.

31.2 The attorneys’ fee award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys’ fees reasonably incurred in good faith.

31.3 Lessor shall be entitled to reasonable attorneys’ fees and all other costs and expenses incurred in the preparation and service of notices as of default and consultations in connection therewith, whether or not a legal action is subsequently commenced in connection with such default.

32. Lessor’s Access.

32.1 Lessor and Lessor’s agents shall have the right to enter the Premises at reasonable times for the purpose of inspecting the same, performing any services required of Lessor, showing the same to prospective purchasers, lenders, or lessees, taking such safety measures, erecting such scaffolding or other necessary structures, making such alterations, repairs, improvements or additions to the Premises or to the Office Building Project as Lessor may reasonably deem necessary or desirable and the erecting, using and maintaining of utilities, services, pipes and conducts through the Premises and/or other premises as long as there is no material adverse effect to Lessee’s use of the Premises. Lessor may at any time place on or about the Premises or the Building any ordinary “For Sale” signs and Lessor may at any time during the last 120 days of the term hereof place on or about the Premises any ordinary “ For Lease” signs.

32.2 All activities of Lessor pursuant to this paragraph shall be without abatement of rent nor shall Lessor have any liability to Lessee for the same.

32.3 Lessor shall have the right to retain keys to the Premises and to unlock all doors in or upon the Premises other than to files, vaults and safes, and in the case of emergency to enter the Premises by any reasonably appropriate means, and any such entry shall not be deemed a forceable or unlawful entry or detainer of the Premises or an eviction. Lessee waives any charges for damages or injuries or interference with Lessee’s property or business in connection therewith.

33. Auctions. Lessee shall not conduct, nor permit to be conducted, either voluntarily or involuntarily, any auction upon the Premises or the Common Areas without first having obtained Lessor’s prior written consent. Notwithstanding anything to the contrary in this Lease, Lessor shall not be obligated to exercise any standard of reasonableness in determining whether to grant such consent. The holding of any auction on the Premises or Common Areas in violation of this paragraph shall constitute a material default of this Lease.

34. Signs. Lessee shall not place any sign upon the Premises or the Office Building Project without Lessor’s prior written consent. Under normal circumstances shall Lessee place a sign on any roof of the Office Building Project.

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35. Merger. The voluntary or other surrender of this Lease by Lessee, or a mutual cancellation hereof or a termination by Lessor, shall not work; merger, and shall, at the option of Lessor, terminate all or any existing subtenancies or may, at the option of Lessor, operate as an assignment to Lessor of any or all of such subtenancies.

36. Consents. Except for paragraphs 33 (auctions) and 34 (signs) hereof, wherever in this Lease the consent of one party is required to an act of the other party such consent shall not be unreasonably withheld or delayed.

37. Guarantor. In the event that there is a guarantor of this Lease, said guarantor shall have the same obligations as Lessee under this Lease.

38. Quiet Possession. Upon Lessee paying the rent for the Premises and observing and performing all of the covenants, conditions and provisions of Lessee’s part to be observed and performed hereunder, Lessee shall have quiet possession of the Premises for the entire term hereof subject to all of the provisions of this Lease. The individuals executing this Lease on behalf of Lessor represent and warrant to Lessee that they are fully authorized and legally capable of executing this Lease on behalf of Lessor and that such execution is binding upon all parties holding an ownership interest in the Office Building Project.

39. Options.

39.1 Definition. As used in this paragraph the word “Option” has the following meaning: (1) the right or option to extend the term of this Lease or to renew this Lease or to extend or renew any lease that Lessee has on other property of Lessor; (2) the option or right of first refusal to lease the Premises or the right of first offer to lease the Premises or the right of first refusal to lease other space within the Office Building Project or other property of Lessor or the right of first offer to lease other space within the Office Building Project or other property of Lessor; (3) the right or option to purchase the Premises or the Office Building Project or the right of first refusal to purchase the Premises or the Office Building Project or the right of first offer to purchase the Premises or the Office Building Project, or the right or option to purchase other property of Lessor, or the right of first refusal to purchase other property of Lessor or the right of first offer to purchase other property of Lessor.

39.2 Options Personal. Each Option granted to Leasor in this Lease is personal to the original Lessee and may be exercised only by the original Lessee while occupying the Premises who does so without the intent of thereafter assigning this Lease or subletting the Premises or any portion thereof, and may not be exercised or be assigned, voluntarily or involuntarily, by or to any person or entity other than Lessee; provided, however, that an Option may be exercised by or assigned to any Lessee Affiliate as defined in paragraph 12.2 of this Lease. The Options, if any, herein granted to Lessee are not assignable separate and apart from this Lease, nor may any Option be separated from this Lease in any manner, either by reservation or otherwise.

39.3 Multiple Options. In the event that Lessee has any multiple options to extend or renew this Lease a later option cannot be exercised unless the prior option to extend or renew this Lessee has been so exercised.

39.4 Effect of Default on Options.

(a) Lessee shall have no right to exercise an Option, notwithstanding any provision in the grant of Option to the contrary, (i) during the time commencing from the date Lessor gives to Lessee a notice of default pursuant to paragraph 13.1(c) or 13.1(d) and continuing until the noncompliance alleged in said notice of default is cured, or (ii) during the period of time commencing on the day after a monetary obligation to Lessor is due from Lessee and unpaid (without any necessity for notice thereof to Lessee) and continuing until the obligation is paid, or (iii) in the event that Lessor has given to Lessee three or more notices of default under paragraph 13.1(c), or paragraph 13.1(d), whether or not the defaults are cured during the 12 month period of time immediately prior to the time that Lessee attempts to exercise the subject Option, (iv) if Lessee has committed any non-cureable breach, including without limitation those described in paragraph 13.1(b), or is otherwise in default of any of the terms, covenants or conditions of this Lease.

(b) The period of time within which an Option may be exercised shall not be extended or enlarged by reason of Lessee’s inability to exercise an Option because of the provisions of paragraph 39.4(a).

(c) All rights of Lessee under the provisions of an Option shall terminate and be of no further force or effect, notwithstanding Lessee’s due and timely exercise of the Option, if, after such exercise and during the term of this Lease, (i) Lessee fails to pay to Lessor a monetary obligation of Lessee for a period of thirty (30) days after such obligation becomes due (without any necessity of Lessor to give notice thereof to Lessee or (ii) Lessee fails to commence to cure a default specified in paragraph 13.1(d) within thirty (30) days after the date that Lessee gives notice to Lessee of such default and /or Lessee fails thereafter to diligently prosecute said cure to completion, (iii) Lessor gives to Lessee three or more notices of default under paragraph 13.1(c), or paragraph 13.1(d), whether or not the defaults are cured, or (iv) if Lessee has committed any non-curable breach including without limitation those described in paragraph 13.1(b), or is otherwise in default of any of the terms, covenants and conditions of this Lease.

40. Security Measures – Lessor’s Reservations.

40.1 Lessee hereby acknowledges that Lessor shall have no obligation whatsoever to provide guard service or other security measures for the benefit of the Premises or the Office Building Project, Lessee assumes all responsibility for the protection of Lessee, its agents, and invitees on the property of Lessee and of Lessee’s agents and invitees from acts of third parties. Nothing herein contained shall prevent Lessor at Lessor’s role option from providing security protection for the Office Building Project or any part thereof, in which event the cost thereof shall be included within the definition of Operating Expenses as set forth in paragraph 4.2(b).

40.2 Lessor shall have the following rights:

(a) To change the name, address or title of the Office Building Project or building in which the Premises are located upon no less than 90 days prior written notice;

(b) To at Lessee’s expense, provide and install Building standard graphics on the door of the Premises and such portions of the Common Areas as Lessor shall reasonably deem appropriate;

(c) To permit any lessee the exclusive right to conduct any business as long as such exclusive does not conflict with any rights expressly given herein;

(d) To place such signs, notices or displays as Lessor reasonably deems necessary or advisable upon the roof, exterior of the buildings or the Office Building Project or on pole signs in the Common Areas;

40.3 Lessee shall not:

(a) Use a representation (photographic or otherwise) of the Building or the Office Building Project or their name(s) in connection with Lessee’s business;

(b) Suffer or permit anyone, except in emergency, to go upon the roof of the Building.

41. Easements.

41.1 Lessor reserves to itself the right, from time to time, to grant such easements, rights and dedications that Lessor necessary or desirable, and to cause the recordation of Parcel Maps and restrictions, so long as such easements, rights, dedications, Maps, and restrictions to not unreasonably interfere with the use of the Promises by Lessee, Lessee shall sign any of the aforementioned documents upon request of Lessor and failure to do so shall constitute a material default of this Lease by Lessee without the need for further notice to Lessee.

41.2 The obstruction of Lessee’s view, air, or light by any structure created in the vicinity of the Building, whether by Lessor or third parties shall in no way affect this Lease or impose any liability upon Lessor.

42. Performance Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one party to the other under the provisions hereof, the party against whom the obligation to pay the money is asserted shall have the right to make payment “under protest” and such payment shall not be regarded as a voluntary payment, and there shall survive the right on the part of said party to institute call for recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said party to pay such sum or any part thereof, said party shall be entitled to recover such sum or so much thereof as it was not legally required to pay under the provisions of this lease.

43. Authority. If Lessee is a corporation, trust, or general or limited partnership, Lessee, and each individual executing this Lease on behalf of such entity, represent and warrant that such individual is duly authorized to execute and deliver this Lease on behalf of said entity. If Lessee is a corporation, trust or partnership, Lessee shall, within thirty (30) days after execution of this Lease, deliver to Lessor evidence of such authority satisfactory to Lessor.

44. Conflict. Any conflict between the printed provisions, Exhibits or Addends of this Lease and the typewritten or handwritten provisions, if any, shall be controlled by the typewritten or handwritten provisions.

45. No offer. Preparation of this Lease by Lessor or Lessor’s agent and submission of same to Lessee shall not be deemed an offer to Lessee to Lease. This lease shall become binding upon Lessor and Lessee only when fully executed by both parties.

46. Lender Modification. Lessee agrees to make such reasonable modifications to this Lease as may be reasonably required by an institutions lender in connection with the obtaining of normal financing or refinancing of the Office Building Project.

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47. Multiple Parties. If more than one person or entity is named as either Lessor or Lessee herein, except as otherwise expressly provided herein the obligations of the Lessor or Lessee herein shall be the joint and several responsibility of all persons or entities named herein as such Lessor or Lessee, respectively.

48. Work Letter. This Lease is supplemented by that certain Work Letter of even date executed by Lessor and Lessee attached hereto as Exhibit C and incorporated herein by this reference.

49. Attachments. Attached hereto are the following documents which constitute a part of this Lease:

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN AND BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO, THE PARTIES HEREBY AGREE THAT AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.

IF THIS LEASE HAS BEEN FILED IN IT HAS BEEN PREPARED FOR SUBMISSION TO YOUR ATTORNEY FOR HIS APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY THE REAL ESTATE BROKER OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION RELATING THERETO; THE PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN LEGAL COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.

LESSOR			LESSEE
Duane A. Harlan			Sierra Digital, Inc., a California corporation
By		/s/ Duane A. Harlan	By		/s/ Duane A. Harlan
		Duane A. Harlan			Duane A. Harlan
	Its			Its	President
By			By
	Its			Its
Executed at			Executed at
on			on
Address			Address

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NOTE:  These forms are _______ modified to meet changing requirements of law and needs of the industry. Always write or call to make _____ you are ______ the most current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 345 ______ M-1, Los Angelos, CA 90071 (213) 68__8777.

EX-10.1(A)

Exhibit 10.1(a)

Addendum to Standard Office Lease-Net

Dated as of September 20, 1995, in which

Duane A. Harlan is named as Lessor and

Sierra Digital, Inc. is named as Lessee (“Lease”)

The Lessor and Lessee named in the Lease hereby supplement the Lease as follows:

1. Rent. Base rent pursuant to paragraph 1.6 of the Lease shall be in the amount of $3,500.00 per month payable on the 1^st day of each month pursuant to Paragraph 4.1 of the Lease. Each anniversary date of the Lease, Lessor and Lessee may, at their respective elections, reestablish the base rent to be the fair market value base rent determined for the premises with respect to similar building and similar use in the same geographic vicinity.

2. Term. The term of this Lease shall commence on September 20, 1995, and shall renew for one (1) year periods on each anniversary of the commencement date. Notwithstanding the foregoing, either party may give the other party six (6) months advance written notice to terminate this Lease.

Dated: September 20, 1995.

LESSOR:

/s/ Duane A. Harlan

DUANE A. HARLAN

LESSEE: SIERRA DIGITAL, INC., a California corporation
By:	/s/ Duane A. Harlan
	Duane A. Harlan, President

RULES AND REGULATIONS FOR

STANDARD OFFICE LEASE

[GRAPHIC]

Dated:                                                                  

By and Between                                                                                                   .

GENERAL RULES

1. Lessee shall not suffer or permit the obstruction of any Common Areas, including driveways, walkways and stairways.

2. Lessor reserves the right to refuse access to any persons Lessor in good faith Judges to be a threat to the safety, reputation, or property to the Office Building Project and its occupants.

3. Lessee shall not make or permit any noise or odors that annoy or interfere with other Lesses or persons having business within the Office Building Project.

4. Lessee shall not keep animals or birds within the Office Building Project, and shall not bring bicycles, motorcycles or other vehicles into areas, not designated as authorized for same.

5. Lessee shall not make, suffer or permit litter except in appropriate receptacles for that purpose.

6. Lessee shall not alter any lock or install new or additional locks or bolts.

7. Lessee shall be responsible for the inappropriate use of any toilet rooms, plumbing or other utilities. No foreign substances of any kind are to be inserted therein.

8. Lessee shall not deface the walls, partitions or other surfaces of the Premises or Office Building Project.

9. Lessee shall not suffer or permit any thing in or around the Premises or Building that causes excessive vibration or floor landing in any part of the Office Building Project.

10. Furniture, significant freight and equipment shall be moved into or out of the building only with the Lessor’s knowledge and consent and subject to such reasonable limitations, techniques and timing, as may be designated by Lessor. Lessee shall be responsible for any damage to the Office Building Project arising from any such activity.

11. Lessee shall not employ any service or contractor for services or work to be performed in the Building, except as approved by Lessor.

12. Lessor reserves the right to close and lock the Building on Saturdays, Sundays and legal holidays, and on other days between the hour of _____ P.M. and _____ A.M. of the following day. If Lessee uses the Premises during such periods, Lessee shall be responsible for securely locking any doors it may have opened for entry.

13. Lessee shall return all keys at the termination of its tenancy and shall be responsible for the cost of replacing any keys that are lost.

14. No window coverings, shades or awnings shall be installed or used by Lessee.

15. No Lessee, employee or invitee shall go upon the roof of the Building.

16. Lessee shall not suffer or permit smoking or carrying of lighted cigars or cigarettes in areas reasonably designated by Lessor or by applicable governmental agencies as non-smoking areas.

17. Lessee shall not use any method of heating or air conditioning other than as provided by Lessor.

18. Lessee shall not install, maintain or operate any vending machines upon the Premises without Lessor’s written consent.

19. The Premises shall not be used for lodging or manufacturing, cooking or food preparation.

20. Lessee shall comply with all safety, fire protection and evacuation regulations established by Lessor or any applicable governmental agency.

21. Lessor reserves the right to waive any one of these rules or regulations, and/or as to any particular Lessee, and any such waiver shall not constitute a waiver of any other rule or regulation of any subsequent application thereof to such Lessee.

22. Lessee assumes all risks from theft or vandalism and agrees to keep its Premises locked as may be required.

23. Lessor reserves the right to make such other reasonable rules and regulations as it may from time to time deem necessary for the appropriate operation and safety of the Office Building Project and its occupants. Lessee agrees to abide by these and such rules and regulations.

PARKING RULES

1. Parking areas shall be used only for parking by vehicles no longer than full size, passenger automobiles herein called “Permitted Size Vehicles.” Vehicles other than Permitted Size Vehicles are herein referred to as “Oversized Vehicles.”

2. Lessee shall not permit or allow any vehicles that belong to or are controlled by Lessee or Lessee’s employees, suppliers, shippers, customers, or invitees to be loaded, unloaded, or parked in areas other than those designated by Lessor for each activities.

3. Parking stickers or identification devices shall be the property of Lessor and be returned to Lessor by the holder thereof upon termination of the holder’s parking privileges. Lessee will pay such replacement charges as is reasonably established by Lessor for the lese of such devices.

4. Lessor reserves the right to refuse the sale of monthly identification devices to any person or entity that willfully refuses to comply with the applicable rules, regulations, laws and/or agreements.

5. Lessor reserves the right to relocate all or a part of parking spaces from floor to floor, within one floor, and/or to reasonably adjacent offsite, location(s), and to reasonably allocate them between compact and standard size spaces, as long as the same complies with applicable laws ordinances and regulations.

6. Users of the parking area will obey all posted signs and park only in the areas designated for vehicle parking.

7. Unless otherwise instructed, every person using the parking area is required to park and lock his own vehicle. Lessor will not be responsible for any damage to vehicles, injury to persons or loss of property, all of which risks are assumed by the party using the parking area.

8. Validation, if established, will be permissible only by such method or methods as Lessor and/or its licensee may establish at rates generally applicable to visitor parking.

9. The maintenance, washing, waxing or cleaning of vehicles in the parking structure or Common Areas is prohibited.

10. Lessee shall be responsible for seeing that all of its employees, agents and invitees comply with the applicable parking rules, regulations, laws and agreements.

11. Lessor reserves the right to modify these rules and/or adopt such other reasonable and non-discriminatory rules and regulations as it may deem necessary for the proper operation of the parking area.

12. Such parking use as is herein provided is intended merely as a license only and no bailment is intended or shall be created hereby.

© 1984 American Industrial Real Estate Association	FULL SERVICE–NET	Initials:
	EXHIBIT B PAGE 1 OF 1 PAGE

STANDARD OFFICE LEASE

FLOOR PLAN

[GRAPHIC]

EXHIBIT A

© 1984 American Industrial Real Estate Association	FULL SERVICE–NET	Initials:
	PAGE 1 OF 1 PAGES

EX-10.1(B)

Exhibit 10.1(b)

Addendum to Lease Agreement

Dated 9/20/1995

The Active Network, Inc. and Safari Holdings, LLC (and/or Duane Harlan) hereby agree to extend the term of the building lease for 4,000’ feet of office space at 937 Enterprise Dr., Sacramento, CA 95825. The following terms shall apply:

1. The lease term shall be extended to August 30, 2005.

2. The rental rate shall remain at the current and existing rate.

3. At the beginning of the extended term, two month’s free rent shall be provided to Active. These months shall be September and October 2003.

4. Certain building improvements shall be made as determined by Lessor, but at a minimum shall include updated landscaping, new exterior paint, and refurbishment of central lunch/meeting area.

5. All other lease provisions shall remain in effect and shall be unchanged.

Accepted:

/s/ Matt Landa	4-28-03	/s/ Duane Harlan	4-24-03
Matt Landa	Date	Duane Harlan	Date
President		Member
The Active Network, Inc.		Safari Holdings, LLC

EX-10.2

Exhibit 10.2

PROSPECT CENTER

OFFICE LEASE

between

Prospect Center Corporation,

a California corporation

(LANDLORD)

and

RaceGate.Com

a Delaware corporation

(TENANT)

Date: June 2, 1999

TABLE OF CONTENTS

		Page
ARTICLE 1	DEFINITIONS	1
ARTICLE 2	LEASE OF PREMISES	5
ARTICLE 3	RENT	7
ARTICLE 4	USE OF PREMISES	10
ARTICLE 5	SERVICES AND UTILITIES	13
ARTICLE 6	MAINTENANCE AND REPAIR	14
ARTICLE 7	ALTERATIONS AND IMPROVEMENTS	14
ARTICLE 8	RIGHTS OF LANDLORD	16
ARTICLE 9	INSURANCE AND INDEMNITY	17
ARTICLE 10	ASSIGNMENT AND SUBLETTING	21
ARTICLE 11	DAMAGE OR DESTRUCTION	23
ARTICLE 12	EMINENT DOMAIN	25
ARTICLE 13	DEFAULT AND REMEDIES	25
ARTICLE 14	ESTOPPEL CERTIFICATES	28
ARTICLE 15	HOLDING OVER; SURRENDER OF PREMISES	28
ARTICLE 16	QUIET ENJOYMENT	29
ARTICLE 17	SUBORDINATION	29
ARTICLE 18	LIENS	30
ARTICLE 19	BANKRUPTCY	30
ARTICLE 20	PROFESSIONAL FEES	30
ARTICLE 21	PERFORMANCE BY TENANT	31
ARTICLE 22	MORTGAGEE PROTECTION	31
ARTICLE 23	DEFINITION OF LANDLORD	31
ARTICLE 24	WAIVER	32
ARTICLE 25	IDENTIFICATION OF TENANT	32

104268 00000 1\97746 \	(i)	ONE LEASE
February 14, 1997		FIXED TERM

		Page
ARTICLE 26	NO PARKING RIGHTS	32
ARTICLE 27	FORCE MAJEURE	33
ARTICLE 28	LIMITATION ON LIABILITY	33
ARTICLE 29	MODIFICATION FOR LENDER	34
ARTICLE 30	FINANCIAL STATEMENTS	34
ARTICLE 31	LENDER APPROVAL	34
ARTICLE 32	RELOCATION	34
ARTICLE 33	LEASE INCENTIVES	34
ARTICLE 34	MISCELLANEOUS	35

EXHIBITS
EXHIBIT A	THE PREMISES
EXHIBIT B	THE PROJECT
EXHIBIT C	RULES AND REGULATIONS
EXHIBIT D	NOTICE OF LEASE TERM DATES AND TENANT’S PERCENTAGE SHARE
EXHIBIT E	STANDARDS FOR UTILITIES AND SERVICES
EXHIBIT F	TENANT ESTOPPEL CERTIFICATE
EXHIBIT G	TENANT IMPROVEMENT AGREEMENT
EXHIBIT H	GUARANTY OF LEASE

104268 00000 1\97746 \	(ii)	ONE LEASE
February 14, 1997		FIXED TERM

PROSPECT CENTER

OFFICE LEASE

BASIC LEASE PROVISIONS

1. DATE OF LEASE: June 2, 1999

2. LANDLORD: Prospect Center Corporation, a California corporation

3. TENANT: RaceGate.Com, a Delaware corporation

4. BUILDING NAME AND ADDRESS:

Prospect Center

1020 Prospect Street

La Jolla, CA 92037

5. PREMISES:

Suite(s) No. 250, 401, and 201 located on the 2^nd and 4^th floors of the Building as shown on Exhibit A with approximate square footage as follows:

Suite 250, 3499 rentable square feet and 3043 useable square feet

Suite 401, 1350 rentable square feet and 1174 useable square feet

Suite 201, 2760 rentable square feet and 2400 useable square feet (See Addendum 1)

6. TERM:

Suites 250 and 401 - Thirty-seven (37) months, (July 1, 1999 – July 31, 2002)

Suite 201 - Twenty-five (25) months and fifteen (15) days, (June 15, 2000 – July 31, 2002)

plus any partial month at the commencement of the Term.

7. COMMENCEMENT DATE: The Term shall commence upon the earlier of the following dates (the “Commencement Date”).

a) Substantial completion of the Tenant Improvements described in the Tenant Improvement Agreement and Landlord’s tender of possession of the Premises to Tenant, or

b) The date that Tenant opens for business in the Premises.

For reference purposes only, the anticipated Commencement Date is July 1, 1999 for Suites 250 and 401; and June 15, 2000 for Suite 201.

8. BASE MONTHLY RENT:

Suite 250 - Seven Thousand Eight Hundred Seventy Two and 75/100 Dollars ($7,872.75) ($2.25 per square foot of Rentable Area and $2.587 per square foot of Useable Area).

Suite 401 - Three Thousand Thirty Seven and no/100 Dollars ($3,037.50) ($2.25 per square foot of Rentable Area and $2.587 per square foot of Useable Area).

Suite 201 - Six Thousand Nine Hundred and no/100 Dollars ($6,900.00) ($2.50 per square foot of Rentable Area and $2.875 per square foot of Useable Area).

(i)

9. RENTAL ADJUSTMENTS:

Step Increase. The Base Monthly Rent shall increase to the amounts and on the dates shown below (each such date being an “Adjustment Date”).

Landlord’s initials: /s/ Illegible Tenant’s initials: /s/ Illegible

Suite	Adjustment Date	New Base Monthly Rent		Per Square Foot of Rentable Area
250	July 1, 2000	$	8,047.70	$	2.30
250	July 1, 2001	$	8,222.65	$	2.35
401	July 1, 2000	$	3,105.00	$	2.30
401	July 1, 2001	$	3,172.50	$	2.35
201	June 15, 2001	$	7,038.00	$	2.55
201	June 15, 2002	$	7,176.00	$	2.60

10. PREPAID RENT: Upon Lease execution, Tenant shall pay to Landlord the sum of One Hundred Thirty Four Thousand Seven Hundred Twenty Eight and 05/100 Dollars ($134,728.05) which shall be applied towards the Base Rent for months 1, 2, 13, 14, 15, 25, 26, and 27 of the Lease Term.

11. SECURITY DEPOSIT: Seventeen Thousand Eight Hundred Ten and 25/100 Dollars ($17,810.25)

12. TENANT’S PERCENTAGE SHARE OF OPERATING EXPENSES:

Approximate percentage based upon the Rentable Area of the Premises and the Rentable area of the Building which is 42,264 square feet is as follows: Suite 250 – 8.28%: Suite 401 – 3.19%: and Suite 201 – 6.53%

13. BROKERS:

Landlord’s Broker: Capital Growth Properties, Inc. (Suites 250, 401 & 201)

Tenant’s Broker: The Irving Hughes Group, Inc. (Suites 250, 401, & 201);

Third Party Broker for Suite 250: San Diego Commercial Realty

14. ADDRESS FOR NOTICE:

Landlord: Prospect Center Corporation

1020 Prospect Street, Suite 312

La Jolla, California 92037

Attn: Property Manager

Tenant:

Attn:

15. PARKING: No parking rights are provided under this Lease.

16. TENANT’S PERMITTED USE: General office for research and development and related functions of an Internet company.

17. GUARANTOR: (If none, so state)

(ii)

18. TENANT IMPROVEMENTS: Landlord will provide improvements to the Premises prior to the Lease Commencement Dates as noted in Exhibit G. Any additional improvements requested by Tenant shall be at the Tenant’s expense.

19. TENANT’S ANNUAL OPERATING EXPENSE ALLOWANCE:

Tenant shall be responsible for its pro rata share of Operating Expenses in excess of the Base Year of 1999 for Suites 250 and 401, and in excess of the Base Year of 2000 for Suite 201.

(To be adjusted upon determination of actual Rentable Area of the Premises in accordance with Article 2. Landlord and Tenant acknowledge that the Operating Expense Allowance is an estimate of the Operating Expenses for the Project and that the actual Operating Expenses may be higher or lower).

20. ADDENDA: Addenda 1 through 2, inclusive, are attached to this Lease and are incorporated herein by this reference and made a part hereof.

21. EXHIBITS: The exhibits referenced in the Table of Contents are each attached to this Lease and are incorporated herein by this reference and made a part hereof.

Each Basic Lease Provision set forth above is a summary of the terms elsewhere in this Lease which relate to each such Basic Lease Provision. If there is any conflict between any Basic Lease Provision and any specific clause of the Lease, the more specific clause shall control.

(iii)

GENERAL LEASE PROVISIONS

ARTICLE

DEFINITIONS

Unless the context otherwise specifically requires, the following terms shall have the meaning set forth below.

1.1 Additional Rent. “Additional Rent” means all fees, assessments, expenses and charges, however denominated, required to be paid by Tenant pursuant to this Lease in addition to the Base Monthly Rent, including, but not limited to, Tenant’s Percentage Share of Operating Expenses.

1.2 Base Monthly Rent. “Base Monthly Rent” shall refer to the initial Base Monthly Rent specified in Section 6 of the Basic Lease Provisions, and, as the context requires, any adjustments made to the initial Base Monthly Rent.

1.3 Building; Office Building. “Building” or “Office Building” means the office building located on the Building Lot, in which the Premises are located as delineated on Exhibit B.

1.4 Building Common Areas. “Building Common Areas” means the following: all areas within the Building and the Project which are not now or hereafter held for exclusive use by persons entitled to occupy space in the Building. Building Common Areas include, but are not limited to, parking areas, driveways, truckways, delivery passages, loading docks, sidewalks, ramps, landscaped and planted areas, exterior stairways, hallways and interior stairwells not located within the premises of any tenant, ground floor lobby, elevators, elevator lobbies not located within the premises of any tenant, retaining walls, restrooms not located within the premises of any tenant, fountains, statues, any and all monument signs situated on the Building Lot, common pipes, conduits, wires and appurtenant equipment serving the Premises and all other areas and improvements within the Building and/or the Building Lot provided by Landlord from time to time for the common use of Landlord and tenants of the Building and their respective employees and invitees as reasonably determined by Landlord from time to time.

1.5 Building Lot. “Building Lot” means the real property upon which the Building is located which is more particularly described on Exhibit B hereto.

1.6 Business Days. “Business Days” means all days in any given year other than Saturdays, Sundays and Legal Holidays.

1.7 Index. “Index” means the United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index, all urban consumers index for all items in the Los Angeles/Anaheim/Riverside metropolitan area (1982-1984 = 100). If the issuance of the Index by the Federal Government is discontinued or revised during the Term, such other governmental index or computation with which it is replaced shall be used to obtain substantially the same result as would be obtained if the Index had not been discontinued or revised.

1.8 Lease; Office Lease. “Lease” or “Office Lease” means the Basic Lease Provisions, General Lease Provisions, Tenant Improvement Agreement, Rules and Regulations in their present form or as modified subsequent to the execution of the Lease, and any and all addenda, amendments and exhibits, to this Lease.

1.9 Lease Year. “Lease Year” means each period of twelve (12) consecutive full calendar months beginning on the first day of the first calendar month next following the Commencement Date (or beginning on the Commencement Date, if the Commencement Date falls on the first day of a month) provided, however, that the first Lease Year shall also include any partial month from the Commencement Date through the last day of the month in which the Commencement Date falls and the last Lease Year shall end on the Date the Term expires or terminates.

1.10 Legal Holidays. “Legal Holidays” means only New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day and such other national holidays which now exist or may be established after the date of this Lease by the U.S. Government.

1.11 Mortgage. “Mortgage” means any mortgage or deed of trust which constitutes a lien on the Building and/or the Building Lot given for the purpose of securing indebtedness to purchase or improve the Building and/or the Building Lot.

1.12 Mortgagee. “Mortgagee” means the holder of the beneficial interest in any Mortgage. The term “Beneficiary” shall be synonymous with the term “Mortgagee.”

1.13 Operating Expenses.

“Operating Expenses” mean with respect to each full or partial calendar year during the Term all reasonable costs of managing, operating, overhauling, repairing and maintaining the Building, the Building Common Areas, and the Building Lot (sometimes hereinafter collectively referred to as the “Project”) (including any expansions thereto) consistent with a first-class Class A institutional quality office building determined by (a) the average percent of actual occupancy for the entire calendar year or (b) as if the Building were not less than 95% occupied for an entire calendar year, whichever is greater, including but not limited to the following items:

1.13.1.1 payroll costs, including all salaries, wages, payroll and similar taxes, social security taxes, federal and state unemployment taxes, unemployment insurance costs, workers’ compensation, disability and other insurance, medical and other health benefits or payments, welfare, retirement, vacation, holiday and other paid absences and other employee benefits applicable to persons engaged in the management, operation, maintenance or repair of the Project whether employed by Landlord or another party with whom Landlord contracts for such services;

1.13.1.2 premiums and other charges for fire and extended coverage insurance (all risk, full replacement cost), including at Landlord’s election earthquake, flood, windstorm, hail, explosion or riot, broad form comprehensive public liability and property damage insurance, contractual liability insurance, plate glass insurance, owned and non-owned automobile insurance, elevator insurance, boiler and machinery insurance, sprinkler leakage and water damage insurance, legal liability insurance, burglary and hold-up insurance, fidelity and pilferage insurance, rental loss and business interruption insurance, excess and umbrella insurance and any other insurance Landlord deems necessary or desirable;

1.13.1.3 service contracts, including but not limited to contracts for outside maintenance or repair, security which Landlord may elect to provide, janitorial, landscaping and replanting, gardening and cleaning services, window cleaning, rubbish removal, pest control, water treatment, non-structural roof repairs, servicing of elevators and escalators and electrical, plumbing and mechanical equipment;

1.13.1.4 the cost of materials, tools, supplies and equipment held for use or used for the benefit of the Project;

1.13.11.5 the fair market rental value of Landlord’s managing agent office in the Project;

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1.13.1.6 the costs of all capital improvements and replacements to the Project its contents or any portion thereof, made to comply with any present or future law, ordinance, rule or regulation or made to improve or add Building life-safety or security systems or made to reduce other Building Expenses, such costs to be amortized over the applicable recovery period for federal tax purposes or the estimated useful life as determined by Landlord and utilized by Landlord in its financial and tax reporting, and to include a return on capital at such rate as Landlord may pay on funds borrowed for the purpose of constructing such improvements or replacements;

1.13.1.7 license, permit and inspection fees;

1.13.1.8 management fees and expenses not exceeding fees and charges normally incurred with respect to comparable first class office buildings;

1.13.1.9 legal, accounting and consulting fees and expenses;

1.13.1.10 Property Taxes levied against the Project whether assessed against Landlord or assessed against Tenant and paid by Landlord, or any combination of the foregoing;

1.13.1.11 Utility Costs (defined below);

1.13.1.12 any and all other expenses related to the Project however denominated which, in accordance with generally accepted accounting principles consistently applied, could fairly be treated as an operating expenses by landlords of comparable first-class, Class A institutional quality office buildings.

1.13.2 Operating Expenses shall not include (i) Mortgage and debt service on any debt instrument which encumbers the Project; (ii) ground lease payments; (iii) Landlord’s general overhead and general administrative expenses not related to management or operation of the Project; (iv) depreciation (except for the amortization of capital improvements and replacements described in Section 1.13.1.6 above); (v) any and all costs of selling, exchanging or refinancing the Project including any escrow charges, transfer taxes, loan fees and points; (vi) extraordinary real estate taxes or insurance premiums related to the tenant improvements of other tenants in the Building which are in excess of building standard as may be defined by Landlord from time to time; (vii) costs incurred by Landlord for the repair of damage to the Project to the extent Landlord is reimbursed by insurance proceeds from policies paid for in total or in part by Tenant; (viii) capital expenditures required by Landlord’s failure to comply with laws enacted on or before the date of issuance of a certificate of occupancy or an equivalent governmental permit for the initial occupancy of the Building; (ix) costs incurred with respect to the installation of tenant improvements made for tenants in the Building or incurred in renovating or otherwise decorating, painting or redecorating vacant space for tenants of the Building; (x) leasing commissions, attorneys’ fees, and other costs and expenses incurred in connection with negotiations or disputes with present or prospective tenants or other occupants of the Building, (xi) costs incurred by Landlord to enforce the provisions of any lease of space in the Building due to the violation by ant tenant of the Building of the terms and conditions of any lease; (xii) cost of services paid to Landlord or to subsidiaries or affiliates of Landlord for services in the Building to the extent the same exceeds the costs of such services rendered by unaffiliated qualified third parties on a comparable competitive basis; (xiii) any compensation (including wages and fringe benefits) paid to clerks, attendants or other persons in commercial concessions operated by Landlord in the Building lobby; (xiv) all items and services for which Tenant or any other tenant of the Building reimburses Landlord (other than the pass-through of Building Expenses) and which Landlord provides selectively to one or more tenants (other than Tenant) without reimbursement; (xv) the cost of purchase and installation of signs in or on the Building which identify the owner of the Building or any tenant of the Building; (xvi) tax penalties incurred as a result of Landlord’s negligence or inability or unwillingness to make payments when due.

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1.14 Prime. “Prime” shall mean the rate publicly announced from time to time by Union Bank as its “Reference Rate” or “Prime Rate.”

1.15 Property Taxes. “Property Taxes” means and shall include any form of assessment, license fee, license tax, special tax, business license fee, commercial rental tax, levy, charge, penalty (not resulting from failure of the Landlord), tax or similar imposition, imposed by any authority having the direct power to tax, including any city, county, state or federal government, or any school, agricultural, lighting, drainage or other improvement assessment or special district thereof, as against any legal or equitable interest of Landlord in the Premises or the Project including, but not limited to, the following:

(a) any tax, special tax, on Landlord’s right to other income from the Premises or Project or as against Landlord’s business of leasing the Premises or Project.

(b) any assessment, tax, special tax, fee, levy or charge, in substitution or addition, partial or total, to or regarding any assessment, tax, special tax, fee, levy or charge previously included or not included within the definition of real estate tax, including but not limited to, any assessments, taxes, fees, levies and charges that may be imposed by governmental agencies for such services as fire protection, street, sidewalk and road maintenance, refuse removal and for other governmental services formerly provided without charge to property owners or occupants. Tenant and Landlord intend that all such new and increased assessments, taxes, special taxes, fees, levies and charges be included within the definition of Property Taxes for the purposes of this Lease;

(c) any assessment, tax, special tax, fee, levy or charge allocable to or measured by the area of the Premises, Building, Building Lot or Project or the rent payable pursuant to this Lease or the providing of parking, including, without limitation, any gross income tax or excise tax levied by the State, city or federal government, or any political subdivision thereof, with respect to the receipt of such rent, or upon or with respect to the possession, leasing, operating, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises, Building, Building Lot or Project or any portion thereof;

(d) any assessment, tax, special tax, fee, levy or charge upon this transaction or any document to which Tenant is a party creating or transferring an interest or an estate in the Premises or the Project.

Notwithstanding any contrary provision of this Section 1.15, Property Taxes shall not include Landlord’s federal or state income, franchise, inheritance or estate taxes. Property Taxes constitute a portion of the Operating Expenses.

1.16 Rent. “Rent” as used in this Lease, means and includes the Base Monthly Rent (as adjusted), Additional Rent and all other amounts Tenant is required to pay pursuant to this Lease.

1.17 Rentable Area/Usable Area. The terms “Rentable Area” and “Usable Area” as used in the Lease in reference to the Building, the Premises, or any other portion of the Building shall mean the number of rentable square feet or usable square feet (as applicable) as determined by Landlord’s representative in the manner provided in Section 2.1 of this Lease. From time to time if space is added to or deleted from the Premises, Landlord’s representative shall determine the Rentable Area and the Usable Area of such space.

1.18 Rules and Regulations. “Rules and Regulations” means and refers to the Rules and Regulations set forth in Exhibit C attached hereto, together with any and all reasonable and nondiscriminatory amendments and modifications thereto made by Landlord from time to time.

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1.19 Tenant Improvements. The term “Tenant Improvements” refers to all improvements to the Premises shown on the plans and specifications approved by Landlord to be constructed pursuant to the terms of the Tenant Improvement Agreement attached to this Lease as Exhibit G.

1.20 Tenant Improvement Agreement. The term “Tenant Improvement Agreement” refers to the agreement attached hereto as Exhibit G.

1.21 Tenant’s Taxes. The term “Tenant’s Taxes” shall include any and all taxes, special taxes, assessments, levies, fees, and other governmental charges of every kind or nature levied or assessed by municipal, county, state, federal or other taxing or assessing authorities with respect to those items referenced in Section 3.2.2 of this Lease.

1.22 Term; Lease Term. “Term” or “Lease Term” means the entire period during which the Lease is in effect, commencing with the Commencement Date and continuing for the period specified in Section 6 of the Basic Lease Provisions plus any extension or renewal period.

1.23 Utility Costs. “Utility Costs” means for any calendar year, the utility costs for the Project (excluding those Utility Costs, if any, which are separately metered to the Premises and paid for by Tenant directly to the public utility providing the same and those which at Landlord’s option are directly allocated to and paid by tenants of the Building) as follows: (i) the costs of all fuel, power (including without limitation electricity costs for air conditioning), light, heat, chilled water and ventilation serving the Project or consumed or used in the Project or any portion thereof; (ii) all sewer and water charges incurred in the operation of the Project; (iii) all charges incurred for off-site disposal of solid waste from the Project; (iv) any and all fees, charges or expenses otherwise imposed as part of any billing by a regulated utility supplying any services or commodities to the Project including without limitation all rentals for equipment and pass-throughs of government mandated charges; and (v) the annual amortization of the cost of any energy conservation equipment installed subsequent to the commencement of the Term, amortized (in the same, manner as described in paragraph 1.13.1.6 above) over the applicable recovery period for federal tax purposes or the estimated useful life as determined by Landlord and utilized by Landlord in its financial and tax reporting.

ARTICLE 2

LEASE OF PREMISES

2.1 Premises Leased. Landlord leases to Tenant and Tenant hereby leases from Landlord the Premises described in Section 5 of the Basic Lease Provisions and in Exhibit A, provided that the Rentable Area and Useable Area shall be determined by Landlord’s space planner upon completion of the working plans and specifications for the construction of the Tenant Improvements. Such determination shall be made in accordance with the method of measuring rentable and useable office space specified in the American National Standard Institute Publication ANSI Z65.1-1980 (the “BOMA Standard”). Base Monthly Rent and Tenant’s Percentage Share of Operating Expenses shall be adjusted upon the final determination of the Rentable Area of the Premises.

2.1.1 Tenant’s Percentage Share of Operating Expenses. Tenant’s Percentage Share shall be adjusted upon the final determination of the Rentable Area of the Premises to equal a fraction, the numerator of which is the Rentable Area of the Premises and the denominator is the Rentable Area of the Building all as determined by Landlord’s space planner in accordance with the BOMA Standard.

2.1.2 Use of Building Common Area. Tenant shall have the nonexclusive right to use in common with other tenants and occupants of the Building, the Building Common Area subject, however, to Tenant’s prior compliance with all applicable provisions of this Lease.

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2.1.3 Landlord’s Rights with Respect to Building Common Areas and the Project. Landlord reserves the right from time to time without unreasonable interference with Tenant’s use of the Premises:

2.1.3.1 To install, use, maintain, repair and replace pipes, ducts, conduits, wires, meters and equipment for service to other parts of the Building above the ceiling surfaces, below the floor surfaces, within the walls and in the central core areas, and to relocate any pipes, ducts, conduits, wires and appurtenant meters and equipment included in the Premises which are located in the Premises or located elsewhere outside the Premises, and to expand the Building;

2.1.3.2 To make or permit changes, additions and deletions to the Building Common Areas;

2.1.3.3 To close temporarily any of the Building Common Areas for maintenance, repair, improvement and/or construction purposes so long as reasonable access to the Premises remains available:

2.1.3.4 To designate other land outside the boundaries of the Building or Building Lot to be a part of the Project;

2.1.3.5 To add other or permit the addition of improvements to the Building Common Areas and to change the address and name of the Building and/or the Project;

2.1.3.6 To use the Building Common Areas while engaged in making additional improvements, repairs or alterations to the Building, or any portion thereof;

2.1.3.7 To do and perform such other acts and make such other changes, additions and deletions in, to or with respect to the Building Common Areas, the Building Lot, or the Project as Landlord may, in the exercise of sound business judgment, deem to be appropriate.

2.1.3.8 Tenant acknowledges that Landlord may construct additional buildings and improvements within the Building Lot and/or Project which may cause the relocation or closing of driveways and parking facilities on a temporary or permanent basis.

No change of the Building Common Areas, the Building Lot, or the Project by Landlord shall entitle Tenant to any abatement of Rent.

2.2 Lease Term. The Lease Term is for the period stated in Section 6 of the Basic Lease Provisions. The Term of the Lease shall commence on the earlier to occur of the events specified in Section 7 of the Basic Lease Provisions. If not specifically designated in the Basic Lease Provisions, the Commencement Date, the date upon which the term of this Lease shall end, the Rentable Area and Usable Area of the Premises and Tenant’s Percentage Share of Operating Expenses shall be determined by Landlord will be specified in Landlord’s Notice of Lease Term Dates and Tenant’s Percentage Share (“Notice”), in the form of Exhibit D and which shall be given to Tenant by Landlord as provided in Section 34.8. The Notice shall be binding upon Tenant unless Tenant objects to the Notice in writing, within five (5) days of Tenant’s receipt of the Notice.

2.3 Delay In Commencement. Tenant agrees that if Landlord is unable to deliver possession of the Premises to Tenant with Tenant Improvements substantially completed in accordance with the Tenant Improvement Agreement on the scheduled Commencement Date, this Lease shall not be void or voidable, nor shall Landlord be liable to Tenant for any loss or damage resulting therefrom, nor shall the expiration date of the Term be in any way extended, but in such event Tenant shall not be liable for any Rent until Landlord tenders possession of the Premises to Tenant with the Tenant Improvements substantially completed. If Landlord completes construction of the Tenant Improvements prior to the scheduled Commencement Date, Landlord may deliver

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3.1.2.3 The failure of Landlord to deliver timely notice of any rent adjustment shall not constitute a waiver by Landlord of its rights hereunder.

3.2 Additional Rent. The sums, if any, required to be paid by Tenant pursuant to the terms of this Section 3, and all other fees, assessments, expenses and charges required to be paid by Tenant under this Lease (except Base Monthly Rent), however denominated, including but not limited to Tenant’s Percentage Share of Operating Expenses, shall be deemed to be Additional Rent. If any Additional Rent is not paid at the time provided in the Lease, such Additional Rent nevertheless shall be payable with the next installment of Base Monthly Rent falling due.

3.2.1 Operating Expenses.

3.2.1.1 Tenant’s Percentage Share of Operating Expenses. Operating Expenses shall be determined and calculated on a calendar year basis. If Tenant’s Percentage Share of Operating Expenses paid or incurred by Landlord for any calendar year during the Term, exceeds Tenant’s Annual Operating Expense Allowance, then Tenant shall pay such excess as Additional Rent in the manner specified in subparagraphs 3.2.1.2, 3.2.1.3 and 3.2.1.4 below. If the Rentable Area of the Premises or of the Building changes during the Term then Tenant’s Percentage Share shall be recomputed by dividing the Rentable Area of the Premises for the calendar year in question by the total Rentable Area of the Building for the same year. If the Rentable Area of the Premises or Building changes during the year in question, there shall be a proration for the partial year applicable to the changed space. (See Article 12. of the Basic Lease Provisions for Suite percentages.)

3.2.1.2 Expense Statements. Landlord shall provide to Tenant a written estimate of the amount by which the Operating Expenses for that year will exceed the Operating Expense Allowance (which amount may be re-estimated from time to time during the calendar year) and an estimate of Tenant’s Percentage Share thereof for the ensuing calendar year or portion thereof. With respect to each such calendar year or partial calendar year, Tenant shall pay to Landlord, monthly, in advance, without deduction or offset and concurrently with the installments of Base Monthly Rent then due, one-twelfth (1/12th) of the estimate of Tenant’s Percentage Share of Operating Expenses as Additional Rent. If for any reason Landlord is unable to provide to Tenant the estimate of Operating Expenses prior to the commencement of any calendar year during the Term, then Tenant shall continue to pay monthly the same amount for Tenant’s Percentage Share of Operating Expenses as was applicable for the most recent previous month until thirty (30) days after receipt of such estimate; such delay shall not be deemed a waiver of any such Additional Rent which Tenant is otherwise obligated to pay for Tenant’s Percentage Share of Operating Expenses for such preceding months during the new calendar year, all of which shall be paid within thirty (30) days after receipt of the estimate from Landlord.

3.2.1.3 Year-End Adjustments. Within ninety (90) days after the end of each calendar year during the Term, or as soon thereafter as reasonably practicable, Landlord will prepare and deliver to Tenant a statement showing the actual Operating Expenses incurred by Landlord during such calendar year and showing the amount of Tenant’s Percentage Share of Operating Expenses based thereon. Such statement will be final and binding on the Tenant unless Tenant objects in writing within thirty (30) days after the statement is delivered to Tenant. If in any calendar year, Tenant’s Percentage Share of Operating Expenses is less or greater than the amount which Tenant has paid for that year, then upon receipt of Landlord’s statement, any overpayment made by Tenant shall be credited against (i.e., a reduction of) the next installment of Base Monthly Rent falling due or Tenant shall pay the amount of any underpayment to Landlord with the next installment of Base Monthly Rent falling due, as the case may be. The estimated monthly installments of Tenant’s Percentage Share of Operating Expenses thereafter shall be adjusted to reflect such lower or higher Operating Expenses for the most recent calendar year. In no event will Tenant receive a credit against or reduction of Base Monthly Rent or Additional Rent if Tenant’s Percentage Share of Operating Expenses is ever equal to or less than Tenant’s annual Operating Expense Allowance.

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3.2.1.4 Adjustment Upon Termination of Lease. In the event of the termination or expiration of this Lease prior to the final determination of Tenant’s Percentage Shares of Operating Expenses, and even though Tenant has vacated the Premises, Tenant’s agreement to pay Tenant’s Percentage Share of Operating Expenses up to the time of termination shall survive termination of this Lease, and Tenant shall pay all amounts due to Landlord within ten (10) days after receipt of a statement therefor and conversely any overpayment made in the event of a decrease in Operating Expenses shall be rebated by Landlord to Tenant.

3.2.2 Tenant’s Taxes.

Tenant shall be liable for and shall pay, at least ten (10) days before delinquency, all taxes levied against any personal property or trade fixtures placed by Tenant in or about the Premises. If any such taxes on Tenant’s personal property or trade fixtures are levied against Landlord or Landlord’s property or if the assessed value of the Premises, Building, the Building Lot, or Project is increased by the inclusion therein of a value placed upon such personal property or trade fixtures of Tenant and if Landlord, after written notice to Tenant, pays the taxes based upon such increased assessment, which Landlord shall have the right to do regardless of the validity thereof, but only under proper protest if requested by Tenant, Tenant shall, upon demand, repay to Landlord the taxes so levied against Landlord, or the portion of such taxes resulting from such increase in the assessment.

3.2.2.2 If the Tenant Improvements in the Premises, are assessed for Property Tax purposes at a valuation higher than the valuation of building standard tenant improvements for other space in the Building, then the Property Taxes levied against the Building, the Building Lot or Project by reason of such excess assessed valuation shall be deemed to be taxes levied against personal property of Tenant and shall be governed by the provisions of paragraph 3.2.2.1. If the records of the County Assessor are not available or sufficiently detailed to serve as a basis for making said determination, the actual cost of construction of the Tenant Improvements shall be used.

3.3 Security Deposit. Upon execution of this Lease. Tenant shall deposit with Landlord the amount specified in Section 11 of the Basic Lease Provisions as security for the full and faithful performance of every provision of the Lease to be performed by Tenant. If Tenant defaults with respect to any provision of this Lease, including, but not limited to, the provisions relating to the payment of Rent, Landlord may use, apply, or retain all or any part of the Security Deposit for the payment of any Rent and any other sum in default, or for the payment of any other amount which Landlord may spend or become obligated to spend by reason of Tenant’s default, or to compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenant’s default. If any portion of the Security Deposit is so used or applied, Tenant shall, upon written demand therefor, deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its original amount, and Tenant’s failure to do so shall be a breach of this Lease. No interest shall be paid on the Security Deposit. Landlord shall not be required to keep the Security Deposit separate from its general funds, and no trust relationship is created with respect to the Security Deposit. As a condition to any assignment of this Lease, Landlord may require an increase in the Security Deposit. If Tenant is not in default at the expiration or termination of this Lease, and subject to Landlord’s inspection of the Premises following such expiration or termination, the Security Deposit or any balance thereof shall be returned to Tenant (or, at Landlord’s option, to the last assignee of Tenant’s interest hereunder) fourteen (14) days following the expiration or termination of the Lease Term and upon Tenant’s vacation of the Premises. Tenant acknowledges that Landlord has the right to transfer its interest in the Premises, the Building, the Building Lot and/or this Lease, and Tenant agrees that in the event of any such transfer, Landlord shall transfer the Security Deposit to the transferee and, upon such transfer, Landlord shall be released by Tenant from all liability or obligation for the return of the Security Deposit, and Tenant agrees to look solely to such transferee for the return of the Security Deposit.

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3.4 Interest and Late Charges.

3.4.1 Late Charge. Tenant hereby acknowledges that the late payment by Tenant to Landlord of Rent and other sums due pursuant to this Lease will cause Landlord to incur unanticipated costs, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges and late charges which may be imposed on Landlord by the terms of any Mortgage, encumbrance or note secured by the Building and/or the Building Lot. Therefore, if any Rent or any other sum due from Tenant is not received within five (5) days of the date when it is due, Tenant shall pay to Landlord, in addition to the amount due, a charge, (“Late Charge”) equal to ten percent (10%) of the delinquent amount. The parties agree that the amount of such Late Charge represents a fair and reasonable estimate of the costs and expenses that would be incurred by Landlord by reason of late payment by Tenant. Acceptance of such Late Charge by Landlord shall in no event constitute a waiver of Tenant’s default with respect to such delinquent amount, nor shall such acceptance prevent Landlord from exercising any of the other rights and remedies granted hereunder or by law to Landlord.

3.4.2 Interest on Past Due Obligations. Any amount owed by Tenant which is not paid when due shall bear interest at the lesser of the rate of Prime plus two percent (2%), or the maximum rate allowed by law, computed from the date such payment is due until paid. Interest shall not be payable on Late Charges to be paid by Tenant pursuant to this Lease. The payment of interest on such amounts shall not excuse or cure any default by Tenant pursuant to this Lease. Any payments of any kind returned for insufficient funds will be subject to an additional handling charge of two hundred fifty dollars ($250.00).

3.4.3 Prepaid Rent. Upon the execution of this Lease, Tenant shall pay to Landlord the prepaid rent set forth in Section 10 of the Basic Lease Provisions, and if Tenant is not in default of any provisions of the Lease, such prepaid rent shall be applied toward the Base Monthly Rent due as stipulated in Section 10. of the Basic Lease Provisions. Landlord’s obligations with respect to the prepaid rent are not those of a trustee, and Landlord can commingle the prepaid rent with Landlord’s general funds. Landlord shall not be required to pay Tenant interest on the prepaid rent. Landlord shall be entitled to immediately endorse and cash Tenant’s prepaid rent; however, such endorsement and cashing shall not constitute Landlord’s acceptance of this Lease. If Landlord does not accept this Lease, Landlord shall return said prepaid rent.

3.4.4 Rent Allocation. For purposes of Section 467 of the Internal Revenue Code, the parties to this Lease hereby agree to allocate the stated rents, provided herein, to the periods which correspond to the actual payments of Rent as provided pursuant to the terms and conditions of this Lease.

ARTICLE 4

USE OF PREMISES

4.1 Permitted Use. The Tenant shall use and occupy the Premises only for the use described in Section 16 of the Basic Lease Provisions and shall not use or permit the Premises to be used for any other purpose or for an office purpose which is adverse or detrimental to or inconsistent with the other uses being conducted in the Building. Nothing contained herein shall be deemed to give Tenant any exclusive right to such use in the Building or Project.

4.2 Acceptance of Premises. Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty with respect to the Premises, the Building, and/or the Project, or with respect to their suitability or fitness of either for the conduct of Tenant’s business or for any other purpose. The taking of possession or use of the Premises by Tenant for any purpose other than construction shall conclusively establish that the Premises, the Building and the Project were at such time in satisfactory condition and in conformity with the provisions of this Lease, subject to Landlord’s obligations under the Tenant Improvement Agreement. Without limiting the foregoing, Tenant’s execution of this Lease shall constitute a specific acknowledgment and

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acceptance of the various start-up inconveniences that may be associated with the use of the Building Common Areas such as certain construction obstacles including scaffolding, delays in use of freight elevator service, certain elevators not being available to Tenant, the passage of work crews using elevators, uneven air conditioning services and other typical conditions incident to installation of tenant improvements within the Building.

4.3 Conduct of Business.

4.3.1 Nuisances. Tenant shall not do or permit anything to be done in or about the Premises and/or the Building which will obstruct or interfere with the rights of other tenants or occupants of the Building and the Project or injure or annoy them. Tenant shall not allow the Premises to be used for any improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit anything to be done in or about the Premises which would constitute a nuisance. Tenant shall not commit or allow to be committed any waste in or upon the Premises and shall keep the Premises in first class repair and appearance. Tenant shall not, without the prior written consent of Landlord, use any apparatus or device in or about the Premises which shall cause any substantial noise or vibration. Landlord reserves the right to prescribe the weight and position of all files, safes and heavy equipment which Tenant desires to place in the Premises so as to properly distribute the weight thereof and to require all such heavy equipment, furniture and similar items to be moved into and out of the Building and Premises only at such times and in such manner as Landlord shall direct in writing. Further, Tenant’s business machines and mechanical equipment which cause vibration or noise that may be transmitted to the building structure or to any other space in the Building or Project shall be so installed, maintained and used by Tenant as to eliminate such vibration or noise. Tenant shall, at Tenant’s sole cost and expense, be responsible for all structural engineering required to determine structural loads.

4.3.2 Noxious Activities. Tenant shall not use, keep or permit to be used or kept any foul or noxious gas or substance in the Premises, nor shall any animals or birds be brought in or kept in or about the Premises or the Building. No cooking shall be done or permitted by Tenant on the Premises (except as may be specifically permitted by the Rules and Regulations), nor shall the Premises be used for the storage of merchandise, for washing clothes or for lodging. Tenant shall not use or keep in the Premises or the Building any kerosene, gasoline or inflammable or combustible fluid or material or use any method of heating or air conditioning other than that supplied by Landlord. Tenant shall not conduct, or permit to be conducted, any sale by auction on the Premises or the Building.

4.3.3 Compliance with law, Recorded Covenants and Project Documents.

4.3.3.1 Tenant shall, at its sole cost and expense, promptly comply with all laws, statutes, ordinances and governmental rules and regulations now in force or which may hereafter be in force, and with the requirements of the certificate of occupancy (or its equivalent) for the Building and the requirements of Landlord’s insurance company relating to or affecting the condition, use or occupancy of the Premises, the Building and/or the Project. Tenant shall, upon written notice from Landlord, discontinue any use of the Premises which is declared by any governmental authority having jurisdiction to be a violation of law or of the certificate of occupancy for the Building or its equivalent. Tenant shall comply with all directions of any governmental authority having jurisdiction which shall, by reason of the nature of Tenant’s use or occupancy of the Premises, impose any duty upon Tenant or Landlord with respect to the Premises or with respect to the use or occupation thereof.

4.3.3.2 If the Building, Building Lot, and/or the Project are now or hereafter governed or burdened by any easements, covenants, conditions and/or restrictions of record agreed to, granted and/or imposed by Landlord and/or any other third party, then this Lease and all of Tenant’s rights and interest in the leasehold estate created by this Lease is and shall be subject and subordinate thereto and to any and all amendments or modifications at any time thereafter made thereto. Tenant shall promptly upon request execute and deliver to Landlord any documents or instruments required to evidence the subordination of this Lease hereunder,

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but failure to do so shall not affect the automatic subordination specified herein. If Tenant fails or refuses to do so within ten (10) days after written request therefor by Landlord, such failure or refusal shall constitute an Event of Default by Tenant, which shall in no way affect the validity or enforceability of this subordination as herein specified.

4.4 Rules and Regulations. Tenant and its employees, agents and visitors shall comply with the Rules and Regulations, attached hereto as Exhibit C. Tenant agrees to abide by and comply with such Rules and Regulations and any and all reasonable and nondiscriminatory amendments, modifications, and/or additions thereto. Landlord shall not be liable to Tenant for any violation of the Rules and Regulations, or nonperformance by, or the breach in any provision in any lease, by any other tenant or occupant of the Building or Project.

4.5 Signage. Tenant shall not place, or permit to be placed or maintained, on any exterior door, wall or window of the Premises any sign, awning or canopy, or advertising matter or other thing of any kind, and will not place or maintain any decoration, lettering or advertising matter on the glass of any window or door, or that can be seen through the glass, of the Premises except as specifically approved in advance, in writing by Landlord. If approved by Landlord, Tenant further agrees to maintain such sign, awning, canopy, decoration, lettering, advertising matter or thing as may be approved, in good condition and repair at all times at Tenant’s sole cost and expense. Tenant agrees at Tenant’s sole cost, that any Tenant sign will be maintained in strict conformance with all applicable governmental regulations and Landlord’s sign program for the Project. Landlord shall provide tenant identification within the first floor lobby area where permitted and consistent with the Project signage program for nonretail office tenants. Such identification shall be on a nondiscriminatory basis with any other nonretail office tenants within the Building. Identification on Building directories will be consistent with the Project graphics program.

4.6 Hazardous Materials. Tenant shall not cause or permit any Hazardous Materials (defined below) to be brought upon, kept or used in or about the Premises or Project by Tenant, its agents, employees, contractors or invitees. If Tenant breaches the obligation stated above, or if the presence of Hazardous Materials on the Premises or Project caused or permitted by Tenant results in contamination to the Premises or Project, or if contamination of the Premises or Project by Hazardous Materials otherwise occurs for which Tenant is legally liable to Landlord for damages resulting therefrom, then Tenant shall be liable and responsible for, without limitation, (i) removal from the Premises and Project of any Hazardous Materials and the cost of such removal; (ii) damages to persons or property in or on the Premises and Project; (iii) claims resulting therefrom; (iv) fines imposed by any governmental agency; and (v) any other liability as provided by law. In addition to the foregoing, Tenant shall indemnify, defend and hold Landlord, its agents and contractors harmless from any and all claims, judgments, damages, penalties, fines, costs, liabilities or losses (including, without limitation, diminution in value of the Premises and Project or any portion of the real property surrounding the Project (the “Adjacent Property”), damages for the loss or restriction on use of rentable or Rentable space or of any amenity of the Premises and Project, damages arising from any adverse impact on marketing of space in the Project or the Adjacent Property, and sums paid in settlement of claims, attorneys’ fees, consultant fees and expert fees, which arise during or after the Lease Term as a result of such contamination. This indemnification of Landlord by Tenant includes, without limitation, costs incurred in connection with any investigation of site conditions or any cleanup, remedial, removal or restoration work required by any federal, state or local governmental agency or political subdivision because of Hazardous Materials present in the soil or ground water on or under the Project and arising out of a breach of Tenant’s obligation pursuant to this Section 4.6. Without limiting the foregoing, if the presence of any Hazardous Materials within the Project caused or permitted by Tenant results in any contamination of the Premises or Project, Tenant shall immediately take all actions, at its sole expense, as are necessary to return the Premises and Project to the condition existing prior to the introduction of any such Hazardous Material, provided that Landlord’s approval of such action shall first be obtained, which approval shall not be unreasonably withheld so long as such actions would not potentially have any material adverse long term or short term effect on the Project or the Adjacent Property and are permitted by any lender of Landlord having a first priority lien on the Project. As used herein, the term “Hazardous Materials” or “Hazardous Material” means any hazardous or toxic substance,

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material or waste which is or becomes regulated by any local governmental authority, the State of California or the United States Government.

4.7 Non-Smoking Building. The Building is a non-smoking building. Smoking is not permitted in any area of the Building including but not limited to Tenant suites including the Premises, private offices, corridors, restrooms, stairwells, parking garages and/or lobbies. Neither Tenant nor any of its employees, agents, guests or invitees shall smoke in the Building and Tenant will enforce this requirement with respect to anyone in the Building on behalf of, related to, or at the request of Tenant.

ARTICLE 5

SERVICES AND UTILITIES

5.1 Landlord’s Provision of Services. Provided that Tenant is not in default pursuant to this Lease, Landlord agrees to furnish or cause to be furnished to the Premises the utilities and services described in the Standards for Utilities and Services, attached hereto as Exhibit E_, subject to the conditions and in accordance with the standards set forth therein. Landlord’s failure to furnish any of the foregoing items when such failure is caused by (i) accident, breakage or repairs; (ii) strikes, lockouts or other labor disturbance or labor dispute of any character; (iii) governmental regulation, moratorium or other governmental action; (iv) inability despite the exercise of reasonable diligence to obtain electricity, chilled water, water or fuel; or by (v) any other cause beyond Landlord’s reasonable control, shall not result in any liability to Landlord. In addition, Tenant shall not be entitled to any abatement or reduction of Rent by reason of such failure, no eviction of Tenant shall result from such failure and Tenant shall not be relieved from the performance of any covenant or agreement in this Lease because of such failure. In the event of any failure, stoppage or interruption thereof, Landlord shall diligently attempt to resume service promptly. If Tenant requires or utilizes more water or electrical power or heating, ventilating or cooling energy than is considered reasonable or normal by Landlord, Landlord may at its option require Tenant to pay, as Additional Rent, the cost, as fairly determined by Landlord, incurred by such extraordinary usage.

5.1.1 Tenant’s Obligation to Pay for Premises Utilities/Separate Metering. Tenant shall pay for all utilities used by Tenant on the Premises. Tenant shall pay directly to the appropriate utility company the cost of any utilities used on the Premises and not provided by Landlord. Landlord may at its sole discretion install separate meter(s) or monitors for the Premises, at Tenant’s sole expense, if necessitated by Tenant’s after-hours use, and Tenant thereafter shall pay to the Landlord or the utility company, as applicable, all charges of the utility providing service and Landlord shall make an appropriate adjustment to the Operating Expense Allowance to account for the fact that Tenant is directly paying such metered charges. If Landlord separately meters or monitors any utility costs being utilized by Tenant, such cost shall be paid by Tenant separate from the computation of the Operating Expenses and such payments shall be made directly to Landlord or utility company as Landlord directs. If payment is made to Landlord it shall be in the same manner as the Base Monthly Rent. Such direct payment will not be computed as part of or affect the computation of Base Monthly Rent. If Landlord is prohibited from charging Tenant for the utility costs by separately monitoring, metering or collecting for tenant usage, or by including such charges in the Operating Expenses, and if Tenant is not paying for such utilities directly to such utility company, then Tenant agrees that the Base Monthly Rent payable to Landlord pursuant to this Lease will be increased to yield to Landlord the same net annual rental after the increase as had been payable to Landlord when a monthly average of the preceding twelve (12) months utility costs are added to the Base Monthly Rent received before the increase.

5.2 Excess Usage. Tenant shall not use any apparatus or device in the Premises, including without limitation, electronic data processing machines, punch card machines and machines using current in excess of 110 volts, which will in any way increase the amount of electricity or water usually furnished or supplied for use of the Premises for normal office use; nor connect with electric current, except through existing outlets in the Premises or water pipes, any apparatus or device, for the purposes of using electric current or water. If Tenant shall require

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water or electric current in excess of that usually furnished or supplied for use of the Premises, Tenant shall first procure the consent of Landlord and Landlord may cause a water meter or electric current meter to be installed in the Premises, so as to measure the amount of water and electric current consumed for any such other use. The cost of any such meters and of installation, maintenance and repair thereof shall be paid for by Tenant and Tenant agrees to pay to Landlord promptly upon demand therefor by Landlord for all such water and electric current consumed as shown by said meters, at the rates charged for such services by the local public utility furnishing the same, plus any additional expense incurred in keeping account of the services so consumed. If heat generating machines or equipment are used in the Premises by Tenant which affect the temperature otherwise maintained by the air conditioning system, Landlord reserves the right to install supplementary air conditioning units in the Building and/or the Premises and the cost thereof, including the cost of installation and the cost of operation and maintenance thereof, shall be paid by Tenant to Landlord upon demand by Landlord. Any additional costs provided for hereunder shall be separate and apart from the calculations for and sharing of Operating Expenses as specified in Article 3 above.

ARTICLE 6

MAINTENANCE AND REPAIR

6.1 Tenant to Maintain. Tenant shall, at its sole expense, keep and maintain in first-class appearance and in good order, condition and repair during the term of this Lease the Premises and any and all appurtenances thereto, except to the extent such services are included as part of Landlord’s maintenance obligations pursuant to this Lease. Except for the routine and customary cleaning and janitorial services furnished by Landlord, Tenant shall, at its own expense, keep and maintain the Premises in a clean, sanitary and safe condition and shall, when and if needed, at Tenant’s cost and expense, make all repairs to the Premises and every part thereof. Notwithstanding the foregoing, Tenant shall be responsible for all repairs to the Building, including the Premises which are made necessary by any misuse or neglect by Tenant or any of its officers, agents, employees, contractors, licensees, invitees, or subtenants. Tenant shall, upon the expiration or sooner termination of the term hereof, surrender the Premises to Landlord in the same good condition as when received, usual and ordinary wear and tear excepted. Landlord shall have no obligation to alter, remodel, improve, repair, decorate or paint the Premises or any part thereof. The parties hereto affirm that Landlord has made no representations to Tenant respecting the condition of the Premises or the Project except as specifically herein set forth.

6.2 Landlord’s Maintenance. Landlord shall repair and maintain the structural portions of the Building, the Building Common Areas, and the building systems installed or furnished by Landlord as “Building Standard” connecting to and servicing the Premises with heating, ventilating, air conditioning, plumbing, fire sprinklers, and electrical services. Landlord shall not be liable for any failure to make any repair or to perform any maintenance unless such failure shall persist for an unreasonable time after written notice for such repairs or maintenance is given to Landlord by Tenant. Except as provided in Article 11, (Damage or Destruction) there shall be no abatement of Rent and no liability of Landlord by reason of any injury to or interference with Tenant’s business arising from the making of any repairs, alterations, or improvements in or to any portion of the Building or the Premises or in or to fixtures, appurtenances and equipment therein. Notwithstanding the foregoing, Tenant shall be responsible for all repairs to the Premises and the Building which are made necessary by any misuse, or neglect by Tenant or any of its officers, agents, employees, contractors, licensees, invitees, or subtenants. Tenant shall pay to Landlord within ten (10) days after request therefor by Landlord, the reasonable cost (or portion thereof equitably allocated to Tenant, in Landlord’s best judgment) of such maintenance and repair. Tenant waives the right to make repairs at Landlord’s expense under any law, statute or ordinance now or hereafter in effect.

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ARTICLE 7

ALTERATIONS AND IMPROVEMENTS

7.1 Alterations by Tenant.

7.1.1 Landlord’s Approval Required. Except for improvements less than 41,000.00, Tenant shall make no alterations, additions or improvements in or to the Premises (“Alterations”) without Landlord’s prior written consent which consent shall not be unreasonably withheld. All alterations shall be made by Landlord or a contractor approved by Landlord. Tenant shall submit to Landlord plans and specifications for any proposed Alterations, and no such Alterations, additions or improvements shall be made until Landlord has approved of such plans and specifications. All Alterations, shall be constructed in accordance with the plans and specifications approved by Landlord, and no amendments or modifications thereto shall be effective without Landlord’s prior written consent and all structural modifications will also be subject to the approval of the holder of the first Mortgage against the Building. If the proposed change requires the consent or approval of any lessor of a superior lease, or the holder of a Mortgage encumbering the Building, such consent or approval must be secured prior to the construction of the Alterations. No construction of partitions or other obstructions shall interfere with Landlord’s free access to mechanical installations or service facilities of the Building or interfere with the moving of Landlord’s equipment to or from the enclosures containing said installations or facilities. All such work shall be done at such times and in such manner as Landlord may from time to time designate. Tenant covenants and agrees that all work done on behalf of or by Tenant shall be performed in full compliance with all laws, rules, orders, ordinances, regulations and requirements of all governmental agencies, offices and boards having jurisdiction, and in full compliance with the rules, regulations and requirements of Landlord’s insurance company. All Alterations to the Premises made by either party or its agent, including (without limiting the generality of the foregoing) all wallcovering, built-in cabinet work, paneling and the like, shall, unless Landlord elects otherwise, become the property of Landlord, and shall remain upon, and be surrendered, with the Premises as a part thereof at the end of the Term hereof, except that Landlord may, by written notice to Tenant at the time Landlord approves such Alterations, require Tenant to remove some or all Alterations installed by or on behalf of Tenant, and Tenant shall repair all damage resulting from such removal or, at Landlord’s option, shall pay to Landlord all costs arising from such removal.

7.1.2 Removal of Trade Fixtures. All articles of personal property and all business and trade fixtures, machinery and equipment, furniture and movable partitions owned by Tenant and installed by Tenant at its expense (and not paid for by Landlord as a part of the Tenant Improvement Allowance) in the Premises shall be and remain the property of Tenant. Such items may be removed by Tenant at any time during the Term provided Tenant shall repair and restore all damages to the Premises caused by such Removal, and further provided Tenant may not, without Landlord’s prior written consent, remove any such items if Tenant is in default under this Lease. If Tenant shall fail to remove all of its effects from the Premises upon termination of this Lease for any cause whatsoever, Landlord may, at its option, remove the same in any manner that Landlord shall choose, and store said effects without liability to Tenant for loss thereof. In such event, Tenant agrees to pay Landlord upon demand, any and all expenses incurred in such removal, including court costs and attorneys’ fees and storage charges on such effects, for any length of time that the same shall be in Landlord’s possession. Landlord may, at its option, without notice, sell said effects, or any of the same, at private sale and without legal process, for such price as Landlord may obtain and apply the proceeds of such sale to the amounts due pursuant to this Lease from Tenant to Landlord and to the expenses incident to the removal and sale of said effects.

7.2 General Contractor and Bonds. The work necessary to make any repairs required pursuant to this Lease, or to make any Alterations to the Premises to which Landlord may consent, shall be done by employees or contractors employed by Landlord or by Tenant using licensed contractors approved by Landlord in writing and subject to all conditions Landlord may reasonably impose. If Landlord allows Tenant to use its own contractor to make Alterations, all such work shall be performed by licensed contractors or mechanics who have demonstrated through the completion of previous work the ability to successfully undertake the assignment in a workmanlike

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manner and are ___________________________________ contractor, Tenant shall, if required by Landlord, secure at Tenant’s cost and _____________ and lien indemnity bond satisfactory to Landlord for said work. All such bonds to be obtained by Tenant shall be California private work bonds issued by an admitted corporate surety reasonably acceptable to Landlord and shall name Landlord as a dual obligee. All bonds obtained by Tenant shall be recorded in accordance with California Civil Code Section 3235 et seq., or any successor statute or law. Upon obtaining each bond required pursuant to this Lease, Tenant shall promptly submit a copy thereof to Landlord. Upon completion of any Alterations by Tenant, Tenant shall supply Landlord with “as-built” plans.

7.3 Builder’s Insurance. During the period of any construction work by Tenant on the Premises, Tenant shall procure, or cause Tenant’s contractor to procure, at no expense to Landlord, builder’s “all risk” insurance and worker’s compensation insurance with an insurance company satisfying the requirements set forth in Section 9.1.2 below. Landlord and any Mortgagee(s) designated by Landlord shall be named as additional insureds under such policies and the insurance shall be kept in full force and effect during the entire construction period, and copies of such policies or certificates of the insurance shall be furnished to Landlord prior to the commencement of such work.

7.4 Written Notification Required. Tenant will notify Landlord in writing not less than thirty (30) days prior to commencing any Alterations, which have been approved by Landlord. Landlord shall have the right to record and post notices of nonresponsibility on the Premises.

7.5 Freedom From Liens. Tenant shall pay to Landlord or to a contractor approved by Landlord, as the case may be, when due, all claims for labor and materials furnished or alleged to have been furnished to or for Tenant at or for use in the Premises, which claims are or may be secured by any mechanic’s or materialman’s lien against the Premises or any interest therein, and upon completion, deliver to Landlord (if payment is made directly to a contractor approved by Landlord), evidence of payment and waivers of all liens for labor, services, or material. Tenant shall, at its sole cost and expense, keep the Premises, all other property therein and the Building free from any liens arising out of any work performed, material furnished or obligations incurred by Tenant, and shall indemnify, defend and hold Landlord harmless from any liens’ and encumbrances arising out of any work performed or material furnished by or at the direction of Tenant. If Tenant shall, in good faith, contest the validity of any such lien, claim or demand, then Tenant shall at its sole expense defend itself and Landlord against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof against the Landlord, the Premises, and the Project upon the condition that if Landlord shall require, Tenant shall furnish to Landlord a surety bond satisfactory to Landlord in an amount equal to such contested lien claim or demand indemnifying Landlord against liability for the same and holding the Premises and the Project free from the effect of such lien or claim. In addition, Landlord may require Tenant to pay Landlord’s attorneys’ fees and costs in participating in such action if Landlord shall decide it is to its best interest to do so. In the event that Tenant shall not, within ten (10) days following the imposition of any such lien, cause such lien to be released of record by payment or posting of a proper bond, Landlord shall have, in addition to all other remedies provided herein and by law, the right, but not the obligation, to cause the same to be released by such means as it shall deem proper, including payment of and/or defense against the claim giving rise to such lien. All such sums paid by Landlord and all expenses incurred by it in connection therewith, including reasonable attorneys’ fees and costs, shall be payable as Additional Rent to Landlord by Tenant on demand with interest at the maximum rate per annum then permitted by law accruing from the date paid or incurred by Landlord until reimbursed to Landlord by Tenant.

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ARTICLE 8

RIGHTS OF LANDLORD

8.1 Entry and Inspection.

8.1.1 Landlord’s Inspection and Maintenance. Landlord reserves and shall at any and all reasonable times have the right to enter the Premises to inspect the same, to supply janitor service and any other service to be provided by Landlord to Tenant pursuant to this Lease, to show the Premises to prospective purchasers or tenants, to post notices of nonresponsibility, to alter, improve or repair the Premises or any other portion of the Building, all without committing any eviction of Tenant and without abatement of rent. Landlord may, to carry out such purposes, erect scaffolding and other necessary structures where reasonably required by the character of the work to be performed, provided that the business of Tenant shall be interfered with as little as reasonably practicable. Tenant hereby waives any claim for damages for any injury or inconvenience to or interference with Tenant’s business, any loss of occupancy or quiet enjoyment of the Premises, and any other loss in, upon and about the Premises. Landlord shall at all times have and retain a key with which to unlock all doors in the Premises, excluding Tenant’s vaults and safes. Landlord shall have the right to use any and all means which Landlord may deem proper to open said doors in an emergency to obtain entry to the Premises. Any entry to the Premises obtained by Landlord by any of said means, or otherwise, shall not be construed or deemed to be a forcible or unlawful entry into the Premises, or an eviction of Tenant from the Premises or any portion thereof, and any damages caused on account thereof shall be paid by Tenant. No provision of this Lease shall be construed as obligating Landlord to perform any repairs, alterations or decorations except as otherwise expressly agreed to herein by Landlord. Tenant shall not be entitled to any rebate or abatement of Rent for any loss of occupancy or quiet enjoyment of the Premises resulting from any entry into or upon the Premises by Landlord or its agents authorized by this Section 8.1, or for any damage, injury, or inconvenience occasioned thereby.

8.2 Transfer by Landlord. In the event of a transfer of all of Landlord’s ownership interest in the Building, other than a transfer for security purposes only, Landlord shall be automatically relieved of any and all obligations and liabilities of Landlord pursuant to this Lease accruing from and after the closing of such transfer. Tenant’s right to quiet possession of the Premises shall not, however, be disturbed on account of any such transfer, so long as Tenant shall pay Rent and observe and perform all the provisions of this Lease unless this Lease is otherwise terminated.

8.3 Right of Landlord to Perform. If Tenant shall fail to pay any sum of money, other than Rent due Landlord, required to be paid by it pursuant to this Lease or shall fail to perform any other act on its part to be performed pursuant to this Lease, Landlord may, but shall not be obligated to do so, and without waiving or releasing Tenant from any obligations of Tenant, make any such payment or perform any such other act on Tenant’s part provided Landlord (except in emergencies in which case no prior notice need be given) delivers three (3) days’ notice prior to performing any work on behalf of Tenant and Tenant fails to commence to perform such work within five (5) days after receipt of Landlord’s notice. All sums so paid by Landlord and all necessary incidental costs, together with an administrative charge in the amount of ten percent (10%) of any costs incurred by Landlord, and interest thereon at the rate permitted under Section 3.4.2 of this Lease accruing from the date paid or incurred by Landlord until reimbursed to Landlord by Tenant, shall be payable to Landlord by Tenant as Rent on demand and Tenant covenants to pay all such sums. Landlord shall have (in addition to any other right or remedy of Landlord) the same rights and remedies in the event of Tenant’s nonpayment of such sums, as in the case of default by Tenant in the payment of Rent to Landlord.

8.4 Rights Reserved. Despite anything in this Lease to the contrary, Landlord reserves the following rights, exercisable without notice and without incurring any liability to Tenant therefor, and without effecting an eviction, constructive or actual, or disturbance of Tenant’s use or possession, or giving rise to any claim for set-off or abatement of Rent:

8.4.1 Signs. To install, affix, and maintain any and all signs on the exterior and interior of the Building; and

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8.4.2 Alterations/Additions. To refinish, repaint or to make repairs, alterations, additions, or improvements, whether structural or otherwise, in and about the Building and the Project or any part thereof, and for such purposes to enter upon the Premises, and during the continuance of said work to temporarily close doors, entryways, public spaces, and corridors in the Building, and to interrupt or temporarily suspend Building services and facilities. Landlord to use reasonable efforts to minimize any interruption or interference with Tenant’s use or occupancy of the Premises when performing such work.

ARTICLE 9

INSURANCE AND INDEMNITY

9.1 Tenant’s Insurance.

9.1.1 Required Insurance. Tenant shall at all times during the Term and any other period of occupancy, at its own expense, keep in full force and effect the following insurance:

9.1.1.1 Worker’s Compensation and Employers’ Liability Insurance as required by State law;

9.1.1.2 Standard form property insurance insuring against the perils of fire, extended coverage, vandalism, malicious mischief, special extended all risk coverage and sprinkler leakage. This insurance policy shall be upon all property owned by Tenant, for which Tenant is legally liable or that was installed at Tenant’s expense, and which is located in the Building including, without limitation, furniture, fittings, installations, fixtures, equipment and any other personal property, in an amount not less than the full replacement cost thereof with an “agreed amount” or “stipulated value” endorsement. In the event of a dispute as to the amount which comprises full replacement cost, the decision of Landlord or any mortgagees of Landlord shall be conclusive. This insurance policy shall also provide loss of income insurance including loss of Tenant’s earnings attributable to Tenant’s inability to use fully or obtain access to the Premises in an amount which will properly reimburse Tenant for actual loss sustained. Such policy shall name Landlord and any mortgagees of Landlord as loss payees, as their respective interests may appear.

9.1.1.3 Any combination of a Commercial General Liability Insurance Policy, excess Liability Policy and/or Umbrella Liability Policy insuring Tenant on an occurrence basis against any liability arising out of the leasing, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be in the amount of one million dollars ($1,000,000) Combined Single Limit for injury to, or death of one or more persons in an occurrence. The policy shall insure the hazards of the Premises and Tenant’s operations thereon, independent contractors, contractual liability (covering the indemnity contained in Section 9.4 hereof) and shall (i) name Landlord and any Mortgagee(s) designated by Landlord as additional insureds, (ii) contain a cross liability provision and (iii) contain a provision that the insurance provided the Landlord hereunder shall be primary and non-contributing with any other insurance available to the Landlord.

9.1.1.4 Any other form or forms of insurance as Tenant or Landlord or any mortgagees of Landlord may reasonably require from time to time in form, in amounts and for insurance risks against which a prudent tenant would protect itself.

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_____________________________________ Landlord, elect to have reasonable deductibles in connection with the policies of insurance required to be maintained by Tenant pursuant to this Article 9. If Tenant elects to maintain such deductibles, Tenant shall be liable for paying the full amount of any deductibles in the event of a loss or casualty.

9.1.2 Certificates of Insurance. All policies obtained by Tenant shall be written in a form satisfactory to Landlord; shall be maintained with insurance companies holding a General Policyholder’s Rating of “A-” or better, and a financial rating of “VI”, or better, as set forth in the most current issue of Best’s Key Rating Guide; and shall require thirty (30) days advance written notice to Landlord of any cancellation or modification. Tenant shall deliver to Landlord at least thirty (30) days prior to the time such insurance is first required to be carried by Tenant pursuant to this Lease Certificates of Insurance (“Certificates”) evidencing the above coverage with limits not less than those specified above. The Certificates, with the exception of Worker’s Compensation, shall add Landlord, and each of its partners, subsidiaries, affiliates, directors, agents and employees and any Mortgagee(s) designated by Landlord as additional insured and shall expressly provide that the interest of same therein shall not be affected by any breach by Tenant of any policy provision for which such Certificates evidence coverage. The insurance required by this Section shall be the primary insurance as respects Landlord (and any other additional insureds designated by Landlord) and not contributory with any other available insurance. The Certificate(s) evidencing the liability insurance coverage required under Section 9.1.1.2 above shall contain an endorsement providing that such insurance as is afforded hereby for the benefit of Landlord shall be primary and any insurance carried by Landlord shall be excess and not contributory. Tenant shall, within ten (10) days prior to the expiration of such policies, furnish Landlord with renewals or “binders” thereof. If Landlord obtains any insurance that is the responsibility of Tenant pursuant to this Article 9, Landlord shall deliver to Tenant a written statement setting forth the cost of any such insurance and showing in reasonable detail the manner in which it has been computed and Tenant shall thereupon pay the same to Landlord as Additional Rent.

9.1.3 Adjustments to Insurance. The minimum commercial general liability insurance limits set forth in Section 9.1.1.3 above may be adjusted upward after the expiration of the third anniversary of the Commencement Date and upon the expiration of every third year thereafter. Not less than sixty (60) days prior to each relevant adjustment date commencing with the third anniversary of the Commencement Date, Landlord may request that the amount of insurance to be obtained by Tenant be increased if, in the reasonable opinion of Landlord’s lender or the insurance broker retained by Landlord, the amount of such insurance is inadequate.

9.2 Landlord’s Insurance. Landlord may insure the Building (excluding any property which Tenant is obligated to insure) against damage with property liability insurance, all in such amounts and with such deductibles as Landlord considers appropriate. All Tenant Improvements installed by Landlord or Landlord’s Contractor shall be covered by insurance obtained by the Landlord. Landlord may, but shall not be obligated to, obtain and carry any other form or forms of insurance as it or Landlord’s mortgagees may determine advisable. Notwithstanding any contribution by Tenant for the cost of insurance premiums, as provided herein, Tenant acknowledges that it has no right to receive any proceeds from any insurance policies carried by Landlord. The cost of all such insurance obtained by Landlord shall be included as an Operating Expense pursuant to Section 3.2.1.

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9.2.1 Tenant’s Activities/Tenant Improvements. Tenant will not keep, use, sell or offer for sale in or upon the Premises any article which may be prohibited by any insurance policy in force covering the Building. If Tenant’s occupancy or business in, or on, the Premises, whether or not Landlord has consented to the same, results in any increase in premiums for the insurance carried by Landlord with respect to the Building, Tenant shall pay any such increase in premiums as Additional Rent within ten (10) days after being billed therefore by Landlord. In determining whether increased premiums are a result of Tenant’s use of the Premises, a schedule issued by the organization computing the insurance rate on the Building or the Tenant Improvements showing the various components of such rate, shall be conclusive evidence of the several items and charges which make up such rate. Tenant shall promptly comply with all reasonable requirements of the insurance company or any present or future insurer relating to the Project, Building or Premises. Tenant acknowledges that if Landlord incurs additional insurance expense related to the quality of tenant improvements or Alterations within the Premises in excess of building standard improvements which Landlord insures pursuant to the terms of this Lease, such additional insurance expense identified by the insurer relating to Tenant’s Premises shall be paid solely by Tenant.

9.2.2 Cancellation of Coverage. If any of Landlord’s insurance policies shall be cancelled or cancellation shall be threatened, the coverage thereunder reduced or threatened to be reduced in any way or the premiums are increased or threatened to be increased because of the use of the Premises or any part thereof by Tenant or any assignee, subtenant, invitee, permittee or agent of Tenant and, if Tenant fails to remedy the condition giving rise to such event within forty-eight (48) hours after notice thereof, Landlord may, at its option, either terminate this Lease or enter upon the Premises and attempt to remedy such condition, and Tenant shall promptly pay the cost thereof to Landlord as Additional Rent. Landlord shall not be liable for any damage or injury caused to any property of Tenant or of others located on or near the Premises resulting from such entry. If Tenant fails to remedy such condition and if Landlord is unable or elects not to remedy such condition, then Tenant shall be in default under this Lease and Landlord shall have all of the remedies provided for in this Lease in the event of a default by Tenant.

9.3 Mutual Waiver of Subrogation. All policies of property insurance required pursuant to this Lease shall include a clause or endorsement denying the insurer any rights of subrogation against the other party to the extent rights have been waived by the insured before the occurrence of injury or loss. Landlord and Tenant each hereby waive any and all rights of recovery against the other or against the officers, directors, shareholders, partners, employees, agents and representatives of the other, on account of loss or damage occasioned to such waiving party or its property or the property of others under its control to the extent that such loss or damage is insured against under any policy of insurance required to be carried by such waiving party pursuant to the provisions of this Lease (or any other policy of insurance carried by such waiving party in lieu thereof). Tenant shall give notice to the insurance carrier or carriers that the foregoing mutual waiver of subrogation is contained in this Lease.

9.4 Indemnification of Landlord. Tenant shall indemnify, defend and hold Landlord harmless from all claims arising from Tenant’s use of the Premises or the conduct of its business or from any activity, work or thing done, permitted or suffered by Tenant in or about the Premises, the Building or the Project. Tenant shall further indemnify, defend and hold Landlord harmless from all claims arising from any breach or default in the performance of any obligation to be performed by Tenant pursuant to the terms of this Lease, or arising from any act, neglect, fault or omission of Tenant or of its agents or employees, and from and against all costs, attorneys’ fees, expenses and liabilities incurred in or about such claim or any action or proceeding brought thereon. In case any action or proceeding shall be brought against Landlord by reason of any such claim, Tenant, upon notice from Landlord, shall defend the same at Tenant’s expense by counsel approved in writing by Landlord. Tenant, as a material part of the consideration to Landlord, hereby assumes all risk of damage to property or injury to person in, upon or about the Premises from any cause whatsoever except that which is caused by Landlord’s gross negligence or willful misconduct or by the failure of Landlord to observe any of the terms and conditions of this Lease where such failure has persisted for an unreasonable period of time after written notice of such failures and Tenant hereby waives all its claims in respect thereof against Landlord. Neither Landlord nor any partner, director,

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shareholder, officer, agent or employee of Landlord shall be liable to Tenant or its partners, directors, officers, contractors, agents, employees, invitees, sublessees or licensees, for any loss, injury or damage to Tenant or to any other person, or to its or their property, irrespective of the cause of such injury, damage or loss, unless solely caused by or solely resulting from the gross negligence or willful misconduct of Landlord or its employees in the operation or maintenance of the Premises, or the Building without contributory negligence on the part of Tenant or any of its sublessees or licensees or its or their employees, agents or contractors, or any other tenants or occupants of the Building or Project. Further, neither Landlord nor any partner, director, officer, agent or employee of Landlord shall be liable (i) for any such damage caused by other tenants or persons in or about the Building or Project, or caused by quasi-public work, or (ii) for consequential damages, including loss of earnings, arising out of any loss of the use of the Premises or of any equipment or facilities therein by Tenant or by any person claiming through or under Tenant.

9.5 Damage to Tenant’s Property. Notwithstanding the provisions of Section 9.4 to the contrary, Landlord shall not be liable for injury or damage which may be sustained by the person, goods, wares, merchandise, or other property of Tenant, of Tenant’s employees, invitees, customers, or of any other person in or about the Premises or the Building caused by or resulting from any peril which may affect the Premises or Building, including fire, steam, electricity, gas, water, or rain which may leak or flow from or into any part of the Premises or Building, or from the breakage, leakage, obstruction, or other defects of the pipes, sprinklers, wires, appliances, plumbing, air conditioning, or lighting fixtures of the Premises or Building, whether such damage or injury results from conditions arising upon the Premises or upon other portions of the Building or from other sources except if such injury or damage is caused by the gross negligence or willful misconduct of Landlord or Landlord’s agents, contractors, employees, servants, tenants or concessionaires. Landlord and its agents shall not be liable for any damages arising from any act or neglect of: (a) any other tenant of the Building; or (b) any officer, employee, agent, representative, customer, business visitor, or invitee of any such tenant. Landlord and its agents shall further not be liable for (i) damage to any property entrusted by Tenant to employees of the Building or Project; (ii) loss or damage to any property by theft or otherwise; or (iii) any injury or damage to persons or property resulting from criminal activity (even though Landlord may provide security services). Landlord or its agents shall not be liable for interference with light, view, sight or other incorporeal hereditaments, nor shall Landlord be liable for any latent defect in the Premises or in the Building. Tenant shall give prompt notice to Landlord in case of fire or accidents in the Premises or in the Building and of defects therein or in the fixtures or equipment.

ARTICLE 10

ASSIGNMENT AND SUBLETTING

10.1 Landlord’s Consent. Tenant it shall not voluntarily or involuntary, because of death divorce or disability, or by operation of law or otherwise assign or encumber its interest in this Lease or in the Premises or sublease all or any part of the Premises, or allow any other person or entity to occupy or use all or any part of the Premises (collectively “Transfer”), without first obtaining Landlord’s prior written consent which shall not be unreasonably withheld. Any Transfer without Landlord’s prior written consent shall be voidable at Landlord’s election and shall constitute a default. If Tenant is a partnership, withdrawal, change or transfer of interest of one or more partners owning more than a twenty-five percent (25%) interest in the partnership (in one or more transfers), or if Tenant is a corporation any transfer of twenty-five percent (25%) of its stock (in one or more transfers), shall constitute Transfer and shall be subject to this Article 10. Occupancy of all or part of the Premises for the same use as permitted by Article 4 by parent or subsidiary companies of Tenant shall not be deemed a Transfer.

Tenant shall give Landlord advance written notice of Tenant’s intent to Transfer, the name of the proposed Transferee, information concerning the financial responsibility of the propose Transferee, a full description of the terms of the proposed Transfer including copies of documents relating thereto, a description of the proposed use of the Premises, a list of personal business and references of the proposed Transferee, similar information for any proposed guarant_

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and any other information, documentation or evidence that may be reasonably requested by Landlord.

In connection with any proposed or requested consent to Transfer this Lease, Tenant shall pay to Landlord a transfer fee of $500 (payment of which shall accompany Tenant’s request for Transfer), plus all of Landlord’s reasonable attorneys’ fees expended in connection with the proposed Transfer. Within ten (10) business days after the submission of all required information described in the preceding sentence, Landlord shall give notice to Tenant of its election under subsection 10.2 below. If Landlord fails to give such notice, Landlord shall be presumed to have denied Tenant’s request for such Transfer.

10.2 Landlord’s Election. Upon receiving a request for Transfer of the Lease, and compliance with subsection 10.1 above, Landlord shall have the right to do any of the following:

10.2.1 Landlord may consent to the proposed Transfer, subject to any reasonable conditions on such Transfer, which reasonable conditions may include without limitation, (i) that the proposed transferee assume the Tenant’s obligations under the Lease (without, however, releasing Tenant therefrom), (ii) in the case of a proposed sublease, that the subtenant agree that Landlord shall have the right to enforce any and all of the terms of the sublease directly against such subtenant, and that in the event the Lease is terminated prior to the expiration of the sublease, that at the election of Landlord, the sublease shall not terminate and the subtenant will attorn to the Landlord, and (iii) that the terms of the Lease be modified to assure that Landlord will receive, in Landlord’s reasonable judgment, at least substantially the same percentage rent (if any) and other economic benefits as the Landlord would have received had the Tenant remained in business at the Premises under the Lease and the proposed Transfer not taken place.

10.2.2 Landlord may deny its consent to the proposed Transfer on any reasonable ground. Such reasonable grounds shall include, without limitation, any one or more of the following:

10.2.2.1 That the proposed transferee’s financial condition is or may become insufficient to support all of the financial and other obligations of the Lease;

10.2.2.2 That the use to which the Premises will be put by the proposed transferee is violative or inconsistent with the terms of the Lease, any law, rule or regulation or any other agreement to which Landlord is a party or otherwise will materially and adversely affect any interest of Landlord;

10.2.2.3 That the nature of the proposed transferee’s proposed or likely use of the Premises would (i) involve any increased risk of the use, release or mishandling of hazardous materials or (ii) be inappropriate in light of the existing tenant mix in the Building;

10.2.2.4 That the business reputation or character of the proposed transferee or any of its affiliates is not reasonably acceptable to Landlord;

10.2.2.5 That the proposed transferee is not likely to conduct on the Property a business of a quality substantially equal to that conducted by Tenant;

10.2.2.6 That Landlord has not received assurances acceptable to Landlord in its sole discretion that all past due amounts owing from Tenant to Landlord (if any) will be paid and all other defaults on the part of Tenant (if any) will be cured prior to the effectiveness of the proposed Transfer;

10.2.2.7 That Landlord is not satisfied that the proposed transferee’s assets, businesses or inventory would not be subject to seizure or forfeiture under any laws related to criminal or illegal activities; or

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10.2.2.8 That the proposed transferee’s business and occupancy of the Premises would not generate substantially the same percentage rent (if any) as the Tenant has been generating, on an average basis, during the two years prior to the date of the proposed Transfer; or

10.2.2.9 That the proposed transferee is a governmental agency (federal, state, local or foreign).

If Landlord denies its consent to the proposed Transfer pursuant to this subsection 10.2.2, and if Tenant shall so request in writing, Landlord shall provide to Tenant a statement of the basis on which Landlord denied its consent within a reasonable time after the receipt of Tenant’s notice. Landlord and Tenant agree that Tenant shall have the burden of proving that Landlord’s consent to the proposed Transfer was withheld unreasonably, and that such burden may be satisfied if Landlord fails to provide a statement of a reasonable basis for withholding its consent within a reasonable time after Tenant’s request therefor.

10.2.3 Landlord shall have the right to consent to the proposed Transfer and, in addition to imposing any other reasonable condition thereon in accordance with subparagraph 10.2.1 above, Landlord shall have the right to increase the rent payable under this Lease as of the effective date of such Transfer by an amount equal to all sums paid or payable to Tenant by the transferee in excess of the then-existing rent payable by Tenant hereunder, including, without limitation, any monthly rent, percentage rent, transfer or sales prices, and all other sums or other consideration received by Tenant as a result of the Transfer, however denominated (less expenses for verifiable, reasonable and customary brokerage commissions, tenant improvements, lease concessions or other expenses actually incurred by Tenant in connection with the Transfer and paid to third parties). Such excess rent shall be paid to Landlord upon demand as additional rent hereunder. In the event of any approved Transfer of the Lease in connection with the sale of all or substantially all of the assets of Tenant used in connection with the business operated at the Property by Tenant, the amount of the consideration attributable to the assignment of the Lease shall be as reasonably determined by Landlord.

10.2.4 Landlord may terminate this Lease as of the date of the proposed Transfer as to that portion of the Premises affected by the proposed Transfer. If Tenant receives a bona fide offer to make a Transfer of the Lease, Tenant may give Landlord notice thereof and request that Landlord, within ten (10) business days after the receipt of such notice, elect in writing whether to waive its rights under this subsection 10.2.4 with respect to the Transfer contemplated by the bona fide offer. Tenant’s notice shall contain the information described in Section 10.1. Landlord’s failure to respond within such ten (10) business day period shall be deemed to be an election not to waive its rights hereunder. If Landlord does waive its rights hereunder, such waiver shall be effective only for the Transfer specifically covered in Tenant’s notice for a period of sixty (60) days after the date of the waiver. If Landlord does not waive its rights under this subsection 10.2.4, Tenant shall have the right to withdraw its request to the proposed Transfer within ten (10) days of Landlord’s failure to waive its rights, in which case Landlord shall have no right to terminate the Lease or any portion thereof in accordance with the terms of this subsection 10.2.4 unless a new notice is effectively given. If Landlord does duly exercise its rights hereunder, and terminates the Lease or any portion thereof, Landlord shall have the right to enter into a lease or other occupancy agreement directly with the proposed transferee, and Tenant shall have no right to any of the rents or other consideration payable by such proposed transferee under such other lease, even if such rents and other consideration exceed the rent payable under this Lease by Tenant: Landlord shall have the right to lease the Premises to any other tenant, or not lease the Premises, in its sole discretion. Tenant’s failure to request such waiver by Landlord shall not in any way prejudice or diminish Landlord’s right to exercise its rights under this subsection at any time. No such election to waive its rights under this Section shall in any way prejudice or diminish Landlord’s other rights to approve or disapprove the proposed transferee, or to receive additional rent, in accordance with the other terms and provisions of this Section and the Lease.

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10.3 Conditions Deemed Reasonable. Tenant acknowledges and agrees that each of the rights of Landlord set forth in this Section 10 above in the event of a proposed Transfer is a reasonable restriction on Transfer for purposes of California Civil Code Section 1951.4.

10.4 No Release. No consent to any proposed Transfer, whether conditional or unconditional, shall be deemed to be a consent to any other or further Transfer of the Lease, or any other Transfer of the Lease on the same or other conditions (if any). No transfer of the Lease shall in any way diminish, impair or release any of the liabilities and obligations of Tenant, any guarantor or any other person liable for all or any portion of the Tenant’s obligations under the Lease.

10.5 Tenant’s Remedy. Landlord shall have no liability to Tenant or to any proposed transferee in damages if it is adjudicated that Landlord’s consent has been unreasonably withheld and such unreasonable withholding of consent constitutes a breach of this Lease or other duty to Tenant, the proposed transferee or any other person on the part of Landlord. In such event, Tenant’s sole remedy shall be to have the proposed Transfer declared valid as if Landlord’s consent had been duly and timely given (although Tenant shall be entitled to reasonable attorneys’ fees if it is the prevailing party in such litigation, in accordance with Article 20 of this Lease).

10.6 Continuing Liability of Tenant. If Tenant’s transferee defaults pursuant to this Lease Landlord may proceed directly against Tenant without pursuing remedies against the transferee Tenant agrees to defend, indemnify and hold Landlord harmless with respect to all costs (including reasonable attorneys’ fees expended by Landlord in connection with) and liability for compensation claimed by any broker or agent in connection with any assignment, subletting or other transfer or Tenant’s interest pursuant to this Lease.

ARTICLE 11

DAMAGE OR DESTRUCTION

11.1 Repair or Termination.

11.1.1 Insured Damage. In the event the Building and/or the Premises is damage by fire or other perils covered by Landlord’s insurance, Landlord shall:

11.1.1.1 In the event of total destruction of the Building and/or ___ Premises to an extent exceeding twenty-five percent (25%) of the full insurable value there (“Total Destruction”), at Landlord’s option, as soon as reasonably possible thereafter commence repair, reconstruction and restoration of the Building and/or the Premises __ prosecute the same diligently to completion, in which event this Lease shall remain in full ____ and effect; or within ninety (90) days after such damage, elect not to so repair, ____________ restore the Building and/or the Premises, in which event this Lease shall terminate. In either event, Landlord shall give Tenant written notice of its intention within said ninety (90) days period. In the event Landlord elects not to restore the Building, and/or the Premises, this Lease shall be deemed to have terminated as of the date of such Total Destruction.

11.1.1.2 In the event of a partial destruction of the Building and/or ____ Premises, to an extent not exceeding twenty-five percent (25%) of the full insurable value the _____ of (“Partial Destruction”), and if the damage thereto is such that the Building and/or Premises may be repaired, reconstructed or restored within a period of one hundred-eighty (180) days from the date of the happening of such casualty, and if Landlord (subject to the rights Landlord’s lenders) will receive insurance proceeds sufficient to cover the cost of such ______ then Landlord shall commence and proceed diligently with the work of repair, reconstruction ___ restoration and this Lease shall continue in full force and effect. If such work of repair, reconstruction and restoration shall require a period longer than one hundred eighty (180) days exceeds twenty-five percent (25%) of the full insurable value thereof, or if said __________ proceeds will not be sufficient to cover the cost of such repairs, then Landlord may either ___ to so repair, reconstruct or restore and the Lease shall continue in full force and effect

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Landlord may elect not to repair, reconstruct or restore and the Lease shall then terminate. Under any of the conditions of this Section 11.1.1.2, Landlord shall give written notice to Tenant of its intention within ninety (90) days of such determination. In the event Landlord elects not to restore the Building and/or the Premises, this Lease shall be deemed to have terminated as of the date of such Partial Destruction.

11.2 Termination And Release. Upon any termination of this Lease pursuant to any of the provisions of this Article 11, the parties shall be released without further obligation to the other from the date possession of the Premises is surrendered to Landlord except for items which have accrued and are then unpaid.

11.3 Temporary Abatement of Rent. In the event of repair, reconstruction and restoration by Landlord as herein provided, the Rent payable pursuant to this Lease shall be abated proportionately with the degree to which Tenant’s use of the Premises is impaired during the period of such repair, reconstruction or restoration; provided that there shall be no abatement of Rent if such damage is the result of Tenant’s negligence or intentional wrongdoing: Tenant shall not be entitled to any compensation or damages for loss in the use of the whole or any part of the Premises and/or any inconvenience or annoyance occasioned by such damage, repair, reconstruction or restoration.

11.4 Force Majeure. Tenant shall not be released from any of its obligations under this Lease except to the extent and upon the conditions expressly stated in this Article 11. Notwithstanding anything to the contrary contained in this Article 11, if Landlord is delayed or prevented from repairing or restoring the damaged Premises within one (1) year after the occurrence of such damage or destruction by reason of acts of God, war, governmental restrictions, inability to procure the necessary labor or materials, or other cause beyond the control of Landlord, Landlord, at its option, may terminate this Lease, whereupon Landlord shall be relieved of its obligation to make such repairs or restoration and Tenant shall be released from its obligations under this Lease as of the end of such one year period.

11.5 Uninsured Casualty. If damage is due to any cause other than fire or other peril covered by extended coverage insurance, Landlord may elect to terminate this Lease.

11.6 Limits of Landlord’s Obligations. If Landlord is obligated to or elects to repair or restore as herein provided, Landlord shall be obligated to make repair or restoration only of those portions of the Building and the Premises which were originally provided at Landlord’s expense or are covered by Landlord’s insurance pursuant to the terms of this Lease, and the repair and restoration of items not provided at Landlord’s expense shall be the obligation of Tenant.

11.7 Damages at End of Term. Notwithstanding anything to the contrary contained in this Article 11, Landlord shall not have any obligation whatsoever to repair, reconstruct or restore the Premises when the damage resulting from any casualty covered by this Article 11 occurs during the last twelve (12) months of the Term of this Lease or any extension hereof.

11.8 Waiver. Each party waives the provisions of any statutes or court decisions which relate to the abatement or termination of leases when leased property is damaged or destroyed and agree that such event shall be exclusively governed by the terms of this Lease.

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ARTICLE 12

EMINENT DOMAIN

12.1 Substantial or Total Taking. If all of the Premises are taken by exercise of the power of eminent domain (or conveyed by Landlord in lieu of such exercise) this Lease will terminate on a date (for purposes of this Article the “Termination Date”) which is the earlier of the date upon which the condemning authority takes possession of the Premises or the date on which title to the Premises is vested in the condemning authority. If more than twenty-five percent (25%) of the Rentable Area of the Premises is so taken, and Tenant cannot use the Premises to conduct its business therein, Tenant will have the right to cancel this Lease by written notice to Landlord given within twenty (20) days after the Termination Date. If less than twenty-five percent (25%) of the Rentable Area of the Premises is so taken, or if Tenant does not cancel this Lease according to the preceding sentence, the Base Monthly Rent will be abated in the proportion that the Rentable Area of the Premises so taken bears to the Rentable Area of the Premises immediately before such taking, and Tenant’s Percentage Share will be appropriately recalculated. If all or substantially all of the Building or the Project is so taken, Landlord may cancel this Lease by written notice to Tenant given within thirty (30) days after the Termination Date. In the event of any such taking, the entire award will be paid to Landlord and Landlord’s Mortgagees, as their interests may appear, and Tenant will have no right or claim to any part of such award; however, Tenant will have the right to assert a claim, so long as Landlord’s and Landlord’s lender’s award is not reduced by such claim, for (i) Tenant’s moving expenses, and (ii) the unamortized value of the leasehold improvements owned and paid for by Tenant.

12.1 Temporary Taking. In the event of taking of the Premises or any part thereof for temporary use, (1) this Lease shall be and remain unaffected thereby and Rent shall not abate, and (2) Tenant shall be entitled to receive for itself such portion or portions of any award made for such use with respect to the period of the taking which is within the Term, provided that if such taking shall remain in force at the expiration or earlier termination of this Lease, Tenant shall then pay to Landlord a sum equal to the reasonable cost of performing Tenant’s obligations pursuant to Article 6 with respect to the Premises and upon such payment shall be excused from such obligations. For purposes of this Section 12.2, a temporary taking shall be defined as a taking for a period of two hundred seventy (270) days or less.

12.3 Waiver. Each party waives the provisions of any statute or court decisions allowing either party to petition the Superior Court to terminate this Lease in the event of a partial taking of the Premises.

ARTICLE 13

DEFAULT AND REMEDIES

13.1 Covenants and Conditions. Tenant’s performance of each of Tenant’s obligations under this Lease is a condition as well as a covenant. Tenant’s right to continue in possession of the Premises is conditioned upon such performance. The notice required by the provisions set forth below are intended to satisfy any and all notice requirements imposed on Landlord by law and is not in addition to any such requirements.

13.2 Events of Default. The occurrence of any one or more of the following events shall constitute an event of default hereunder by Tenant:

13.2.1 Abandonment. The abandonment of the Premises by Tenant. Abandonment is herein defined to include, but is not limited to, (i) any absence by Tenant from the Premises for ten (10) business days or longer and (ii) failure of Tenant to occupy the Premises within thirty (30) days of substantial completion of the Tenant improvements.

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13.2.2 Failure to Pay. The failure by Tenant to make any payment of Base Monthly Rent or Additional Rent or any other payment required to be made by Tenant pursuant to this Lease, as and when due.

13.2.3 Failure to Perform. The failure by Tenant to observe or perform any of the express or implied covenants or provisions of this Lease to be observed or performed by Tenant, other than as specified in Section 13.2.1 or 13.2.2 above, where such failure shall continue for a period of ten (10) days after written notice thereof from Landlord to Tenant. If the nature of Tenant’s default is such that more than ten (10) days are reasonably required for its cure, then Tenant shall not be deemed to be in default if Tenant shall commence such cure within said ten (10) pay period and thereafter diligently prosecute such cure to completion, which completion shall occur not later than sixty (60) days from the date of such notice from Landlord.

13.2.4 Other Defaults. The making by Tenant of any general assignment for the benefit of creditors; the filing by or against Tenant of a petition to have Tenant adjudged a bankrupt or a petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Tenant, the same is dismissed within thirty (30) days); the appointment of a trustee or receiver to take possession of substantially all of Tenant’s assets located at the Premises or of Tenant’s interest in this Lease, where possession is not restored to Tenant within thirty (30) days; or the attachment, execution or other judicial seizure of substantially all of Tenant’s assets located at the Premises or of Tenant’s interest in this Lease where such seizure is not discharged within thirty (30) days.

13.3 Landlord’s Remedies. In the event of any such default by Tenant, and at any time thereafter, with or without notice or demand and without limiting Landlord in the exercise of any right or remedy which Landlord may have in law or equity, Landlord shall be entitled to the following rights and remedies:

13.3.1 Termination of Possession. In the event of any such default by Tenant, in addition to any other remedies available to Landlord at law or in equity, Landlord shall have the immediate option to terminate this Lease and all rights of Tenant hereunder. In the event that Landlord shall elect to so terminate this Lease then Landlord may recover from Tenant:

13.3.1.1 the worth at the time of award of any unpaid rent which had been earned at the time of such termination; plus the value of any “lease incentive” utilized by Tenant to such time; plus

13.3.1.2 the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus

13.3.1.3 the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that Tenant proves could be reasonably avoided; plus

13.3.1.4 any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant’s failure to perform Tenant’s obligations under this Lease or which in the ordinary course of things would be likely to result therefrom.

As used in Section 13.3.1.1 and 13.3.1.2 above, the “worth at the time of award” is computed by allowing interest at the maximum rate an individual is permitted to charge by law. As used in Section 13.3.1.3 above, the “worth at the time of award” is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).

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13.4 Re-Entry and Removal. In the event of any such default by Tenant, _________ also have the right, with or without terminating this Lease, to re-enter the Premises and remove all persons and property from the Premises; such property may be removed and stored in a public warehouse or elsewhere at the cost of and for the account of Tenant. No re-entry or taking possession of the Premises by Landlord pursuant to this Section 13.4 shall be construed as an election to terminate this Lease unless a written notice of such intention is given to Tenant. In addition to its other rights under this Lease, Landlord has the remedy described in California Civil Code Section 1951.4 (Landlord may continue the Lease in effect after Tenant’s breach and abandonment and recover Base Monthly Rent, and/or Operating Expenses as they become due, if Tenant has the right to sublet or assign, subject only to reasonable limitations).

13.5 Reletting the Premises. In the event of abandonment of the Premises by Tenant or in the event that Landlord shall elect to re-enter as provided above or shall take possession of the Premises pursuant to legal proceeding or pursuant to any notice provided by law, then if Landlord does not elect to terminate this Lease as provided above, Landlord may from time to time, without terminating this Lease, either recover all rent as it becomes due or relet the Premises or any part thereof for the term for this Lease on terms and conditions as Landlord in its sole discretion may deem advisable with the right to make alterations and repairs to the Premises.

In the event that Landlord shall elect to so relet, then rentals received by Landlord from such reletting shall be applied: first, to the payment of any indebtedness other than rent due pursuant to this Lease from Tenant to Landlord; second, to the payment of any cost of such reletting; third, to the payment of the cost of any alterations and repairs to the Premises; fourth, to the payment of rent due and unpaid hereunder and the residue, if any, shall be held by Landlord and applied to payment of future rent as the same may become due and payable hereunder. Should that portion of such rentals received from such reletting during any month, which is applied to the payment of rent hereunder, be less than the rent payable during that month by Tenant hereunder, then Tenant shall pay such deficiency to Landlord immediately upon demand therefore by Landlord. Such deficiency shall be calculated and paid monthly. Tenant shall also pay to Landlord, as soon as ascertained, any costs and expenses incurred, including but not limited to brokers’ commissions, by Landlord in such reletting or in making such alterations and repairs not covered by the rentals received from such reletting.

13.6 Remedies Cumulative: No Waiver. All rights, options and remedies of Landlord contained in this Lease shall be construed and held to be cumulative, and no one of them shall be exclusive of the other, and Landlord shall have the right to pursue any one or all of such remedies or any other remedy or relief which may be provided by law, whether or not stated in this Lease. No waiver of any default of Tenant shall be implied from any acceptance by Landlord of any rent or other payments due pursuant to this Lease or any omission by Landlord to take any action on account of such default if such default persists or is repeated, and no express waiver shall affect defaults other than as specified in said waiver. The consent or approval of Landlord to or of any act by Tenant requiring Landlord’s consent or approval shall not be deemed to waive or render unnecessary Landlord’s consent or approval to or of any subsequent similar acts by Tenant.

13.7 Landlord’s Default. Landlord shall not be in default in the performance of any obligation required to be performed by it pursuant to this Lease unless it has failed to perform such obligation within thirty (30) days after receipt of written notice by Tenant to Landlord specifying the manner in which Landlord has failed to perform such obligation. If the nature of Landlord’s obligation is such that more than thirty (30) days are required for its performance, then Landlord shall not be deemed to be in default if it shall commence such performance within such thirty (30) day period and thereafter diligently prosecute the same to completion.

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ARTICLE 14

ESTOPPEL CERTIFICATES

14.1 Estoppel Certificates.

14.1.1 Landlord’s Request. Within ten (10) days following any written request which Landlord may make from time to time, Tenants shall execute, acknowledge and deliver to Landlord a written statement, in a form substantially similar to the form of Exhibit E, certifying to any potential Mortgagee, encumbrancer or prospective purchaser the matters set forth therein and such other matters requested by Landlord. Landlord and Tenant intend that any statement delivered pursuant to this Section 14.1.1 may be relied upon by any such purchaser or prospective purchaser, encumbrancer, or Mortgagee of the Building or Project.

14.1.2 Failure to Deliver. Tenant’s failure to deliver such statement to Landlord within such ten (10) day period shall be conclusive upon Tenant that (i) the terms and provisions of this Lease have not been changed except as otherwise represented by Landlord; (ii) that this Lease has not been cancelled or terminated and is in full force and effect, excepts as otherwise represented by Landlord; (iii) that the current amounts of the Base Monthly Rent and Security Deposits are as represented by Landlord; (iv) that any charges made against the Security Deposit are uncontested and valid; (v) that have been no sublease or assignments of the Lease; (vi) that not more than one month’s Base Monthly Rent or other charges have been paid in advance; and (vii) that Landlord is not in default under the Lease. Tenant’s failure to deliver such statement within ten (10) days of receipt of Landlord’s request therefor shall constitute a default under this Lease.

ARTICLE 15

HOLDING OVER: SURRENDER OF PREMISES

15.1 Holding Over. If Tenant holds over after the expiration or earlier termination of the term hereof without the express written consent of Landlord, Tenant shall become a Tenant at sufferance only, at a rental rate equal to the greater of one hundred fifty percent (150%) of Landlord’s scheduled rent for the Premises or one hundred fifty percent (150%) of the Base Monthly Rent in effect upon the date of such expiration (including adjustment to the Base Monthly Rent as provided in Article 3 hereof and prorated on a daily basis), and otherwise subject to the terms, covenants and conditions herein specified, so far as applicable. Acceptance by Landlord of Rent after such expiration or earlier termination shall not result in a renewal of this Lease. The foregoing provisions of this Section 15.1 are in addition to and do not affect Landlord’s right of re-entry or any rights of Landlord pursuant to this Lease or as otherwise provided by law. If Tenant fails to surrender the Premises upon the expiration of this Lease despite demand to do so by Landlord, Tenants shall indemnify and hold Landlord harmless from all loss or liability, including without limitation, any claim made by any succeeding tenant founded on or resulting from such failure to surrender and any attorney fees and costs incurred by Landlord.

15.2.1 Surrender of Premises.

Surrender of Lease Not Merger. A surrender of this Lease by Tenant, a cancellation of this Lease by mutual agreement between Landlord and Tenant, or a termination of this Lease for any reason shall not automatically work a merger. After such a surrender, cancellation or termination Landlord may elect to (i) terminate any or all then existing subleases or subtenancies and/or (ii) treat such surrender, cancellation or termination as effecting an assignment to Landlord of any or all such sublease or subtenancies. The delivery of keys to any employee of Landlord or to Landlord’s agent or any employee thereof shall not be sufficient to constitute a termination of this Lease or a surrender of the Premises.

15.2.2 Condition of Premises. Upon the expiration or earlier termination of the Term, Tenant shall surrender possession of the Premises to Landlord in the same good order,

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condition, and repair as when received by Tenant or as thereafter improved by Landlord or Tenant excepting only reasonable wear and tear which Tenant was not otherwise obligated to remedy pursuant to any provision of this Lease. In such event, Tenant shall, at its expense, promptly remove or cause to be removed from the Premises all debris, rubbish, furniture, equipment, business and trade fixtures, freestanding cabinet work, shelving, movable partitions, and other articles of personal property owned by Tenant or installed or placed by Tenant at its expense in the Premises (exclusive of any items described in Subsection 15.2.3), and all similar articles of any other persons claiming under Tenant, unless Landlord exercises its option to have any subleases or subtenancies assigned to it. Tenant shall also repair, at its expense, all damages which removals from or restoration of the Premises may cause.

15.2.3 Affixed Improvements. All fixtures, equipment, alterations, additions, improvements, and/or appurtenances attached to or built into the Premises prior to or during the Lease Term, whether at the expense of Landlord, at the expense of Tenant, or at the expense of both, shall be and remain part of the Premises and shall not be removed by Tenant at the end of the Lease Term, unless otherwise expressly provided for in this Lease or by separate written agreement of the parties.

ARTICLE 16

QUIET ENJOYMENT

Landlord covenants and agrees that Tenant, upon paying the Rent and any and all other charges herein provided for and observing and performing the covenants, agreements and conditions of this Lease to be observed and performed by Tenant shall and may peaceably and quietly have, hold and enjoy the Premises in accordance with this Lease.

ARTICLE 17

SUBORDINATION

17.1 Landlord’s Election. Without the necessity of any additional document being executed by Tenant for the purpose of effecting a subordination, and at the election of Landlord or any Mortgagee with a lien on the Building or the Building Lot, this Lease shall be subject and subordinate at all times to:

17.1.1 all leases which may now exist or hereafter be executed affecting the Building or the Building Lot or both, and

17.1.2 the lien of any Mortgage, or specific provisions of any such Mortgage as determined by Landlord and its lenders which may now exist or hereafter be executed in any amount for which the Building, Building Lot, leases or Landlord’s interest or estate in any of said items is specified as security.

17.2 Delivery of Documents. Notwithstanding the foregoing, Landlord shall have the right to subordinate or cause to be subordinated any such leases or any such liens or specific provisions of such liens as determined by Landlord and its lenders to this Lease. In the event that any lease terminates for any reason or any Mortgage is foreclosed or a conveyance in lieu of foreclosure is made for any reason, Tenant shall, notwithstanding any subordination, attorn to and become the Tenant of the successor-in-interest to Landlord, at the option of such successor-in-interest. Tenant covenants and agrees to execute and deliver, upon demand by Landlord and in the form requested by Landlord, any additional documents evidencing the priority or subordination of this Lease with respect to any such leases or the lien of any such Mortgage, provided Landlord shall provide Tenant with nondisturbance agreements in favor of Tenant from any lessors, mortgage holders or lien holders of Landlord in consideration of, and as a condition precedent to, Tenant’s agreement to subordinate. Should Tenant fail to sign and return any such documents within ten (10) business days of request Tenant shall be in default, and Landlord may, at Landlord’s option, terminate the

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Lease provided written notice of such termination is received by Tenant prior to Landlord’s ______ of such documents. Tenant hereby irrevocably appoints Landlord as attorney-in-fact of Tenant to execute, deliver and record any such document in the name and on behalf of Tenant.

ARTICLE 18

LIENS

Tenant shall not permit any mechanics’, materialmens’ or other liens to be filed against the Premises or the Project, except for those liens being contested and bonded in accordance with the terms of Section 7.5 above. Landlord shall have the right at all reasonable times to post and keep posted on the Premises any notices which it deems necessary for protection from such liens. If any such liens are filed, Landlord may, without waiving its rights and remedies based on such breach of Tenant and without releasing Tenant from any of its obligations, cause such liens to be released by any means it shall deem proper, including payments in satisfaction of the claim giving rise to such lien. Tenant shall pay to Landlord at once, upon notice by Landlord, any sum paid by Landlord to remove such liens, together with interest at the maximum rate per annum permitted by law from the date of such payment by Landlord.

ARTICLE 19

BANKRUPTCY

If Tenant shall file a petition in bankruptcy pursuant to any provision of the Bankruptcy Code as then in effect, or if Tenant shall be adjudicated a bankrupt in involuntary bankruptcy proceedings and such adjudication shall not have been vacated within thirty (30) days from the date thereof, or if a receiver or trustee shall be appointed of Tenant’s property and the order appointing such receiver of trustee shall not be set aside or vacated within thirty (30) days after the entry thereof, or if Tenant shall assign Tenant’s estate or effects for the benefit of creditors, or if this Lease shall, by operation of law or otherwise, pass to any person or persons other than Tenant, then in any such event Landlord may terminate this Lease, if Landlord so elects, with or without notice of such election and with or without entry or action by Landlord. In such case, notwithstanding any other provisions of this Lease, Landlord in addition to any and all rights and remedies allowed by law or equity, shall, upon such termination, be entitled to recover damages in the amount provided in Section 13.3 hereof. Neither Tenant nor any person claiming through or under Tenant or by virtue of any statute or order of any court shall be entitled to possession of the Premises but shall surrender the Premises to Landlord. Nothing contained herein shall limit or prejudice the right of Landlord to recover damages by reason of any such termination equal to the maximum damages allowed by any statute or rule of law in effect at the time when, and governing the proceedings in which, such damages are to be proved; whether or not such amount is greater, equal to or less than the amount of damages recoverable under the provisions of this Article 19.

ARTICLE 20

PROFESSIONAL FEES

If Landlord should bring suit for possession of the Premises, for the recovery of any sum due pursuant to this Lease, or because of the breach of any provisions of this Lease, or for any other relief against Tenant hereunder, or in the event of any other litigation between the parties with respect to this Lease, then all costs and expenses, including without limitation, its actual professional fees such as appraisers’, accountants, and attorneys’ fees, incurred by the prevailing party therein shall be paid by the other party, which obligation on the part of the other party shall be deemed to have accrued on the date of the commencement of such action and shall be enforceable whether or not the action is prosecuted to judgment. If Landlord employs a collection agency to recover delinquent charges, Tenant agrees to pay all collection agency fees charged to Landlord in addition to Rent, late charges, interest and other sums payable pursuant to this Lease.

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ARTICLE 21

PERFORMANCE BY TENANT

All covenants and agreements to be performed by Tenant pursuant to any of the terms of this Lease shall be performed by Tenant at Tenant’s sole cost and expense and without any abatement of Rent. If Tenant shall fail to pay any sum of money owed to any party other than Landlord, for which Tenant is liable pursuant to this Lease, or if Tenant shall fail to perform any other obligation on its part to be performed pursuant to this Lease, and such failure shall continue for ten (10) days after notice thereof by Landlord, Landlord may, without waiving or releasing Tenant from its obligations, but shall not be obligated to, make any such payment or perform any such other act to be made or performed by Tenant. All sums so paid by Landlord and all necessary incidental costs together with interest thereon at the maximum rate permissible by law, from the date of such payment by Landlord, shall be payable to Landlord on demand. Tenant covenants to pay any such sums, and Landlord shall have (in addition to any other right or remedy of Landlord) all rights and remedies in the event of the nonpayment thereof by Tenant as are set forth in Article 13.

ARTICLE 22

MORTGAGEE PROTECTION

In the event of any default on the part of Landlord, Tenant will give notice by registered or certified mail to any beneficiary of a first or lower priority Mortgage covering the Project whose address shall have been furnished to Tenant, and shall offer such Mortgagee a reasonable opportunity to cure the default, including time to obtain possession of the Premises by power of sale or a judicial foreclosure, if such should prove necessary to effect a cure.

ARTICLE 23

DEFINITION OF LANDLORD

The term “Landlord,” as used in this Lease, so far as covenants or obligations on the part of Landlord are concerned, shall be limited to mean and include only the owner at the time in question, of the fee title of the Premises or the lessee under a ground lease, if any. In the event of any transfer, assignment or other conveyance of title, Landlord herein named (and in case of any subsequent transfers or conveyances, the then grantor) shall be automatically freed and relieved from and after the date of such transfer, assignment or conveyance of any and all liability for the performance of all covenants or obligations of Landlord thereafter to be performed. Without further agreement, the transferee of such title shall be deemed to have assumed and agreed to observe and perform any and all obligations of Landlord pursuant to this Lease, during its ownership of the Premises, Building and/or the Building Lot. Landlord may transfer its interest in the Premises, the Building and/or the Building Lot without the consent of Tenant and any such transfer shall not be deemed a violation by Landlord of this Lease.

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ARTICLE 24

WAIVER

24.1 Waiver by Landlord. Landlord’s waiver of any breach of any term, covenant or condition herein contained shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition herein contained, nor shall any custom or practice which may grow up between the parties in the administration of the terms hereof be deemed a waiver of or in any way affect the right of Landlord to insist upon full performance by Tenant of the terms, covenants and conditions of this Lease in strict accordance with the terms thereof. The subsequent acceptance of Rent by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant or any term, covenant or condition of this Lease, other than the failure of Tenant to pay the particular Rent so accepted, regardless of Landlord’s knowledge of such preceding breach at the time of acceptance of such Rent. Acceptance by Landlord of a sum less than the Base Monthly Rent and Additional Rent or other sum then due shall not be deemed to be other than on account of the earliest installment of such rent or other amount due, nor shall any endorsement or statement on any check or any letter accompanying any check be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such installment or other amount or pursue any other remedy provided in this Lease.

24.2 Waiver by Tenant. Tenant’s waiver of any breach of any term, covenant or condition herein contained shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition herein contained, nor shall any custom or practice which may grow up between the parties in the administration of the terms hereof be deemed a waiver of or in any way affect the right of Tenant to insist upon the performance by Landlord in strict accordance with said terms.

ARTICLE 25

IDENTIFICATION OF TENANT

If more than one person or entity executes this Lease as Tenant, (i) each of them is jointly and severally liable for the keeping, observing and performing of all of the terms, covenants, conditions, provisions and agreements of this Lease to be kept, observed and performed by Tenant, and (ii) the term “Tenant” as used in this Lease shall mean and include each of them jointly and severally. The act of or notice from, or notice or refund to, or the signature of any one or more of them, with respect to the tenancy of this Lease, including, but not limited to any renewal, extension, expiration, termination or modification of this Lease, shall be binding upon each and all of the persons executing this Lease as Tenant with the same force and effect as if each and all of them had so acted or so given or received such notice or refund or so signed.

ARTICLE 26

NO PARKING RIGHTS

26.1 No Lease of Parking Rights. Parking Rights are not included in and are not a part of this Lease. Tenant, its employees and invitees shall have no right to use any parking areas in or on the Building or Building Lot except as Landlord and Tenant may otherwise agree in a separate written parking agreement.

26.2 Additional Restrictions. Tenant shall not permit or allow any vehicles that belong to or are controlled by Tenant or Tenant’s employees, suppliers, shippers, customers or invitees to be loaded or unloaded in areas other than those designated for such activities and for no longer than permitted by Landlord. If Tenant permits any of the prohibited activities described above, Landlord shall have the right, without notice, in addition to such other rights and remedies that it may have,

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to remove or tow away the vehicle involved and charge the cost to Tenant, which cost shall be immediately payable upon demand to Landlord as required.

ARTICLE 27

FORCE MAJEURE

The period for performance of any obligation by either party shall be extended (except for Tenant’s obligations to pay Rent, Additional Rent and other charges due pursuant to this Lease which obligations shall not be extended) by the period of any delay in performance caused by an act of God, labor strike, adverse weather conditions, shortage of materials, war, invasion, acts of a public enemy, governmental preemption in connection with a national emergency, riot, laws, rules, regulations or order of governmental or military authorities, or failure or defect in the supply, quantity or character of utilities furnished to the Building or Premises (collectively “Force Majeure Event”), excluding from all the foregoing financial inability.

ARTICLE 28

LIMITATION ON LIABILITY

In consideration of the benefits accruing to Tenant pursuant to this Lease, Tenant and all successors and assigns covenant and agree that, in the event of any actual or alleged failure, breach or default hereunder by Landlord:

(a) The sole and exclusive remedy shall be against the Landlord’s interest in the Building;

(b) No officer, director, shareholder or partner of Landlord shall be sued or named as a party in any suit or action (except as may be necessary to secure jurisdiction of the partnership) and no service of process shall be made against any officer, director, shareholder or partner of Landlord (except as may be necessary to secure jurisdiction of the partnership);

(c) No officer, director, shareholder or partner of Landlord shall be required to answer or otherwise plead to any service of process and no judgment will be taken against any officer, director, shareholder or partner;

(d) Any judgment taken against any officer, director, shareholder or partner of Landlord may be vacated and set aside at any time nunc pro tunc;

(e) No writ of execution will ever be levied against the assets of any officer, director, shareholder or partner of Landlord;

(f) The obligations of Landlord under this Lease do not constitute personal obligations of the individual partners, directors, officers or shareholders of Landlord, and Tenant shall not seek recourse against the individual partners, directors, officers or shareholders of Landlord or any of their personal assets for satisfaction of any liability in respect to this Lease;

(g) These covenants and agreements are enforceable both by Landlord and also by any partner of Landlord.

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ARTICLE 29

MODIFICATION FOR LENDER

If, in connection with obtaining construction, interim or permanent financing or refinancing for the building and/or the Project and Mortgagee shall request reasonable modification in this Lease as a condition to such financing, Tenant will not unreasonably withhold, delay or defer its consent thereto, provided that such modifications do not increase the obligations of Tenant hereunder or materially adversely affect the leasehold estate created by this Lease or Tenant’s rights hereunder.

ARTICLE 30

FINANCIAL STATEMENTS

No more frequently than two (2) times per calendar year; Tenant shall upon ten (10) days prior written notice from landlord, provide Landlord with a current financial statement and financial statements of the two (2) years prior to the current financial statement year. Such statements shall be prepared in accordance with generally accepted accounting principles and shall either be audited by an independent certified public accountant if such is the normal practice of Tenant and, if not, such statements may be unaudited but signed by an accountant. Tenant shall provide consolidated financial statements if requested by Landlord.

ARTICLE 31

LENDER APPROVAL

Notwithstanding any other provision hereof, the effectiveness of this Lease is expressly conditioned upon receipt by Landlord of approval of the Lease by Landlord’s lender(s).

ARTICLE 32

RELOCATION

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ARTICLE 33

LEASE INCENTIVES

Without limiting any other provisions of this Lease, if Tenant is in default under this Lease at any time during the Term and if Landlord has given Tenant any lease incentives or other inducements or consideration in connection with this Lease (“Incentives”), including without limitation, any abatement of rent but excluding the Tenant Improvement Allowance then the Incentives will terminate and Landlord may recover from Tenant the value of all such Incentives received by Tenant in addition to all other damages recoverable by Landlord pursuant to the provisions of this Lease.

ARTICLE 34

MISCELLANEOUS

34.1 Governing Law. This Lease shall be governed by and construed in accordance with the laws of the State of California.

34.2 Headings and Titles. The captions of the Articles or Sections of this Lease are only to assist the parties in reading this Lease and shall have no effect upon the construction or interpretation of any part hereof.

34.3 Interpretation. Whenever required by the context of this Lease, the singular shall include the plural and the plural shall include the singular. The masculine, feminine and neuter gender shall each include the other. In any provision relating to the conduct, acts or omissions of Tenant, the term “Tenant” shall include Tenant’s agents, employees, contractors, invitees, successors or others using the Premises with Tenant’s expressed or implied permission.

34.4 Successors and Assigns. Except as otherwise specifically provided in the Lease, all of the covenants, conditions and provisions of this Lease shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and assigns.

34.5 Time is of the Essence. Time is of the essence with respect to the performance of every provision of this Lease in which time of performance is a factor.

34.6 Severability. If any term or provision of this Lease is held invalid or unenforceable to any extent under any applicable law by a court of competent jurisdiction, the remainder of this Lease shall not be affected thereby, and each remaining term and provision of this Lease shall be valid and enforceable to the fullest extent permitted by law.

34.7 Integration. This Lease, along with any exhibits, attachments or other documents affixed hereto or referred to herein, constitutes the entire agreement between Landlord and Tenant relative to the leasing of the Premises. This Lease and such exhibits, attachments and other documents may be amended or revoked only by an instrument in writing signed by both Landlord and Tenant. Landlord and Tenant hereby agree that no prior agreement, understanding or representation pertaining to any matter covered or mentioned in this Lease shall be effective for any purpose.

34.8 Notices. All notices required or permitted under this Lease shall be in writing and shall be personally delivered or sent by certified mail, return receipt requested, postage prepaid or by nationally or locally recognized overnight or same day delivery service which provides for acknowledgment of delivery. Notices to Tenant shall be delivered to the address specified in Section 14 of the Basic Lease Provisions, expect that upon Tenant’s taking possession of the Premises, the Premises shall be Tenant’s address for notice purposes. Notices to Landlord shall be delivered to the address specified in Section 14 of the Basic Lease Provisions. All notices shall be

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effective upon personal delivery or three (3) days after deposit in the U.S. Mail. Either party may change its notice address upon written notice to the other party, except that Landlord may in any event use the Premises as Tenant’s address for notice purposes after the Commencement Date.

34.9 No Light, Air or View Easements. Any diminution or shutting off of light, air or view by any structure which may be erected on lands adjacent to the Building or elsewhere in the project shall in no way affect this Lease or impose any liability on the Landlord.

34.10 Brokers. Landlord and Tenant acknowledge that the broker(s) who procured this Lease is, unless otherwise specifically provided in this Lease, specified in Section 11 of the Basic Lease Provisions. Landlord shall be solely responsible for the payment of brokerage commissions to such broker, and Tenant shall have no responsibility therefor unless written provision to the contrary has been made a part of the Lease. If Tenant has dealt with any other real estate broker or agent or any other person in connection with the leasing of space in the Building, Tenant shall be solely responsible for the payment of any fee due such person, and Tenant shall indemnify, defend and hold Landlord harmless from and against any liability in respect thereto, including attorneys’ fees and costs.

34.11 No Partnership. This Lease shall not be construed to constitute any form of partnership or joint venture between Landlord and Tenant. Landlord and Tenant mutually acknowledge that no business or financial relationship exists between them other than as Landlord and Tenant, and that Landlord is not responsible in any way for the debts of Tenant or any other party.

34.12 Corporation or Partnership as Tenant. If Tenant is a corporation, each person signing this Lease on behalf of Tenant represents and warrants that he has full authority to do so and that this Lease binds the corporation. Concurrently with the execution of this Lease, Tenant shall deliver to Landlord a certified copy of a resolution of Tenant’s Board of Directors authorizing the execution of this Lease or other evidence of such authority reasonably acceptable to Landlord. If Tenant is a partnership, each person signing this Lease for a Lessee represents and warrants that he is a general partner of the partnership, that he has full authority to sign for the partnership and that this Lease binds the partnership and all general partners of the partnership. Tenant shall give written notice to Landlord of any general partner’s withdrawal or addition. Concurrently with the execution of this Lease, Tenant shall deliver to Landlord a copy of Tenant’s recorded statement of partnership or certificate of limited partnership.

34.13 Recording. Neither Landlord nor Tenant shall record this Lease nor a short form memorandum of this Lease without prior written consent of the other.

34.14 Exhibits. All exhibits, schedules and addenda attached to this Lease are incorporated herein by references as though fully set forth herein.

34.15 Landlord’s Consent. Tenant shall pay Landlord’s reasonable attorney’s fees incurred in connection with Tenant’s request for Landlord’s consent in connection with any act which Tenant proposes to do and which requires Landlord’s consent.

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34.16 Examination of Lease. The submission of this Lease by Landlord, its agent, or its representative for examination or execution by Tenant does not constitute an option or offer to lease the Premises or a reservation of the Premises in favor of Tenant, it being intended that this Lease shall become effective only upon Landlord’s execution and delivery of fully executed counterpart thereof to Tenant.

LANDLORD		TENANT
Prospect Center Corporation, a California corporation		RaceGate.Com, a Delaware corporation
By:	/s/ David C. Mize	By:	/s/ Robert Raczkowski
Name:	David C. Mize	Name:	Robert Raczkowski
Title:	President	Title:	Chief Executive

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ADDENDUM I

1. Provided that Tenant has not been in default of the Lease at anytime during its term, Landlord agrees to Lease Suite 201 to Tenant on the terms and conditions noted herein for Suite 201.

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ADDENDUM 2

Tenant at Tenant’s expense is responsible to install air conditioning equipment complete to Tenant’s computer room for the purpose of maintaining proper temperature for their computer equipment.

The maintenance of this equipment of twenty-four (24) hour service, seven days a week, if necessary, is the sole responsibility of the Tenant. The Landlord will supply the electrical power outlet. Upon termination of the Lease the Tenant is responsible to remove it’s air conditioning equipment at the Tenant’s cost.

Landlord		Tenant
Sign	/s/ David C. Mize	Sign	/s/ Scott G. Kyle
Print	DAVID C. MIZE	Print	Scott G. Kyle
Title	PRESIDENT	Title	CFO

EXHIBIT A

THE PREMISES

The Premises description shall mean the area shown on the floor plan below indicated by the crosshatched areas.

[GRAPHIC]

TYPICAL OFFFICE LEVEL PLAN

LESSEE’S INITIALS /s/ Illegible LESSOR’S INITIALS /s/ Illegible

Page 1 of 2

EXHIBIT A

[GRAPHIC]

TYPICAL OFFFICE LEVEL PLAN

LESSEE’S INITIALS /s/ Illegible LESSOR’S INITIALS /s/ Illegible

Page 2 of 2

EXHIBIT C

RULES AND REGULATIONS

1. Except as specifically provided in the Lease to which these Rules and Regulations are attached, no sign, placard, picture, advertisement, name or notice shall be installed or displayed on any part or Premises without the prior written consent of Landlord if visible from outside the Premises. Landlord shall have the right to remove, at Tenant’s expense and without notice, any sign installed or displayed in violation of this rule. All approved signs or lettering on doors and walls shall be printed, painted, affixed or inscribed at the expense of Tenant by a person approved by Landlord.

2. If Landlord objects in writing to any curtains, blinds, shades, screens or hanging plants or other similar objects attached to or used in connection with any window or door of the Premises, or placed on any windowsill, which is visible from the exterior of the Premises, Tenant shall immediately discontinue such use. Tenant shall not place any thing against or near glass partitions or doors or windows which may appear unsightly from outside the Premises.

3. Tenant shall not obstruct or litter any sidewalks, halls, passages, exits, entrances, parking areas, elevators, escalators, or stairways of the Building or Project. The halls, passage, exits, entrances, elevators, escalators, or stairways or not open to the general public, but are open, subject to reasonable regulation, to Tenant’s business invitees. Landlord shall in all cases retain the right to control and prevent access thereto of all persons whose presence in the judgment of Landlord would be prejudicial to the safety, character, reputation and interest of the Project and its tenants; provided that nothing herein contained shall be construed to prevent such access to persons with whom any tenant normally deals in the ordinary course of its business, unless such persons are engaged in illegal or unlawful activities. No tenant and no employee or invitee of any tenant shall go upon the roof of the building without the permission of Landlord.

4. All cleaning and janitorial services for the Building and the Premises shall be provided exclusively through the Landlord, and except with the prior written consent of Landlord, no person or persons other than those approved by Landlord shall be employed by Tenant or permitted to enter the Building for the purpose of cleaning the same. Tenant shall not cause any unnecessary labor by carelessness or indifference to the good order and cleanliness of the Premises.

5. Landlord will furnish Tenant, free of charge, keys to each door lock in the Premises. Landlord may make a reasonable charge for any additional keys. Tenant shall not make or have made additional keys, and Tenant shall not alter any lock or install a new additional lock or bolt on any door of its Premises without consent of Landlord. Tenant, upon the termination of its tenancy, shall deliver to Landlord the keys of all doors which have been furnished to Tenant, and in the event of loss of any keys so furnished, shall pay Landlord therefor.

6. If Tenant requires telegraphic, telephonic, burglar alarm or similar services, it shall first obtain, and comply with, Landlord’s instruction in their installation.

7. No equipment, materials, furniture, packages, supplies, merchandise or other property will be received in the Building or carried in the elevators except between such hours and in such elevators as may be designated by Landlord. Tenant’s initial move in and subsequent deliveries of bulky items such as furniture, safes and similar items shall, unless otherwise agreed in writing by Landlord, be made during hours of 6:00 P.M. and 6:00 A.M. or on Saturday or Sunday. Deliverers during normal office hours shall be limited to normal office supplies and other small items. No deliveries shall be made which impede or interfere with other tenants or the operation of the Building.

8. Tenant shall not place a load upon any floor of the Building or Premises which exceeds the load per square foot which such floor was designed to carry and which is allowed by law. Heavy objects shall, if considered necessary by Landlord, stand on such platforms ad determined by Landlord to be necessary to properly distribute the weight, which platforms shall be provided at Tenant’s expense. The persons employed to move such equipment

Page 1C of 4C

in or out of the Project must be acceptable to Landlord. Landlord will not be responsible for loss of, or damage to, any such equipment or other property from any cause, and all damage done to the Project by maintaining or moving such equipment or other property shall be repaired at the expense of Tenant.

9 Tenant shall not use any method of heating or air conditioning other than that supplied by Landlord.

10 Tenant shall not waste electricity, water or air conditioning and agrees to cooperate fully with Landlord to assure the most effective operation of the Building’s heating and air-conditioning and to comply with any governmental energy-saving rules, laws or regulations of which Tenant has actual notice, and shall refrain from attempting to adjust controls. Tenant shall keep corridor doors closed, and shall close window coverings at the end of each business day.

11 Landlord reserves the right to close and keep locked all entrances and exit doors of the Building and to exclude from the Building between the hours of 6:30 P.M. and 6:30 A.M. the following day, or such other hours as may be established from time to time by Landlord, and on Sundays and Legal Holidays, any person unless that person is known to the person or employee in charge of the Building and has a pass or is properly identified. Tenant shall be responsible for all persons for whom it requests passes and shall be liable to Landlord for all acts of such persons. Landlord shall not be liable for damages for any error with regard to the admission to or exclusion from the Building of any person. Landlord reserves the right to prevent access to the Project in case of invasion, mob, riot, public excitement or other commotion by closing the doors or by other appropriate action.

12 Tenant shall close and lock the doors of its Premises and entirely shut off all faucets or other water apparatus, and electricity, gas or air outlets before Tenant and its employees leave the Premises. Tenant shall be responsible for any damage or injuries sustained by other tenants or occupants of the Building or by Landlord for noncompliance with this rule.

13 Except as specifically provided in Paragraph 25 of these Rules and Regulations, Tenant shall not obtain for use on the Premises ice, drinking water, food, beverage, towel or other similar services or accept barbering or bootblacking service upon the Premises, except at such reasonable hours and under such reasonable regulations ad may be fixed by Landlord.

14 The toilet rooms, toilets, urinals, wash bowls and other apparatus shall not be used for any purpose other than that for which they were constructed and no foreign substance of any kind whatsoever shall be thrown therein. The expense of any breakage, stoppage or damage resulting from the violation of this rule shall be borne by the Tenant who, or whose employees or invitees, shall have caused it.

15 Tenant shall not sell, or permit the sale at retail, of newspapers, magazines, periodicals, theater tickets or any other goods or merchandise to the general public in or on the Premises. Tenant shall not make any room-to-room solicitation of business from other tenants in the Project. Tenant shall not use the Premises for any business or activity other than that specifically provided for in Tenants Lease.

16 Tenant shall not install any radio or television antenna, loudspeaker or other devices on the roof or exterior walls of the Project except as specifically permitted in writing by Landlord. Tenant shall not interfere with radio or television broadcasting or reception from or in the Project of elsewhere.

17 Tenant shall not mark, drive nails, screw or drill into the partitions, woodwork or plaster or in any way deface the Premises or any part thereof, except in accordance with normal decorating practices. Landlord reserves the right to direct electricians as to where and how telephone and telegraph wires are to be introduced to the Premises. Tenant shall not cut or bore holes for wires. Tenant shall not affix any floor covering to the floor of the Premises in any manner except as approved by Landlord. Tenant shall repair any damage resulting from noncompliance with this rule.

Page 2C of 4C

18 Tenant shall not install, maintain or operate upon the Premises any vending machines without the written consent of Landlord.

19 Canvassing, soliciting and distribution of handbills or any other written material, and peddling in the Project are prohibited and Tenant shall cooperate to prevent such activities.

20 Landlord reserves the right to exclude or expel from the Project any person who, in Landlord’s judgment, is intoxicated or under the influence of liquor or drugs or who is in violation of any of the Rules and Regulations of the Building.

21 Tenant shall store all its trash and garbage within its Premises or in other facilities provided by Landlord. Tenant shall not place in, any trash box or receptacle any material which cannot be disposed of in the ordinary and customary manner of trash and garbage disposal. All garbage and refuse disposal shall be made in accordance with directions issued from time to time by Landlord.

22 The Premises shall not be used for the storage of merchandise held for sale to the general public, or for lodging or for manufacturing of any kind, nor shall the Premises be used for any improper, immoral or objectionable purpose. No cooking shall be done or permitted on the Premises without Landlord’s consent, except that used by Tenant of Underwriter’s Laboratory approved equipment for brewing coffee, tea, hot chocolate and similar beverages or use of microwave ovens for employee use shall be permitted, provided that such equipment and use is in accordance with all applicable federal, state, county and city laws, codes ordinances, rules and regulations.

23 Tenant shall not use in any space or in the Building Common Areas any hand truck except those equipped with rubber tires, and side guards or such other material handling equipment as Landlord may approve. Tenant shall not bring any other vehicles of any kind into the Building.

24 Without the written consent of Landlord, Tenant shall not use the name of the Building or Project in connection with or in promoting or advertising the business of Tenant except as Tenant’s address.

25 Tenant shall comply with all safety, fire protection and evacuation procedures and regulations established by Landlord or any governmental agency.

26 Tenant assumes any and all responsibility for protecting its Premises from theft, robbery and pilferage, which includes keeping doors locked and other means of entry to the Premises closes.

27 Requests by tenant relating to the performance of Landlord’s maintenance obligations under this Lease will be attended to only upon appropriate application to the Building or Project management office (as appropriate) by an authorized representative of Tenant whose identity shall be designated to Landlord in writing. Employees of Landlord shall not perform any work or do anything outside of their regular duties unless under special instructions from Landlord, and no employee of Landlord will admit any person (Tenant or otherwise) to any office without specific instructions from Landlord.

28 The building is a non-smoking building. Smoking is not permitted in any area of the Building including but limited to Tenant suites including the Premises, private offices, corridors, restrooms, stairwells, parking garages and/or lobbies. Neither Tenant nor any of its employees, agents, guests or invitees shall smoke in the Building and Tenant will enforce this requirement with respect to anyone in the building on behalf of, related to, or at the request of Tenant.

29 Landlord may waive any one or more of these Rules and Regulations for the benefit of Tenant or any other tenant, but no such waiver by Landlord shall be construed as a waiver of such Rules and Regulations in favor of Tenant or any other tenant, nor prevent Landlord from thereafter enforcing any such rules and regulations against any or all of the tenants of the building or Project.

Page 3C of 4C

30 These Rules and Regulations are in addition to, and shall not be construed to in any way modify or amend, in whole or in part, the terms, covenants, agreements and conditions of the Lease.

31 Landlord reserves the right to made such other and reasonable and nondiscriminatory Rules and Regulations as, in its judgment, may from time to time be needed for safety and security, for care and cleanliness of the Project and for the preservation of good order therein. Tenant agrees to abide by all such Rules and Regulations hereinabove stated and any additional rules and regulations which are adopted.

32 Tenant shall be responsible for the observance of all of the foregoing rules by Tenant’s employees, agents, clients, customers, invitees and guests.

Page 4C of 4C

EXHIBIT E

STANDARDS FOR UTILITIES AND SERVICES

The following standards for utilities and services are in effect. Landlord reserves the right to adopt nondiscriminatory modifications and additions hereto:

1 Landlord shall provide nonattended automatic elevator facilities Monday through Friday, except Legal Holidays, from 8 A.M. to 6 P.M. and have one elevator available at all other time.

2 Landlord shall, on Monday through Friday, except Legal Holidays, from 8 A.M.. to 6 P.M.. and on Saturday mornings from 8 A.M.. to 12 Noon, (“Business Days” and Business Hours”) ventilate the Premises and furnish air conditioning or heating on such days and hours. If Tenant requires additional hours of air conditioning or heating, Landlord will provide the same upon reasonable advance notice by Tenant, and reimbursement by Tenant to Landlord for the cost thereof at a reasonable hourly rate (based upon 100% of the estimated operating and maintenance costs per hour of the Building primary heating and cooling system). Charges for any such excess usage will be billed monthly and shall be payable by Tenant as Additional Rent. Tenant agrees to cooperate fully at all times with Landlord, and to abide by all regulations and requirements which Landlord may prescribe for the proper function and protection of said air conditioning system. Tenant agrees not to connect any apparatus, device, conduit or pipe to the Building chilled and hot water air conditioning supply lines. Tenant further agrees that neither Tenant nor its servants, employees, agents, visitors, licensees or contractors shall at any time enter mechanical installations or facilities of the Building or adjust, tamper with, touch or otherwise in any manner affect said installations or facilities. The cost of maintenance and service calls to adjust and regulate the heating and air conditioning system shall be charged to Tenant if the need for maintenance work results from either Tenant’s adjustment of room thermostats or Tenant’s failure to comply with its obligations under this section, including keeping window coverings closed as needed. Such work shall be charged at hourly rates equal to then current wages for heating and air conditioning mechanics and shall include the cost of all parts to repair the system.

3 Landlord shall furnish to the Premises, during the usual Business Hours on Business Days, electric current as required by building standard office lighting and office business machines. It is the intent of Landlord that the electrical service provided to the Premises will be separately metered. If Tenant’s electrical needs are in excess of the service capacities designated herein and require redesign and/or reconstruction of the main Building electrical system, the cost of such redesign and/or reconstruction shall be paid by Tenant to Landlord upon demand. Tenant agrees not to use any apparatus or device in, upon, or about the Premises which may in any way increase the amount of such services usually furnished or supplied to said Premises, and Tenant further agrees not to connect any apparatus or device with wires, conduits or pipes, or other means by which such services are supplied, for the purpose of using additional or unusual amounts of such services without written consent of Landlord.

4 Whenever equipment or lighting (other than Building standard lights) is used in the Premises by Tenant and such equipment or lighting affects the temperature otherwise normally maintained by the design of the air conditioning system, Landlord will have the right, after notice to Tenant, to install supplementary air conditioning facilities in the Building or Premises or otherwise modify the ventilation and air conditioning system serving the Premises, and the cost of such facilities and modifications will be borne by Tenant. Tenant will bear the cost of replacement bulbs or tubes for all non-building standard light fixtures.

5 Water will be available in public areas for drinking and lavatory purposes only, but if Tenant requires, uses or consumes water for any purposes in addition to ordinary drinking and lavatory purposes of which fact Tenant constitutes Landlord to be the sole judge. Landlord may install a water meter and thereby measure Tenant’s water consumption for all purposes. Tenant shall pay landlord for the cost of the meter and the cost of the installation thereof and throughout the duration of Tenant’s occupancy Tenant shall keep said meter and installation equipment in good working order and repair at Tenant’s own cost and expense, in default of which Landlord may cause such meter and equipment to be replaced or repaired and collect the cost thereof from

Page 1E of 2E

Tenant. Tenant agrees to pay for water consumed, as shown on said meter, as and when bills are rendered, and on default in making such payment, Landlord may pay such charges and collect the same from Tenant. Any such costs or expenses incurred, or payments made by Landlord for any of the reasons or purposes hereinabove stated shall be deemed to be Additional Rent payable by Tenant and collectible by Landlord as such.

6 Landlord shall provide janitor service to the Premises not more than five (5) times per week, provided the same are used exclusively as offices, and are kept reasonably in order by Tenant, and if to be kept clean by Tenant, no one other than persons approved by Landlord shall be permitted to enter the Premises for such purposes. If the premises are not used exclusively as offices, they shall be kept clean and in order by Tenant, at Tenant’s expense, and to the satisfaction of Landlord, and by persons approved by Landlord and if in Landlord’s opinion the Premises are not being so kept, upon giving notice to Tenant, Landlord shall be permitted to clean Tenant’s Premises on behalf of Tenant and Tenant shall pay Landlord as Additional Rent the sum which Landlord shall charge therefor. Tenant shall pay to Landlord the cost of removal of any of Tenant’s refuse and rubbish, to the extent that the same exceeds the refuse and rubbish usually attendant upon the use of the Premises as offices.

7 Landlord reserves the right to stop service of the elevator, plumbing, ventilation, air conditioning and electric systems, when necessary, by reason of accident or emergency or for repairs, alterations or improvements, in the judgment of Landlord desirable or necessary to be made, until said repairs, alterations or improvements shall have been completed, and shall further have no responsibility or liability for failure to supply elevator facilities, plumbing, ventilating, air conditioning or electric service, when prevented from so doing by strike or accident or by any cause beyond Landlord’s reasonable control, or by laws, rules, orders, ordinances, directions, regulations or requirements of any federal, state, county or municipal authority or failure of gas, oil or other suitable fuel supply or inability by exercise of reasonable diligence to obtain gas, oil or other suitable fuel. It is expressly understood and agreed that any covenants on Landlord’s part to furnish any service pursuant to any of the terms, covenant, conditions, provisions or agreements of this Lease, or to perform any act or thing for the benefit of Tenant, shall not be deemed breached if Landlord is unable to furnish or perform the same by virtue of a strike or labor trouble or any other cause whatsoever beyond Landlord’s control.

8 If Tenant requires additional services which are not specified herein and Landlord elects to provide such services to Tenant, or if Tenant’s floor covering or other improvements are Non-Building Standard, Tenant will pay to Landlord, as Additional Rent, upon demand, Landlord’s actual cost of providing such services, plus an additional fifteen percent (15%) of such costs to cover Landlord’s overhead costs.

9 Landlord may, at its sole option, provide security services or devices in the Building, although Landlord is not required to do so. If Landlord provides any such security or devices, Landlord shall establish the hours, days and level of service. The cost shall be included as an Operating Expense. If Tenant requires additional security service, Landlord will provide the same on reasonable advance notice from Tenant who will reimburse Landlord for the actual cost of the additional service. Landlord is not responsible for any loss or damage arising out of or related to the presence or absence of security services or devices in the building.

Page 2E of 2E

EXHIBIT “G”

TENANT IMPROVEMENT AGREEMENT

Landlord and Tenant agree that Landlord shall, at Landlord’s expense, improve and prepare the Premises on Tenant’s behalf prior to Tenant’s occupancy as follows:

Suite 250 - Per Exhibit G-1

Suite 401- Per the following: (See Exhibit G-II for demolition plan.)

a) remove all interior walls and doors,

b) install new entry doors

c) install new building standard carpet and paint

d) install new ceiling, if required by demolition

e) relocate HVAC ductwork as may be required

Suite 201 – Per the following:

a) install new building standard carpet and paint to match Suite 250’s carpet and paint,

b) open up a doorway from Suite 250 to 201, and between the front and rear portion of Suite 201.

Page 1 of 5

[GRAPHIC]

General Notes:

• wallpaper to be removed and all wall surfaces to be painted.

• lighting to remain as is

• ceiling to remain as is.

• ___ carpet voids with carpet from lunch room.

EXHIBIT G-II

[GRAPHIC]

Page 1 of 1

[GRAPHIC]

EXHIBIT H

GUARANTY OF LEASE

This Guaranty of Lease (“Guaranty”) is made and effective as of this day of May 20, 1999, by                                               (“Guarantor”) in favor of Prospect Center Corporation (“Landlord”) with reference to the facts set forth below.

RECITALS:

A. Landlord has entered into that certain Lease Agreement (“Lease”) of even date herewith with RaceGate.Com, a Delaware corporation (“Tenant”), to which this Guaranty is attached as an Addendum for the lease of the premises (“Premises”) located in the City of San Diego, State of California, as more particularly described in the Lease.

B. As a condition to entering into the Lease, Landlord has required that Guarantor execute this Guaranty guaranteeing performance of all the covenants on Tenant’s part to be performed pursuant to the Lease. Guarantor’s agreement to provide this Guaranty is material consideration for Landlord’s decision to lease the Premises to Tenant.

NOW, THEREFORE, to induce Landlord to enter into the Lease and in consideration thereof, Guarantor agrees as set forth below.

1 Guarantor unconditionally guarantees to Landlord, and to Landlord’s successors and assigns, the payment by Tenant of the rental and all other charges which accrue under the Lease in the manner and at the time prescribed therein, and the full and punctual performance and observance, by Tenant, of all the terms, covenants and conditions contained in the Lease. Guarantor waives notice of any breach or default by Tenant. Guarantor’s obligations hereunder shall continue in full force and effect with respect to any of Tenant’s obligations under the Lease which are not performed upon the termination of this Lease.

2 This Guaranty is a continuing guaranty of all of Tenant’s obligations under the Lease, independent of and in addition to any other guaranty, previously or subsequently given to Landlord, and this Guaranty shall not affect any of said guaranties.

3 Guarantor hereby expressly waives and relinquishes any and all right and remedies which Guarantor may have or be able to assert by reason of the laws or decisions of the State of California pertaining to the rights and remedies of sureties.

4 Guarantor waives any right to require Landlord to (a) proceed against Tenant or any co-guarantor, (b) proceed against or exhaust any security (including a security deposit) held by Landlord, or (c) pursue any remedy in Landlord’s power whatsoever. Guarantor waives any defense it may acquire by reason of Landlord’s election of any remedy against it or Tenant or both, including, but without limitation, the election by Landlord to exercise its rights to occupy and operate the Premises under the Lease.

5 Guarantor waives any defense based upon the legal disability of Tenant, or any discharge, release or limitation of liability of Tenant to Landlord, or any restraint or stay applicable to actions against Tenant, or any disaffirmance or abandonment of the Lease by trustee of Tenant whether consentual, or by order of a court or other governmental authority, arising by operation of law or any liquidation, reorganization, receivership, bankruptcy, insolvency of debtor relief proceeding, or any other cause. Guarantor further waives any defense based upon any

Page 1H of 3H

amendment modification, renewal, extension, assignment, subletting or other alteration (with or without the consent of Landlord) of the Lease, or the term of the Lease or obligation of Tenant or Landlord under the Lease, or any other documents relating to the transactions described therein; any defense based upon the negligence of Landlord any defense based upon the forfeiture or termination of the Lease by Landlord whether by expiration or default; any defense based upon the failure of Landlord to file a claim in bankruptcy of Tenant; all rights of subrogation, all right to enforce any remedy that Landlord may have against Tenant, and all rights to participate in any security held by Landlord for the performance and obligations of Tenant under the Lease, except to the extent such security remains after payment and performance of Tenant’s obligations in full; any defense based upon the impairment of any subrogation rights that Tenant might have; any defense based upon death, incapacity, lack of authority or termination of existence or revocation hereof by any person or entity, or persons or entities, or the substitution of any party hereto, and any defense based upon or related to Guarantor’s lack of knowledge as to Tenant’s financial condition, and any and all right under Section 2845 of the California Civil Code and any successor provision.

6 Guarantor waives all presentments, demands, protests and notices of any kind including notice of acceptance of the Guaranty by Landlord. Any act of Landlord, or its successors or assigns, consisting of a modification of the Lease, a waiver of any of the terms or conditions of the Lease, or the giving of any consent to any manner or thing relating to the Lease, or the granting of any indulgences or extentions of time to Tenant, are hereby deemed approved by Guarantor and may be done without notice to Guarantor and without releasing Guarantor from any of its obligations hereunder.

7 Guarantor assumes full responsibility for keeping fully informed of the financial condition of Tenant and all other circumstances affecting Tenant’s ability to perform its obligations to Landlord, and agrees that Landlord shall have no duty to report to Guarantor any information which Landlord receives about Tenant’s financial condition or any circumstances bearing on Tenant’s ability to perform.

8 The covenants and obligations of Guarantor hereunder are independent of the Tenant’s obligations under the Lease and are binding upon the Guarantor notwithstanding the fact that the Guarantor is not the signatory to the Lease; separate action or actions may be brought against any guarantor hereon, whether or not action is brought against Tenant or any co-guarantor or Tenant or any co-guarantor be joined in any such action or actions.

9 Any indebtedness or other obligations of Tenant now or hereafter held by Guarantor is hereby subordinated to Tenant’s obligations to Landlord, and such indebtedness or other obligations of Tenant to Guarantor, if Landlord so request, shall be collected, enforced and received by Guarantor as Trustee for Landlord and be paid over to Landlord on account of Tenant’s obligations to Landlord, but without reducing or affecting in any manner the liability of Guarantor under the other provisions of this Guaranty.

10 The guaranty shall be enforceable by Landlord in accordance with the laws of the State of California and shall be construed in accordance therewith. Guarantor agrees to pay attorney’s fees and all other costs and expenses which may be incurred by Landlord in enforcement of this Guaranty. Until paid to Landlord, such sums will bear interest from the date such costs and expenses are incurred at the maximum rate permitted by law.

11 No delay or failure on the part of Landlord to pursue any right or remedy hereunder or under the Lease shall constitute a waiver of that right or remedy. All remedies of Landlord against Guarantor are cumulative.

12 The obligations and promises set forth herein shall be joint and several undertakings of each of the persons executing this Guaranty as a Guarantor, and Landlord may proceed hereunder against any one or more of said persons without waiving its right to proceed against any of the others. The use of the singular herein shall include the plural.

13 Guarantor acknowledges that its undertakings given hereunder are given in consideration of Landlord’s entering into the Lease and that Landlord would not consummate the Lease were it not for the execution and delivery of this Guaranty.

Page 2H of 3H

UNIFORM DISCLAIMER FORM

LEASE FORM

RE: LEASE DATED June 2, 1999 between Prospect Center Corporation, a California corporation (LANDLORD), and RaceGate.Com, a Delaware corporation. (TENANT).

1. LEGAL EFFECT. Landlord and Tenant acknowledge that Broker is not qualified to practice law, nor authorized to give legal advice or counsel you as to any legal matters affecting this document. Broker hereby advises Landlord and Tenant to consult with their respective attorneys in connection with any questions each may have as to legal ramifications or effects of this document, prior to its execution.

2. FORM OF LEASE. This proposed lease is a standard from document, and Broker makes no representations or warranties with respect to the adequacy of this document for either Landlord’s or Tenant’s particular purposes. Landlord or Tenant acknowledge and agree that this document is delivered to each subject to the express condition that Broker has merely followed the instructions of the parties in preparing this document, and does not assume any responsibility for its accuracy, completeness or form.

3. NO INDEPENDENT INVESTIGATION. Landlord and Tenant acknowledge and understand that any financial statements, information, reports, or written materials of any nature whatsoever, as provided by the parties of Broker, and thereafter submitted by Broker to either Landlord and/or Tenant, are so provided without any independent investigation by Broker, and as such Broker assumes no responsibility or liability for the accuracy or validity of the same. Any verification of such submitted documents is solely and completely the responsibility of the party to whom such documents have been submitted.

4. NO WARRANTY. Landlord and Tenant acknowledge and agree that no warranties, recommendations, or representations are made by the Broker as to the accuracy, the legal sufficiency, the legal effect of the tax consequences of any of the documents submitted by Broker to Landlord and/or Tenant referenced in Paragraph 3 above, nor of the legal sufficiency, legal effect of tax consequences of the transactions contemplated thereby. Furthermore, Landlord and Tenant acknowledge and agree that Broker has made no representations concerning the ability of the Tenant to use the Premises intended, nor of the sufficiency or adequacy of the Premises of their intended use, and Tenant is relying solely on its own investigation of the Premises in accepting this Proposal to Lease.

5. NOTICE REGARDING HAZARDOUS WASTES OR SUBSTANCES AND UNDERGROUND STORAGE TANKS. Broker will disclose any knowledge it actually has with respect to the existence of any hazardous wastes, substances, or underground storage tanks at the Premises, Broker has not made any independent investigations or obtained reports with respect thereto, except as may be described in a separate written document signed by Broker. All parties hereto acknowledge and understand that Broker makes no representation regarding the existence or nonexistence of hazardous wastes, substances, or underground storage tanks at the Premises. Each party should contact a professional, such as a civil engineer, geologist, industrial hygienist or other persons with experience in these matters to advise you concerning the property.

6. DISCLOSURE RESPECTING AMERICANS WITH DISABILITIES ACT. The United States Congress has recently enacted the Americans with Disabilities Act. Among other things, this act is intended to make many business establishments equally accessible to persons with a variety of disabilities: modifications to real property may be required. State and local laws also may mandate changes. Broker is not qualified to advise you as to what, if any, changes may be required now or in the future. Broker recommends mat you consult the attorneys and qualified design professionals of your choice for information regarding these matters.

7. ATTORNEY’S FEES. In any action, proceeding, or arbitration arising out of this Agreement, the prevailing party shall be entitled to reasonable attorney’s fees and costs.

8. ENTIRE AGREEMENT. This document constitutes the entire agreement between parties with respect to the subject matter contained herein and supersedes all prior or contemporaneous agreements, representations, negotiations and understandings of the parties other than such writings as my executed and/or delivered by the parties pursuant hereto. There are no oral agreements or implied covenants by the Seller or Buyer, or by their respective employees, or other representatives.

9. MARKET INFORMATION DISTRIBUTION. If Broker is a representative in a lease. Broker is authorized by Lessor/Lessee to report the lease price and terms to trade journal publication.

Lessor	/s/ Illegible	Date	6/14/99
Lessee	Illegible	Date	6/7/95

ADDENDUM 2

Tenant at Tenant’s expense is responsible to install air conditioning equipment complete to Tenant’s computer room for the purpose of maintaining proper temperature for their computer equipment.

The maintenance of this equipment of twenty-four (24) hour service, seven days a week, if necessary, is the sole responsibility of the Tenant. The Landlord will supply the electrical power outlet. Upon termination of the lease the Tenant is responsible to remove it’s air conditioning equipment at the Tenant’s cost.

Landlord		Tenant
Sign	/s/ David C. Mize	Sign	/s/ Scott G. Kyle
Print	DAVID C. MIZE	Print	Scott G. Kyle
Title	PRESIDENT	Title	CFO

EX-10.2(A)

Exhibit 10.2(a)

AMENDMENT TO ORIGINAL LEASE

DATED JUNE 2, 1999

AND

ADDENDUM III TO

PROSPECT CENTER OFFICE LEASE

November 17, 1999

This amendment and addendum is attached to and made a part of the Prospect Center Office Lease dated June 2, 1999 by and between Prospect Center Corporation (“Landlord”) and RaceGate.com, a Delaware Corporation (“Lessee”) for suite #250, 304, 401 and 201, 1020 Prospect St., La Jolla CA 92037.

1. EXPANSION OF PREMISES: Suite #250 to be expanded into contiguous space for the new rental area of 5,000 square feet and the usable area of 4,348 square feet.

Suite #304 located on the 3^rd floor of the building as shown on Exhibit G-2 with approximate rental area of 2,513 square feet and an approximate usable area of 2,185 square feet.

2. TERM: The original term of the lease to remain unchanged. The anticipated commencement date of this Amendment and Addendum III to be upon completion of tenant improvements or January 1, 2000, whichever is sooner. The lease ending date is not changed from July 31, 2002.

3. BASE MONTHLY RENT: Expanded Suite 250 - Eleven thousand two hundred fifty dollars ($11,250.00) ($2.25 per square foot of rentable area and $2.587 per square foot of usable area).

Rental Adjustment: Suite	Adjustment Date:	Monthly Base		Square Foot Rate
250	July 1, 2000	$	11,500.00	$	2.30
250	July 1, 2001		11,750.00		2.35
401	July 1, 2000		3,105.00		2.30
401	July 1, 2001		3,172.50		2.35
201	June 15, 2001		7,038.00		2.55
201	June 15, 2002		7,176.00		2.60
304	Jan. 1, 2001		5,779.90		2.30
304	Jan. 1, 2002		5,905.55		2.35

Suite 304 - Five thousand six hundred fifty-four and 25/100 dollars ($5,654.25) ($2.25 per square foot of rentable area and $2.587 per square foot of usable area).

Page 1

4. TENANT IMPROVEMENTS: The landlord at the landlord’s expense agrees to tenant improvements to the approximate 1501 square feet of new space for suite 250 making this area consistent with the tenant’s current office décor. Tenant improvements to suite 304 are to be completed at the landlord’s expense. These improvements per tenant’s request and as agreed to in the proposal by Rhule Construction Company on a regular time basis. All overtime, if any, by Rhule Construction Company and its subcontractors will be paid by Racegate, the tenant. Rhule Construction Company will keep separate records of all overtime.

5. PREPAID RENT: Upon lease execution, tenant shall pay Landlord the sum of $65,026.80 of which $40,710.60 shall be applied towards the Base Rent per schedule attached in Exhibit D and 24,316.20 shall be refunded upon review of RaceGate current balance sheet.

All other terms, covenants and conditions of this Lease shall remain in effect.

LANDLORD: Prospect Centre Corp.		TENANT: RaceGate.com
By:	/s/    Illegible	By:	Scott Kyle
Date:		Date:	11/27//99

Page 2

RACEGATE - PREPAID RENT PER ITEM 10 OF BASIC LEASE PROVISIONS

LEASE DATED JUNE 2, 1999 AND

ADDENDUM III DATED 11/17/1999

	DATE	SUITE 250		ADD’N STE 250		SUITE 401		STE 304		SUITE 201		TOTAL
1ST MO	Aug-99	$	7,872.75			$	3,037.50		0		0	$	10,910.25
2ND MO	Sep-99	$	7,872.75			$	3,037.50		0		0	$	10,910.25
11TH MO	Jun-00						0	$	5,654.25	$	3,450.00	$	9,104.25
13TH MO	Aug-00	$	8,047.70			$	3,105.00	$	5,779.90	$	6,900.00	$	23,832.60
14TH MO	Sep-00	$	8,047.70			$	3,105.00	$	5,779.90	$	6,900.00	$	23,832.60
15TH MO	Oct-00	$	8,047.70			$	3,105.00	$	5,779.90	$	6,900.00	$	23,832.60
25TH MO	Aug-01	$	8,222.65			$	3,172.50	$	5,905.55	$	7,038.00	$	24,338.70
26TH MO	Sep-01	$	8,222.65			$	3,172.50	$	5,905.55	$	7,038.00	$	24,338.70
27TH MO	Oct-01	$	8,222.65			$	3,172.50	$	5,905.55	$	7,038.00	$	24,338.70
TOTAL		$	64,556.55	$	—	$	24,907.50	$	40,710.60	$	45,264.00	$	175,438.65
PREVIOUSLY PAID												$	134,728.05
ADDENDUM III - BALANCE DUE -												$	40,710.80

EX-10.2(B)

Exhibit 10.2(b)

SECOND AGREEMENT TO AMEND LEASE

MARCH 14, 2000

WHEREAS, Prospect Center Corporation (“Landlord”) and RaceGate.com (“Tenant”), entered into an office lease (“the Lease”) for Suite #250 and Suite #201 and #401 in the Prospect Center Building, 1020 Prospect street, La Jolla California; and

WHEREAS, Landlord and Tenant desire to increase the leased premises leased to Lessee under the Lease, to include a second expanded area within suite 250 as pictured on the diagrams attached hereto as Exhibit “C”, under the same terms as the Lease as modified herein.

NOW, THEREFORE, Landlord agrees to lease to Tenant and Tenant agrees to lease from Landlord, an expanded area of Suite 250 as pictured on Exhibit “C” on the following terms and conditions:

(1) SUITE #250: Expansion covered in this Agreement (referred to as the Centex expansion, formerly suite 200). Landlord agrees to lease to Tenant this expanded area contiguous to suite 250 as depicted on Exhibit “C” comprising a total rental area of 3,250 square feet and useable area of 2,826 square feet. Tenant agrees to pay as rent on the 1^st of each month, for the expanded suite 250, the monthly base rent of $19,375.00 computed as follows: existing Suite 250 $11,250 per 12/16/99 Agreement plus the expanded area $8,125.00 ($2.50 x 3,250 square feet ). The square foot rate of $2.50 is through the month of June, 2000 whereupon the rate increases to $2.55 per square foot of rentable space for the months of July, 2000 through June, 2001 and then to $2.60 per square foot of rentable space for the months of July, 2001 through July, 2002.

(2) EFFECTIVE DATE: The effective date of this Agreement and the possession and commencement of rent, for the spaces described in paragraph (1) shall be upon substantial completion of the leasehold improvements by the Landlord, or May 1, 2000, whichever first occurs. The termination of the Lease for all space leased by Tenant, including that described above is July 31, 2002.

(3) PERIODIC ADJUSTMENTS: The addition to the periodic adjustment of rent as set forth above for the expanded suite 250, adjustments in rent shall be paid by Tenant for other spaces leased to Tenant, as follows:

For Suite 401, the base monthly rent shall be $3,037.50 ($2.25 per square foot for rentable space) from the effective date of the Lease to June 30, 2000 and the base monthly rent shall be $3,105. ($2.30 per square foot for rentable space) for the months of July 2000 through June 2001; and $3,172.50 ($2.35 per square foot for rentable space ) for the months of July 2001 through July 2002.

1 of 2

For Suite 201, the base monthly rent shall be $6,900. ($2.50 per square foot for rentable space ) upon substantial completion of leasehold improvements by the Landlord, or April 1, 2000, whichever first occurs to June 14, 2001 and the base monthly rent shall be $7,038 ($2.55 per square foot for rentalbe space) for the months of June 2001 thru May 14, 2002; and $7,176 ($2.60 per square foot for rentalbe space) for the period of June 15, to July 31, 2002.

(4) TENANT IMPROVEMENTS: The Landlord at the Landlord’s expense, will construct the tenant improvements to the expanded areas of Suite 250 consistent with the current tenant improvements paid by Landlord for the portion of Suite 250 currently occupied by Tenant. In the event Tenant requires or requests any expedited work, requiring overtime or extraordinary expense, Tenant shall pay that additional cost.

(5) PREPAID RENT: Upon the execution of this Agreement, Tenant shall deposit with Landlord the sum of $58,337.50 in prepaid rent deposit to be held by Landlord as provided in the Lease.

(6) TENANT’S PERCENTAGE SHARE OF OPERATING EXPENSES for the combined space is 35.2% based on the following: Suite 250, 18.47%; Suite 401, 3.19%; suite 201, 6.53%, suite 304, 5.95%.

(7) RATIFICATION: The parties hereby agree that all other terms of the Lease, not specifically modified or amended herein, shall remain in full force and effect; and that said terms shall apply to the tenant’s obligations in leasing the additional space referred to herein. This Agreement shall be null and void in the event Tenant is in default in the Lease at any time prior to the effective date of this Agreement.

Prospect Center Corporation Landlord		RaceGate.com /ACTIVE.com Tenant
By:	/s/    Illegible	By:	/s/    Scott Kyle
Date:		Date:

2 of 2

Exhibit C

March 14, 2000

[GRAPHIC]

RACEGATE - PREPAID RENT PER ITEM 10 OF BASIC LEASE PROVISIONS

LEASE DATED JUNE 2, 1999 AND

ADDENDUM III DATED 11/17/1999

ADDENDUM IV DATED 3/14/2000

	DATE	SUITE 250		ADD’N STE 250 11/17/99		ADD’N STE 250 3/14/00		SUITE 401		STE 304 11/17/99		SUITE 201		TOTAL
1ST MO	Aug-99	$	7,872.75		0		0	$	3,037.50		0		0	$	10,910.25
2ND MO	Sep-99	$	7,872.75		0		0	$	3,037.50		0		0	$	10,910.25
11th MO	Jun-00			$	3,377.25	$	8,125.00		0	$	5,654.25	$	3,450.00	$	20,606.50
13TH MO	Aug-00	$	8,047.70	$	3,452.30	$	8,287.50	$	3,105.00	$	5,779.90	$	6,900.00	$	35,572.40
14TH MO	Sep-00	$	8,047.70	$	3,452.30	$	8,287.50	$	3,105.00	$	5,779.90	$	6,900.00	$	35,572.40
15TH MO	Oct-00	$	8,047.70	$	3,452.30	$	8,287.50	$	3,105.00	$	5,779.90	$	6,900.00	$	35,572.40
25TH MO	Aug-01	$	8,222.65	$	3,527.35	$	8,450.00	$	3,172.50	$	5,905.55	$	7,038.00	$	36,316.05
26TH MO	Sep-01	$	8,222.65	$	3,527.35	$	8,450.00	$	3,172.50	$	5,905.55	$	7,038.00	$	36,316.05
27TH MO	Oct-01	$	8,222.65	$	3,527.35	$	8,450.00	$	3,172.50	$	5,905.55	$	7,038.00	$	36,316.05
TOTAL		$	64,556.55	$	24,316.20	$	58,337.50	$	24,907.50	$	40,710.60	$	45,264.00	$	258,092.35
PREVIOUSLY PAID														$	199,754.85
ADDENDUM IV - BALANCE DUE -														$	58,337.50

EX-10.2(C)

Exhibit 10.2(c)

THIRD LEASE AMENDMENT

Dated For Reference March 11, 2002

The undersigned parties agree as follows:

1) This document amends that certain lease dated June 1, 1999, as amended by an AGREEMENT TO AMEND LEASE signed 12/16/99 and 12/17/99, and by the SECOND AGREEMENT TO AMEND LEASE dated March 14, 2000, collectively called the Lease.

2) The Lease is between 1020 Prospect Street LP, successor to Prospect Associates LLC, (The Landlord) and The Active Network, Inc., a Delaware corporation formerly known as RaceGate.com, ActiveUSA.com, and Active.com, (the Tenant), for the office space known as Suite #200 201 and 250 (being the entire second floor and herein called the Second Floor Space or Suite #250) and Suite #304 and Suite #401 (the Premises) located at 1020 Prospect Street, La Jolla, California 92037 (the Building).

3) The Term of the Lease expires July 31, 2002. The Term of the Lease as to the Second Floor Space only shall be extended for a period of thirty six (36) months, commencing August 1 2002 and ending July 31, 2005.

4) For all purposes under the Lease the Second Floor Space is agreed to have a Rentable Area of 11,010 square feet (sometimes herein called Rentable Square Feet or RSF).

5) The Monthly Base Rent for the Second Floor Space shall be as followings:

12 months starting 8/1/02	$28,075.50	$2.55 per RSF
12 months starting 8/1/03	$30,277.50	$2.75 per RSF
12 months starting 8/1/04	$33,580.50	$3.05 per RSF

6) Landlord’s Address for Notice is 5090 Shoreham Place Suite 102, San Diego, CA 92122

7) All other terms of the Lease shall remain unchanged.

LANDLORD: 1020 Prospect Street, LP Investors L.L.C
By NSD Ventures, LLC, a California Limited Liability Company, General Partner
By	/s/ Henry A. Gotthelf	Date	3/19/02
	Henry A. Gotthelf, Managing Member

TENANT: The Active Network, Inc , A Delaware Corporation
By	/s/ Kourosh Vossughi	Date	3-13-02
Print name Kourosh Vossughi
Title General Counsel

EX-10.2(D)

Exhibit 10.2(d)

THIRD AMENDMENT TO OFFICE LEASE

That Office Lease dated June 2, 1999, as amended on November 17, 1999 (the “First Amendment”) and further amended on March 14, 2000 (the “Second Amendment”) by and between 1020 Prospect St. L.P., a California limited partnership and its predecessors, as Landlord and The Active Network. Inc., a Delaware corporation formerly known as ActiveUSA.com. Inc. and RaceGate.com, (“Tenant”) (the lease, the First Amendment and the Second Amendment are sometimes hereinafter collectively referred to as the “Lease”) is hereby amended effective July 15, 2003 (the “Amendment”) as follows:

Recitals

A. Tenant has special electrical needs resulting from Tenant’s use of the premises located on the second floor of the Building, (exclusive of the common areas and elevator) (the “Premises”).

B. As a result of Tenant’s special electrical needs, the Landlord and Tenant desire to allocate the responsibility for the maintenance, repair and expansion of the electrical systems within the Premises and the Building.

Agreement

1. Landlord’s Electrical Obligations. Landlord will be responsible for the repair and maintenance of the electrical systems serving the Building exclusive of the Premises, and any electrical problems in the Premises caused by electrical problems in the Building, including, but not limited to the repair and maintenance of the existing electrical services connecting to the existing electrical panels serving the Premises.

2. Tenant’s Electrical Obligations. Except as provided in paragraph 1 above, and except for any electrical problems caused by Landlord’s negligence after the date of this Amendment, Tenant will be responsible for the repair and maintenance of all electrical systems solely serving the Premises, and no other part of the Building including, but not limited to the maintenance, repair and re-wiring, if necessary of the electrical services connecting from the electrical panels described in paragraph 1 above, to and throughout the Premises. Tenant will have such repairs, maintenance and/or re-wiring done by an electrician reasonably approved by the Landlord.

3. Release. Landlord hereby releases Tenant from any and all claims for reimbursement in the sum of approximately $8,938.00 for sums expended by Landlord for repairs and/or rewiring of the Premises prior to the date of this Amendment.

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4. Miscellaneous. Except as provided herein all terms and conditions of the Lease will remain in full force and effect. If any inconsistencies exist between the terms and conditions of this Amendment and the terms and conditions of the Lease, the terms and conditions of this Amendment shall control. Except as otherwise provided, all capitalized terms and conditions contained herein shall have the same meaning as in the Lease. This Amendment may be signed in multiple counterparts which, when taken together shall constitute one document. A facsimile signature shall have the same effect as an original and may be relied upon by any party.

“Landlord”
1020 Prospect Street, L.P. a California limited partnership
By:	NSD Ventures, LLC, a California limited liability company, general partner
	By	/s/ Hank Gotthelf
		Hank Gotthelf, Manager

“Tenant”
The Active Network, Inc., a Delaware corporation
By:	/s/ Kory Vossoughi
	Kory Vossoughi,
	Title:	General Counsel

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EX-10.3

Exhibit 10.3

THE ACTIVE NETWORK, INC.

2002 STOCK OPTION/STOCK ISSUANCE PLAN

ARTICLE ONE

GENERAL PROVISIONS

I. PURPOSE OF THE PLAN

This Plan is intended to promote the interests of the Corporation, by providing eligible persons employed by or serving the Corporation or any Subsidiary or Parent with the opportunity to acquire a proprietary interest, or otherwise increase their proprietary interest, in the Corporation as an incentive for them to continue in such employ or service.

Capitalized terms herein shall have the meanings assigned to such terms in the attached Appendix.

II. STRUCTURE OF THE PLAN

A. The Plan shall be divided into two separate equity programs:

(1) the Option Grant Program under which eligible persons may, at the discretion of the Plan Administrator, be granted options to purchase shares of Common Stock, and

(2) the Stock Issuance Program under which eligible persons may, at the discretion of the Plan Administrator, be issued shares of Common Stock directly, either through the immediate purchase of such shares or as a bonus for services rendered the Corporation (or any Parent or Subsidiary).

B. The provisions of Articles One and Four shall apply to both equity programs under the Plan and shall accordingly govern the interests of all persons under the Plan.

III. ADMINISTRATION OF THE PLAN

A. The Board shall administer the Plan. However, any or all administrative functions otherwise exercisable by the Board may be delegated to the Committee. Members of the Committee shall serve for such period of time as the Board may determine and shall be subject to removal by the Board at any time. The Board may also at any time terminate the functions of the Committee and reassume all powers and authority previously delegated to the Committee.

B. The Plan Administrator shall have full power and authority (subject to the provisions of the Plan) to establish such rules and regulations as it may deem appropriate for proper administration of the Plan and to make such determinations under, and issue such

interpretations of, the Plan and any outstanding options or stock issuances thereunder as it may deem necessary or advisable. Decisions of the Plan Administrator shall be final and binding on all parties who have an interest in the Plan or any option grant or stock issuance thereunder.

C. The Plan Administrator shall have full authority to determine, (1) with respect to the grants made under the Option Grant Program, which eligible persons are to receive such grants, the time or times when those grants are to be made, the number of shares to be covered by each such grant, the status of the granted option as either an Incentive Option or a Non-Statutory Option, the time or times when each option is to become exercisable, the vesting schedule (if any) applicable to the option shares and the maximum term for which the option is to remain outstanding, and (2) with respect to stock issuances made under the Stock Issuance Program, which eligible persons are to receive such issuances, the time or times when those issuances are to be made, the number of shares to be issued to each Participant, the vesting schedule (if any) applicable to the issued shares and the consideration to be paid by the Participant for such shares. Each option grant or stock issuance approved by the Plan Administrator shall be evidenced by the appropriate documentation.

IV. ELIGIBILITY

A. The persons eligible to participate in the Plan are as follows:

(a) Employees,

(b) members of the Board and the members of the board of directors of any Parent or Subsidiary, and

(c) independent contractors who provide services to the Corporation (or any Parent or Subsidiary).

V. STOCK SUBJECT TO THE PLAN

A. The shares issuable under the Plan shall be shares of authorized but unissued or reacquired shares of Common Stock. The maximum number of shares of Common Stock that may be issued and outstanding or subject to options outstanding under the Plan shall not exceed 58,500,000 shares. Such reserve shall be equal to the number of shares that remain available for issuance, as of the Plan Effective Date, under the Predecessor Plan as last approved by the Corporation’s stockholders, including the shares subject to outstanding options under the Predecessor Plan.

B. Shares of Common Stock subject to outstanding options (including options transferred to this Plan from the Predecessor Plan) shall be available for subsequent issuance under the Plan to the extent (1) the options expire or terminate for any reason prior to exercise in full or (2) the options are cancelled in accordance with the cancellation-regrant provisions of Article Two. Unvested Shares issued under the Plan and subsequently repurchased by the Corporation, at a price per share not greater than the option exercise or direct issue price paid per share, pursuant to the Corporation’s repurchase rights under the Plan shall be added

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back to the number of shares of Common Stock reserved for issuance under the Plan and shall accordingly be available for reissuance through one or more subsequent option grants or direct stock issuances under the Plan.

C. Should any change be made to the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration, appropriate adjustments shall be made to (1) the maximum number and/or class of securities issuable under the Plan and (2) the number and/or class of securities and the exercise price per share in effect under each outstanding option (including options incorporated from the Predecessor Plan) in order to prevent the dilution or enlargement of benefits thereunder. The adjustments determined by the Plan Administrator shall be final, binding and conclusive. In no event shall any such adjustments be made in connection with the conversion of one or more outstanding shares of the Corporation’s preferred stock into shares of Common Stock.

D. The grant of options or the issuance of shares of Common Stock under the Plan shall in no way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

ARTICLE TWO

OPTION GRANT PROGRAM

I. OPTION TERMS

A. Exercise Price.

1. The Plan Administrator shall fix the exercise price per share. However, (a) if the option is granted to a 10% Stockholder, the exercise price per share shall not be less than 110% of the Fair Market Value per share of Common Stock on the date the option is granted and (b) if the option is granted to other than a 10% Stockholder, the exercise price per share shall not be less than 85% of the Fair Market Value per share of Common Stock on the date the option is granted.

2. The exercise price shall become immediately due upon exercise of the option and shall, subject to the provisions of Section I of Article Four and the documents evidencing the option, be payable in cash or check made payable to the Corporation. Should the Common Stock be registered under Section 12 of the 1934 Act at the time the option is exercised, then the exercise price (and any applicable withholding taxes) may also be paid as follows:

(a) in shares of Common Stock held for the requisite period necessary to avoid a charge to the Corporation’s earnings for financial reporting purposes and valued at Fair Market Value on the Exercise Date, or

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(b) to the extent the option is exercised for Vested Shares, through a special sale and remittance procedure pursuant to which the Optionee shall concurrently provide irrevocable instructions (i) to a Corporation-designated brokerage firm to effect the immediate sale of the purchased shares and remit to the Corporation, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares plus all applicable income and employment taxes required to be withheld by the Corporation by reason of such exercise and (ii) to the Corporation to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale.

Except to the extent such sale and remittance procedure is utilized, payment of the exercise price for the purchased shares must be made on the Exercise Date.

B. Exercise and Term of Options. Each option shall be exercisable at such time or times, during such period and for such number of shares as shall be determined by the Plan Administrator and set forth in the documents evidencing the option grant. However, no option shall have a term in excess of ten years measured from the option grant date.

C. Effect of Termination of Service.

1. The following provisions shall govern the exercise of any options granted to the Optionee that remain outstanding at the time the Optionee’s Service ceases:

(a) Should the Optionee cease to remain in Service for any reason other than death, Disability or Misconduct, then each option shall be exercisable for the number of shares subject to the option that were Vested Shares at the time the Optionee’s Service ceased and shall remain exercisable until the close of business on the earlier of (i) the three month anniversary of the date Optionee’s Service ceased or (ii) the expiration date of the option.

(b) Should the Optionee cease to remain in Service by reason of death or Disability, then each option shall be exercisable for the number of shares subject to the option which were Vested Shares at the time of the Optionee’s Service ceased and shall remain exercisable until the close of business on the earlier of (i) the twelve month anniversary of the date Optionee’s Service ceased or (ii) expiration date of the option.

(c) No additional vesting will occur after the date the Optionee’s Service ceases, and the option shall immediately terminate with respect to the Unvested Shares. Upon the expiration of any post-Service exercise period or (if earlier) upon the expiration date of the term of the option, the option shall terminate with respect to the Vested Shares.

(d) Should the Optionee’s Service be terminated for Misconduct or should the Optionee otherwise engage in Misconduct, then each outstanding option shall terminate immediately with respect to all shares.

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2. The Plan Administrator shall have the discretion, exercisable either at the time an option is granted or at any time while the option remains outstanding, to:

(a) extend the period of time for which the option is to remain exercisable following the Optionee’s cessation of Service for such period of time as the Plan Administrator shall deem appropriate, but in no event beyond the expiration of the option, and/or

(b) permit the option to be exercised, during the applicable post-Service exercise period, not only with respect to the number of Vested Shares for which such option is exercisable at the time of the Optionee’s cessation of Service but also with respect to one or more additional installments in which the Optionee would have vested under the option had the Optionee continued in Service.

D. Stockholder Rights. The holder of an option shall have no stockholder rights with respect to the shares subject to the option until such person shall have exercised the option, paid the exercise price and become the recordholder of the purchased shares.

E. Unvested Shares. The Plan Administrator shall have the discretion to grant options that are exercisable for Unvested Shares. Should the Optionee’s Service cease while the shares issued upon the early exercise of the Optionee’s option are still unvested, the Corporation shall have the right to repurchase any or all of those Unvested Shares at the lower of (1) the exercise price paid per share or (2) the Fair Market Value per share on the date the Optionee’s Service ceased. Once the Corporation exercises its repurchase right, the Optionee shall have no further stockholder rights with respect to those shares. The terms upon which such repurchase right shall be exercisable (including the period and procedure for exercise and the appropriate vesting schedule for the purchased shares) shall be established by the Plan Administrator and set forth in the document evidencing such repurchase right. The Plan Administrator may not impose a vesting schedule upon any option grant or the shares of Common Stock subject to that option which is more restrictive than 20% per year vesting, with the initial vesting to occur not later than one year after the option is granted. However, such limitation shall not apply to options granted to individuals who are officers, independent consultants or directors of the Corporation.

F. Limited Transferability of Options. An Incentive Option shall be exercisable only by the Optionee during his or her lifetime and shall not be assignable or transferable other than by will or by the laws of inheritance following the Optionee’s death. A Non-Statutory Option may be assigned in whole or in part during the Optionee’s lifetime to one or more members of the Optionee’s family or to a trust established exclusively for one or more such family members or to the Optionee’s former spouse, to the extent such assignment is in connection with the Optionee’s estate plan or pursuant to a domestic relations order. The assigned portion may only be exercised by the person or persons who acquire a proprietary interest in the Non-Statutory Option pursuant to the assignment. The terms applicable to the assigned portion shall be the same as those in effect for the option immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the Plan Administrator may deem appropriate. Notwithstanding the foregoing, the Optionee may also designate one or more persons as the beneficiary or beneficiaries of his or her outstanding options under the Plan, and those options shall, in accordance with such designation, automatically be transferred to such beneficiary or beneficiaries upon the Optionee’s death while

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holding those options. Such beneficiary or beneficiaries shall take the transferred options subject to all the terms and conditions of the applicable agreement evidencing each such transferred option, including (without limitation) the limited time period during which the option may be exercised following the Optionee’s death.

II. INCENTIVE OPTIONS

The terms specified below shall be applicable to all Incentive Options. Except as modified by the provisions of this Section II, all the provisions of Articles One, Two and Four shall be applicable to Incentive Options. Options that are specifically designated as Non-Statutory Options shall not be subject to the terms of this Section II.

A. Eligibility. Incentive Options may only be granted to Employees.

B. Exercise Price. The exercise price per share shall not be less than 100% of the Fair Market Value per share of Common Stock on the grant date.

C. Dollar Limitation. The aggregate Fair Market Value of the shares of Common Stock (determined as of the respective date or dates of grant) for which one or more options granted to any Employee under the Plan (or any other option plan of the Corporation or any Parent or Subsidiary) may for the first time become exercisable as Incentive Options during any one calendar year shall not exceed $100,000.

D. 10% Stockholder. If any Employee to whom an Incentive Option is granted is a 10% Stockholder, then the option term shall not exceed five years measured from the date the option is granted.

III. CHANGE IN CONTROL

A. The shares subject to each option outstanding under the Plan at the time of a Change in Control shall automatically become Vested Shares, and each such option shall, immediately prior to the effective date of the Change in Control, become exercisable for all of the shares of Common Stock at the time subject to that option. However, the shares subject to an outstanding option shall not become Vested Shares on an accelerated basis if and to the extent: (1) such option is assumed by the successor corporation (or parent thereof) or otherwise continued in full force and effect pursuant to the terms of the Change in Control transaction or (2) such option is to be replaced with a cash incentive program of the Corporation or any successor corporation which preserves the spread existing on the unvested option shares at the time of the Change in Control and provides for subsequent payout of that spread in accordance with the same vesting schedule applicable to those unvested option shares or (3) the acceleration of such option is subject to other limitations imposed by the Plan Administrator.

B. All outstanding repurchase rights under the Option Grant Program shall also terminate automatically, and the shares of Common Stock subject to those terminated rights shall immediately become Vested Shares, in the event of any Change in Control, except to the extent: (1) those repurchase rights are assigned to the successor corporation (or parent thereof) or

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otherwise continued in effect pursuant to the terms of the Change in Control transaction, (2) the property (including cash payments)

issued with respect to Unvested Shares is to be held in escrow and released in accordance with the vesting schedule in effect for the Unvested Shares pursuant to the Change in Control transaction or (3) such accelerated vesting is precluded by other limitations imposed by the Plan Administrator.

C. Immediately following the consummation of the Change in Control, all outstanding options shall terminate, except to the extent assumed by the successor corporation (or parent thereof) or otherwise continued in effect pursuant to the terms of the Change in Control transaction.

D. Each option that is assumed in connection with a Change in Control or otherwise continued in effect shall be appropriately adjusted, immediately after such Change in Control, to apply to the number and class of securities which would have been issuable to the Optionee in consummation of such Change in Control, had the option been exercised immediately prior to such Change in Control. Appropriate adjustments shall also be made to (1) the number and class of securities available for issuance under the Plan following the consummation of such Change in Control and (2) the exercise price payable per share under each outstanding option, provided the aggregate exercise price payable for such securities shall remain the same. To the extent the holders of the Common Stock receive cash consideration for their Common Stock in consummation of the Change in Control, the successor corporation may, in connection with the assumption of the outstanding options under this Plan, substitute one or more shares of its own common stock with a fair market value equivalent to the cash consideration paid per share of Common Stock in such Change in Control.

E. The Plan Administrator shall have the discretion, exercisable either at the time the option is granted or at any time while the option remains outstanding, to structure one or more options so that the option shall become immediately exercisable and some or all of the shares subject to those options shall automatically become Vested Shares (and some or all of the repurchase rights of the Corporation with respect to the Unvested Shares subject to those options shall immediately terminate) upon the occurrence of a Change in Control, or another specified event or otherwise continued in effect the Optionee’s Involuntary Termination within a designated period following a specified event.

F. In addition, the Plan Administrator may provide that one or more of the Corporation’s outstanding repurchase rights with respect to some or all of the shares held by the Optionee at the time of a Change in Control or other specified event, or the Optionee’s Involuntary Termination following a specified event shall immediately terminate on an accelerated basis, and the shares subject to those terminated rights shall become Vested Shares at that time.

G. The portion of any Incentive Option accelerated in connection with a Change in Control shall remain exercisable as an Incentive Option only to the extent the applicable $100,000 limitation set forth in Section II.C. of Article Two is not exceeded. To the extent such dollar limitation is exceeded, the accelerated portion of such option shall be exercisable as a Non-Statutory Option under the federal tax laws.

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IV. CANCELLATION AND REGRANT OF OPTIONS

The Plan Administrator shall have the authority to effect, at any time and from time to time, with the consent of the affected option holders, the cancellation of any or all outstanding options under the Plan Program (including outstanding options incorporated from the Predecessor Plan) and to grant in substitution therefor new options covering the same or different number of shares of Common Stock.

ARTICLE THREE

STOCK ISSUANCE PROGRAM

I. STOCK ISSUANCE TERMS

A. Purchase Price.

1. The Plan Administrator shall fix the purchase price per share. However, if shares are issued under the Stock Issuance Program to a 10% Stockholder, then the purchase price per share shall not be less than 100% of the Fair Market Value per share of Common Stock on the date of issuance or (b) if shares are issued under the Stock Issuance Program to other than a 10% Stockholder, then the purchase price per share shall not be less than 85% of the Fair Market Value per share of Common Stock on the date of issuance.

2. Shares of Common Stock may be issued under the Stock Issuance Program for any of the following items of consideration, which the Plan Administrator may deem appropriate in each individual instance:

(a) cash or check made payable to the Corporation,

(b) past services rendered to the Corporation (or any Parent or Subsidiary), or

(c) a promissory note to the extent permitted by Section I of Article Four.

B. Vesting Provisions.

1. Shares of Common Stock issued under the Stock Issuance Program may, in the discretion of the Plan Administrator, be Vested Shares or may vest in one or more installments over the Participant’s period of Service or upon attainment of specified performance objectives. The Plan Administrator may not impose a vesting schedule upon any shares of Common Stock issued under the Stock Issuance Program which is more restrictive than 20% per year vesting, with the initial vesting to occur not later than one year after the shares are issued. However, such limitation shall not apply to shares issued to individuals who are officers, independent consultants or directors of the Corporation.

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2. Any new, substituted or additional securities or other property (including money paid other than as a regular cash dividend) which the Participant may have the right to receive with respect to the Participant’s Unvested Shares by reason of any stock dividend, stock split, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration shall be issued subject to (a) the same vesting requirements applicable to the Participant’s Unvested Shares treated as if acquired on the same date as the Unvested Shares and (b) such escrow arrangements as the Plan Administrator shall deem appropriate.

3. The Participant shall have full stockholder rights with respect to any shares of Common Stock issued to the Participant under the Stock Issuance Program, whether or not the Participant’s interest in those shares is vested. Accordingly, the Participant shall have the right to vote such shares and to receive any regular cash dividends paid on such shares.

4. Should the Participant cease to remain in Service while holding one or more Unvested Shares issued under the Stock Issuance Program or should the performance objectives not be attained with respect to one or more such Unvested Shares, then the Corporation shall have the right to repurchase the Unvested Shares at the lower of (a) the purchase price paid per share or (b) the Fair Market Value per share on the date Participant’s Service ceased or the performance objective where not attained. The terms upon which such repurchase right shall be exercisable shall be established by the Plan Administrator and set forth in the document evidencing such repurchase right.

5. The Plan Administrator may in its discretion waive the surrender and cancellation of one or more Unvested Shares (or other assets attributable thereto) which would otherwise occur upon the non-completion of the vesting schedule applicable to those shares. Such waiver shall result in the immediate vesting of the Participant’s interest in the shares of Common Stock as to which the waiver applies. Such waiver may be effected at any time, whether before or after the Participant’s Service ceases or he or she attains the applicable performance objectives.

II. CHANGE IN CONTROL

A. Upon the occurrence of a Change in Control, all outstanding repurchase rights under the Stock Issuance Program shall terminate automatically, and the shares of Common Stock subject to those terminated rights shall immediately become Vested Shares, except to the extent: (1) those repurchase rights are assigned to the successor corporation (or parent thereof) or otherwise continued in effect pursuant to the terms of the Change in Control transaction, (2) the property (including cash payments) issued with respect to the Unvested Shares is held in escrow and released in accordance with the vesting schedule in effect for the Unvested Shares pursuant to the terms of the Change in Control transaction, or (3) such accelerated vesting is precluded by other limitations imposed by the Plan Administrator.

B. The Plan Administrator shall have the discretionary authority, exercisable either at the time the Unvested Shares are issued or any time while the Corporation’s repurchase

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rights with respect to those shares remain outstanding, to provide that those rights shall automatically terminate in whole or in part on an accelerated basis, and some or all of the shares of Common Stock subject to those terminated rights shall immediately become Vested Shares, in the event of a Change of Control or other event or the Participant’s Service is terminated by reason of an Involuntary Termination within a designated period following a Change in Control or any other specified event.

ARTICLE FOUR

MISCELLANEOUS

I. FINANCING

The Plan Administrator may permit any Optionee or Participant to pay the option exercise price under the Option Grant Program or the purchase price for shares issued under the Stock Issuance Program by delivering a full-recourse, interest bearing promissory note payable in one or more installments and secured by the purchased shares. In no event may the maximum credit available to the Optionee or Participant exceed the sum of (A) the aggregate option exercise price or purchase price payable for the purchased shares (less the par value of those shares) plus (B) any applicable income and employment tax liability incurred by the Optionee or the Participant in connection with the option exercise or share purchase.

II. FIRST REFUSAL RIGHTS

The Corporation shall have the right of first refusal with respect to any proposed disposition by the Optionee or Participant (or any successor in interest) of any shares of Common Stock issued under the Plan. Such right of first refusal shall be exercisable and lapse in accordance with the terms established by the Plan Administrator and set forth in the document evidencing such right.

III. SHARE ESCROW/LEGENDS

Unvested Shares may, in the Plan Administrator’s discretion, be held in escrow by the Corporation until the Unvested Shares vest or may be issued directly to the Participant or Optionee with restrictive legends on the certificates evidencing the fact that the Participant or Optionee does not have a vested right to them.

IV. EFFECTIVE DATE AND TERM OF PLAN

A. The Plan became effective on the Plan Effective Date, when adopted by the Board. No option granted under the Plan may be exercised, and no shares shall be issued under the Plan, until the Corporation’s stockholders approve the Plan. If such stockholder approval is not obtained within twelve months after the date of the Board’s adoption of the Plan, then all options previously granted under the Plan shall terminate, and no further options shall be granted and no shares shall be issued under the Plan. Subject to such limitation, the Plan

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Administrator may grant options and issue shares under the Plan at any time after the effective date of the Plan and before the date fixed herein for termination of the Plan.

B. The Plan shall serve as the successor to the Predecessor Plan, and no further option grants or direct stock issuances shall be made under the Predecessor Plan after the Plan Effective Date. All options outstanding under the Predecessor Plan on the Plan Effective Date shall be transferred to the Plan at that time and shall be treated as outstanding options under the Plan. However, each outstanding option so transferred shall continue to be governed solely by the terms of the documents evidencing such option, and no provision of the Plan shall be deemed to affect or otherwise modify the rights or obligations of the holders of such transferred options with respect to their acquisition of shares of Common Stock.

C. One or more provisions of the Plan, including (without limitation) the option/vesting acceleration provisions of Article Two relating to Changes in Control, may, in the Plan Administrator’s discretion, be extended to one or more options incorporated from the Predecessor Plan which do not otherwise contain such provisions.

D. The Plan shall terminate upon the earlier of (1) the expiration of the ten year period measured from the date the Plan is adopted by the Board or (2) termination by the Board. All options and unvested stock issuances outstanding at the time of the termination of the Plan shall continue in effect in accordance with the provisions of the documents evidencing those options or issuances.

V. AMENDMENT OR TERMINATION OF THE PLAN

A. The Board shall have complete and exclusive power and authority to amend or terminate the Plan or any awards made thereunder in any or all respects. However, no such amendment or termination shall adversely affect the rights and obligations with respect to options or unvested stock issuances at the time outstanding under the Plan unless the Optionee or the Participant consents to such amendment or termination. In addition, certain amendments, including amendments that increase the share reserve or change the class of individuals eligible to receive grants pursuant to the Plan, may require stockholder approval pursuant to applicable laws and regulations.

B. Options may be granted under the Option Grant Program and shares may be issued under the Stock Issuance Program which are in each instance in excess of the number of shares of Common Stock then available for issuance under the Plan, provided any excess shares actually issued under those programs shall be held in escrow until there is obtained stockholder approval of an amendment sufficiently increasing the number of shares of Common Stock available for issuance under the Plan. If such stockholder approval is not obtained within twelve months after the date the first such excess grants or issuances are made, then (1) any unexercised options granted on the basis of such excess shares shall terminate and (2) the Corporation shall promptly refund to the Optionees and the Participants the exercise or purchase price paid for any excess shares issued under the Plan and held in escrow, together with interest (at the applicable Short Term Federal Rate) for the period the shares were held in escrow, and such shares shall thereupon be automatically cancelled.

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VI. USE OF PROCEEDS

Any cash proceeds received by the Corporation from the sale of shares of Common Stock under the Plan shall be used for any corporate purpose.

VII. WITHHOLDING

The Corporation’s obligation to deliver shares of Common Stock upon the exercise of any options granted under the Plan or upon the issuance or vesting of any shares issued under the Plan shall be subject to the satisfaction of all applicable income and employment tax withholding requirements.

VIII. REGULATORY APPROVALS

The implementation of the Plan, the granting of any options under the Plan and the issuance of any shares of Common Stock (A) upon the exercise of any option or (B) under the Stock Issuance Program shall be subject to the Corporation’s procurement of all approvals and permits required by regulatory authorities having jurisdiction over the Plan, the options granted under it and the shares of Common Stock issued pursuant to it.

IX. NO EMPLOYMENT OR SERVICE RIGHTS

Nothing in the Plan shall confer upon the Optionee or the Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining such person) or of the Optionee or the Participant, which rights are hereby expressly reserved by each, to terminate such person’s Service at any time for any reason, with or without cause.

X. FINANCIAL INFORMATION

The Corporation shall deliver a balance sheet and an income statement at least annually to each Optionee and Participant, unless such individual is a key Employee whose duties in connection with the Corporation (or any Parent or Subsidiary) assure such individual access to equivalent information.

XI. SHARE RESERVE

The maximum number of shares of Common Stock that may be issued over the term of the Plan together with the total number of shares of Common Stock provided for under any stock bonus or similar plan of the Corporation shall not exceed 30% of the then outstanding shares (on an as if converted basis) of the Corporation unless a percentage higher than 30% is approved by at least 2/3 of the outstanding shares of the Corporation entitled to vote on such matter.

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APPENDIX

The following definitions shall be in effect under the Plan:

A. Board shall mean the Corporation’s Board of Directors.

B. Change in Control shall mean a change in ownership or control of the Corporation effected through any of the following transactions:

(i) a stockholder-approved merger, consolidation or other reorganization in which securities representing more than 50% of the total combined voting power of the Corporation’s outstanding securities are beneficially owned, directly or indirectly, by a person or persons different from the person or persons who beneficially owned those securities immediately prior to such transaction;

(ii) a stockholder-approved sale, transfer or other disposition of all or substantially all of the Corporation’s assets; or

(iii) the acquisition, directly or indirectly, by any person or related group of persons (other than the Corporation or a person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation), of beneficial ownership (within the meaning of Rule 13-d3 of the 1934 Act) of securities possessing more than 50% of the total combined voting power of the Corporation’s outstanding securities from a person or persons other than the Corporation.

In no event shall any public offering of the Corporation’s securities be deemed to constitute a Change in Control.

C. Code shall mean the Internal Revenue Code of 1986, as amended.

D. Committee shall mean a committee of one or more Board members appointed by the Board to exercise one or more administrative functions under the Plan.

E. Common Stock shall mean the Corporation’s common stock.

F. Corporation shall mean The Active Network, Inc., a Delaware corporation, or the successor to all or substantially all of the assets or the voting stock of The Active Network, Inc. which has assumed the Plan.

G. Disability shall mean the inability of the Optionee or the Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that is expected to result in death or has lasted or can be expected to last for a continuous period of twelve months or more.

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H. Employee shall mean an individual who is in the employ of the Corporation (or any Parent or Subsidiary), subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance.

I. Exercise Date shall mean the date on which the option has been exercised in accordance with the applicable option documentation.

J. Fair Market Value per share of Common Stock on any relevant date shall be determined in accordance with the following provisions:

(i) If the Common Stock is at the time listed on the Nasdaq Stock Market, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question, as such price is reported by the National Association of Securities Dealers on the Nasdaq Stock Market and published in The Wall Street Journal. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.

(ii) If the Common Stock is at the time listed on any stock exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question on the stock exchange determined by the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite tape of transactions on such exchange and published in The Wall Street Journal. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.

(iii) If the Common Stock is at the time neither listed on any stock exchange or the Nasdaq Stock Market, then the Fair Market Value shall be determined by the Plan Administrator after taking into account such factors as the Plan Administrator shall deem appropriate.

K. Incentive Option shall mean an option that satisfies the requirements of Code Section 422.

L. Involuntary Termination shall mean the termination of the Service of any individual which occurs by reason of:

(i) such individual’s involuntary dismissal or discharge by the Corporation (or any Parent or Subsidiary) for reasons other than Misconduct, or

(ii) such individual’s voluntary resignation following (A) a change in his or her position with the Corporation (or any Parent or Subsidiary) which materially reduces his or her duties and responsibilities, (B) a reduction in his or her base salary by more than 15%, unless the base salaries of all similarly situated individuals are reduced by the Corporation or any Parent or Subsidiary employing the individual, or (C) a relocation of such individual’s place of employment by more than fifty miles, provided and only if such change, reduction or relocation is effected without the individual’s written consent.

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M. Misconduct shall mean the commission of any act of fraud, embezzlement or dishonesty by the Optionee or Participant, any unauthorized use or disclosure by such person of confidential information or trade secrets of the Corporation (or any Parent or Subsidiary), or any other intentional misconduct by such person adversely affecting the business or affairs of the Corporation (or any Parent or Subsidiary) in a material manner; provided, however, that if the term or concept has been defined in an employment agreement between the Corporation and the Optionee or Participant, then Misconduct shall have the definition set forth in such employment agreement. The foregoing definition shall not in any way preclude or restrict the right of the Corporation (or any Parent or Subsidiary) to discharge or dismiss any Optionee, Participant or other person in the Service of the Corporation (or any Parent or Subsidiary) for any other acts or omissions, but such other acts or omissions shall not be deemed, for purposes of the Plan, to constitute grounds for termination for Misconduct.

N. 1934 Act shall mean the Securities Exchange Act of 1934, as amended.

O. Non-Statutory Option shall mean an option that does not satisfy the requirements of Code Section 422.

P. Option Grant Program shall mean the option grant program in effect under the Plan.

Q. Optionee shall mean any person to whom an option is granted under the Plan.

R. Parent shall mean any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

S. Participant shall mean any person who is issued shares of Common Stock under the Stock Issuance Program.

T. Plan shall mean The Active Network, Inc. 2002 Stock Option/Stock Issuance Plan.

U. Plan Administrator shall mean either the Board or the Committee acting in its capacity as administrator of the Plan.

V. Plan Effective Date shall mean January 1, 2002.

W. Predecessor Plan shall mean The Active Network, Inc. 1999 Stock Option/Stock Issuance Plan in effect immediately prior to the Plan Effective Date hereunder.

X. Service shall mean the provision of services to the Corporation (or any Parent or Subsidiary) by a person in the capacity of an Employee, a member of the board of

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directors or an independent contractor, except to the extent otherwise specifically provided in the documents evidencing the option grant.

Y. Stock Issuance Agreement shall mean the agreement entered into by the Corporation and the Participant at the time of issuance of shares of Common Stock under the Stock Issuance Program.

Z. Stock Issuance Program shall mean the stock issuance program in effect under the Plan.

AA. Subsidiary shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

BB. 10% Stockholder shall mean the owner of stock (as determined under Code Section 424(d)) possessing more than 10% of the total combined voting power of all classes of stock of the Corporation (or any Parent or Subsidiary).

CC. Unvested Shares shall mean shares of Common Stock have not vested in accordance with the vesting schedule applicable to those shares or any special vesting acceleration provisions and which are subject to the Corporation’s repurchase right.

DD. Vested Shares shall mean shares of Common Stock which have vested in accordance with the vesting schedule applicable to those shares or any special vesting acceleration provisions and which are no longer subject to the Corporation’s repurchase right.

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EX-10.3(A)

Exhibit 10.3(a)

AMENDMENT

to

2002 STOCK OPTION/STOCK ISSUANCE PLAN

of

THE ACTIVE NETWORK, INC.

The 2002 Stock Option/Stock Issuance Plan of The Active Network, Inc., a Delaware corporation (the “Plan”) is hereby amended, effective as of February 7, 2003, as follows:

1. Notwithstanding any provision to the contrary, the Plan is hereby amended to include Article Four, Section XII to be and read in its entirety as follows:

“XII. RESTRUCTURING

A. On November 29, 2001, the Company entered into that certain Restructuring Agreement by and among the Company and those stockholders set forth on the signature pages thereto (the “Restructuring Agreement”), whereby each of the parties agreed to take all necessary and desirable action to simplify the capital structure of the Company (via merger or otherwise) (the “Restructuring”). In consideration of the Restructuring, any person to whom an option is granted under the Plan on or after January 1, 2002 shall be entitled to receive, upon exercise of such option, the same percentage of Common Stock (on a fully-diluted basis, assuming the conversion or exercise of all convertible or exercisable securities and assuming all reserved shares under the Plan or similar plans have been issued) after completion of the Restructuring as such person was entitled to receive, upon exercise of the option, immediately prior to the Restructuring. The exercise price of any such option shall be adjusted after the Restructuring so that the amount paid upon exercise of such option for that certain percentage of Common Stock shall be the same after completion of the Restructuring as it was immediately prior to the Restructuring.

B. Any person to whom an option is granted under the Plan on or after January 1, 2002, who shall have exercised such option prior to the Restructuring, shall be entitled to receive the same percentage of Common Stock of the Company (on a fully-diluted basis, assuming the conversion or exercise of all convertible or exercisable securities and assuming all reserved shares under the Plan or similar plans have been issued) after completion of the Restructuring as such person held immediately prior to the Restructuring.”

2. Except as modified by this Amendment, all the terms and provisions of the Plan shall continue in full force and effect.

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IN WITNESS WHEREOF, The Active Network, Inc. has caused this Amendment to be executed on its behalf by its duly authorized Chief Executive Officer as of the 7th day of February, 2003.

THE ACTIVE NETWORK, INC.
By:	/s/    David Alberga
	Name:	David Alberga
	Title:	Chief Executive Officer

EX-10.4

Exhibit 10.4

THE ACTIVE NETWORK, INC.

STOCK OPTION AGREEMENT

A. The Board has adopted the Plan for the purpose of retaining the services of selected Employees, members of the Board or the board of directors of any Parent or Subsidiary and independent contractors in the service of the Corporation (or any Parent or Subsidiary).

B. Optionee is to render valuable services to the Corporation (or a Parent or Subsidiary), and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the Corporation’s grant of an option to Optionee.

C. All capitalized terms in this Agreement shall have the meaning assigned to them in the attached Appendix.

NOW, THEREFORE, it is hereby agreed as follows:

1. Grant of Option. The Corporation hereby grants to Optionee, as of the Grant Date, an option to purchase the number of Option Shares specified in the Grant Notice. The Option Shares shall be purchasable from time to time during the option term specified in Paragraph 2 at the Exercise Price.

2. Option Term. This option shall expire on the Expiration Date, unless sooner terminated in accordance with this Agreement.

3. Limited Transferability.

(a) This option shall be neither transferable nor assignable by Optionee other than by will or the laws of inheritance following Optionee’s death and may be exercised, during Optionee’s lifetime, only by Optionee. However, Optionee may designate one or more persons as the beneficiary or beneficiaries of this option, so that, if Optionee is holding this outstanding option at the time of his or her death, this option shall, in accordance with such designation, automatically be transferred to such beneficiary or beneficiaries upon Optionee’s death. Such beneficiary or beneficiaries shall take the transferred option subject to all the terms and conditions of this Agreement, including (without limitation) the limited time period during which this option may, pursuant to Paragraph 5, be exercised following Optionee’s death.

(b) If this option is designated a Non-Statutory Option in the Grant Notice, then this option may be assigned in whole or in part during Optionee’s lifetime to one or more members of Optionee’s family or to a trust established for the benefit of one or more such family members or to Optionee’s former spouse, to the extent such assignment is in connection with Optionee’s estate plan or pursuant to a domestic relations order. The assigned portion shall be exercisable only by the person or persons who acquire a proprietary interest in the option pursuant to such assignment. The terms applicable to the assigned portion shall be the same as those in effect for this option immediately prior to such assignment.

4. Dates of Exercise. This option shall become exercisable for the Option Shares as specified in the Grant Notice. If the option is exercisable in installments, then as the option becomes exercisable for such installments, those installments shall accumulate, and the option shall remain exercisable for the accumulated installments until the Expiration Date or sooner termination of the option under this Agreement.

5. Cessation of Service. The option term specified in Paragraph 2 shall terminate (and this option shall cease to be outstanding) prior to the Expiration Date should any of the following provisions become applicable:

(a) Should Optionee cease to remain in Service for any reason (other than death, Disability or Misconduct), then this option shall be exercisable for the number of Option Shares which were Vested Shares at the time of Optionee’s cessation of Service and shall remain exercisable until the earlier of (i) the close of business on the three month anniversary of the date Optionee’s Service ceases or (ii) the Expiration Date.

(b) Should Optionee cease to remain in Service by reason of death or Disability, then this option shall be exercisable for the number of Option Shares which were Vested Shares at the time of Optionee’s cessation of Service and shall remain exercisable until the earlier of (i) the close of business on the twelve month anniversary of the date Optionee’s Service ceases or (ii) the Expiration Date.

(c) No additional vesting will occur after the date Optionee’s Service ceases, and this option shall immediately terminate with respect to the Unvested Shares. Upon the expiration of any post-Service exercise period or (if earlier) upon the Expiration Date, this option shall terminate with respect to the Vested Shares.

(d) Should Optionee’s Service be terminated for Misconduct or should Optionee otherwise engage in Misconduct while this option is outstanding, then this option shall terminate immediately with respect to all Option Shares.

6. Accelerated Vesting.

(a) Immediately prior to the effective date of the Change in Control, the Unvested Shares subject to this option shall automatically become Vested Shares, and this option shall become exercisable for all of the Option Shares. However, the Unvested Shares shall not vest on such an accelerated basis if and to the extent: (i) this option will be assumed by the successor corporation (or parent thereof) or otherwise continued in effect pursuant to the terms of the Change in Control transaction or (ii) this option is to be replaced with a cash incentive program of the successor corporation which preserves the spread existing on the Unvested Shares at the time of the Change in Control (the excess of the Fair Market Value of those Unvested Shares over the Exercise Price payable for such shares) and provides for subsequent payout of that spread no later than the time Optionee would otherwise vest in the Option Shares as set forth in the Grant Notice.

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(b) Immediately following the Change in Control, this option shall terminate and cease to be outstanding, except to the extent assumed by the successor corporation (or parent thereof) or otherwise continued in effect pursuant to the terms of the Change in Control transaction.

(c) If this option is assumed in connection with a Change in Control or otherwise continued in effect, then this option shall be appropriately adjusted, upon such Change in Control, to apply to the number and class of securities which would have been issuable to Optionee in consummation of such Change in Control had the option been exercised immediately prior to such Change in Control, and appropriate adjustments shall also be made to the Exercise Price, provided the aggregate Exercise Price shall remain the same. To the extent that the holders of Common Stock receive cash consideration for their Common Stock in consummation of the Change in Control, the successor corporation (or its parent) may, in connection with the assumption of this option, substitute one or more shares of its own common stock with a fair market value equivalent to the cash consideration paid per share of Common Stock in such Change in Control.

(d) This Agreement shall not in any way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.

7. Adjustment in Option Shares. Should any change be made to the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration, appropriate adjustments shall be made to (a) the total number and/or class of securities subject to this option and (b) the Exercise Price in order to reflect such change and thereby preclude a dilution or enlargement of benefits hereunder.

8. Stockholder Rights. The holder of this option shall not have any stockholder rights with respect to the Option Shares until such person shall have exercised the option, paid the Exercise Price and become the record holder of the purchased Option Shares.

9. Manner of Exercising Option.

(a) In order to exercise this option with respect to all or any part of the Option Shares for which this option is at the time exercisable, Optionee (or any other person or persons permitted to exercise the option) must take the following actions:

(i) Execute and deliver to the Corporation a Purchase Agreement for the Option Shares for which the option is exercised;

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(ii) Pay the aggregate Exercise Price for the purchased shares in one or more of the following forms:

(A) cash or check made payable to the Corporation; or

(B) a promissory note payable to the Corporation, but only to the extent authorized by the Plan Administrator in accordance with Paragraph 14.

Should the Common Stock be registered under Section 12 of the 1934 Act at the time the option is exercised, then the Exercise Price may also be paid as follows:

(C) in shares of Common Stock (1) held by Optionee (or any other person or persons exercising the option) for the requisite period necessary to avoid a charge to the Corporation’s earnings for financial reporting purposes and (2) valued at Fair Market Value on the Exercise Date; or

(D) to the extent the option is exercised for Vested Shares, through a special sale and remittance procedure pursuant to which Optionee (or any other person or persons exercising the option) shall concurrently provide irrevocable instructions (1) to a Corporation-designated brokerage firm to effect the immediate sale of the purchased shares and remit to the Corporation, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate Exercise Price payable for the purchased shares plus all applicable income and employment taxes required to be withheld by the Corporation by reason of such exercise and (2) to the Corporation to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale;

Except to the extent the sale and remittance procedure is utilized in connection with the option exercise, payment of the Exercise Price must accompany the Purchase Agreement delivered to the Corporation in connection with the option exercise.

(iii) Furnish to the Corporation appropriate documentation that the person or persons exercising the option (if other than Optionee) have the right to exercise this option;

(iv) Execute and deliver to the Corporation such written representations as may be requested by the Corporation in order for it to comply with the applicable requirements of applicable securities laws; and

(v) Make appropriate arrangements with the Corporation (or Parent or Subsidiary employing or retaining Optionee) for the satisfaction of all applicable income and employment tax withholding requirements applicable to the option exercise.

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(b) As soon as practical after the Exercise Date, the Corporation shall issue to or on behalf of Optionee (or any other person or persons exercising this option) a certificate for the purchased Option Shares, with the appropriate legends affixed thereto.

(c) In no event may this option be exercised for any fractional shares.

10. REPURCHASE RIGHTS. ALL OPTION SHARES ACQUIRED UPON THE EXERCISE OF THIS OPTION SHALL BE SUBJECT TO CERTAIN RIGHTS OF THE CORPORATION AND ITS ASSIGNS TO REPURCHASE THOSE SHARES IN ACCORDANCE WITH THE TERMS SPECIFIED IN THE STOCK PURCHASE AGREEMENT.

11. Compliance with Laws and Regulations.

(a) The exercise of this option and the issuance of the Option Shares upon such exercise shall be subject to compliance by the Corporation and Optionee with all applicable requirements of law relating thereto and with all applicable regulations of any applicable stock exchange or quotation system on which the Common Stock may be traded at the time of such exercise and issuance.

(b) The inability of the Corporation to obtain approval from any regulatory body having authority deemed by the Corporation to be necessary to the lawful issuance and sale of any Common Stock pursuant to this option shall relieve the Corporation of any liability with respect to the non-issuance or sale of the Common Stock as to which such approval shall not have been obtained.

12. Successors and Assigns. Except to the extent otherwise provided in Paragraphs 3 and 6, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the Corporation and its successors and assigns and Optionee, Optionee’s permitted assigns and the legal representatives, heirs and legatees of Optionee’s estate, whether or not any such person shall have become a party to this Agreement or has agreed in writing to join herein and be bound by the terms hereof.

13. Notices. Any notice required to be given or delivered to the Corporation under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal corporate offices. Any notice required to be given or delivered to Optionee shall be in writing and addressed to Optionee at the address indicated below Optionee’s signature line on the Grant Notice. All notices shall be deemed effective upon personal delivery or on the third day following deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.

14. Financing. The Plan Administrator may, in its absolute discretion and without any obligation to do so, permit Optionee to pay the Exercise Price for the purchased Option Shares (to the extent such Exercise Price is in excess of the par value of those shares) by delivering a full-recourse, interest-bearing promissory note secured by those Option Shares. The

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payment schedule and other terms of any such promissory note shall be established by the Plan Administrator in its sole discretion.

15. Construction. This Agreement and the option evidenced hereby are made and granted pursuant to the Plan, which is incorporated herein by reference. In the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Agreement, the terms and conditions of this Agreement shall prevail. All decisions of the Plan Administrator with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in this option.

16. Governing Law. The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Delaware without giving effect to that State’s choice of law or conflict-of-laws rules.

17. Stockholder Approval. If the Option Shares covered by this Agreement exceed, as of the Grant Date, the number of shares of Common Stock which may be issued under the Plan as last approved by the stockholders, then this option shall be void with respect to such excess shares, unless stockholder approval of an amendment sufficiently increasing the number of shares of Common Stock issuable under the Plan is obtained in accordance with the provisions of the Plan. The inability of the Corporation to obtain stockholder approval shall relieve the Corporation of any liability with respect to the non-issuance or sale of the Common Stock as to which such approval shall not have been obtained.

18. At Will Employment. Nothing in this Agreement or in the Plan shall confer upon Optionee any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining Optionee) or of Optionee, which rights are hereby expressly reserved by each, to terminate Optionee’s Service at any time for any reason, with or without cause.

19. Additional Terms Applicable to an Incentive Option. In the event this option is designated an Incentive Option in the Grant Notice, the following terms and conditions shall also apply to the grant:

(a) This option shall cease to qualify for favorable tax treatment as an Incentive Option if (and to the extent) this option is exercised for one or more Option Shares: (i) more than three months after the date Optionee ceases to be an Employee for any reason other than death or Disability or (ii) more than twelve months after the date Optionee ceases to be an Employee by reason of Disability.

(b) This option shall not become exercisable in the calendar year in which granted if (and to the extent) the aggregate Fair Market Value (determined at the Grant Date) of the Common Stock for which this option would otherwise first become exercisable in such calendar year would, when added to the aggregate value (determined as of the respective date or dates of grant) of the Common Stock and any other securities for which one or more other Incentive Options granted to Optionee prior to the Grant Date (whether under the Plan or any other option plan of the Corporation or any Parent or Subsidiary) first become exercisable during

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the same calendar year, exceed $100,000 in the aggregate. To the extent the exercisability of this option is deferred by reason of the foregoing limitation, the deferred portion shall become exercisable in the first calendar year or years thereafter in which the $100,000 limitation of this Paragraph 19(b) would not be contravened, but such deferral shall in all events end immediately prior to the effective date of a Change in Control in which this option is not to be assumed or otherwise continued in effect, whereupon the option shall become immediately exercisable as a Non-Statutory Option for the deferred portion of the Option Shares.

(c) Should Optionee hold, in addition to this option, one or more other options to purchase Common Stock which become exercisable for the first time in the same calendar year as this option, then the foregoing limitations on the exercisability of such options as Incentive Options shall be applied to the option granted second.

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APPENDIX

The following definitions shall be in effect under the Agreement:

A. Agreement shall mean this Stock Option Agreement.

B. Board shall mean the Corporation’s Board of Directors.

C. Change in Control shall mean a change in ownership or control of the Corporation effected through any of the following transactions:

(i) a stockholder-approved merger, consolidation or other reorganization in which securities representing more than 50% of the total combined voting power of the Corporation’s outstanding securities are beneficially owned, directly or indirectly, by a person or persons different from the person or persons who beneficially owned those securities immediately prior to such transaction;

(ii) a stockholder-approved sale, transfer or other disposition of all or substantially all of the Corporation’s assets; or

(iii) the acquisition, directly or indirectly, by any person or related group of persons (other than the Corporation or a person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation), of beneficial ownership (within the meaning of Rule 13-d3 of the 1934 Act) of securities possessing more than 50% of the total combined voting power of the Corporation’s outstanding securities from a person or persons other than the Corporation.

In no event shall any public offering of the Corporation’s securities be deemed to constitute a Change in Control.

D. Code shall mean the Internal Revenue Code of 1986, as amended.

E. Common Stock shall mean the common stock of the Corporation.

F. Corporation shall mean The Active Network, Inc., a Delaware corporation, or any successor corporation to all or substantially all of the assets or the voting stock of The Active Network, Inc. that has assumed this option.

G. Disability shall mean the inability of Optionee to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that is expected to result in death or has lasted or can be expected to last for a continuous period of twelve months or more

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H. Employee shall mean an individual who is in the employ of the Corporation (or any Parent or Subsidiary), subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance.

I. Exercise Date shall mean the date on which the option shall have been exercised in accordance with this Agreement.

J. Exercise Price shall mean the exercise price payable per Option Share as specified in the Grant Notice.

K. Expiration Date shall mean the close of business on the date on which the option expires as specified in the Grant Notice.

L. Fair Market Value per share of Common Stock on any relevant date shall be determined in accordance with the following provisions:

(i) If the Common Stock is at the time listed on the Nasdaq Stock Market, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question, as the price is reported by the National Association of Securities Dealers on the Nasdaq Stock Market and published in The Wall Street Journal. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.

(ii) If the Common Stock is at the time listed on any stock exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question on the stock exchange determined by the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite tape of transactions on such exchange and published in The Wall Street Journal. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.

(iii) If the Common Stock is at the time neither listed on any stock exchange or the Nasdaq Stock Market, then the Fair Market Value shall be determined by the Plan Administrator after taking into account such factors as the Plan Administrator shall deem appropriate.

M. Grant Date shall mean the date of grant of the option as specified in the Grant Notice.

N. Grant Notice shall mean the Notice of Grant of Stock Option accompanying this Agreement, pursuant to which Optionee has been informed of the basic terms of the option evidenced hereby.

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O. Incentive Option shall mean an option that satisfies the requirements of Code Section 422.

P. Misconduct shall mean (i) the commission of any act of fraud, embezzlement or dishonesty by Optionee, (ii) any unauthorized use or disclosure by Optionee of confidential information or trade secrets of the Corporation (or any Parent or Subsidiary), (iii) or any other intentional misconduct by Optionee adversely affecting the business or affairs of the Corporation (or any Parent or Subsidiary) in a material manner; provided, however, that if the term or concept has been defined in an employment agreement between the Corporation and Optionee, then Misconduct shall have the definition set forth in such employment agreement. The foregoing definition shall not in any way preclude or restrict the right of the Corporation (or any Parent or Subsidiary) to discharge or dismiss any Optionee or other person in the Service of the Corporation (or any Parent or Subsidiary) for any other acts or omissions, but such other acts or omissions shall not be deemed, for purposes of the Plan or this Agreement, to constitute grounds for termination for Misconduct.

Q. 1934 Act shall mean the Securities Exchange Act of 1934, as amended.

R. Non-Statutory Option shall mean an option that is not intended to satisfy the requirements of Code Section 422.

S. Option Shares shall mean the shares of Common Stock subject to the option.

T. Optionee shall mean the person to whom the option is granted as specified in the Grant Notice.

U. Parent shall mean any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

V. Plan shall mean The Active Network, Inc. 2002 Stock Option/Stock Issuance Plan.

W. Plan Administrator shall mean either the Board or a committee of the Board acting in its capacity as administrator of the Plan.

X. Purchase Agreement shall mean the stock purchase agreement in substantially the form of Exhibit B to the Grant Notice.

Y. Service shall mean Optionee’s performance of services for the Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a member of the board of directors or an independent contractor.

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Z. Subsidiary shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

AA. Unvested Shares shall mean the Option Shares which have not vested in accordance with the Vesting Schedule applicable to those shares or any special vesting acceleration provisions and which are subject to the Corporation’s right to repurchase those shares upon termination of Service.

BB. Vested Shares shall mean the Option Shares which have vested in accordance with the Vesting Schedule applicable to those shares or any special vesting acceleration provisions and which are no longer subject to the Corporation’s right to repurchase those shares upon termination of Service.

CC. Vesting Schedule shall mean the vesting schedule specified in the Grant Notice.

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ADDENDUM

TO

STOCK OPTION AGREEMENT

The following provisions are hereby incorporated into, and are hereby made a part of, that certain Stock Option Agreement (the “Option Agreement”) by and between the Corporation and                          (“Optionee”) evidencing the stock option (the “Option”) granted to Optionee under the terms of The Active Network, Inc. 2002 Stock Option/Stock Issuance Plan, and such provisions shall be effective immediately. All capitalized terms in this Addendum, to the extent not otherwise defined herein, shall have the meanings assigned to them in the Option Agreement.

INVOLUNTARY TERMINATION FOLLOWING A CHANGE IN CONTROL

1. If the Option is assumed by the successor corporation (or the parent thereof) or is otherwise continued in effect pursuant to the terms of the Change in Control transaction and Optionee is Involuntary Terminated within twelve months following such Change in Control, then the Option Shares at the time subject to the Option shall automatically become Vested Shares on an accelerated basis, and the Option shall immediately become exercisable for the lesser of (a) 25% of the Option Shares subject to the Option at the time of grant or (b) all of the remaining Unvested Shares. The Option shall remain so exercisable until the earlier of (i) the Expiration Date or (ii) the expiration of the one year period measured from the date of the Optionee’s Involuntary Termination.

2. To the extent that, in connection with a Change in Control, the successor corporation (or the parent thereof) replaces the Option with a cash incentive program, Optionee’s right to receive cash payments for the Option Shares (the “Cash Payments”) will be paid out in accordance with the Vesting Schedule. However, upon an Involuntary Termination of Optionee’s Service within twelve months following a Change in Control, Optionee’s right to receive the unvested Cash Payments shall be accelerated with respect to the lesser of (a) 25% of the total Cash Payments that were placed in escrow in connection with the Change in Control and (b) the Cash Payments that remain in escrow at the time Optionee’s Service is Involuntarily Terminated.

3. For purposes of this Addendum, an Involuntary Termination shall mean the termination of Optionee’s Service by reason of:

(a) Optionee’s involuntary dismissal or discharge by the Corporation or Parent or Subsidiary employing Optionee for reasons other than Misconduct, or

(b) Optionee’s voluntary resignation following (i) a change in Optionee’s position with the Corporation, Parent or Subsidiary employing Optionee which materially

reduces Optionee’s duties and responsibilities, (ii) a reduction in Optionee’s base salary by more than 15%, unless the base salaries of all similarly situated individuals are reduced by the Corporation, Parent or Subsidiary employing Optionee or (iii) a relocation of Optionee’s place of employment by more than fifty miles, provided and only if such change, reduction or relocation is effected without Optionee’s written consent.

The provisions of this Addendum shall supersede any provisions to the contrary in the Option Agreement.

IN WITNESS WHEREOF, The Active Network, Inc. has caused this Addendum to be executed by its duly-authorized officer as of the Effective Date specified below.

Effective Date:             ,             

THE ACTIVE NETWORK, INC.

By:

Printed Name:

Title:

EX-10.5

Exhibit 10.5

THE ACTIVE NETWORK, INC.

STOCK PURCHASE AGREEMENT

AGREEMENT made as of this             day of             ,             by and between the Corporation, and            , Optionee under the Plan.

All capitalized terms in this Agreement shall have the meaning assigned to them in this Agreement or in the attached Appendix.

A. EXERCISE OF OPTION

1. Exercise. Optionee hereby purchases             shares of Common Stock (the “Purchased Shares”) at the exercise price of $             per share (the “Exercise Price”) pursuant to the exercise of that certain option (the “Option”) granted to Optionee pursuant to the Plan.

2. Payment. Concurrently with the delivery of this Agreement to the Corporation, Optionee shall pay the aggregate Exercise Price for all of the Purchased Shares in accordance with the provisions of the Option Agreement and shall deliver whatever additional documents may be required by the Option Agreement as a condition for exercise, together with a duly-executed blank Assignment Separate from Certificate (in the form attached hereto as Exhibit I) with respect to the Purchased Shares.

3. Stockholder Rights. Until such time as the Corporation exercises the Repurchase Right or the First Refusal Right, Optionee (or any successor in interest) shall have all stockholder rights (including voting, dividend and liquidation rights) with respect to the Purchased Shares, subject, however, to the transfer restrictions imposed by this Agreement.

B. SECURITIES LAW COMPLIANCE

1. Restricted Securities. The Purchased Shares have not been registered under the 1933 Act and are being issued to Optionee in reliance upon the exemption from such registration provided by Section 4(2) of the 1933 Act or SEC Rule 504, 505, 506 or 701. Optionee hereby confirms that Optionee has been informed that the Purchased Shares are restricted securities under the 1933 Act and may not be resold or transferred unless the Purchased Shares are first registered under the Federal securities laws or unless an exemption from such registration is available. Accordingly, Optionee hereby acknowledges that Optionee is acquiring the Purchased Shares for investment purposes only and not with a view to resale and is prepared to hold the Purchased Shares for an indefinite period and that Optionee is aware that SEC Rule 144 issued under the 1933 Act which exempts certain resales of unrestricted securities is not presently available to exempt the resale of the Purchased Shares from the registration requirements of the 1933 Act.

2. Restrictions on Disposition of Purchased Shares.

(a) Optionee shall make no disposition of the Purchased Shares (other than a Permitted Transfer) unless and until there is compliance with all of the following requirements:

(i) Optionee shall have provided the Corporation with a written summary of the terms and conditions of the proposed disposition.

(ii) Optionee shall have complied with all requirements of this Agreement applicable to the disposition of the Purchased Shares.

(iii) Optionee shall have provided the Corporation with written assurances, in form and substance satisfactory to the Corporation, that (A) the proposed disposition does not require registration of the Purchased Shares under the 1933 Act or (B) all appropriate action necessary for compliance with the registration requirements of the 1933 Act or any exemption from registration available under the 1933 Act (including Rule 144) has been taken.

(b) The Corporation shall not be required (i) to transfer on its books any Purchased Shares which have been sold or transferred in violation of the provisions of this Agreement or (ii) to treat as the owner of the Purchased Shares, or otherwise to accord voting, dividend or liquidation rights to, any transferee to whom the Purchased Shares have been transferred in contravention of this Agreement.

3. Restrictive Legends. The stock certificates representing the Purchased Shares shall be endorsed with one or more of the following restrictive legends:

“The shares represented by this certificate have not been registered under the Securities Act of 1933. The shares may not be sold or offered for sale in the absence of (a) an effective registration statement for the shares under such Act, (b) a “no action” letter of the Securities and Exchange Commission with respect to such sale or offer or (c) satisfactory assurances to the Corporation that registration under such Act is not required with respect to such sale or offer.”

“The shares represented by this certificate are subject to certain repurchase rights and rights of first refusal granted to the Corporation and accordingly may not be sold, assigned, transferred, encumbered, or in any manner disposed of except in conformity with the terms of a written agreement dated             ,          between the Corporation and the registered holder of the shares (or the predecessor in interest to the shares). A copy of such agreement is maintained at the Corporation’s principal corporate offices.”

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C. TRANSFER RESTRICTIONS

1. Restriction on Transfer. Except for any Permitted Transfer, (a) Participant shall not transfer, assign, encumber or otherwise dispose of any of the Unvested Shares and (b) Participant shall not transfer, assign, encumber or otherwise dispose of any of the Vested Shares in contravention of the First Refusal Right, the Market Stand-Off or the transfer restrictions set forth in Article B.

2. Transferee Obligations. Each person (other than the Corporation) to whom the Purchased Shares are transferred by means of a Permitted Transfer must, as a condition precedent to the validity of such transfer, acknowledge in writing to the Corporation that such person is bound by the provisions of this Agreement and that the transferred shares are subject to (a) the Repurchase Right, (b) the First Refusal Right, (c) the Market Stand-Off and (d) the transfer restrictions set forth in Article B, to the same extent such shares would be so subject if retained by Optionee.

3. Market Stand-Off.

(a) In connection with the Corporation’s initial public offering and any underwritten public offering by the Corporation of its equity securities pursuant to an effective registration statement filed under the 1933 Act within two years after the effective date of the Corporation’s initial public offering, Owner shall not sell, make any short sale of, hedge with, loan, hypothecate, pledge, grant any option for the purchase of, or otherwise dispose or transfer for value or otherwise agree to engage in any of the foregoing transactions with respect to, any Vested Shares without the prior written consent of the Corporation or its underwriters (the “Market Stand-Off’). The Market Stand-Off shall be in effect for such period of time from and after the effective date of the final prospectus for the offering as may be requested by the Corporation or such underwriters; provided, however, that such period shall not exceed one hundred eighty days.

(b) Owner shall be subject to the Market Stand-Off provided and only if the officers and directors of the Corporation are also subject to similar restrictions.

(c) Any new, substituted or additional securities that are by reason of any Recapitalization or Reorganization distributed with respect to Vested Shares shall be immediately subject to the Market Stand-Off.

(d) In order to enforce the Market Stand-Off, the Corporation may impose stop-transfer instructions with respect to Vested Shares until the end of the applicable stand-off period.

D. REPURCHASE RIGHT

1. Grant. The Corporation shall have the right (the “Repurchase Right”) to repurchase, at the Repurchase Price, any or all of the Purchased Shares which are Unvested Shares at the time Optionee’s Service ceases.

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2. Exercise of the Repurchase Right. The Repurchase Right shall be exercisable by written notice delivered to each Owner of the Unvested Shares at any time during the sixty day period following the date Optionee ceases for any reason to remain in Service or (if later) during the sixty day period following the execution date of this Agreement. The notice shall indicate the number of Unvested Shares to be repurchased, the Repurchase Price to be paid, and the date on which the repurchase is to be effected, such date to be not more than thirty days after the date of such notice. The certificates representing the Unvested Shares to be repurchased shall be delivered to the Corporation on the closing date specified for the repurchase. Concurrently with the receipt of such stock certificates, the Corporation shall pay to Owner, in cash or cash equivalents (including the cancellation of any purchase-money indebtedness), an amount equal to the aggregate Repurchase Price for the Unvested Shares which are to be repurchased from Owner.

3. Termination of the Repurchase Right. The Repurchase Right shall terminate with respect to any Unvested Shares for which it is not timely exercised under Paragraph D.2. In addition, the Repurchase Right shall terminate and cease to be exercisable as and when the Purchased Shares become Vested Shares. All Vested Shares shall, however, be subject to (a) the First Refusal Right, (b) the Market Stand Off and (c) the transfer restrictions set forth in Article B.

4. Aggregate Vesting Limitation. If the Option is exercised in more than one increment so that Optionee is a party to other Stock Purchase Agreements (the “Prior Purchase Agreements”) which are executed prior to the date of this Agreement, then the total number of Purchased Shares as to which Optionee shall be deemed to have a fully-vested interest under this Agreement and all Prior Purchase Agreements shall not exceed in the aggregate the number of Purchased Shares in which Optionee would otherwise at the time be vested, in accordance with the Vesting Schedule, had all the Purchased Shares (including those acquired under the Prior Purchase Agreements) been acquired exclusively under this Agreement.

5. Recapitalization. Any new, substituted or additional securities or other property (including cash paid other than as a regular cash dividend) which is by reason of any Recapitalization distributed with respect to the Unvested Shares shall be immediately subject to the Repurchase Right and any escrow requirements hereunder. Appropriate adjustments to reflect such distribution shall be made to the number and/or class of Unvested Shares subject to this Agreement. In addition, for purposes of determining the Repurchase Price, appropriate adjustments shall be made to the Exercise Price in order to reflect the effect of any such Recapitalization upon the Corporation’s capital structure; provided, however, that the aggregate Exercise Price shall remain the same.

6. Change in Control.

(a) The Repurchase Right shall automatically terminate in its entirety, and all Unvested Shares shall become Vested Shares, upon the consummation of a Change in Control, except to the extent (i) the Repurchase Right is to be assigned to the successor entity (or its parent) or is to be otherwise continued in effect pursuant to the terms of the Change in Control transaction or (ii) the property (including cash payments) issued with respect to Unvested Shares

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is to be held in escrow and released in accordance with the Vesting Schedule in effect for the Unvested Shares pursuant to the terms of the Change in Control transaction.

(b) To the extent the Repurchase Right remains in effect following a Change in Control, such right shall apply to any new securities or other property (including any cash payments) received in exchange for the Unvested Shares in consummation of the Change in Control. For purposes of determining the Repurchase Price, appropriate adjustments shall be made to the Exercise Price to reflect the effect (if any) of the Change in Control upon the Corporation’s capital structure; provided, however, that the aggregate Exercise Price shall remain the same. The new securities or other property (including any cash payments) issued or distributed with respect to the Unvested Shares in consummation of the Change in Control shall be immediately deposited in escrow with the Corporation (or the successor entity) and shall not be released from escrow until Optionee vests in such securities or other property in accordance with the Vesting Schedule.

E. RIGHT OF FIRST REFUSAL

1. Grant. The Corporation shall have the right of first refusal (the “First Refusal Right”) exercisable in connection with any proposed transfer of Vested Shares. For purposes of this Article E, the term “transfer” shall include any sale, assignment, pledge, encumbrance or other disposition of Vested Shares intended to be made by Owner, but shall not include any Permitted Transfer.

2. Notice of Intended Disposition. In the event any Owner of Vested Shares desires to accept a bona fide third-party offer for the transfer of any or all of such shares (Vested Shares subject to such offer to be hereinafter referred to as the “Target Shares”), Owner shall promptly (a) deliver to the Corporation written notice (the “Disposition Notice”) of the terms of the offer, including the purchase price and the identity of the third-party offeror, and (b) provide satisfactory proof that the disposition of the Target Shares to such third-party offeror would not be in contravention of the provisions set forth in Articles B and C.

3. Exercise of the First Refusal Right. The Corporation shall have the right to repurchase any or all of the Target Shares subject to the Disposition Notice upon the same terms as those specified therein or upon such other terms (not materially different from those specified in the Disposition Notice) to which Owner consents. Such right shall be exercisable by delivery of written notice (the “Exercise Notice”) to Owner prior to the twenty-fifth day following the Corporation’s receipt of the Disposition Notice. If such right is exercised with respect to all the Target Shares, then the Corporation shall effect the repurchase of such shares, including payment of the purchase price, not more than five business days after delivery of the Exercise Notice; and at such time the certificates representing the Target Shares shall be delivered to the Corporation.

Should the purchase price specified in the Disposition Notice be payable in property other than cash or evidences of indebtedness, the Corporation shall have the right to pay the purchase price in the form of cash equal in amount to the value of such property. If Owner and the Corporation cannot agree on such cash value within ten days after the Corporation’s receipt of the Disposition Notice, the valuation shall be made by an appraiser of recognized

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standing selected by Owner and the Corporation or, if they cannot agree on an appraiser within twenty days after the Corporation’s receipt of the Disposition Notice, each shall select an appraiser of recognized standing and the two appraisers shall designate a third appraiser of recognized standing, whose appraisal shall be determinative of such value. Owner and the Corporation shall share the cost of such appraisal equally. The closing shall then be held on the later of (i) the fifth business day following delivery of the Exercise Notice or (ii) the fifth business day after such valuation shall have been made.

4. Non-Exercise of the First Refusal Right. In the event the Exercise Notice is not given to Owner prior to the expiration of the twenty-five day exercise period, Owner shall have a period of thirty days thereafter in which to sell or otherwise dispose of the Target Shares to the third-party offeror identified in the Disposition Notice upon terms (including the purchase price) no more favorable to such third-party offeror than those specified in the Disposition Notice; provided, however, that any such sale or disposition must not be effected in contravention of the provisions of Articles B and C. The third-party offeror shall acquire the Target Shares subject to the First Refusal Right and the provisions and restrictions of Article B and Paragraph C.3, and any subsequent disposition of the acquired shares must be effected in compliance with the terms and conditions of such First Refusal Right and the provisions and restrictions of Article B and Paragraph C.3. In the event Owner does not effect such sale or disposition of the Target Shares within the specified thirty day period, the First Refusal Right shall continue to be applicable to any subsequent disposition of the Target Shares by Owner until such right lapses.

5. Partial Exercise of the First Refusal Right. In the event the Corporation makes a timely exercise of the First Refusal Right with respect to a portion, but not all, of the Target Shares specified in the Disposition Notice, Owner shall have the option, exercisable by written notice to the Corporation delivered within five business days after Owner’s receipt of the Exercise Notice, to effect the sale of the Target Shares pursuant to either of the following alternatives:

(a) sale or other disposition of some or all the Target Shares to the third-party offeror identified in the Disposition Notice, but in full compliance with the requirements of Paragraph E.4, as if the Corporation did not exercise the First Refusal Right; or

(b) sale to the Corporation of the portion of the Target Shares which the Corporation has elected to purchase, such sale to be effected in substantial conformity with the provisions of Paragraph E.3. The First Refusal Right shall continue to be applicable to any subsequent disposition of the remaining Target Shares until such right lapses.

Owner’s failure to deliver timely notification to the Corporation shall be deemed to be an election by Owner to sell the Target Shares pursuant to alternative (a) above.

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6. Recapitalization/Reorganization.

(a) Any new, substituted or additional securities or other property that is by reason of any Recapitalization distributed with respect to Vested Shares shall be immediately subject to the First Refusal Right.

(b) In the event of a Reorganization, the First Refusal Right shall remain in full force and effect and shall apply to the new capital stock or other property received in exchange for Vested Shares in consummation of the Reorganization and shall apply to the remaining Unvested Shares as and when they become Vested Shares.

7. Lapse. The First Refusal Right shall lapse upon the earlier to occur of (a) a firm commitment underwritten public offering, pursuant to an effective registration statement under the 1933 Act, covering the offer and sale of the Common Stock in the aggregate amount of at least $20,000,000 or (b) the acquisition of the Corporation by an entity that is traded on a stock exchange or the Nasdaq Stock Market. However, the Market Stand-Off shall continue to remain in full force and effect following the lapse of the First Refusal Right, in the case of a transaction described in (a) above.

F. SPECIAL TAX ELECTION

The acquisition of the Purchased Shares may result in adverse tax consequences that may be avoided or mitigated by filing an election under Code Section 83(b). Such election must be filed with the Internal Revenue Service within thirty days after the date of this Agreement. A description of the tax consequences applicable to the acquisition of the Purchased Shares and the form for making the Code Section 83(b) election are set forth in Exhibit II. Optionee should consult with his or her tax advisor to determine the tax consequences of acquiring the Purchased Shares and the advantages and disadvantages of filing the Code Section 83(b) election. Optionee acknowledges that it is Optionee’s sole responsibility, and not the Corporation’s responsibility, to file a timely election under Code Section 83(b), even if Optionee requests the Corporation or its representatives to make this filing on his or her behalf.

G. GENERAL PROVISIONS

1. Assignment. The Corporation may assign the Repurchase Right and/or the First Refusal Right to any person or entity selected by the Plan Administrator, including (without limitation) one or more stockholders of the Corporation.

2. At Will Employment. Nothing in this Agreement or in the Plan shall confer upon Optionee any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining Optionee) or of Optionee, which rights are hereby expressly reserved by each, to terminate Optionee’s Service at any time for any reason, with or without cause.

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3. Notices. Any notice required to be given under this Agreement shall be in writing and shall be deemed effective upon personal delivery or on the third day following deposit in the U.S. mail, registered or certified, postage prepaid and properly addressed to the party entitled to such notice at the address indicated below such party’s signature line on this Agreement or at such other address as such party may designate by ten days advance written notice under this paragraph to all other parties to this Agreement.

4. No Waiver. The failure of the Corporation in any instance to exercise the Repurchase Right or the First Refusal Right shall not constitute a waiver of any other repurchase rights and/or rights of first refusal that may subsequently arise under the provisions of this Agreement or any other agreement between the Corporation and Optionee. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition, whether of like or different nature.

5. Cancellation of Shares. If the Corporation shall make available, at the time and place and in the amount and form provided in this Agreement, the consideration for the Purchased Shares to be repurchased in accordance with the provisions of this Agreement, then from and after such time, the person from whom such shares are to be repurchased shall no longer have any rights as a holder of such shares (other than the right to receive payment of such consideration in accordance with this Agreement). Such shares shall be deemed purchased in accordance with the applicable provisions hereof, and the Corporation shall be deemed the owner and holder of such shares, whether or not the certificates therefor have been delivered as required by this Agreement.

6. Governing Law. The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Delaware without giving effect to that State’s choice of law or conflict-of-laws rules.

7. Optionee Undertaking. Optionee hereby agrees to take whatever additional action and execute whatever additional documents the Corporation may deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on either Optionee or the Purchased Shares pursuant to the provisions of this Agreement.

8. Construction. The Plan is incorporated herein by reference. In the event of a conflict between the terms of the Plan and the terms of this Agreement, the terms of this Agreement shall prevail. All decisions of the Plan Administrator with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in this option.

9. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

10. Successors and Assigns. The provisions of this Agreement shall inure to the benefit of, and be binding upon, the Corporation and its successors and assigns and upon Optionee, Optionee’s permitted assigns and the legal representatives, heirs and legatees of

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Optionee’s estate, whether or not any such person shall have become a party to this Agreement and have agreed in writing to join herein and be bound by the terms hereof.

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IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first indicated above.

THE ACTIVE NETWORK, INC.

By:

Name:

Title:

Address:

OPTIONEE

Signature:

Printed Name:

Address:

SPOUSAL ACKNOWLEDGMENT

The undersigned spouse of Optionee has read and hereby approves the foregoing Stock Purchase Agreement. In consideration of the Corporation’s granting Optionee the right to acquire the Purchased Shares in accordance with the terms of such Agreement, the undersigned hereby agrees to be irrevocably bound by all the terms of such Agreement, including (without limitation) the right of the Corporation (or its assigns) to purchase any Purchased Shares in which Optionee is not vested at the time of his or her cessation of Service.

OPTIONEE’S SPOUSE

Address:

EXHIBIT I

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED                          hereby sell(s), assign(s) and transfer(s) unto The Active Network, Inc. or its successors or assigns (the “Corporation”),                          (            ) shares of the Common Stock of the Corporation standing in his or her name on the books of the Corporation represented by Certificate No.              herewith and do(es) hereby irrevocably constitute and appoint                          as Attorney to transfer the said stock on the books of the Corporation with full power of substitution in the premises.

Dated:

Signature                                                                      

Instruction: Please do not fill in any blanks other than the signature line. Please sign exactly as you would like your name to appear on the issued stock certificate. The purpose of this assignment is to enable the Corporation to exercise the Repurchase Right without requiring additional signatures on the part of Optionee

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EXHIBIT II

FEDERAL INCOME TAX CONSEQUENCES AND SECTION 83(b) TAX ELECTION

I. Federal Income Tax Consequences and Section 83(b) Election For Exercise of Non-Statutory Option. If the Purchased Shares are acquired pursuant to the exercise of a Non-Statutory Option as specified in the Grant Notice, then under Code Section 83, the excess of the Fair Market Value of the Purchased Shares on the date any forfeiture restrictions applicable to such shares lapse over the Exercise Price paid for those shares will be reportable as ordinary income on the lapse date. For this purpose, the term “forfeiture restrictions” includes the right of the Corporation to repurchase the Purchased Shares pursuant to the Repurchase Right. However, Optionee may elect under Code Section 83(b) to be taxed at the time the Purchased Shares are acquired, rather than when and as such Purchased Shares cease to be subject to such forfeiture restrictions. Such election must be filed with the Internal Revenue Service within thirty days after the date of the Agreement. Even if the Fair Market Value of the Purchased Shares on the date of the Agreement equals the Exercise Price paid (and thus no tax is payable), the election must be made to avoid potentially adverse tax consequences in the future. The form for making this election is attached as part of this exhibit. Failure to make this filing within the applicable thirty day period may result in the recognition of ordinary income by Optionee as the forfeiture restrictions lapse.

II. Federal Income Tax Consequences and Conditional Section 83(b) Election For Exercise of Incentive Option. If the Purchased Shares are acquired pursuant to the exercise of an Incentive Option, as specified in the Grant Notice, then the following tax principles shall be applicable to the Purchased Shares:

(i) For regular tax purposes, no taxable income will be recognized at the time the Option is exercised.

(ii) The excess of (a) the Fair Market Value of the Purchased Shares on the date the Option is exercised or (if later) on the date any forfeiture restrictions applicable to the Purchased Shares lapse over (b) the Exercise Price paid for the Purchased Shares will be includible in Optionee’s taxable income for alternative minimum tax purposes.

(iii) If Optionee makes a disqualifying disposition of the Purchased Shares, then, in most cases, Optionee will recognize ordinary income in the year of such disposition equal in amount to the excess of (a) the Fair Market Value of the Purchased Shares on the date the Option is exercised or (if later) on the date any forfeiture restrictions applicable to the Purchased Shares lapse over (b) the Exercise Price paid for the Purchased Shares. Any additional gain recognized upon the disqualifying disposition will be either short-term or long-term capital gain depending upon the period for which the Purchased Shares are held prior to the disposition.

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(iv) For purposes of the foregoing, the term “forfeiture restrictions” will include the right of the Corporation to repurchase the Purchased Shares pursuant to the Repurchase Right. The term “disqualifying disposition” means any sale or other disposition¹ of the Purchased Shares within either two years after the date the option was granted to Optionee or within one year after the exercise date of the Option.

(v) In the absence of final Treasury Regulations relating to Incentive Options, it is not certain whether Optionee may, in connection with the exercise of the Option for any Purchased Shares at the time subject to forfeiture restrictions, file a protective election under Code Section 83(b) which would limit Optionee’s ordinary income upon a disqualifying disposition to the excess of the Fair Market Value of the Purchased Shares on the date the Option is exercised over the Exercise Price paid for the Purchased Shares. Accordingly, such election if properly filed will only be allowed to the extent the final Treasury Regulations permit such a protective election.

(vi) The Code Section 83(b) election will be effective in limiting Optionee’s alternative minimum taxable income to the excess of the Fair Market Value of the Purchased Shares at the time the Option is exercised over the Exercise Price paid for those shares.

Page 2 of the attached form for making the election should be filed with any election made in connection with the exercise of an Incentive Option.

¹ Generally, a disposition of shares purchased under an Incentive Option includes any transfer of legal title, including a transfer by sale, exchange or gift, but does not include a transfer to Optionee’s spouse, a transfer into joint ownership with right of survivorship if Optionee remains one of the joint owners, a pledge, a transfer by bequest or inheritance or certain tax-free exchanges permitted under the Code.

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SECTION 83(b) ELECTION

This statement is being made under Section 83(b) of the Internal Revenue Code, pursuant to Treasury Regulation Section 1.83-2.

(1) The taxpayer who performed the services is:

Name:

Address:

Taxpayer Ident. No.:

(2) The property with respect to which the election is being made is              shares of the common stock of The Active Network, Inc.

(3) The property was issued on                     ,             .

(4) The taxable year in which the election is being made is the calendar year             .

(5) The property is subject to a repurchase right pursuant to which the issuer has the right to acquire the property, at the lower of the original purchase price per share or the fair market value per share, if for any reason taxpayer’s service with the issuer terminates. The issuer’s repurchase right will lapse in a series of annual and monthly installments over a four year period ending on                     ,             .

(6) The fair market value at the time of transfer (determined without regard to any restriction other than a restriction which by its terms will never lapse) is $ per share.

(7) The amount paid for such property is $             per share.

(8) A copy of this statement was furnished to The Active Network, Inc. for whom taxpayer rendered the services underlying the transfer of property.

(9) This statement is executed on                    ,             .

Spouse (if any) Taxpayer

This election must be filed with the Internal Revenue Service Center with which taxpayer files his or her federal income tax returns and must be made within thirty days after the execution date of the Stock Purchase Agreement. This filing should be made by registered or certified mail, return receipt requested. Optionee must retain two copies of the completed form for filing with his or her federal and state tax returns for the current tax year and an additional copy for his or her records.

The property described in the above Section 83(b) election is comprised of shares of common stock acquired pursuant to the exercise of an incentive stock option under Section 422 of the Internal Revenue Code (the “Code”). Accordingly, it is the intent of the Taxpayer to utilize this election to achieve the following tax results:

1. One purpose of this election is to have the alternative minimum taxable income attributable to the purchased shares measured by the amount by which the fair market value of such shares at the time of their transfer to the Taxpayer exceeds the purchase price paid for the shares. In the absence of this election, such alternative minimum taxable income would be measured by the spread between the fair market value of the purchased shares and the purchase price which exists on the various lapse dates in effect for the forfeiture restrictions applicable to such shares.

2. Section 421(a)(l) of the Code expressly excludes from income any excess of the fair market value of the purchased shares over the amount paid for such shares. Accordingly, this election is also intended to be effective in the event there is a “disqualifying disposition” of the shares, within the meaning of Section 421(b) of the Code, which would otherwise render the provisions of Section 83(a) of the Code applicable at that time. Consequently, the Taxpayer hereby elects to have the amount of disqualifying disposition income measured by the excess of the fair market value of the purchased shares on the date of transfer to the Taxpayer over the amount paid for such shares. Since Section 421 (a) presently applies to the shares which are the subject of this Section 83(b) election, no taxable income is actually recognized for regular tax purposes at this time, and no income taxes are payable, by the Taxpayer as a result of this election. The foregoing election is to be effective to the full extent permitted under the Code.

This page 2 is to be attached to any Section 83(b) election filed in connection with the exercise of an INCENTIVE STOCK OPTION under the federal tax laws.

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APPENDIX

The following definitions shall be in effect under the Agreement:

A. Agreement shall mean this Stock Purchase Agreement.

B. Board shall mean the Corporation’s Board of Directors.

C. Change in Control shall mean a change in ownership or control of the Corporation effected through any of the following transactions:

(i) a stockholder-approved merger, consolidation or other reorganization in which securities representing more than 50% of the total combined voting power of the Corporation’s outstanding securities are beneficially owned, directly or indirectly, by a person or persons different from the person or persons who beneficially owned those securities immediately prior to such transaction;

(ii) a stockholder-approved sale, transfer or other disposition of all or substantially all of the Corporation’s assets; or

(iii) the acquisition, directly or indirectly, by any person or related group of persons (other than the Corporation or a person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation), of beneficial ownership (within the meaning of Rule 13-d3 of the 1934 Act) of securities possessing more than 50% of the total combined voting power of the Corporation’s outstanding securities from a person or persons other than the Corporation.

In no event shall any public offering of the Corporation’s securities be deemed to constitute a Change in Control.

D. Code shall mean .the Internal Revenue Code of 1986, as amended.

E. Common Stock shall mean the common stock of the Corporation.

F. Corporation shall mean The Active Network, Inc., a Delaware corporation, or any successor corporation to the voting stock or all or substantially all of the assets of The Active Network, Inc. which has assumed some or all of the rights of The Active Network, Inc. under this Agreement.

G. Disposition Notice shall have the meaning assigned to such term in Paragraph E.2.

H. Exercise Price shall have the meaning assigned to such term in Paragraph A. 1.

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I. Fair Market Value per share of Common Stock on any relevant date shall be determined in accordance with the following provisions:

(i) If the Common Stock is at the time listed on the Nasdaq Stock Market, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question, as such price is reported by the National Association of Securities Dealers on the Nasdaq Stock Market and published in The Wall Street Journal. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.

(ii) If the Common Stock is at the time listed on any stock exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question on the stock exchange determined by the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite tape of transactions on such exchange and published in The Wall Street Journal. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.

(iii) If the Common Stock is at the time neither listed on any stock exchange or the Nasdaq Stock Market, then the Fair Market Value shall be determined by the Plan Administrator after taking into account such factors as the Plan Administrator shall deem appropriate.

J. First Refusal Right shall mean the right granted to the Corporation in accordance with Article E.

K. Grant Notice shall mean the Notice of Grant of Stock Option pursuant to which Optionee has been informed of the basic terms of the Option.

L. Incentive Option shall mean an option that satisfies the requirements of Code Section 422.

M. Market Stand-Off shall mean the market stand-off restriction specified in Paragraph C.3.

N. 1933 Act shall mean the Securities Act of 1933, as amended.

O. 1934 Act shall mean the Securities Exchange Act of 1934, as amended.

P. Non-Statutory Option shall mean an option that is not intended to satisfy the requirements of Code Section 422.

Q. Option shall have the meaning assigned to such term in Paragraph A.1.

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R. Option Agreement shall mean all agreements and other documents evidencing the Option.

S. Option Shares shall mean the shares of Common Stock subject to the option.

T. Optionee shall mean the person to whom the Option is granted under the Plan.

U. Owner shall mean Optionee and all subsequent holders of the Purchased Shares who derive their chain of ownership through a Permitted Transfer from Optionee.

V. Parent shall mean any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

W. Permitted Transfer shall mean (i) a transfer of the Purchased Shares to one or more members of Optionee’s family or to a trust established for the benefit of one or more family members or to Optionee’s former spouse pursuant to a domestic relations order, (ii) a transfer of title to the Purchased Shares effected pursuant to Optionee’s will or the laws of inheritance following Optionee’s death or (iii) a transfer to the Corporation in pledge as security for any purchase-money indebtedness incurred by Optionee in connection with the acquisition of the Purchased Shares.

X. Plan shall mean The Active Network, Inc. 2002 Stock Option/Stock Issuance Plan.

Y. Plan Administrator shall mean either the Board or a committee of the Board acting in its capacity as administrator of the Plan.

Z. Prior Purchase Agreement shall have the meaning assigned to such term in Paragraph D.4.

AA. Purchased Shares shall have the meaning assigned to such term in Paragraph A.I.

BB. Recapitalization shall mean any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the Corporation’s outstanding Common Stock as a class without the Corporation’s receipt of consideration.

CC. Reorganization shall mean any of the following transactions:

(i) a merger or consolidation in which the Corporation is not the surviving entity;

(ii) a sale, transfer or other disposition of all or substantially all of the Corporation’s assets;

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(iii) a reverse merger in which the Corporation is the surviving entity but in which the Corporation’s outstanding voting securities are transferred in whole or in part to a person or persons different from the persons holding those securities immediately prior to the merger; or

(iv) any transaction effected primarily to change the state in which the Corporation is incorporated or to create a holding company structure.

DD. Repurchase Price shall mean the lower of (i) the Exercise Price per share or (ii) the Fair Market Value per share of Common Stock on the date Optionee’s Service ceases.

EE. Repurchase Right shall mean the right granted to the Corporation in accordance with Article D.

FF. SEC shall mean the Securities and Exchange Commission.

GG. Service shall mean Optionee’s performance of services for the Corporation (or any Parent or Subsidiary) in the capacity of an employee, subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance, a member of the board of directors or an independent contractor.

HH. Subsidiary shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

II. Target Shares shall have the meaning assigned to such term in Paragraph E.2.

JJ. Unvested Shares shall mean the Option Shares which have not vested in accordance with the Vesting Schedule applicable to those shares or any special vesting acceleration provisions and which are subject to the Repurchase Right.

KK. Vested Shares shall mean the Option Shares which have vested in accordance with the Vesting Schedule applicable to those shares or any special vesting acceleration provisions and which are no longer subject to the Repurchase Right.

LL. Vesting Schedule shall mean the vesting schedule specified in the Grant Notice.

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ADDENDUM

TO

STOCK PURCHASE AGREEMENT

The following provisions are hereby incorporated into, and are hereby made a part of, that certain Stock Purchase Agreement (the “Purchase Agreement”) by and between the Corporation and                              (“Optionee”) evidencing the shares of Common Stock purchased by Optionee under The Active Network, Inc. 2002 Stock Option/Stock Issuance Plan, and such provisions shall be effective immediately. All capitalized terms in this Addendum, to the extent not otherwise defined herein, shall have the meanings assigned to such terms in the Purchase Agreement.

INVOLUNTARY TERMINATION FOLLOWING

A CHANGE IN CONTROL

1. If the Repurchase Right is assigned to the successor corporation (or parent thereof) or otherwise continued in full force and effect pursuant to the terms of the Change in Control transaction and Optionee’s Service is Involuntarily Terminated within twelve months following such Change in Control, then the Repurchase Right shall terminate automatically, and all the Purchased Shares shall immediately vest with respect to the lesser of (a) 25% of total number of Purchased Shares or (b) the number of Unvested Shares at the time Optionee’s Service is Involuntary Terminated. Unvested Shares that have been held in an escrow account maintained on Optionee’s behalf pursuant to Paragraph D.6 of the Purchase Agreement and that become vested on an accelerated basis in accordance with this Addendum shall be released from such escrow at the time of such Involuntary Termination.

2. If (a) pursuant to the terms of a Change in Control transaction, property (including cash payments) issued or distributed with respect to Unvested Shares (the “Payments”) is deposited in escrow and is to be released from escrow as the Optionee vests in the property in accordance with the Vesting Schedule and (b) Optionee’s Service is Involuntary Terminated within twelve months following such Change in Control, then any unvested escrow account maintained on Optionee’s behalf shall immediately vest with respect to the lesser of (a) 25% of the total Payments that were placed in escrow in connection with the Change in Control and (b) the Payments that remain in escrow at the time Optionee’s Service is Involuntarily Terminated.

3. For purposes of this Addendum, the following definitions shall be in effect:

(a) An Involuntary Termination shall mean the termination of Optionee’s Service by reason of:

(i) Optionee’s involuntary dismissal or discharge by the Corporation, Parent or Subsidiary employing Optionee for reasons other than for Misconduct, or

(ii) Optionee’s voluntary resignation following (A) a change in his or her position with the Corporation, Parent or Subsidiary employing Optionee which materially reduces his or her duties and responsibilities, (B) a reduction in Optionee’s base salary by more than 15%, unless the base salaries of all similarly situated individuals are reduced by the Corporation, Parent or Subsidiary employing Optionee, or (C) a relocation of Optionee’s place of employment by more than fifty miles, provided and only if such change, reduction or relocation is effected without Optionee’s written consent.

(b) Misconduct shall mean (i) the commission of any act of fraud, embezzlement or dishonesty by Optionee, (ii) any unauthorized use or disclosure by Optionee of confidential information or trade secrets of the Corporation (or any Parent or Subsidiary), or (iii) any other intentional misconduct by Optionee adversely affecting the business or affairs of the Corporation (or any Parent or Subsidiary) in a material manner; provided, however, that if the term or concept has been defined in an employment agreement between the Corporation and Optionee, then Misconduct shall have the definition set forth in such employment agreement. The foregoing definition shall not in any way preclude or restrict the right of the Corporation (or any Parent or Subsidiary) to discharge or dismiss Optionee for any other acts or omissions, but such other acts or omissions shall not be deemed, for purposes of the Plan, the Purchase Agreement or this Addendum, to constitute grounds for termination for Misconduct.

IN WITNESS WHEREOF, The Active Network, Inc. has caused this Addendum to be executed by its duly-authorized officer as of the Effective Date specified below.

Effective Date:                     ,             

THE ACTIVE NETWORK, INC.

By:

Printed Name:

Title:

EX-10.10

Exhibit 10.10

INDEMNIFICATION AGREEMENT

THIS AGREEMENT (the “Agreement”) is made and entered into this                      day of              between The Active Network, Inc., a Delaware corporation (the “Company”) and              (“Indemnitee”).

WITNESSETH THAT:

WHEREAS, Indemnitee performs a valuable service for the Company; and

WHEREAS, the Board of Directors of the Company have adopted a Certificate of Incorporation (the “Certificate”) permitting the Board of Directors to indemnify certain officers (the “Officers”) and directors (the “Directors”) designated by the Board of Directors or Chief Executive Officer of the Company; and

WHEREAS, the Certificate and Section 145 of the Delaware General Corporation Law, as amended (the “Law”), by their nonexclusive nature permit contracts between the Company and the Officers and Directors of the Company with respect to indemnification of such Officers and Directors; and

WHEREAS, in accordance with the authorization as provided by the Law, the Company may purchase and maintain a policy or policies of Directors’ and Officers’ liability insurance (“D & O Insurance”), covering certain liabilities which may be incurred by its Officers and Directors in the performance of their obligations as Officers and Directors of the Company; and

WHEREAS, as a result of recent developments affecting the terms, scope and availability of D & O Insurance there exists general uncertainty as to the extent of protection afforded the Company’s Officers and Directors by such D & O Insurance and said uncertainty also exists under statutory and bylaw indemnification provisions; and

WHEREAS, in recognition of past services and in order to induce Indemnitee to continue to serve as an officer and/or a director of the Company, the Company has determined and agreed to enter into this contract with Indemnitee;

NOW, THEREFORE, in consideration of Indemnitee’s continued service as an officer and/or a director after the date hereof, the parties hereto agree as follows:

1. Indemnity of Indemnitee. The Company hereby agrees to hold harmless and indemnify Indemnitee to the full extent authorized or permitted by the provisions of the Law, as such may be amended from time to time, and Article V of the Certificate, as such may be amended. In furtherance of the foregoing indemnification, and without limiting the generality thereof:

(a) Proceedings. Other than proceedings by or in the right of the Company, Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(a) if, by reason of his Corporate Status (as hereinafter defined), he is, or is threatened

to be made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of the Company. Pursuant to this Section 1(a), Indemnitee shall be indemnified against all Expenses (as hereinafter defined), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, with respect to any criminal Proceeding, had no reasonable cause to believe his conduct was unlawful.

(b) Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(b) if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 1(b), Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company; provided, however, that, if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company unless and to the extent that the Court of Chancery of the State of Delaware, or the court in which such Proceeding shall have been brought or is pending, shall determine that such indemnification may be made.

(c) Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he shall be indemnified to the maximum extent permitted by law against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

2. Additional Indemnity.

(a) Subject only to the exclusions set forth in Section 2(b) hereof, the Company hereby further agrees to hold harmless and indemnify Indemnitee against any and all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with any Proceeding (including an action by or on behalf of the Company) to which Indemnitee is, was or at any time becomes a party, or is threatened to be made a party, by reason of his Corporate Status; provided, however, that with respect to actions by or on behalf of the Company, indemnification of Indemnitee against any judgments shall be made by the Company only as authorized in the specific case upon a determination that Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company; and

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(b) No indemnity pursuant to this Section 2 shall be paid by the Company:

(i) In respect to remuneration paid to Indemnitee if it shall be determined by a final judgment or other final adjudication that such remuneration was in violation of law;

(ii) On account of any suit in which judgment is rendered against Indemnitee for an accounting of profits made from the purchase or sale by Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal, state or local statutory law;

(iii) On account of Indemnitee’s conduct which is finally adjudged to have been knowingly fraudulent or deliberately dishonest, or to constitute willful misconduct; or

(iv) If a final decision by a court having jurisdiction in the matter shall determine that such indemnification is not lawful.

3. Contribution. If the indemnification provided in Sections 1 and 2 is unavailable and may not be paid to Indemnitee for any reason other than those set forth in paragraphs (i), (ii) and (iii) of Section 2(b), then in respect to any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall contribute to the amount of Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in such proportion as is appropriate to reflect (i) the relative benefits received by the Company on the one hand and by the Indemnitee on the other hand from the transaction from which such Proceeding arose, and (ii) the relative fault of the Company on the one hand and of the Indemnitee on the other hand in connection with the events which resulted in such Expenses, judgments, fines or settlement amounts, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of the Indemnitee on the other hand shall be determined by reference to, among other things, the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent the circumstances resulting in such Expenses, judgments, fines or settlement amounts. The Company agrees that it would not be just and equitable if contribution pursuant to this Section 3 were determined by pro rata allocation or any other method of allocation which does not take account of the foregoing equitable considerations.

4. Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.

5. Advancement of Expenses. Notwithstanding any other provision of this Agreement, the Company shall advance all reasonable Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate Status

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within ten (10) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses. Any advances and undertakings to repay pursuant to this Section 5 shall be unsecured and interest free. Notwithstanding the foregoing, the obligation of the Company to advance Expenses pursuant to this Section 5 shall be subject to the condition that, if, when and to the extent that the Company determines that Indemnitee would not be permitted to be indemnified under applicable law, the Company shall be entitled to be reimbursed, within thirty (30) days of such determination, by Indemnitee (who hereby agrees to reimburse the Company) for all such amounts theretofore paid; provided, however, that if Indemnitee has commenced or thereafter commences legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee should be indemnified under applicable law, any determination made by the Company that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and Indemnitee shall not be required to reimburse the Company for any advance of Expenses until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have been exhausted or lapsed).

6. Procedure for Determination of Entitlement to Indemnification.

(a) To obtain indemnification (including, but not limited to, the advancement of Expenses and contribution by the Company) under this Agreement, Indemnitee shall submit to the Chief Executive Officer or Chief Financial Officer a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary or any Assistant Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.

(b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 6(a) hereof, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case: (i) if a Change in Control (as hereinafter defined) shall have occurred, by Independent Counsel (as hereinafter defined) in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee (unless Indemnitee shall request that such determination be made by the Board of Directors or the stockholders, in which case the determination shall be made in the manner provided in clause (ii) below), or (ii) if a Change in Control shall not have occurred, (A) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors (as hereinafter defined), or (B) if a quorum of the Board of Directors consisting of Disinterested Directors is not obtainable or, even if obtainable, said Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, or (C) if so directed by said Disinterested Directors, by the stockholders of the Company; and, if it is determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to

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Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Independent Counsel, member of the Board of Directors, or stockholder of the Company shall act reasonably and in good faith in making a determination under the Agreement of the Indemnitee’s entitlement to indemnification. Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

(c) If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 6(b) hereof, the Independent Counsel shall be selected as provided in this Section 6(c). If a Change in Control shall not have occurred, the Independent Counsel shall be selected by the Board of Directors, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. If a Change in Control shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board of Directors, in which event the preceding sentence shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 14 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within twenty (20) days after submission by Indemnitee of a written request for indemnification pursuant to Section 6(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 6(b) hereof. The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 6(b) hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 6(c), regardless of the manner in which such Independent Counsel was selected or appointed. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 8(a)(iii) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

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(i) The Company shall not be required to obtain the consent of the Indemnitee to the settlement of any Proceeding which the Company has undertaken to defend if the Company assumes full and sole responsibility for such settlement and the settlement grants the Indemnitee a complete and unqualified release in respect of the potential liability.

7. Presumptions and Effect of Certain Proceedings.

(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 6(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption.

(b) If the person, persons or entity empowered or selected under Section 6 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within thirty (30) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such thirty (30)-day period may be extended for a reasonable time, not to exceed an additional fifteen (15) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 7(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 6(b) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board of Directors or the Disinterested Directors, if appropriate, resolve to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 6(b) of this Agreement.

(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement (with or without court approval), conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.

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(d) For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise (as hereinafter defined), including financial statements, or on information supplied to Indemnitee by the Officers and Directors of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement. The provisions of this Section 7(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

8. Remedies of Indemnitee.

(a) In the event that (i) a determination is made pursuant to Section 6 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 5 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 6(b) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 3 or 4 of this Agreement within ten (10) days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 6 or 7 of this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction, of his entitlement to such indemnification. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within one hundred eighty (180) days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 8(a). The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

(b) In the event that a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 8 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination.

(c) If a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 8, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

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(d) In the event that Indemnitee, pursuant to this Section 8, seeks a judicial adjudication of or an award in arbitration to enforce his rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company against, any and all expenses (of the types described in the definition of Expenses in Section 16 of this Agreement) actually and reasonably incurred by him in such judicial adjudication or arbitration, but only if he prevails therein. If it shall be determined in said judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification sought, the expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated. The Company shall indemnify Indemnitee against any and all expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee to recover under any Directors’ and Officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses or insurance recovery, as the case may be.

(e) The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 8 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement.

9. Nonexclusivity; Survival of Rights; Insurance; Subrogation.

(a) The rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate, any agreement, a vote of stockholders or a resolution of Directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in the Law, whether by statute or judicial decision, permits greater indemnification than would be afforded currently under the Certificate and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for Directors, Officers, employees, or agents or fiduciaries of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum

8

extent of the coverage available for any such director, officer, employee or agent under such policy or policies.

(c) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(d) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

10. Exception to Right of Indemnification. Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification under this Agreement with respect to any Proceeding brought by Indemnitee, or any claim therein, unless (a) the bringing of such Proceeding or making of such claim shall have been approved by the Board of Directors or (b) such Proceeding is being brought by the Indemnitee to assert his rights under this Agreement.

11. Duration of Agreement. All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is an officer and/or a director of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding (or any proceeding commenced under Section 8 hereof) by reason of his Corporate Status, whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives. This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as an officer and/or a director of the Company or any other enterprise at the Company’s request.

12. Security. To the extent requested by the Indemnitee and approved by the Board of Directors, the Company may at any time and from time to time provide security to the Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to the Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee.

13. Enforcement.

(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as an officer and/or a director of the Company, and the Company

9

acknowledges that Indemnitee is relying upon this Agreement in serving as an officer and/or a director of the Company.

(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.

14. Definitions. For purposes of this Agreement.

(a) “Change in Control” means a change in control of the Company occurring after the date of this Agreement of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934 (the “Act”), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if after the date of this Agreement (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Act, as amended) other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the “beneficial owner” (as defined in Rule 13d3 under the Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of the Company’s then outstanding securities (other than any such person or any affiliate thereof that is such a 15% beneficial owner as of the date hereof) without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person attaining such percentage interest; (ii) there occurs a proxy contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) during any period of two (2) consecutive years, other than as a result of an event described in clause (a)(ii) of this Section 16, individuals who at the beginning of such period constituted the Board of Directors (including for this purpose any new director whose election or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the Directors then still in office who were Directors at the beginning of such period) cease for any reason to constitute at least a majority of the Board of Directors. A Change in Control shall not be deemed to have occurred under item (i) above if the “person” described under item (i) is entitled to report its ownership on Schedule 13G promulgated under the Act and such person is able to represent that it acquired such securities in the ordinary course of its business and not with the purpose nor with the effect of changing or influencing the control of the Company, nor in connection with or as a participant in any transaction having such purpose or effect. If the “person” referred to in the previous sentence would at any time not be entitled to continue to report such ownership on Schedule 13G pursuant to Rule 13d1(b)(3)(i)(B) of the Act, then a Change in Control shall be deemed to have occurred at such time.

(b) “Corporate Status” describes the status of a person who is or was a director, officer, employee or agent or fiduciary of the Company or of any other corporation,

10

partnership, joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the express written request of the Company.

(c) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

(d) “Enterprise” shall mean the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the express written request of the Company as a director, officer, employee, agent or fiduciary.

(e) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding.

(f) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

(g) “Proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was an officer and/or a director of the Company, by reason of any action taken by him or of any inaction on his part while acting as an officer and/or a director of the Company, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement; and excluding one initiated by an Indemnitee pursuant to Section 8 of this Agreement to enforce his rights under this Agreement.

11

15. Severability. If any provision or provisions of this Agreement shall be held by a court of competent jurisdiction to be invalid, void, illegal or otherwise unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

16. Modification and Waiver. No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

17. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder. The failure to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.

18. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:

(a) If to Indemnitee, to:

(b) If to the Company, to:

The Active Network, Inc.

1295 Prospect Street

La Jolla, California 92037

Attention: Chief Financial Officer

or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

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19. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

20. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

21. Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware without application of the conflict of laws principles thereof.

22. Gender. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and year first above written.

THE ACTIVE NETWORK, INC. a Delaware corporation
By
	Chief Financial Officer
	Indemnitee

13

EX-10.11

November 22, 1999

Exhibit 10.11

Personal and Confidential

Mr. David Alberga

Dear Dave:

On behalf of RaceGate.com, Inc., a California corporation (the “Company”), I am pleased to offer you the position of Chief Executive Officer of the Company. This offer is contingent upon the documentation of your U.S. citizenship or authorized alien work status and returning a signed copy of this letter indicating your acceptance. The terms of your employment relationship with the Company will be as set forth below:

1. Position. You will become the Chief Executive Officer of the Company. As such, you will have such responsibilities as determined by the Board of Directors of the Company (“Board”).

2. Base Salary and Benefits. You will be paid a base salary of $15,000.00 per month, effective as of the start date in Section 7. Your salary will be payable in accordance with the Company’s standard payroll policies (subject to applicable withholding). You will receive the standard vacation and benefits package offered by the Company to its employees.

3. Relocation. You will relocate to San Diego no later than January 3, 2000. You will receive reimbursement of reasonable and legitimate moving expenses of up to $5,000.00.

4. Stock Option. As part of your compensation, the Company will grant you, subject to the approval of the Board, an option to purchase 1,568,975 shares of Common Stock, which will vest over a four year period. Twenty-five percent of these shares will vest at the end of your first year of employment at the Company, with the other shares vesting over the remaining thirty-six months on a pro rata basis. The option will be subject to the terms and conditions of the Company’s stock option plan.

5. Standard Employee Agreements. Like all Company employees, you will be required to sign the Company’s standard confidentiality agreement relating to protection of the Company’s proprietary and confidential information and assignment of inventions. In addition, you will abide by the Company’s strict policy that prohibits any new employee from using or bringing with him or her from a previous employer any confidential information, trade secrets, or proprietary materials or processes of such former employer.

Mr. David Alberga	November 22, 1999
	Page 2

6. At-Will Employment. You will be an employee-at-will, meaning that either you or the Company may terminate your employment relationship at any time, without notice, for any reason or no reason. Similarly, the terms and conditions of your employment, including your position, title, duties and compensation, may be changed by the Company at any time for any reason. Even though your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time during your tenure, the “at-will” nature of your employment is one aspect which may not be changed, except in an express writing signed by the Board.

7. Start Date. Your employment with the Company will commence December 6, 1999. However, after working the week of December 6, you will be permitted to take time off so you can complete the transition to California. While completing this transition, you will make yourself available by telephone to attend to issues that need your attention. You will return to your full-time duties on January 3, 2000.

8. Severance Pay. In the event your employment is terminated by the Company for Cause (as defined below) or you resign from the Company without Good Reason (as defined below), or your employment terminates due to your death or disability, you shall not be entitled to severance pay. In the event your employment is terminated by the Company other than for Cause or you resign for Good Reason, you shall be entitled to severance pay in the form of semi-monthly payments in the amount of your base pay as in effect on the date of termination, payable in accordance with customary payroll practices, for twelve (12) months following such termination. In addition, the Company will pay your COBRA premiums for one year after such termination, and will accelerate by one year the vesting on the unvested portion of your options. Solely for purposes of this Section 8, “Cause” shall mean the termination of your employment by reason of your (i) substantial failure or refusal to perform the duties of your employment as specifically directed in writing by the Board of Directors, or (ii) commission of any act of fraud, embezzlement or dishonesty, (iii) being convicted, pleading guilty to or failing to contest a crime that is a felony; (iv) any unauthorized use or disclosure by you of confidential information or trade secrets of the Company (or any parent of subsidiary), failure to abide by the Company’s policies or any other intentional misconduct by you adversely affecting the business affairs or prospects of the Company (or any parent or subsidiary) in a material manner. Solely for purposes of this Section 8, “Good Reason” shall mean Optionee’s voluntary resignation following (A) a change in Optionee’s position with the Corporation (or Parent or Subsidiary employing Optionee) which materially reduces Optionee’s duties and responsibilities, (B) a reduction in Optionee’s level of compensation (including base salary, fringe benefits and target bonuses under any corporate-performance based incentive programs) by more than fifteen percent (15%) or (C) a relocation of Optionee’s place of employment by more than one hundred (100) miles, provided and only if such change, reduction or relocation is effected by the Corporation without Optionee’s consent.

Mr. David Alberga	November 22, 1999
	Page 3

9. Change of Control. In the event of a change of control, all of your then outstanding options will accelerate and vest six months after the date of the Change in Control, provided that you continue to be employed by the Company for that entire period. In the event that you are terminated within the first 6 months following a Change of Control for anything other than for Cause, then your unvested options will vest in full. For purposes of this section, Change of Control shall mean either of the following transactions: (i) a merger or consolidation in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different form the persons holding those securities immediately prior to such transaction, or (ii) the sale, transfer or other disposition of all or substantially all of the Company’s assets to another entity or in complete liquidation or dissolution of the Company.

10. Entire Agreement. This letter, along with your Employee Proprietary Information and Inventions Agreement, constitutes the entire agreement between the parties and supersedes all other agreements or understandings. By signing this letter you acknowledge that you are not relying on any promises or representations that are not contained in this letter. This letter can only be modified in a written agreement signed by you and the Board.

Again, let me indicate how pleased we are to extend this offer, and how much we look forward to working with you. Please indicate your acceptance by signing and returning the enclosed copy of this letter.

Very truly yours,

RaceGate.com, Inc.
By:	/s/    Scott Kyle
Title:	CFO

The forgoing terms and conditions are hereby accepted:

/s/ David Alberga

David Alberga

EX-10.12

Exhibit 10.12

February 14, 2000

Personal and Confidential

Matthew Landa

mattlanda@aol.com

Dear Mr. Landa:

On behalf of ActiveUSA.com, Inc., a California corporation (the “Company”), I am pleased to offer you the position of Chief Commerce Officer for the Company. This offer is also contingent upon the documentation of your U.S. citizenship or authorized alien work status and returning a signed copy of this letter indicating your acceptance as well as an Employee Proprietary Information and Inventions Agreement. The terms of your employment relationship with the Company will be as set forth below:

1. Position. You will become a Chief Commerce Officer for the Company. As such, you will have such responsibilities as determined by the Chief Executive Officer or Board of Directors of the Company.

2. Base Salary and Performance Bonus. You will be paid a base salary of $170,000 per year. Your salary will be payable in accordance with the Company’s standard payroll policies (subject to normal required withholding). You will also receive a vacation and benefits plan.

3. Stock and/or Options. Subject to the approval of the Board of Directors of the Company, you will be granted an option (the “Option”) to purchase 300,000 shares of the Company’s common stock (the “Shares”) at an exercise price per share equal to the fair market value of the Company’s common stock as established by the Company’s Board of Directors on the date of the grant. The grant of the Option will be subject to the terms of the Company’s plan documentation and compliance with applicable securities law and will also be subject to standard Company vesting schedule as follows:

• 12/48^th of the Shares to be vested at the end of the first year of employment, 1/48^th of the shares to vest each month beginning with the 13th month of your employment at the Company.

• 50% of all unvested Shares shall automatically vest at the end of the first six months of your employment following a “change of control” of the Company. For purposes of this Agreement, a “change of control” shall be deemed to have occurred if any person or group of persons acting as a group, other than existing directors or their affiliates, shall have acquired

February 14, 2000

Page 2

control over the voting power represented by at least 50% of the then outstanding shares of common stock of the Company. The rights granted to you under this clause are in addition to any other rights related to termination of your employment that are granted to you under other agreements entered into between you and the Company.

4. Severance.

A. If your employment is terminated by the Company within one year of the commencement of your employment with the Company, for any reason other than for Cause (as defined below) (a) you will be entitled to receive your base salary, paid as though you were still employed by the Company for a period of 6 months following the date of your termination in installments in accordance with the Company’s normal payroll practices, and (b) 6/48th of the Shares granted to you shall automatically vest and your Option shall expire with respect to the remaining unvested Shares. You will not be entitled to any additional payments, salary, bonus or benefits. Cause is defined as (i) fraud, embezzlement or misappropriation by you involving the business or assets of the Company; (ii) the persistent and willful failure by you substantially to perform your duties and responsibilities to the Company, which failure continues after you receive written notice; (iii) failures to abide by the Company’s policies; or (iv) your conviction of a felony.

B. If your employment with the Company is terminated for any reason other than Cause within six months following a “change of control” of the Company, then (i) 50% of all Shares that have not vested at the time of such termination shall automatically vest, (ii) an additional 6/48^th of the Shares that have not vested at the time of such termination shall automatically vest, and (iii) you will be entitled to receive your base salary, paid as though you were still employed by the Company, for a period of 6 months following the date of your termination in installments in accordance with the Company’s normal payroll practices. The total number of Shares that vest under clauses (i) and (ii) of this paragraph shall not exceed the total number of unvested Shares in existence immediately prior to such termination.

5. Moving Allowance. You will receive a relocation allowance not to exceed $10,000.00 plus one month rent for pre-approved local housing arrangements.

6. Standard Employee Agreements. You will be required to sign the Company’s standard confidentiality agreement relating to protection of the Company’s proprietary and confidential information and assignment of inventions. In addition, you will abide by the Company’s strict policy that prohibits any new employee from using or bringing with him or her from a previous employer any confidential information, trade secrets, or proprietary materials or processes of such former employer.

February 14, 2000

Page 3

7. At-Will Employment. You will be an employee-at-will, meaning that either you or the Company may terminate your employment relationship at any time, without notice, for any reason or no reason. Similarly, the terms and conditions of your employment, including your position, title, duties and compensation, may be changed by the company at any time for any reason. Even though your job duties, title compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time during your tenure, the “at-will” nature of your employment is one aspect which may not be changed, except in an express writing signed by the President of the Company.

8. Start Date. Your employment with the Company will commence on March 27, 2000.

9. Entire Agreement. This letter, along with your Employee Proprietary Information and inventions Agreement, constitutes the entire agreement between the parties and supersedes all other agreements or understandings. By signing this letter you acknowledge that you are not relying on any promises or representations that are not contained in this letter. This letter can only be modified in a written agreement signed by both parties.

Again, let me indicate how pleased we are to extend this offer, and how much we look forward to working with you. Please indicate your acceptance by signing and returning the enclosed copy of this letter.

Very truly yours,

ActiveUSA.com.
By:	/s/    Scott Kyle
Title:	Chief Financial Officer

The foregoing terms and conditions are hereby accepted:

Signed:	/s/ Matthew G. Landa
Print Name:	MATTHEW G. LANDA
Date:	3/27/00

3

EX-10.12(A)

Exhibit 10.12(a)

ADDENDUM TO OFFER LETTER

This Addendum to Offer Letter (the “Addendum”) is made and entered into as of December 20, 2000 by and between Matt Landa (“Employee”) and Active.com, Inc., a Delaware corporation (“Employer”).

A. Employee and Employer entered into an offer letter dated as of February 14, 2000 (the “Offer Letter”) and desire to Amend Section 4 to the Offer Letter.

NOW, THEREFOR, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

1. Section 4 of the Offer Letter is added to include the following language:

4. Severance

If your employment is terminated by the Company, for any reason other than for Cause (as defined below) you will be entitled to receive your base salary, paid as though you were still employed by the Company for a period of 6 months following the date of your termination in installments in accordance with the Company’s normal payroll practices. You will not be entitled to any additional payments, salary, bonus or benefits. Cause is defined as (i) fraud, embezzlement or misappropriation by you involving the business or assets of the Company; (ii) the persistent and willful failure by you substantially to perform your duties and responsibilities to the Company, which failure continues after you receive written notice; (iii) failure to abide by the Company’s policies; or (iv) your conviction of a felony.

2. Except as expressly modified herein, the Offer Letter remains unchanged and shall be in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Addendum as of the date first above written.

Active.com Inc.
By:	/s/    David Alberga
Title:	Chief Executive Officer

The forgoing terms and conditions are hereby accepted:

Signed:	/s/ Matt Landa
Print Name:	Matt Landa
Date:

EX-10.13

Exhibit 10.13

April 28, 2000

Personal and Confidential

Jon Belmonte

1288 Silverado

La Jolla, CA 92037

Dear Jon:

On behalf of ActiveUSA.com, Inc. (the “Company”), I am pleased to offer you a position with our Company. The terms of your employment relationship with the Company will be as set forth below:

1. Position. You will become the Chief Operating Officer of the Company.

2. Base Salary and Performance Bonus. You will be paid an annual salary of $150,000. Your salary will be payable in accordance with the Company’s standard payroll policies (subject to normal required withholding). You will receive a vacation and benefit package (including health benefits for yourself and immediate dependents).

3. Stock and/or Options. You will receive no additional shares or options beyond your existing ownership interest, but will become eligible for employee options at a time deemed appropriate by the Board of Directors.

4. Standard Employee Agreements. Like all Company employees, you will be required to sign the Company’s standard confidentiality agreement relating to protection of the Company’s proprietary and confidential information and assignment of inventions. In addition, you will abide by the Company’s strict policy that prohibits any employee from using or bringing with him or her from any previous employer any confidential information, trade secrets, or proprietary materials or processes of such former employer.

5. At-Will Employment. You will be an employee at-will, meaning that either you or the Company may terminate your employment relationship at any time, without notice, for any reason or no reason. Similarly, the terms and conditions of your employment, including your position, title, duties and compensation, may be changed by the Company at any time for any reason. Even though your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time during your

Jon Belmonte	, 2000
Page 2

tenure, the “at-will” nature of your employment is one aspect which may not be changed, except in an express writing signed by the President of the Company.

6. Start Date. The terms of this Agreement will commence on the date the contemplated merger between ActiveUSA.com and the company closes.

7. Termination of Current Employment Agreement. Upon the effective date of this Agreement, the Employment Agreement between LeagueLink, Inc. and you, dated June 1, 1999, shall terminate, and you agree to waive any rights and benefits under that agreement.

8. Entire Agreement. This Agreement (together with your Employee Proprietary Information and Inventions Agreement, that certain Amendment to Stock Option Agreement being executed concurrently herewith, and that certain Noncompetition/Nonsolicitation Agreement being executed concurrently herewith between you and the Company) constitutes the entire agreement between the parties and supersedes all other agreements or understandings relating to your employment with the Company. By signing this agreement you acknowledge that you are not relying on any promises or representations, other than those contained in this written offer. This letter can only be modified in a written agreement signed by both parties.

Again, let me indicate how pleased we are to extend this offer, and how much we look forward to working with you. Please indicate your acceptance by signing and returning the enclosed copy of this letter.

Very truly yours,
ActiveUSA.com, Inc.
By:	/s/ Scott Kyle
Name:	Scott Kyle
Title:	Chief Financial Officer

The foregoing terms and conditions are hereby accepted:
Signed:	/s/ Jon Belmonte
Print Name:	Jon Belmonte
Date:	4-28-00

EX-10.13(A)

Exhibit 10.13(a)

ADDENDUM TO OFFER LETTER

This Addendum to Offer Letter (the “Addendum”) is made and entered into as of December 20, 2000 by and between Jon Belmonte (“Employee”) and Active.com, Inc., a Delaware corporation (“Employer”).

A. Employee and Employer entered into an offer letter dated as of April 28, 2000 (the “Offer Letter”) and desire to add Section 9 to the Offer Letter.

NOW, THEREFOR, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

1. Section 9 of the Offer Letter is added to include the following language:

9. Severance

If your employment is terminated by the Company, for any reason other than for Cause (as defined below) you will be entitled to receive your base salary, paid as though you were still employed by the Company for a period of 6 months following the date of your termination in installments in accordance with the Company’s normal payroll practices. You will not be entitled to any additional payments, salary, bonus or benefits. Cause is defined as (i) fraud, embezzlement or misappropriation by you involving the business or assets of the Company; (ii) the persistent and willful failure by you substantially to perform your duties and responsibilities to the Company, which failure continues after you receive written notice; (iii) failure to abide by the Company’s policies; or (iv) your conviction of a felony.

2. Except as expressly modified herein, the Offer Letter remains unchanged and shall be in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Addendum as of the date first above written.

Active.com, Inc.
By:	/s/    Scott Kyle
Title:	Chief Financial Officer

The forgoing terms and conditions are hereby accepted:
Signed:	/s/ Jon Belmonte
Print Name:	Jon Belmonte
Date:	2-12-01

EX-10.14

Exhibit 10.14

March 11, 2004

Personal and Confidential

John Creelman

P.O. Box 3244

Rancho Santa Fe, CA 92067

Email: creelman@adnc.com

Dear John:

On behalf of the The Active Network, Inc., a Delaware corporation (the “Company”), I am pleased to offer you the position of Chief Financial Officer for the Company. This offer is also contingent upon the documentation of your U.S. citizenship or authorized alien work status and returning a signed copy of this letter indicating your acceptance as well as an Employee Proprietary Information and Inventions Agreement. The terms of your employment relationship with the Company will be as set forth below:

1. Position. You will become the Company’s Vice President of Finance and the Chief Financial Officer for the Company. As such, you will have such responsibilities as determined by the Chief Executive Officer of the Company.

2. Base Salary and Discretionary Bonus. You will be paid a base salary of $160,000 per year. Your salary will be payable in accordance with the Company’s standard payroll policies (subject to normal required withholding). In addition, you will receive upon the first semi-monthly pay period after your initial date of employment, a discretionary bonus of $25,000 (subject to normal withholding) for future work performed in connection with the Company’s initial public offering. However, if you resign without Good Reason (as defined below) or are terminated for Cause (as defined below) within 1 year from the date first written above, you will be responsible for repayment of this entire discretionary bonus in full at that time. You will also receive a standard vacation and benefits package offered by The Active Network to its employees.

3. Stock and/or Options and Performance Bonus. Subject to the approval of the Board of Directors of the Company, you will be granted an option (the “Option”) to purchase 2,734,470 shares of the Company’s common stock (the “Shares”) at an exercise price per share of $0.273. The grant of the Option will be subject to the terms of the Company’s plan documentation and compliance with applicable securities law and will also be subject to standard Company vesting schedule as follows:

• Subject to the provisions of Sections 7 and 8, 12/48^th of the Shares will vest on the day immediately following the 1 year anniversary of your employment, thereafter at the end of each month of your employment 1/48^th of the Shares will vest until such time that all Shares have vested. The options will be subject to the terms and conditions of the Company’s stock option plan.

March 11, 2004

Page 2

4. Standard Employee Agreements. You will be required to sign the Company’s standard confidentiality agreement relating to protection of the Company’s proprietary and confidential information and assignment of inventions. In addition, you will abide by the Company’s strict policy that prohibits any new employee from using or bringing with him or her from a previous employer any confidential information, trade secrets, or proprietary materials or processes of such former employer.

5. At-Will Employment. You will be an employee-at-will, meaning that either you or the Company may terminate your employment relationship at any time, without notice, for any reason or no reason. Similarly, the terms and conditions of your employment, including your position, title, duties and compensation, may be changed by the company at any time for any reason. Even though your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time during your tenure, the “at-will” nature of your employment is one aspect which may not be changed, except in an express writing signed by the CEO of the Company.

6. Start Date. Your employment with the Company will commence on March 12, 2004.

7. Severance. If your employment is terminated by the Company for Cause (as defined below) or you resign from the Company without Good Reason (as defined below) you shall not be entitled to severance pay. In the event that your employment is terminated by the Company other than for Cause or you resign for Good Reason, you will be entitled to severance pay in the form of semi-monthly payments in the amount of your base pay as in effect on the date of termination, payable in accordance with customary payroll practices, for six (6) months following such termination. In addition, the Company will accelerate by twelve months the vesting on the unvested portion of your Option and your Option shall expire with respect to the remaining unvested Shares. You will also receive six (6) months of COBRA benefits, if applicable, to be paid by the company. You will not be entitled to any additional payments, salary, bonus or benefits. “Cause” is defined as (i) substantial failure or refusal to perform the duties of your employment, (ii) commission or act of fraud, embezzlement or misappropriation by you involving the business or assets of the Company; (iii) being convicted, pleading guilty or failing to contest a crime that is a felony; (iv) failure to abide by the Company’s written policies. “Good Reason” shall mean your voluntary resignation following (A) a change in the location of your place of employment by more than 75 miles, or (B) a reduction in your base compensation by more than fifteen percent (15%) on an annualized basis.

8. Change of Control. Change of Control shall mean either of the following shareholder-approved transactions: (i) a merger or consolidation of which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to

March 11, 2004

Page 3

such transaction, or (ii) the sale, transfer or other disposition of all or substantially all of the Company’s assets to another entity or in complete liquidation or dissolution of the Company. In the event of a change of control, fifty percent (50%) of your then outstanding options will accelerate and vest on the date six months after the date of the Change of Control, provided that you continue to be employed by the Company for that entire period. In the event your employment is terminated other than for Cause or you resign for Good Reason within six (6) months following a Change of Control, 50% of your then outstanding unvested options will accelerate and vest and you will be entitled to receive your base pay, paid as though you were still employed by the Company, for a period of six (6) months following the date of such termination in installments in accordance with normal payroll practices. In the event your employment is terminated other than for Cause or you resign for Good Reason after six months following a Change of Control you shall receive severance in accordance with the provisions of Section 7 herein.

9. Entire Agreement. This letter, along with your Employee Proprietary Information and inventions Agreement, constitutes the entire agreement between the parties and supersedes all other agreements or understandings. By signing this letter you acknowledge that you are not relying on any promises or representations that are not contained in this letter. This letter can only be modified in a written agreement signed by both parties.

Again, let me indicate how pleased we are to extend this offer, and how much we look forward to working with you. Please indicate your acceptance by signing and returning the enclosed copy of this letter.

Very truly yours,

The Active Network
By:	/s/ David Alberga
Title:	Chief Executive Officer

The foregoing terms and conditions are hereby accepted:

Signed: /s/ John Creelman

Print Name:

Date:

EX-10.15

Exhibit 10.15

April 9, 2004

Natalya Smith

Re: Separation Agreement

Dear Natalya:

This letter sets forth the separation agreement (the “Agreement”) between The Active Network, Inc. (the “Company”) and you in order to aid in your employment transition.

1. Separation. Your last day of work with the Company and your employment termination date will be March 11, 2004 (the “Separation Date”).

2. Accrued Salary and Vacation. On the Separation Date, the Company will pay you all accrued salary, and all accrued and unused vacation/personal time/PTO earned through the Separation Date, subject to standard payroll deductions and withholdings. You are entitled to these payments regardless of whether or not you sign this Agreement. You acknowledge that as of the Separation Date your accrued salary is $6,826.88 and your accrued vacation/personal time/PTO is $8,529.89.

3. Severance. Pursuant to the terms of your offer letter with the Company dated as of May 22, 2002, the Company will make severance payments to you in the form of continuation of your base salary in effect on the Separation Date for three (3) months following the Separation Date for a total of $37,500. These payments will be made on the Company’s ordinary payroll dates, and will be subject to standard payroll deductions and withholdings.

4. Health Insurance. As consideration for this Agreement, Company shall pay your medical and dental COBRA insurance for a period of three (3) months from the Separation Date (the “Health Benefits”);

5. Stock Options. You were granted an Incentive Stock Option to purchase 2,099,400 shares of the Company’s common stock at an exercise price of $0.0145 per share (the “Option”) (after taking into account the corporate restructuring that took place during February 2003), pursuant to the Company’s 2002 Stock Option/Stock Issuance Plan (the “Plan”). On February 4, 2004, you purchased 831,013 vested shares of common stock subject to your Option. For all tax reporting obligations of the Company in connection with the February 4, 2004 exercise of your Option, the Company will report the fair market value of the Company’s common stock on February 3, 2004 as determined by its Board of Directors to be $0.0145 per share.

Under the terms of the Plan and your stock option grant, vesting of your Option will cease as of the Separation Date. Pursuant to the terms of your offer letter, the Company shall accelerate the vesting of 590,456 shares subject to your Option in connection with your separation from the Company. As of the Separation Date (and including the shares subject to accelerated vesting), there are remaining 677,930 vested and unexercised shares subject to your

Option. Notwithstanding the terms of the agreement setting forth the terms of your Option, you may purchase the 677,930 vested and unexercised shares subject to your Option at any time within fifteen (15) months commencing on the Separation Date. For purposes of Rule 701 of the United States Securities Act of 1933, the Company will treat your Option and the Company common stock issued to you in a manner at least as favorable as the best treatment afforded to the options and Company common stock held by any employees of the Company that were issued prior to the Company’s IPO. The vested and unexercised shares subject to your Option will be registered on a Form S-8 (or any successor form) at the same time the shares subject to options held by executive officers of the Company are registered on a Form S-8 (or any successor form) following the Company’s IPO.

6. Forgiveness of Overpayment. Whereas, you acknowledge and agree that the Company has mistakenly overpaid your salary in the amount of $17,500, and will overpay your severance to you in the amount of $3,522.86 for a total amount of $21,022.86. The reason for such overpayment is because the Company has been paying you at an annual rate of $150,000, instead of the correct rate of $140,000. Your PTO, accrued salary and severance as defined above are based on the $150,000 rate. As additional consideration for this Agreement, the Company shall forgive any claim it may have related to such overpayment (“Forgiveness of Overpayment”).

7. Other Compensation or Benefits. You acknowledge that, except as expressly provided in this Agreement, you will not receive any additional compensation, severance or benefits after the Separation Date.

8. Expense Reimbursements. You agree that, within ten (10) days of the Separation Date, you will submit your final documented expense reimbursement statement reflecting all business expenses you incurred through the Separation Date, if any, for which you seek reimbursement. The Company will reimburse you for these expenses pursuant to its regular business practice.

9. Return of Company Property. By the Separation Date, you agree to return to the Company all Company documents (and all copies thereof) and other Company property that you have had in your possession at any time, including, but not limited to, Company files, notes, drawings, records, business plans and forecasts, financial information, specifications, computer-recorded information, tangible property (including, but not limited to, computers), credit cards, entry cards, identification badges and keys; and, any materials of any kind that contain or embody any proprietary or confidential information of the Company (and all reproductions thereof).

10. Proprietary Information Obligations. Both during and after your employment you acknowledge your continuing obligations under your Proprietary Information and Inventions Agreement not to use or disclose any confidential or proprietary information of the Company. A copy of your Proprietary Information and Inventions Agreement is attached hereto as Exhibit A.

11. Confidentiality. The provisions of this Agreement will be held in strictest confidence by you and will not be publicized or disclosed in any manner whatsoever; provided, however, that: (a) you may disclose this Agreement to your immediate family; (b) you may

disclose this Agreement in confidence to your attorney, accountant, auditor, tax preparer, and financial advisor; and (c) you may disclose this Agreement insofar as such disclosure may be necessary to enforce the terms of this Agreement or as otherwise required by law. In particular, and without limitation, you agree not to disclose the terms of this Agreement to any current or former Company employee.

12. Nonsolicitation. You agree that, for a period of one (1) year after the Separation Date, you will not solicit, divert or attempt to divert, directly or indirectly, any customers or suppliers of the Company. You also agree that, for a period of one (1) year after the Separation Date, you will not solicit or induce any employee or independent contractor of the Company to become employed by or associated with any other person, firm or corporation and you shall not approach any such employee or independent contractor for such purpose or authorize or knowingly approve the taking of such actions by any other person, firm or corporation or assist any person, firm or corporation in taking such action; provided, however, this provision is not intended and shall not be deemed to restrict you from employing a third party service provider of the Company if such third party supplies routine services to customers on a non-exclusive basis.

13. Mutual Nondisparagement. You agree that you will refrain from making any representation, statement, comment or any other form of communication (hereinafter collectively referred to as “representation”), whether written or oral, to any person or entity, including but not limited to the principals, customers, suppliers and competitors of the Company, which representation reflects any opinion, judgment, observation or representation of fact, which has the effect or tendency or could have the effect or tendency to disparage, denigrate, criticize or otherwise reflect negatively on the Company and/or its products, services, officers, directors, shareholders, employees or investors. The Company shall require Dave Alberga, Matt Landa, Jon Belmonte, Jim Woodman and Kory Vossoughi to refrain from making any representation, whether written or oral, to any person or entity, which reflects any opinion, judgment, observation or representation of fact, which has the effect or tendency or could have the effect or tendency to disparage, denigrate, criticize or otherwise reflect negatively on you.

14. Mutual Release of Claims. In exchange for the Health Benefits and the Forgiveness of Overpayment, and other consideration provided to you by this Agreement that you are not otherwise entitled to receive, you hereby generally and completely release the Company and its directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to your signing this Agreement. This general release includes, but is not limited to: (1) all claims arising out of or in any way related to your employment with the Company, or the termination of that employment; (2) all claims related to your compensation or benefits from the Company, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (4) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with

Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), and the California Fair Employment and Housing Act (as amended). Notwithstanding the foregoing, this release excludes any right you may have to indemnification provided by statute, contract or bylaw in the form then existing immediately prior to the Separation Date.

Similarly, the Company hereby generally and completely releases you from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to your signing this Agreement except for any act of intentional misconduct, including fraud.

15. ADEA Waiver. You acknowledge that you are knowingly and voluntarily waiving and releasing any rights you may have under the ADEA (“ADEA Waiver”). You also acknowledge that the consideration given for the ADEA Waiver is in addition to anything of value to which you were already entitled. You further acknowledge that you have been advised by this writing, as required by the ADEA, that: (a) your ADEA Waiver does not apply to any rights or claims that arise after the date you sign this Agreement; (b) you should consult with an attorney prior to signing this Agreement; (c) you have twenty-one (21) days to consider this Agreement (although you may choose to voluntarily sign it sooner); (d) you have seven (7) days following the date you sign this Agreement to revoke the ADEA Waiver; and (e) the ADEA Waiver will not be effective until the date upon which the revocation period has expired unexercised, which will be the eighth day after you sign this Agreement (“Effective Date”). Nevertheless, your general release of claims, except for the ADEA Waiver, is effective immediately, and not revocable.

16. Section 1542 Waiver. In giving the release herein, which includes claims which may be unknown to the parties at present, the parties acknowledge that they have read and understand Section 1542 of the California Civil Code, which reads as follows:

“A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.”

You and the Company hereby expressly waive and relinquish all rights and benefits under that section and any law of any other jurisdiction of similar effect with respect to their release of any unknown or unsuspected claims herein.

16. Company advises you to seek the advice of an attorney concerning the provisions of this Agreement. You hereby acknowledge that you have read and understand the foregoing Agreement, that it represents the product of arms’ length bargaining between the parties, and that you sign it voluntarily and without coercion. You further acknowledges that you were given as much time as you reasonably desired, within which to consider this Agreement and the opportunity by you to consult with an attorney of you own choosing concerning the waivers contained in this Agreement, that you have done so and that the waivers you have made herein are knowing, conscious and with full appreciation that you are forever foreclosed from pursuing any of the rights so waived.

17. Miscellaneous. This Agreement including Exhibit A, constitutes the complete, final and exclusive embodiment of the entire agreement between you and the Company with regard to this subject matter. It is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes any other such promises, warranties or representations. This Agreement may not be modified or amended except in a writing signed by both you and a duly authorized officer of the Company. This Agreement will bind the heirs, personal representatives, successors and assigns of both you and the Company, and inure to the benefit of both you and the Company, their heirs, successors and assigns. If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in part, this determination will not affect any other provision of this Agreement and the provision in question will be modified by the court so as to be rendered enforceable. This Agreement will be deemed to have been entered into and will be construed and enforced in accordance with the laws of the State of California as applied to contracts made and to be performed entirely within California.

If this Agreement is acceptable to you, please sign below and return the original to me.

I wish you good luck in your future endeavors.

Sincerely,

The Active Network, Inc.

By:	/s/    Dave Alberga
	Dave Alberga CEO

Agreed, Acknowledged and Accepted:

/s/    Natalya Smith

Natalya Smith

Exhibit A

Proprietary Information and Inventions Agreement

EX-16.1

Exhibit 16.1

April 15, 2004

Securities and Exchange Commission

450 Fifth Street, N.W.

Washington, DC 20549

Gentlemen:

We have read the section entitled “Change in Independent Auditors” in the Registration Statement on Form S-1 of The Active Network, Inc. that is expected to be filed on or about April 20, 2004 and are in agreement with the statements contained in paragraphs two and three therein.

In addition, we have no basis to agree or disagree with other statements of the registrant contained in paragraphs one and four of the section entitled “Change in Independent Auditors” of the above referenced filing.

/S/    ERNST & YOUNG LLP        

EX-23.2

Exhibit 23.2

INDEPENDENT AUDITOR’S CONSENT

We consent to the use in this Registration Statement of The Active Network, Inc. on Form S-1 of our report dated March 31, 2004 (except for Note 11, as to which the date is April 14, 2004, which report expresses an unqualified opinion and includes an explanatory paragraph related to the Company’s change in its method of accounting for goodwill and intangible assets to conform with Statement of Financial Standards (“SFAS”) No. 142 and its change in its method for accounting for stock-based employee compensation to conform with the minimum value based method under SFAS No. 123 by adopting the modified prospective method as described in SFAS No. 148), appearing in the Prospectus, which is part of this Registration Statement. We also consent to the reference to us under the heading “Experts” in such Prospectus.

/s/    Deloitte & Touche LLP

San Diego, California

April 15, 2004

EX-23.3

Exhibit 23.3

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption “Experts” and the use of our report dated July 12, 2002, in the Registration Statement on Form S-1 and related Prospectus of The Active Network, Inc., expected to be filed on or about April 21, 2004.

/s/ Ernst & Young LLP

San Diego, California

April 15, 2004